-----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, J2IQAgjhRr2T9ne2LjJQQX0iQskBunytpI7KwSIwT8ILepRruyw67F0brUlFJTsL 2+eLEhn62H856ExaPRTGnw== 0001169232-03-005050.txt : 20030812 0001169232-03-005050.hdr.sgml : 20030812 20030812104613 ACCESSION NUMBER: 0001169232-03-005050 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 20030630 FILED AS OF DATE: 20030812 FILER: COMPANY DATA: COMPANY CONFORMED NAME: AUTOINFO INC CENTRAL INDEX KEY: 0000351017 STANDARD INDUSTRIAL CLASSIFICATION: TRUCKING & COURIER SERVICES (NO AIR) [4210] IRS NUMBER: 132867481 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10QSB SEC ACT: 1934 Act SEC FILE NUMBER: 001-11497 FILM NUMBER: 03836276 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 10QSB 1 d56545_10qsb.txt FORM 10QSB FORM 10-QSB SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 |X| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (D) OF THE SECURITIES EXCHANGE ACT OF 1934 For Quarter Ended: JUNE 30, 2003 |_| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES 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 Identification number) incorporation or organization) 6401 Congress Ave., Suite 230, Boca Raton, FL 33487 (Address of principal executive office) (561) 988-9456 (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 August 8, 2003 27,347,923 shares of common stock, $.001 par value. Indicate by check mark whether the Registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. YES |X| NO |_| Transitional Small Business Format YES |_| NO |X| AUTOINFO, INC. AND SUBSIDIARIES INDEX Part I. Financial Information: Item 1. Consolidated Financial Statements: Page Balance Sheets June 30, 2003 (unaudited) and December 31, 2002 (audited) . 3 Statements of Income (unaudited) Three and six months ended June 30, 2003 and 2002 ......... 4 Statements of Cash Flows (unaudited) Three and six months ended June 30, 2003 and 2002 ......... 5 Notes to Unaudited Consolidated Financial Statements ........ 6 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations ......................... 10 Item 3. Controls and Procedures ..................................... 13 Part II. Other Information ............................................... 14 Signatures ............................................................... 15 2 AUTOINFO, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS
June 30, December 31, 2003 2002 ------------ ------------ Unaudited Audited ASSETS Current assets: Cash and cash equivalents $ 52,000 $ 684,000 Accounts receivable 3,357,000 2,996,000 Other current assets 309,000 197,000 ------------ ------------ Total current assets 3,718,000 3,877,000 Fixed assets, net of accumulated depreciation 67,000 67,000 ------------ ------------ $ 3,785,000 $ 3,944,000 ============ ============ LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Loan payable $ -- $ 500,000 Convertible subordinated debentures 575,000 575,000 Accounts payable and accrued liabilities 2,435,000 2,281,000 ------------ ------------ Total current liabilities 3,010,000 3,356,000 ------------ ------------ Stockholders' Equity Common stock - authorized 100,000,000 shares $.001 par value; issued and outstanding - 27,348,000 shares as of June 30, 2003 and December 31, 2002 27,000 27,000 Additional paid-in capital 18,019,000 18,019,000 Deficit (17,271,000) (17,458,000) ------------ ------------ Total stockholders' equity 775,000 588,000 ------------ ------------ $ 3,785,000 $ 3,944,000 ============ ============
The accompanying notes are an integral part of these consolidated financial statements. 3 AUTOINFO, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
Six Months Ended Three Months Ended June 30, June 30, ------------------------------ ------------------------------ 2003 2002 2003 2002 ------------ ------------ ------------ ------------ Gross revenues $ 11,243,000 $ 8,303,000 $ 6,102,000 $ 4,743,000 Cost of transportation 9,144,000 6,830,000 5,002,000 3,952,000 ------------ ------------ ------------ ------------ Net revenues 2,099,000 1,473,000 1,100,000 791,000 ------------ ------------ ------------ ------------ Commissions 1,244,000 797,000 640,000 449,000 Operating expenses 595,000 454,000 319,000 219,000 ------------ ------------ ------------ ------------ 1,839,000 1,251,000 959,000 668,000 ------------ ------------ ------------ ------------ Income from operations 260,000 222,000 141,000 123,000 ------------ ------------ ------------ ------------ Other charges (credits): Investment income (9,000) (10,000) (6,000) (3,000) Interest expense 71,000 77,000 33,000 39,000 ------------ ------------ ------------ ------------ 62,000 67,000 27,000 36,000 ------------ ------------ ------------ ------------ Income before income taxes 198,000 155,000 114,000 87,000 Income taxes 11,000 7,000 6,000 4,000 ------------ ------------ ------------ ------------ Net income $ 187,000 $ 148,000 $ 108,000 $ 83,000 ============ ============ ============ ============ Basic and diluted net income per share: $ .01 $ .01 $ .00 $ .00 ============ ============ ============ ============ Weighted average number of common and common equivalent shares 28,432,000 27,815,000 28,517,000 27,942,000 ------------ ------------ ------------ ------------
The accompanying notes are an integral part of these consolidated financial statements. 4 AUTOINFO, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) Six Months Ended June 30, 2003 2002 --------- ----------- Cash flows from operating activities: Net income $ 187,000 $ 148,000 Adjustments to reconcile net income to net cash used in operating activities: Depreciation and amortization 16,000 9,000 Gain on sales of securities -- (1,000) Changes in assets and liabilities: Accounts receivable (361,000) (1,478,000) Other current assets (112,000) (1,000) Accounts payable and accrued liabilities 154,000 1,068,000 --------- ----------- Net cash used in operating activities (116,000) (255,000) --------- ----------- Cash flows from investing activities: Capital expenditures (16,000) (10,000) Proceeds from sale of short-term investments -- 14,000 --------- ----------- Net cash provided by (used in) investing activities (16,000) 4,000 --------- ----------- Cash flows from financing activities: Decrease in borrowings, net (500,000) -- --------- ----------- Net cash used in financing activities (500,000) -- --------- ----------- Net decrease in cash and cash equivalents (632,000) (251,000) Cash and cash equivalents, beginning of period 684,000 885,000 --------- ----------- Cash and cash equivalents, end of period $ 52,000 $ 634,000 ========= =========== The accompanying notes are an integral part of these consolidated financial statements. 5 AUTOINFO, INC. AND SUBSIDIARIES NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS Forward Looking Statements Certain statements made in this Quarterly Report on Form 10-QSB 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 under the headings "Business," and "Risk Factors" in our Annual Report on Form 10-KSB for the year ended December 31, 2002 as filed with the Securities and Exchange Commission. Note 1 - Business and Summary of Significant Accounting Policies Business We are a full service third party transportation logistics provider. Our services include ground transportation coast to coast, local pick up and delivery, warehousing, air freight and ocean freight. We have strategic alliances with less than truckload (LTL), truckload, air, rail and ocean common carriers to service our customers' needs. We have six regional operating centers and representatives in 12 states and Canada. As of July 21, 2003, we had 42 sales agents. Our services include arranging for the transport of customers' freight from a shipper's location to the designated destination. We do not own any trucking equipment and rely on independent carriers for the movement of customers' freight. We seek to establish long-term relationships with our customers and provide a variety of logistics services and solutions to eliminate inefficiencies in our customers' supply chain management. Summary of Significant Accounting Policies Basis of Presentation The financial statements of the Company have been prepared using the accrual basis of accounting under accounting principles generally accepted in the United States of America (GAAP). The consolidated financial statements, which are unaudited, have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC"). In management's opinion, these financial statements include all adjustments (consisting only of normal recurring adjustments) necessary for a fair presentation of the results of operations for the interim periods presented. The results of operations for the three and six months ended June 30, 2003 and 2002 are not necessarily indicative of results to be expected for the entire year. Pursuant to SEC rules and 6 regulations, certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been omitted from these statements. The consolidated financial statements and notes thereto should be read in conjunction with the financial statements and notes included in our Annual Report on Form 10-KSB for the year ended December 31, 2002. Principles of Consolidation The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary Sunteck Transport Co., Inc. All significant intercompany balances and transactions have been eliminated in consolidation. Revenue Recognition As a third party transportation logistics provider, the Company acts as the shippers' agent and arranges for a carrier to handle the freight. Gross revenues consist of the total dollar value of services purchased by shippers. Revenue is recognized upon the delivery of freight, at which time the related transportation cost, including commission, is also recognized. At that time, the Company's obligations are completed and collection of receivables is reasonably assured. Provision For Doubtful Accounts The Company continuously monitors the creditworthiness of its customers and has established an allowance for amounts that may become uncollectible in the future based on current economic trends, historical payment trends and bad debt write-off experience, and any specific customer related collection issues. The provision for doubtful accounts was $43,000 and $60,000 as of June 30, 2003 and December 31, 2002, respectively. Cash and Cash Equivalents Cash and cash equivalents consist of cash in banks and investments in short-term, highly liquid securities having original maturities of three months or less. From time to time, the Company has on deposit at financial institutions cash balances which exceed federal deposit insurance limitations. The Company has not experienced any losses in such accounts and believes it is not exposed to any significant credit risk on cash and cash equivalents. Fixed Assets Fixed assets as of June 30, 2003 and December 31, 2002, consisting primarily of furniture, fixtures and equipment, were carried at cost, net of accumulated depreciation. Depreciation of fixed assets was provided on the straight-line method over the estimated useful lives of the related assets which range from three to five years. Income Per Share Basic income per share is based on net income divided by the weighted average number of common shares outstanding. Common stock equivalents outstanding were 1,169,000 and 1,084,000 and 644,000 and 517,000 for the three and six months ended June 30, 2003 and 2002, respectively. Use of Estimates The preparation of these financial statements in conformity with GAAP requires management to make certain estimates and assumptions. These estimates and assumptions affect the reported amounts of assets, liabilities and contingent liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the 7 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 and future benefits to be recognized upon the utilization of certain operating loss carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Stock-Based Compensation The Company has adopted Statement of Financial Accounting Standards No. 123, "Accounting for Stock Based Compensation" (SFAS 123). As permitted by SFAS 123, the Company has chosen to continue to apply Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued to Employees" (APB 25) and, accordingly, no compensation cost has been recognized for stock options in the financial statements. Note 2 Income Tax Expense Components of income taxes follow:
Six Months Ended Three Months Ended June 30, 2003 June 30, 2003 ------------------------ ------------------------ Current Deferred Current Deferred -------- -------- -------- -------- Tax expense before application of operating loss carryforwards $ 75,000 $ -- $ 44,000 $ -- Tax expense (benefit) of operating loss carryforwards (64,000) 64,000 (38,000) 38,000 Change in valuation allowance -- (64,000) -- (38,000) -------- -------- -------- -------- Tax expense $ 11,000 $ -- $ 6,000 $ -- ======== ======== ======== ======== Three Months Ended Six Months Ended June 30, 2002 June 30, 2002 ------------------------ ------------------------ Current Deferred Current Deferred -------- -------- -------- -------- Tax expense before application of operating loss carryforwards $ 32,000 $ -- $ 57,000 $ -- Tax expense (benefit) of operating loss carryforwards (28,000) 28,000 (50,000) 50,000 Change in valuation allowance -- (28,000) -- (50,000) -------- -------- -------- -------- Tax expense $ 4,000 $ -- $ 7,000 $ -- ======== ======== ======== ========
8 June December 30, 31, 2003 2002 ----------- ----------- Deferred tax assets: Net operating loss carryforward $ 6,037,000 $ 6,101,000 ----------- ----------- Gross deferred tax assets 6,037,000 6,101,000 Less: valuation allowance (6,037,000) (6,101,000) ----------- ----------- Deferred tax asset $ -- $ -- =========== =========== Note 3 Line of Credit In May 2003, the Company entered into a credit facility with Wachovia Bank providing for an available line of credit of $1,500,000 secured by substantially all of the Company's assets. The credit facility provides for the monthly payment of interest at the bank's prime rate plus 1/2 of 1%, requires the maintenance of certain financial ratios, and places limitations on future capital expenditures. Initial borrowings under this facility were used to repay the $500,000 line of credit, obtained from a related party in August 2001. The Company's available cash is used to reduce borrowings under this facility and, therefore, the outstanding balance under the credit facility is $0 as of June 30, 2003. Note 4 2003 Stock Option Plan On June 23, 2003, by written consent of a majority of the Company's stockholders, the Company's 2003 stock option plan, covering the grant of up to a maximum of 3,000,000 shares of Company Common Stock, was approved. The stock options are utilized as a component of long-term compensation incentives for the Company's employees and qualified sales agents. 9 AUTOINFO, INC. AND SUBSIDIARIES - -------------------------------------------------------------------------------- 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. The following Management's Discussion and Analysis of Financial Condition and Results of Operations should be read in conjunction with our unaudited consolidated financial statements and the notes thereto appearing elsewhere in this report. General We are a full service third party transportation logistics provider. Our services include ground transportation coast to coast, local pick up and delivery, warehousing, air freight and ocean freight. We have strategic alliances with less than truckload (LTL), truckload, air, rail and ocean common carriers to service our customers' needs. We have six regional operating centers and representatives in 12 states and Canada. As of July 21, 2003, we had 42 sales agents. Our services include arranging for the transport of customers' freight from a shipper's location to the designated destination. We do not own any trucking equipment and rely on independent carriers for the movement of customers' freight. We seek to establish long-term relationships with our customers and provide a variety of logistics services and solutions to eliminate inefficiencies in our customers' supply chain management. Results of Operations In the transportation industry, results of operations generally show a seasonal pattern as customers reduce shipments during the winter months. This industry trend has not had a significant impact on our results of operations or our cash flows in recent years. Also, inflation has not materially affected our operations due to the short-term transactional basis of our business. However, we cannot fully predict the impact seasonality and inflation may have in the future. Three and six months ended June 30, 2003 and 2002 During the period ended June 30, 2003, we continued to implement our strategic growth business plan consisting primarily of the expansion of client services, the opening of regional operations centers in key geographical markets and the addition of independent sales agents. Our net revenues (gross revenues less cost of transportation) are 10 the primary indicator of our ability to source, add value and resell service that are provided by third parties and are considered to be the primary measurement of growth. Therefore, the discussion of the results of operations below focuses on the changes in our net revenues. The increases in net revenues and all related cost and expense categories are the direct result of our business expansion. The following table represents certain statement of operation data as a percentage of net revenues:
Three Months Ended Six Months Ended June 30, June 30, 2003 2002 2003 2002 ------ ------ ------ ------ Net revenues 100.0% 100.0% 100.0% 100.0% ------ ------ ------ ------ Commissions 58.1% 56.7% 59.3% 54.1% Operating expenses 29.0% 27.7% 28.3% 30.8% Other charges 2.5% 4.6% 3.0% 4.6% ------ ------ ------ ------ Income before income taxes 10.4% 11.0% 9.4% 10.5% ------ ------ ------ ------
Revenues Gross revenues consisting of freight fees and other related services revenue totaled $6,102,000 and $11,243,000 for the three and six month periods ended June 30, 2003, as compared with $4,743,000 and $8,303,000 in the prior year periods. Net revenues were $1,100,000 and $2,099,000 for the three and six month periods ended June 30, 2003, as compared with $791,000 and $1,473,000 in the prior year periods. Costs and expenses Commissions totaled $640,000 and $1,244,000 for the three and six month periods ended June 30, 2003, as compared with $449,000 and $797,000 in the prior year periods. As a percentage of net revenues, commissions were 58% and 59% for the three and six month periods ended June 30, 2003 as compared with 57% and 54% in the prior year periods. This increase is the direct result of higher commission rates related to the Company's business expansion and the addition of independent sales agents at higher commission rates than historical averages. Operating expenses totaled $319,000 and $595,000 for the three and six month periods ended June 30, 2003, as compared with $219,000 and $454,000 in the prior year periods. As a percentage of net revenues, operating expenses were 29% and 28% for the three and six month periods ended June 30, 2003 as compared with 28% and 31% in the prior year periods. This decrease in percentage terms for the six months ended June 30, 2003 is the direct result of management's ability to leverage selling, general and administrative expenses in connection with the Company's business expansion. Investment income, primarily consisting of dividend and interest income, was $6,000 and $9,000 for the three and six month periods ended June 30, 2003, as compared with $3,000 and $10,000 in the prior year periods. 11 Interest expense totaled $33,000 and $71,000 for the three and six month periods ended June 30, 2003, as compared with $39,000 and $77,000 in the prior year periods. This decrease is primarily the result of the lower interest rate on our new line of credit entered into in May 2003 (See Liquidity and capital resources). Income taxes Income taxes were $6,000 and $11,000 for the three and six month periods ended June 30, 2003 as compared with $4,000 and $7,000 in the prior year periods, and consist of only state taxes as the Company has a net operating loss carryforward for Federal tax purposes. Net income Net income totaled $108,000 and $187,000 for the three and six month periods ended June 30, 2003, as compared with $83,000 and $148,000 in the prior year periods. Trends and uncertainties The transportation industry is highly competitive and highly fragmented. Our primary competitors are other non-asset based as well as asset based third party logistics companies, freight brokers, carriers offering logistics services and freight forwarders. We also compete with shippers internal traffic departments as well as carriers internal sales and marketing departments directly seeking shippers' freight. We anticipate that competition for our services will continue to increase. Many of our competitors have substantially greater capital resources, sales and marketing resources and experience. We cannot assure you that we will be able to effectively compete with our competitors in effecting our business expansion plans. Our operations were profitable for the three and six months period ended June 30, 2003. However, as of June 30, 2003, we had an accumulated deficit of $17.7 million. Other factors that could adversely affect our operating results include: o the success of Sunteck in expanding its business operations; and o changes in general economic conditions. Depending on our ability to generate revenues, we may require additional funds to expand Sunteck's business operations and for working capital and general corporate purposes. Any additional equity financing may be dilutive to stockholders, and debt financings, if available, may involve restrictive covenants that further limit our ability to make decisions that we believe will be in our best interests. In the event we cannot obtain additional financing on terms acceptable to us when required, our ability to expand Sunteck's operations may be materially adversely affected. Liquidity and capital resources In May 2003, we entered into a credit facility with Wachovia Bank providing for an available line of credit of $1,500,000 secured by substantially all of our assets. The credit facility provides for the monthly payment of interest at the bank's prime rate plus 1/2 of 1%, requires the maintenance of certain financial ratios, and places limitations on future capital expenditures. Initial borrowings under this facility were used to repay the $500,000 line of credit, obtained from a related party in August 2001. Our available cash is used to reduce borrowings under this facility and, therefore, the outstanding balance under the credit facility is $0 as of June 30, 2003. 12 At June 30, 2003, we had outstanding $575,000 of subordinated convertible debentures. The debentures are convertible into common stock at the option of the debenture holder at a conversion price of $0.25 per share and are redeemable, at the option of the holder, on or after May 31, 2004. We believe that we have sufficient working capital to meet our short-term operating needs. At June 30, 2003, we had liquid assets of approximately $52,000. The total amount of debt outstanding as of June 30, 2003 was $575,000. This following table presents our debt instruments and their weighted average interest rates as of June 30, 2003: Weighted Average Balance Rate -------- -------- Subordinated Debt $575,000 12.0% Inflation and changing prices had no material impact on revenues or the results of operations for the period ended June 30, 2003. Controls and Procedures (a) Evaluation of Disclosure Controls and Procedures Within the past 90 days, AutoInfo's management, including its Chief Executive Officer and Chief Financial Officer, have conducted an evaluation of the effectiveness of disclosure controls and procedures pursuant to Rule 13a-14 and 15d-14 under the Securities Exchange Act of 1934, as amended. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the disclosure controls and procedures are effective in ensuring that all material information required to be filed in this quarterly report has been made known to them in a timely fashion. (b) Changes in Internal Controls There have been no significant changes in internal controls, or in factors that could significantly affect internal controls, subsequent to the date the Chief Executive Officer and Chief Financial Officer completed their evaluation. 13 AUTOINFO, INC. AND SUBSIDIARIES Part II - OTHER INFORMATION Item 1 - 4: Inapplicable Item 5 - Submission of Matters to a Vote of Security Holders On June 23, 2003, the following actions were taken by written consent of a majority (15,600,000 or 57%) of the Registrant's stockholders: (a) The election of Peter Einselen, Thomas Robertson, Harry Wachtel and Mark Weiss as directors (each of whom was incumbent); (b) The amendment of our certificate of incorporation to increase our total authorized shares to include 10 million shares of "blank-check" $ .001 par preferred stock; (c) The approval of our 2003 stock option plan reserving for grant up to a maximum of 3,000,000 shares of common stock; (d) The ratification of Dworken, Hillman, LaMorte & Sterczala, P.C. as independent auditors for fiscal 2003. Item 6 - Exhibits: 3.1 Certificate of Amendment of Certificate of Incorporation filed July 28, 2003. 31.1 Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 31.2 Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 32.1 Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 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 Executive Vice President and Principal Financial Officer Date: August 11, 2003 15 EX-3.1 3 d56545_ex3-1.txt CERTIFICATE OF AMENDMENT Exhibit 3.1 CERTIFICATE OF AMENDMENT OF CERTIFICATE OF INCORPORATION OF AUTOINFO, INC. (Pursuant to Section 242 of the Delaware General Corporation Law) ---------- AutoInfo, Inc. ("Corporation"), a corporation organized and existing under and by virtue of the Delaware General Corporation Law (the "DGCL") does hereby certifies that: 1. The name of the corporation is AutoInfo, Inc. 2. The Certificate of Incorporation of the Corporation is hereby amended to increase the authorized capitalization from 100,000,000 to 110,000,000 shares, consisting of 100,000,000 shares of common stock and 10,000,000 shares of preferred stock. 3. In order to effect the change described in Paragraph 2 hereof, the Certificate of Incorporation of the Corporation is hereby amended by striking out Article FOURTH and by substituting the following new Article: "FOURTH: The total number of shares of all classes of stock which the Corporation shall have authority to issue is 110,000,000 shares, consisting of (i) 100,000,000 shares of common stock, $0.001 par value per share (the "Common Stock") and (ii) 10,000,000 shares of preferred stock, $0.001 par value per share (the "Preferred Stock"). (a) Common Stock. No holder of any of the shares of the stock of the Corporation, whether now or hereafter authorized and issued, shall be entitled as of right to purchase or subscribe for (1) any unissued stock of any class, or (2) any additional shares of any class to be issued by reason of any increase of the authorized capital stock of the Corporation of any class, or (3) bonds, certificates of indebtedness, debentures or other securities convertible into stock of the Corporation, or carrying any right to purchase stock of any class, but any such unissued stock or such additional authorized issue of any stock or of other securities convertible into stock, or carrying any right to purchase stock, may be issued and disposed of pursuant to resolution of the Board of Directors to such persons, firms, corporations or associations and upon such terms as may be deemed advisable by the Board of Directors in the exercise of its discretion. (b) Preferred Stock. The Board of Directors, in the exercise of its discretion, is authorized to issue the undesignated Preferred Stock in one or more series, to determine the powers, preferences and rights, and qualifications, limitations or restrictions, granted to or imposed upon any wholly unissued series of undesignated Preferred Stock, and to fix the number of shares constituting any series and the designation of such series, without any further vote or action by the stockholders. No holder of any of the shares of any series of Preferred Stock of the Corporation, whether now or hereafter authorized and issued, shall be entitled as of right to purchase or subscribe for (1) any unissued stock of any class, or (2) any additional shares of any class to be issued by reason of any increase of the authorized capital stock of the Corporation of any class, or (3) bonds, certificates of indebtedness, debentures or other securities convertible into stock of the Corporation, or carrying any right to purchase stock of any class; but any such unissued stock or such additional authorized issue of such stock or of other securities convertible into such stock, or carrying any right to purchase such stock, may be issued and disposed of pursuant to resolution of the Board of Directors to such persons, firms, partnerships, corporations, associations or other entities and upon such terms as may be deemed advisable by the Board of Directors in the exercise of its discretion." 16 4. The Amendments of the Certificate of Incorporation herein certified have been duly adopted in accordance with the provisions of Sections 228 and 242 of the DGCL by the unanimous written consent of the Board of Directors of the Corporation followed by the written consent from a majority of the stockholders of the Corporation. 5. This Certificate of Amendment shall become effective upon the filing hereof in the Office of the Secretary of State of the State of Delaware. Executed on this 28th day of July, 2003. AutoInfo, Inc. By: /s/ Harry Wachtel ------------------------------------ Harry Wachtel President and Chief Executive Officer 17 EX-31.1 4 d56545_ex31-1.txt CEO CERTIFICATION Exhibit 31.1 AUTOINFO, INC. CERTIFICATIONS PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002 CERTIFICATION I, Harry Wachtel, certify that: 1. I have reviewed this quarterly report on Form 10-QSB of AutoInfo, Inc.; 2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report; 3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report; 4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have: (a) designed such disclosure controls and procedures, or causes such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared; (b) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and (c) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent function): (a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and (b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls. /s/ Harry Wachtel ---------------------------------------- Harry Wachtel President and Chief Executive Officer Date: August 11, 2003 18 EX-31.2 5 d56545_ex31-2.txt CFO CERTIFICATION Exhibit 31.2 CERTIFICATION I, William Wunderlich, certify that: 1. I have reviewed this quarterly report on Form 10-QSB of AutoInfo, Inc.; 2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report; 3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report; 4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have: (a) designed such disclosure controls and procedures, or causes such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared; (b) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and (c) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent function): (a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and (b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls. /s/ William Wunderlich ---------------------------------------- William Wunderlich Chief Financial Officer Date: August 11, 2003 19 EX-32.1 6 d56545_ex32-1.txt CERTIFICATIONS Exhibit 32.1 CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 In connection with the Quarterly Report of AutoInfo, Inc. (the "Company") on Form 10-QSB for the period ending June 30, 2002 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), we, Harry Wachtel and William Wunderlich, Chief Executive Officer and Chief Financial Officer, respectively,of the Company, certify, pursuant to 18 U.S.C. ss. 1350, as adopted pursuant to ss. 906 of the Sarbanes-Oxley Act of 2002, that to our knowledge: (1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and (2) The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company. August 11, 2003 /s/ Harry Wachtel - ---------------------------------- Harry Wachtel Chief Executive Officer /s/ William Wunderlich - ---------------------------------- William Wunderlich Chief Financial Officer 20 -----END PRIVACY-ENHANCED MESSAGE-----