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                     U.S. SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   ----------

                                   FORM 10-KSB

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

                     For the fiscal year ended June 30, 2005

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

                         Commission File Number: 0-21419

                             clickNsettle.com, Inc.
           (Name of small business issuer as specified in its charter)

         Delaware                                        23-2753988
         (State or Other Jurisdiction                    (IRS Employer
         of Incorporation or Organization)               Identification No.)

                         990 Stewart Avenue, First Floor
                           GARDEN CITY, NEW YORK 11530
                    (Address of Principal Executive Offices)

                                 (516) 794-8950
                (Issuer's Telephone Number, Including Area Code)

Securities registered under Section 12(b) of the Exchange Act: None

Securities registered under Section 12(g) of the Exchange Act:

Title of each class                 Name of each exchange on which registered
-------------------                 -----------------------------------------
Common Stock $.001 Par Value             Over-the-Counter Bulletin Board

<PAGE>

Check  whether the issuer (1) filed all reports  required to be filed by Section
13 or 15(d) of the  Exchange  Act during the past 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 |_|

Check if there is no disclosure of delinquent  filers in response to Item 405 of
Regulation S-B contained in this Form, and no disclosure  will be contained,  to
the best of the  registrant's  knowledge,  in  definitive  proxy or  information
statements  incorporated  by  reference  in Part III of this form  10-KSB or any
amendments to this Form 10-KSB.|X|

Indicate by check mark whether the  registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act) Yes |X| No |_|

State  issuer's  revenues for its most recent fiscal year.  $1,808,  400 through
January 13, 2005 when the Company's sole operating business was sold

The aggregate  market value of the voting stock held by  non-affiliates  per the
closing stock price of September 22, 2005 is $664,477.

As of September  22, 2005,  9,929,056  shares of common stock of the issuer were
outstanding.

Transitional Small Business Disclosure Format Yes |_| No |X|

                  DOCUMENTS INCORPORATED BY REFERENCE

                  Part I. -- None Part II. -- None
                  Part III. -- None


                                       2
<PAGE>

                                     PART I

      From  time to  time,  including  in this  annual  report  on Form  10-KSB,
clickNsettle.com,  Inc.  (the  "Company"  or "we") may  publish  forward-looking
statements  relating  to such  matters  as  anticipated  financial  performance,
business prospects,  future operations,  new products,  research and development
activities and similar matters. The Private Securities  Litigation Reform Act of
1995 provides a safe harbor for forward-looking  statements.  In order to comply
with the terms of the safe harbor, we note that a variety of factors could cause
our actual results to differ  materially from the  anticipated  results or other
expectations expressed in our forward-looking statements.

ITEM 1. DESCRIPTION OF BUSINESS

The Company

      The  Company was formed on January 12, 1994 under the laws of the State of
Delaware.  On October 31, 1994, we acquired all of the outstanding  common stock
of National  Arbitration & Mediation,  Inc.  ("NA&M"),  a New York  corporation,
formed on February 6, 1992,  which was  primarily  owned by our Chief  Executive
Officer and President.  NA&M began operations in March 1992 as a provider of ADR
(alternative dispute resolution)  services.  NA&M was merged into the Company as
of the end of June 1999.  In June 2000,  shareholder  approval  was  obtained to
change the name of the Company from NAM Corporation to clickNsettle.com, Inc.

      In July  2004,  the  Board  of  Directors  decided  to  explore  strategic
alternatives  for the Company in an effort to protect  shareholder  value.  As a
result of the  numerous  accounting  scandals in recent years and the passing of
the Sarbanes-Oxley Act of 2002 to safeguard  shareholders,  micro-cap  companies
such as the Company  were faced with  mounting  legal and audit fees to meet the
new compliance  requirements  needed to remain as a publicly  traded entity.  In
addition  to  being  expensive  in terms of  out-of-pocket  expenditures,  these
requirements were costly in that they were time-consuming and placed a strain on
the Company's limited personnel  resources.  While we remained  optimistic about
the need for the  Company's  services,  we believed that the  unavoidability  of
these  escalating  costs shortens the timeframe that the Company needed in order
to  realize  revenues  from its sales and  marketing  initiatives.  Further,  we
believed  our  revenue had been  adversely  affected  by the  consolidation  and
turmoil in the  insurance  industry,  which  represented  a major portion of our
clientele. Additionally, insurance companies in general and some, in particular,
had changed their  claims-settling  philosophies.  We perceived that many of the
larger  insurance  companies  were taking a harder line with the plaintiff  bar.
This  resulted in a slow down in the number of cases being  submitted  to ADR, a
trend that continued into fiscal year 2005.  This adversely  affected the number
of cases referred to our forum.  In a broader  sense,  we believed that lawsuits
continued  to be  commenced  and that our  services  should prove to be vital to
insurers in their ability to address a growing  caseload with reduced costs, but
the timing of such was delayed.

      On October 18, 2004, the Company entered into a definitive  asset purchase
agreement  (the  "Asset  Purchase  Agreement")  with  National  Arbitration  and
Mediation,  Inc. (the "Buyer"),  a company  affiliated  with the Company's Chief
Executive Officer,  Roy Israel.  Pursuant to the Asset Purchase  Agreement,  the
Buyer acquired the assets of the Company's dispute resolution business (the "ADR
business").  In  consideration,   the  Buyer  assumed  all  current  and  future
liabilities and commitments of the ADR business.  Furthermore, Mr. Israel agreed
not to trigger his change-in-control  provision under his employment contract as
a  result  of the  Buyer  acquiring  the ADR  business.  If such  provision  was
triggered upon the sale or  liquidation  of the ADR business,  the Company would
have  owed  Mr.  Israel,  in  one  lump  sum,  approximately  $1,015,000,  which
represented  three times his then current base salary.  Additionally,  the Asset
Purchase  Agreement  provided  that a minimum of  $200,000 in cash was to remain
with the Company  before giving affect to  transaction  costs. A portion of this
cash has been utilized by the Company to pay for


                                       3
<PAGE>

the costs  associated  with the sale of the ADR business and the balance will be
used for continued public reporting obligations and potentially to acquire a new
operating business or enter into a merger transaction.

      The Board of Directors  received an opinion,  dated October 15, 2004, from
an unrelated  party,  Capitalink,  L.C.,  that, as of that date,  based upon and
subject to the  assumptions  made,  matters  considered  and  limitations on its
review as set forth in the opinion, the purchase  consideration was fair, from a
financial point of view, to the Company's unaffiliated stockholders. Capitalink,
L.C. is an  investment-banking  firm that is regularly engaged in the evaluation
of businesses  and their  securities in connection  with mergers,  acquisitions,
corporate restructurings and private placements.

      On January 13, 2005, at the annual meeting of shareholders,  the Company's
shareholders  approved  the  transaction.  Immediately  thereafter,  the Company
completed  the sale of the ADR  business.  In  connection  therewith,  the Buyer
assumed the current and future  commitments  of the Company.  Specifically,  the
Company has been  released from its lease  agreements  for office space in Great
Neck  and  Brooklyn,  New  York and  from  its  employment  agreements  with its
President and Chief Financial  Officer.  Additionally,  the Buyer has guaranteed
the  payments  due on the  remainder of the  Company's  automobile  lease (which
approximated  $18,700 in total as of June 30,  2005).  The Buyer has assumed the
remaining payments due on the lease of a postage meter (which  approximated $900
in total as of June 30, 2005) until such time as the lessor  issues a release of
liability  to the  Company.  Also,  as of June 30,  2005,  the Company  remained
contingently  liable for  additional  payables and other items of  approximately
$288,400  assumed  by the  Buyer  but  not  paid as of that  date.  See  Note 9.
Furthermore, in accordance with the Company's stock option plan, all outstanding
unvested  employee  stock  options  vested as of the date of the sale of the ADR
business.  As the Company did not retain any  employees  subsequent to the sale,
the former  employees  had three months from  January 13, 2005 to exercise  such
options in accordance with the terms of the Company's stock option plan. A total
of 3,485,400 unexercised employee stock options expired at the close of business
on April 13, 2005.

      The loss from discontinued  operations,  including the loss on disposal of
the discontinued operations,  for the years ended June 30, 2005 and 2004 include
the following:

                                                          2005           2004
                                                      -----------     ---------

Loss from operations of discontinued business           ($181,261)    ($513,825)
                                                      -----------     ---------

Loss from disposal:
        Loss on sale*                                    (419,768)           --
         Transaction costs of sale                       (111,526)           --
                                                      -----------     ---------
               Loss from disposal                        (531,294)           --
                                                      -----------     ---------

  Loss from discontinued operations                     ($712,555)    ($513,825)
                                                      ===========     =========

*The loss on the sale was calculated as follows:

                  Book value of liabilities assumed      $667,438
                  Book value of assets sold            (1,087,206)
                                                      -----------
                           Loss on transaction           $419,768
                                                      ===========

      The results from  discontinued  operations for the  approximately  six and
one-half  months  through  January 13, 2005 and for the year ended June 30, 2004
follows:


                                       4
<PAGE>

<TABLE>
<CAPTION>
                                                              From July 1, 2004        Year
                                                                  through              Ended
                                                              January 13, 2005     June 30, 2004
                                                              ----------------     -------------
<S>                                                               <C>                 <C>
Net Revenues                                                    $ 1,808,400           $ 3,759,372
                                                                -----------           -----------

Operating costs and expenses
         Costs of services                                          395,754               860,325
         Sales and marketing expenses                               593,026             1,271,430
         General and administrative expenses                      1,037,600             2,058,503
         Loss on impairment of furniture and equipment               15,885                85,721
                                                                -----------           -----------
                                                                  2,042,265             4,275,979
                                                                -----------           -----------
               Loss from operations                                (233,865)             (516,607)
                                                                -----------           -----------
Other Income
         Investment income                                           45,701
         Interest and dividends                                       5,777                   100
         Other income                                                 1,126                 2,682
                                                                -----------           -----------
                                                                     52,604                 2,782
                                                                -----------           -----------

               Loss from operations of discontinued business    $  (181,261)          $  (513,825)
                                                                ===========           ===========
</TABLE>

      Pursuant to the Asset  Purchase  Agreement,  the cash that remained in the
Company was  increased to the extent of 60% of the excess of the  Remaining  Net
Capital  before  Commitments  (as defined) over $380,462 as of the closing date.
The Remaining Net Capital Before  Commitments  was calculated as the fair market
value of the assets  purchased  less the  following:  (a)  recorded  liabilities
assumed  and (b) $96,371  (that is,  $200,000 in cash to remain with the Company
less payments of $103,629  already made through  January 13, 2005 for certain of
the transaction costs). As of January 13, 2005, the Remaining Net Capital before
Commitments  was $643,728  based upon the Company's  financial  statements as of
that  date  without  adjustment  for  any  subsequent   realization  of  assets,
incurrence of any additional  liabilities or resolution of  contingencies by the
Buyer.  Therefore,  $263,266 represents the amount in excess of $380,462; 60% of
which, or $157,960 is additional cash to remain in the Company. Therefore, as of
January 13,  2005,  the total cash to be  retained  by the Company was  $254,331
before unpaid transaction costs, taxes, other payables and accrued  liabilities.
Although  the  liabilities  and assets other than cash were  transferred  to the
Buyer as of January 13, 2005, the cash balances have yet to be transferred as of
June 30, 2005. As a result,  the accompanying  balance sheet shows cash and cash
equivalents of $870,684. However, as of June 30, 2005, the Company has a balance
due to the Buyer in the amount of $620,798.  This amount  includes  interest due
from the Company to the Buyer on the unpaid  balance.  The interest rate charged
is equal to the interest rate earned on invested  balances.  The interest charge
for the year ended June 30,  2005 was $4,129 all of which is accrued  and unpaid
at June 30, 2005. A portion of the total balance due to the Buyer, in the amount
of $430,595,  was transferred to the Buyer in August 2005. The remaining balance
is expected to be transferred before October 31, 2005.

      The  costs  of the  transaction,  which  have  been  paid by the  Company,
included  legal,  accounting,  tax advice and the cost of the fairness  opinion.
During the year ended June 30,  2005,  the  Company  incurred  $111,526  of such
costs, which are included in the loss on sale of discontinued  operations on the
accompanying  statement of  operations.  At June 30, 2005, all such amounts have
been paid.

      Since the consummation of the sale, the Company has no operating business.
Currently,  the Company is actively  searching for a new  operating  business to
acquire or to enter into a merger  transaction.  There can be no assurances that
an  operating  entity  will be  acquired  or that a merger  transaction  will be
consummated.


                                       5
<PAGE>

Selection of a Business

      The  Company is now  considering  business  opportunities  either  through
merger or merger  transactions that might create value for our stockholders.  We
have no day-to-day operations at the present time. The officers and directors of
the Company devote limited time and attention to the affairs of the Company. The
Company may have to wait some time before  consummating a suitable  transaction.
The Company  does not intend to restrict  its  consideration  to any  particular
business or industry segment.

      However, due to the Company's limited financial  resources,  the scope and
number of  suitable  candidate  business  ventures  available  is  limited.  The
decision to participate  in a specific  business  opportunity  will be made upon
management's  analysis  of  the  quality  of the  other  firm's  management  and
personnel, the anticipated  acceptability of its products or marketing concepts,
the merits of its technology  and numerous other factors.  Since the Company may
participate in a business  opportunity with a newly organized business or with a
business which is entering a new phase of growth, the Company may incur risk due
to the  failure of the  target's  management  to have  proven its  abilities  of
effectiveness, or the failure to establish a market for the target's products or
services or the failure to realize profits.

Acquisition of a Business

      With  respect to any  mergers or  acquisitions,  negotiations  with target
company  management  will be expected to focus on the  percentage of the Company
that  target   company   stockholders   would  acquire  in  exchange  for  their
stockholdings  in the target company.  Depending upon,  among other things,  the
target company's assets and liabilities,  the Company's stockholders will in all
likelihood hold a lesser percentage  ownership interest in the Company following
any  merger  or  acquisition.   The  percentage  ownership  may  be  subject  to
significant  reduction in the event that Company  acquires a target company with
substantial assets. Typically, in these transactions,  which are commonly called
reverse  acquisitions,  voting  control of the merged  company  changes from the
stockholders  of the  pre-existing  public  company  to  those  of the  previous
privately owned company.  Any merger or acquisition  effected by the Company can
be expected to have a significant  dilutive  effect on the  percentage of shares
held by the Company's stockholders immediately preceding the transaction.

Prior Business of the Company

      Prior to the sale of its sole operating  business on January 13, 2005, the
Company  provided ADR services  including  arbitrations,  mediations,  mock jury
trials,   specialized   ADR  video   conferencing   and   electronic   oversight
applications.  Since  the  sale  of the ADR  business,  the  Company  has had no
operations.

Employees

      Since the sale of the ADR business,  the Company has had no operations and
has no employees.  Our executive  officers devote as much time to the affairs of
the  Company as they deem  appropriate.  The focus of the Company is to maintain
its status as a publicly  traded  entity  while  searching  for a new  operating
business to acquire or to enter into a merger transaction.

ITEM 2. DESCRIPTION OF PROPERTY

      Subsequent to January 13, 2005, we do not maintain any leased  facilities.
We maintain a mailing address at 990 Stewart Avenue,  First Floor,  Garden City,
New York 11530, which we believe is adequate to meet our needs at this time.


                                       6
<PAGE>

      Prior to January 13, 2005, we maintained  three leased  facilities,  which
were located in office buildings.  The aggregate rental expense, net of sublease
income of $40,046, and $73,542 respectively, for all of our offices was $102,455
and $189,941 during the years ended June 30, 2005 and 2004, respectively.

ITEM 3. LEGAL PROCEEDINGS

      We are not a party to any legal proceedings.

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

      None.


                                       7
<PAGE>

                                     PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

A. Our Common  Stock is quoted on the  NASD's  Over-the-Counter  Bulletin  Board
under the trading  symbol  "CLIK." Prior to March 5, 2003,  our Common Stock was
quoted on The Nasdaq SmallCap  Market ever since we commenced  public trading on
November 18, 1996.  Before November 18, 1996, there was no public market for our
securities.  The  following  table sets forth the range of high and low  closing
sales  prices  (based on  transaction  data as reported  by The Nasdaq  SmallCap
Market and the NASD's  Over-the-Counter  Bulletin Board) for each fiscal quarter
during the periods indicated.

                                                                Common Stock
                                                             High           Low
                                                            --------------------
Fiscal Year 2005
First quarter (07/1/04-9/30/04)                             $0.13          $0.09
Second quarter (10/01/04-12/31/04)                           0.11           0.07
Third quarter (01/01/05-03/31/05)                            0.10           0.06
Fourth quarter (04/01/05-06/30/05)                           0.18           0.05

Fiscal Year 2004
First quarter (07/1/03-9/30/03)                             $0.23          $0.05
Second quarter (10/01/03-12/31/03)                           0.38           0.25
Third quarter (01/01/04-03/31/04)                            0.35           0.16
Fourth quarter (04/01/04-06/30/04)                           0.20           0.06

      On December 22, 2003, we effectuated a 6-for-1  forward stock split of our
common  stock.  All common stock prices above have been  restated to reflect the
forward stock split. On September 22, 2005, the closing bid price for our common
stock, as reported by the Over-the-Counter Bulletin Board, was $0.139.

      As of August 30, 2005, there were  approximately 513 holders of our common
stock.

      We have not paid any  dividends  upon our  common  stock.  The  payment of
common stock dividends, if any, in the future rests within the discretion of our
board of  directors  and will  depend,  among  other  things,  upon our  capital
requirements and financial condition, as well as other relevant factors.

ITEM 6. MANAGEMENT'S  DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

General

      Through  January 13,  2005,  we provided  alternative  dispute  resolution
services, or ADR services, to insurance companies,  law firms,  corporations and
municipalities.  We focused the majority of our marketing  efforts on developing
and expanding  relationships  with these entities,  which we believe are some of
the largest consumers of ADR services.


                                       8
<PAGE>

Year Ended June 30, 2005 Compared to Year Ended June 30, 2004

Results of Operations

      The Company sold its sole operating business, ADR services, on January 13,
2005.  Since that time,  the  Company  has not had an  operating  business.  The
financial  statements for the year ended June 30, 2004 have been reclassified to
show  the  revenues,  income  and  expenses  relating  to the  ADR  business  as
discontinued  operations.  The income and  expenses  relating  to the  Company's
operations of a public shell are shown as continuing  operations  for the fiscal
year ended June 30,  2004.The  financial  statements for the year ended June 30,
2005 have been  presented to show all revenues,  income and expenses  comprising
the results of operations  through January 13, 2005 as discontinued  operations.
All income and expenses from January 14, 2005 through June 30, 2005 are shown as
continuing  operations as they represent the results of operating the Company as
a public shell. Currently, the Company is actively searching for a new operating
business  to  acquire  or to enter  into a merger  transaction.  There can be no
assurances  that  an  operating  entity  will  be  acquired  or  that  a  merger
transaction will be consummated.

      Loss from continuing  operations.  The loss from continuing operations was
$99,786 for the year ended June 30, 2005 versus $208,879 for the year ended June
30, 2004. The Company sold its sole operating business on January 13, 2005. Loss
from continuing  operations  primarily reflects expenses incurred by the Company
to maintain  its  existence as a publicly  traded  entity  including  its public
reporting  obligations.  Such expenses include  insurance,  audit fees and legal
costs.  The loss  decreased  from  fiscal  year 2004 to fiscal  year 2005 as the
current year period includes such income and expense items for approximately 5.5
months from  January 14, 2005  through June 30, 2005 while the prior year period
includes such income and expense items for the full year. In addition, legal and
auditing expenses  applicable to the external reporting of a public company with
an operating  business are greater then those associated with that applicable to
a public  shell  company.  Continuing  operations  in fiscal  year 2005  include
accounting  services that were  contributed  by the Buyer  pursuant to the Asset
Purchase  Agreement.  The value of such  services,  which  were  performed  from
January  14,  2005  through  June 30,  2005,  was  $12,750.  Such value has been
recorded as an imputed charge on the statement of operations  with an equivalent
offset to additional  paid-in capital.  Subsequent to June 30, 2005,  additional
accounting  services  were  provided  by the Buyer to prepare  the June 30, 2005
financial statements and related year-end SEC filings.  Such amount approximates
$17,500.

      Loss  from  discontinued  operations.  Loss from  discontinued  operations
increased  from  $513,825  for the year ended June 30, 2004 to $712,555  for the
year ended June 30, 2005. The loss for the year ended June 30, 2005 includes the
loss on the sale of the ADR business as well as the  transaction  costs incurred
to affect the sale,  while the loss for the year  ended June 30,  2004 does not.
The  loss on the sale was  $419,768  and the  transaction  costs  incurred  were
$111,526,  totaling  $531,294.  The loss  from  operations  of the  discontinued
business  for the year ended June 30, 2005 was  $181,261 as compared to $513,825
for the year ended June 30,  2004.  The  decline in the loss was due to the fact
that the year ended June 30, 2005  includes  net  revenues  and net  expenses of
$1,808,400 and $2,042,265,  respectively,  for  approximately 6.5 months through
January  13,  2005,  the date of the sale,  while the year ended  June 30,  2004
includes  net  revenues  and  net  expenses  of   $3,759,372   and   $4,275,979,
respectively,  for the full twelve-month period. Additionally,  during the first
half  of the  2005  fiscal  year,  the  Company  had  been  exploring  strategic
alternatives to preserve shareholder value. In furthering that goal, the Company
had instituted cost cutting  measures with respect to salaries and related costs
(including a 15% salary  reduction for employees  earning more than $100,000 per
annum),  travel and  entertainment,  advertising,  auto expenses and legal fees.
Furthermore,  during the year ended  June 30,  2005,  the  Company  recorded  no
depreciation  expense as the Company had recorded a loss from  impairment on its
furniture  and  fixtures  at the  end of the  prior  fiscal  year.  The  loss on
impairment  amounted to $85,721 and was equal to the net book value of furniture
and fixtures as of June 30, 2004.

      Income  Taxes.  Tax benefits  resulting  from net losses  incurred for the
years  ended June 30,  2005 and 2004 were not  recognized  as we recorded a full
valuation  allowance  against the net operating  loss  carryforwards  during the
periods. As of June 30, 2005, we had net operating carryforwards for Federal tax
purposes of  approximately  $8,296,300  and net capital loss  carryforwards  for
Federal  tax  purposes  of  approximately  $815,600,  both with  full  valuation
allowances.


                                       9
<PAGE>

      Net Loss.  For the year ended June 30, 2005, we had a net loss of $812,341
as compared to a net loss of $722,704 for the year ended June 30, 2004. The loss
increased  primarily  due to the loss  incurred on the sale of the ADR business,
offset by lower  losses  from the  discontinued  operations  as such  operations
ceased on January 13, 2005 and as cost cutting  measures had been  instituted in
the current period while the Company was exploring strategic alternatives.

Liquidity and Capital Resources

      At June 30, 2005, the Company had a working capital surplus of $176,729 as
compared to $913,854 at June 30, 2004. The decrease in working capital  occurred
primarily as a result of the net loss,  which  includes the net loss on the sale
of the ADR  business on January  13,  2005.  Thereafter,  the Company has had no
operating business.

      Net cash used in  operating  activities  was  $455,817 for the fiscal year
ended June 30,  2005  versus  $749,416 in the prior  fiscal  year.  Cash used in
operating activities (including  discontinued  operations) principally decreased
due to a higher  net loss  offset by  decreases  in assets  and  liabilities  of
discontinued operations and changes in operating assets and liabilities.

      Net cash provided by investing  activities was $531,470 for the year ended
June 30, 2005 versus net cash used in investing  activities  of $318,501 for the
year  ended June 30,  2004.  The change in cash from  investing  activities  was
principally  due to the fact that during fiscal year 2005,  the Company sold its
marketable  securities and its certificates of deposit matured,  the proceeds of
which were invested primarily in money market funds.

      Net cash provided by financing  activities  during the year ended June 30,
2005 was $64,162 versus $0 during the year ended June 30, 2004. The increase was
due to the fact that the President/CEO,  Chief Financial Officer and Director of
Information Technology exercised stock options in January and April 2005.

      On October 18, 2004, the Company entered into a definitive  asset purchase
agreement  (the  "Asset  Purchase  Agreement")  with  National  Arbitration  and
Mediation,  Inc. (the "Buyer"),  a company  affiliated  with the Company's Chief
Executive Officer,  Roy Israel.  Pursuant to the Asset Purchase  Agreement,  the
Buyer acquired the assets of the Company's dispute resolution business (the "ADR
business").  In  consideration,   the  Buyer  assumed  all  current  and  future
liabilities and commitments of the ADR business.  Furthermore, Mr. Israel agreed
not to trigger his change-in-control  provision under his employment contract as
a  result  of the  Buyer  acquiring  the ADR  business.  If such  provision  was
triggered upon the sale or  liquidation  of the ADR business,  the Company would
have  owed  Mr.  Israel,  in  one  lump  sum,  approximately  $1,015,000,  which
represented  three times his then current base salary.  Additionally,  the Asset
Purchase  Agreement  provided  that a minimum of  $200,000 in cash was to remain
with the Company  before giving affect to  transaction  costs. A portion of this
cash has been utilized by the Company to pay for the costs  associated  with the
sale of the ADR  business  and the  balance  will be used for  continued  public
reporting  obligations  and  potentially to acquire a new operating  business or
enter into a merger transaction.

      On January 13, 2005, at the annual meeting of shareholders,  the Company's
shareholders  approved  the  transaction.  Immediately  thereafter,  the Company
completed  the sale of the ADR  business.  In  connection  therewith,  the Buyer
assumed the current and future  commitments  of the Company.  Specifically,  the
Company has been  released from its lease  agreements  for office space in Great
Neck  and  Brooklyn,  New  York and  from  its  employment  agreements  with its
President and Chief Financial  Officer.  Additionally,  the Buyer has guaranteed
the  payments  due on the  remainder of the  Company's  automobile  lease (which
approximated  $18,700 in total as of June 30,  2005).  The Buyer has assumed the
remaining payments due on the lease of a postage meter (which  approximated $900
in total as of June 30, 2005) until such time as the lessor  issues a release of
liability  to the  Company.  Also,  as of June 30,  2005,  the Company


                                       10
<PAGE>

remained  contingently  liable  for  additional  payables  and  other  items  of
approximately  $288,400  assumed by the Buyer but not paid as of that date.  See
Note 9.  Furthermore,  in accordance  with the Company's  stock option plan, all
outstanding unvested employee stock options vested as of the date of the sale of
the ADR business.  As the Company did not retain any employees subsequent to the
sale,  the former  employees  had three months from January 13, 2005 to exercise
such options in accordance  with the terms of the Company's stock option plan. A
total of 3,485,400  unexercised  employee stock options  expired at the close of
business on April 13, 2005.

      Pursuant to the Asset  Purchase  Agreement,  the cash that remained in the
Company was  increased to the extent of 60% of the excess of the  Remaining  Net
Capital  before  Commitments  (as defined) over $380,462 as of the closing date.
The Remaining Net Capital Before  Commitments  was calculated as the fair market
value of the assets  purchased  less the  following:  (a)  recorded  liabilities
assumed  and (b) $96,371  (that is,  $200,000 in cash to remain with the Company
less payments of $103,629  already made through  January 13, 2005 for certain of
the transaction costs). As of January 13, 2005, the Remaining Net Capital before
Commitments  was $643,728  based upon the Company's  financial  statements as of
that  date  without  adjustment  for  any  subsequent   realization  of  assets,
incurrence of any additional  liabilities or resolution of  contingencies by the
Buyer.  Therefore,  $263,266 represents the amount in excess of $380,462; 60% of
which, or $157,960 is additional cash to remain in the Company. Therefore, as of
January 13,  2005,  the total cash to be  retained  by the Company was  $254,331
before unpaid transaction costs, taxes, other payables and accrued  liabilities.
Although  the  liabilities  and assets other than cash were  transferred  to the
Buyer as of January 13, 2005, the cash balances have yet to be transferred as of
June 30, 2005. As a result,  the accompanying  balance sheet shows cash and cash
equivalents of $870,684. However, as of June 30, 2005, the Company has a balance
due to the Buyer in the amount of $620,798.  This amount  includes  interest due
from the Company to the Buyer on the unpaid  balance.  The interest rate charged
is equal to the interest rate earned on invested  balances.  The interest charge
for the year ended June 30,  2005 was $4,129 all of which is accrued  and unpaid
at June 30, 2005. A portion of the total balance due to the Buyer, in the amount
of $430,595,  was transferred to the Buyer in August 2005. The remaining balance
is expected to be transferred before October 31, 2005.

      The  costs  of the  transaction,  which  have  been  paid by the  Company,
included  legal,  accounting,  tax advice and the cost of the fairness  opinion.
During the year ended June 30,  2005,  the  Company  incurred  $111,526  of such
costs, which are included in the loss on sale of discontinued  operations on the
accompanying  statement of  operations.  At June 30, 2005, all such amounts have
been paid.

      Since the consummation of the sale, the Company has no operating business.
Currently,  the Company is actively  searching for a new  operating  business to
acquire or to enter into a merger  transaction.  There can be no assurances that
an  operating  entity  will be  acquired  or that a merger  transaction  will be
consummated.

      As a result of continued losses, the use of significant cash in operations
and the uncertainty as to the Company's  ability to effect a merger or a similar
transaction with the intent to acquire a different operating business,  there is
substantial  doubt about the Company's  ability to continue as a going  concern.
The Company's  independent  auditors have included a going concern  paragraph in
their report on the June 30, 2005 consolidated  financial  statements which have
been  prepared   assuming  the  Company  will  continue  as  a  going   concern.
Accordingly,  the accompanying  consolidated financial statements do not include
any  adjustments  that may result  should the Company be unable to continue as a
going concern.

Critical Accounting Policies

      The  Securities  and  Exchange  Commission  released  Financial  Reporting
Release No. 60, which requires all companies to include a discussion of critical
accounting  policies  and methods  used in the  preparation  of their  financial
statements.  The  significant  accounting  policies  and  methods  used  in  the


                                       11
<PAGE>

preparation of our consolidated  financial statements are discussed in Note 3 of
the Notes to Consolidated  Financial Statements.  We currently have one critical
accounting policy since we no longer have any operations. Such policy follows:

      Income  taxes and  valuation  allowance - We are  required to estimate our
actual  current  tax  expense  together  with  assessing  temporary  differences
resulting  from differing  treatment of items for tax and  accounting  purposes.
These differences result in deferred tax assets and liabilities,  which would be
included  within our  consolidated  balance sheet. We then assess the likelihood
that the deferred tax assets will be recovered  from future  taxable income and,
to the extent we believe  recovery  is not  likely,  a  valuation  allowance  is
recognized. We have recorded a 100% valuation allowance as of June 30, 2005.

Effect of Recently Issued Accounting Pronouncements

            In December 2004, the Financial  Accounting Standards Board ("FASB")
issued Statement of Financial Accounting Standard No. 123R,  Share-based Payment
("SFAS  No.123R").  SFAS No. 123R  establishes  standards for the accounting for
transactions in which an entity  exchanges its equity  instruments for goods and
services.  This statement  focuses  primarily on accounting for  transactions in
which an entity obtains employee services in share-based  payment  transactions.
SFAS No.  123R  requires  that the fair  value  of such  equity  instruments  be
recognized as an expense in the historical  financial statements as services are
performed.  Prior to SFAS No. 123R,  only certain pro forma  disclosures of fair
value were required. SFAS No. 123R is effective for public entities that file as
small business  issuers as of the beginning of the first annual reporting period
that  begins  after  December  15,  2005 and,  thus,  will be  effective  for us
beginning  with the first  quarter of fiscal  year 2007.  The  adoption  of this
statement is not expected to have a material impact on the financial  statements
of the Company.

            In December 2004, the FASB issued Statement of Financial  Accounting
Standard  No. 153,  Exchanges  of  Nonmonetary  Assets  ("SFAS No.  153").  This
statement  eliminates  the  exception  for  nonmonetary   exchanges  of  similar
productive  assets and  replaces it with a general  exception  for  exchanges of
nonmonetary assets that do not have commercial  substance.  SFAS No. 153 will be
effective for nonmonetary asset exchanges  occurring in fiscal periods beginning
after June 15, 2005.  We do not believe the adoption of SFAS No. 153 will have a
material impact on our financial statements.

                                  RISK FACTORS

            We face risks.  These risks  include those  described  below and may
include  additional  risks  of  which  we are not  currently  aware  or which we
currently  do not believe are  material.  If any of the events or  circumstances
described in the following  risks actually  occurs,  our financial  condition or
results of operations could be adversely affected. These risks should be read in
conjunction with the other information set forth in this report.

We do Not have an Operating Business and if the Company Acquires a New Business,
the Shareholders may Suffer Significant Dilution

      On January 13,  2005,  the Company sold its ADR  business.  The Company is
searching  for an  operating  entity  to  acquire  or to  enter  into  a  merger
transaction.  There  can be no  assurances  that  an  operating  entity  will be
acquired  or that a  merger  transaction  will be  consummated.  Also,  the cash
retained by the Company may not be  sufficient  to pay for the costs  associated
with  continued  public  reporting  obligations  and to acquire a new  operating
business or to enter into a merger transaction. In addition, if the Company does
acquire a new  operating  business  or enters into a merger  transaction,  it


                                       12
<PAGE>

is expected that such  transaction will be accomplished by the issuance of stock
of the Company, resulting in significant dilution.

We have  Recent,  and  Anticipate  Continuing,  Losses  and have  Going  Concern
Considerations

      We have incurred  operating losses during the last nine years through June
30, 2005. Going forward, if we do not acquire another operating business,  there
will be no future revenues being generated.  However,  the Company will continue
to incur costs for continued  public reporting  obligations.  Also, it is likely
that in order to  acquire a new  operating  business  or to enter  into a merger
transaction,  costs will be incurred.  Therefore,  the results of our operations
and our financial condition may be materially and adversely affected.

      The Company's independent auditors have included a going concern paragraph
in their report on the June 30, 2005  consolidated  financial  statements  which
have been prepared  assuming the Company will continue as a going concern.  As a
result of continued  losses,  the use of significant  cash in operations and the
uncertainty  as to the  Company's  ability  to  effect  a  merger  or a  similar
transaction with the intent to acquire a different operating business,  there is
substantial doubt about the Company's ability to continue as a going concern.

Our Current Stockholders Have the Ability to Exert Significant Control

      Our executive officers,  directors,  and their affiliates beneficially own
5,148,646 shares or approximately  51.85% of the common stock  outstanding based
on 9,929,056  shares of common stock  outstanding  as of September  22, 2005. Of
that number,  Mr. Israel  beneficially  owns 3,525,788  shares or  approximately
35.5% of the common stock. As a result, these stockholders acting in concert may
have  significant  influence  on  votes to  elect  or  remove  any or all of our
directors and to control  substantially all corporate activities in which we are
involved, including tender offers, mergers, proxy contests or other purchases of
common stock.

Our  Common  Stock is Traded on the NASD OTC  Electronic  Bulletin  Board and is
subject to the Penny Stock Rules

            Trading in our securities has been conducted in the over-the-counter
market in the NASD's OTC Electronic Bulletin Board. As a result, an investor may
find it more difficult to purchase, dispose of and obtain accurate quotations as
to the value of our securities.

            In addition,  as the trading price of our common stock has been less
than  $5.00 per  share,  trading  in our  common  stock is also  subject  to the
requirements of Rule 15g-9 under the Securities Exchange Act of 1934. Under that
rule,  broker/dealers who recommend such low-priced  securities to persons other
than established  customers and accredited  investors must satisfy special sales
practice   requirements,   including  (a)  a  requirement   that  they  make  an
individualized  written  suitability  determination  for the  purchaser  and (b)
receive the purchaser's written consent prior to the transaction.

            The  Securities  Enforcement  Remedies and Penny Stock Reform Act of
1990 also requires additional disclosure in connection with any trades involving
a stock defined as a penny stock  (generally,  any equity security not traded on
an exchange or quoted on The NASDAQ  SmallCap  Market that has a market price of
less than $5.00 per share),  including  the  delivery,  prior to any penny stock
transaction,  of a disclosure schedule explaining the penny stock market and the
risks associated


                                       13
<PAGE>

therewith.  Such  requirements  could severely limit the market liquidity of our
securities  and the  ability of  stockholders  to sell their  securities  in the
secondary market.

            On February 2, 2005,  the Company was  informed by the Boston  Stock
Exchange ("BSE") that the Company's listing thereon would be suspended as of the
close of trading that day. The  suspension  is due to the fact that the Company,
after the sale of its sole operating business,  was no longer in compliance with
the  BSE's   requirements   of  $1,000,000  in  total  assets  and  $500,000  in
shareholders'  equity.  The BSE agreed to provide a 90-day extension through May
2, 2005. As the Company was unable to regain compliance, the Company's stock was
delisted from the BSE on May 2, 2005.

ITEM 7. FINANCIAL STATEMENTS

      Information  in  response  to this  item  is set  forth  in the  Financial
Statements,  beginning  on Page F-1 of this  filing.  On December  22,  2003,  a
6-for-1 forward stock split of our outstanding common stock was effectuated. Our
shareholders  previously  approved this action in a meeting held on December 12,
2003.

      All  references  to number of shares and per share  data in the  financial
statements and accompanying  notes for all periods  presented have been restated
to reflect the forward stock split.

ITEM  8.  CHANGES  IN AND  DISAGREEMENTS  WITH  ACCOUNTANTS  ON  ACCOUNTING  AND
          FINANCIAL DISCLOSURE

            On June 28, 2005, Grant Thornton LLP ("Grant Thornton")  resigned as
the Company's  independent  registered  public accounting firm as the Company no
longer had an operating business.

            During the  Company's  two most recent fiscal years and through June
28,  2005,  there were no  disagreements  with Grant  Thornton  on any matter of
accounting principles or practices,  financial statement disclosure, or auditing
scope or procedure, which disagreements,  if not resolved to the satisfaction of
Grant Thornton,  would have caused it to make reference to the subject matter of
the  disagreements in connection with this report.  No reportable  events of the
type described in Item  304(a)(1)(iv)(B)  of Regulation S-B occurred  during the
two most recent fiscal years.

            Also effective June 28, 2005, BP Audit Group,  PLLC was appointed by
the Board of Directors as the new independent  registered public accounting firm
for the Company.

            During its two most recent  fiscal  years and through June 28, 2005,
the Company has not consulted  with BP Audit Group,  PLLC on any matter that (i)
involved the  application  of accounting  principles to a specific  completed or
contemplated transaction, or the type of audit opinion that might be rendered on
the Company's  financial  statements,  in each case where written or oral advice
was provided, that was an important factor considered by the Company in reaching
a decision as to the accounting,  auditing or financial  reporting issue or (ii)
was either the subject of a disagreement  or event, as that term is described in
Item 304(a)(1)(iv)(A) of Regulation S-B.

            Form 8K and Form 8K-A were filed by the Company on June 30, 2005 and
July 14, 2005, respectively, disclosing these changes in its auditors.

ITEM 8A. CONTROLS AND PROCEDURES

            Our  disclosure  controls and procedures are designed to ensure that
material  information  relating  to the  Company  are made  known  to our  Chief
Executive  Officer  ("CEO"),  Chief Financial


                                       14
<PAGE>

Officer  ("CFO") and others in the Company  involved in the  preparation of this
annual report,  by others within the Company.  Our CEO and CFO have reviewed our
disclosure  controls and  procedures  within 90 days prior to the filing of this
annual  report  and have  concluded  that  they  are  effective.  There  were no
significant  changes  in our  internal  controls  or other  factors  that  could
significantly affect our internal controls subsequent to the last date they were
reviewed by our CEO and CFO.


                                       15
<PAGE>

                   INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

                                                                        Page
                                                                        ----

Reports of Independent Registered Public Accounting Firms             F-2 - F-3

Consolidated Financial Statements

      Consolidated Balance Sheet                                         F-4

      Consolidated Statements of Operations                              F-5

      Consolidated Statement of Changes in Stockholders' Equity
         and Comprehensive Loss                                          F-6

      Consolidated Statements of Cash Flows                              F-7

      Notes to Consolidated Financial Statements                     F-8 - F- 22


                                      F-1
<PAGE>

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Board of Directors
    clickNsettle.com, Inc.

We have audited the accompanying consolidated balance sheet of clickNsettle.com,
Inc. and  Subsidiaries  (the  "Company")  as of June 30,  2005,  and the related
consolidated  statements  of  operations,  changes in  stockholders'  equity and
comprehensive  loss,  and cash flows 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 the standards of the Public  Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements  are free of material  misstatement.  The Company is not  required to
have,  nor were we engaged to perform,  an audit of its  internal  control  over
financial reporting.  Our audit included  consideration of internal control over
financial  reporting  as  a  basis  for  designing  audit  procedures  that  are
appropriate  in the  circumstances,  but not for the  purpose of  expressing  an
opinion on the  effectiveness  of the Company's  internal control over financial
reporting.  Accordingly,  we express  no such  opinion.  An audit also  includes
examining,  on a test basis,  evidence supporting the amounts and disclosures in
the  financial   statements,   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 consolidated  financial statements referred to above present
fairly,  in all  material  respects,  the  consolidated  financial  position  of
clickNsettle.com, Inc. and Subsidiaries as of June 30, 2005 and the consolidated
results of their operations and their  consolidated cash flows for the year then
ended in conformity with accounting  principles generally accepted in the United
States of America.

The accompanying  consolidated  financial statements have been prepared assuming
that the Company will continue as a going concern. As described in Note 2 to the
consolidated  financial  statements,   the  Company  has  suffered  losses  from
operations that raise substantial doubt about its ability to continue as a going
concern.  Management's plans in regard to these matters are described in Note 2.
The  accompanying   consolidated   financial   statements  do  not  include  any
adjustments that might result from the outcome of this uncertainty.


/s/ BP AUDIT GROUP, PLLC

Farmingdale, New York
August 30, 2005


                                      F-2
<PAGE>

             REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Board of Directors and Stockholders
    clickNsettle.com, Inc.

We have audited the accompanying consolidated statements of operations,  changes
in   stockholders'   equity   and   comprehensive   loss,   and  cash  flows  of
clickNsettle.com,  Inc. and Subsidiaries (the "Company") for the year ended June
30, 2004.  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  auditing  standards of the Public
Company Accounting Oversight Board (United States). Those standards require that
we plan and perform the audit to obtain  reasonable  assurance about whether the
financial  statements  are free of  material  misstatement.  The  Company is not
required  to have,  nor were we  engaged  to  perform  an audit of its  internal
control over financial reporting.  Our audit included  consideration of internal
control over financial  reporting as a basis for designing audit procedures that
are appropriate in the  circumstances,  but not for the purpose of expressing an
opinion on the  effectiveness  of the Company's  internal control over financial
reporting.  Accordingly,  we express  no such  opinion.  An audit also  includes
examining,  on a test basis,  evidence supporting the amounts and disclosures in
the  financial   statements,   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 consolidated results of operations and cash flows of
clickNsettle.com,  Inc. and  Subsidiaries  for the year ended June 30, 2004,  in
conformity with accounting principles generally accepted in the United States of
America.

The  accompanying  financial  statements  have been  prepared  assuming that the
Company  will  continue  as a  going  concern.  Historically,  the  Company  has
sustained significant losses and used substantial amounts of cash in operations.
The uncertainty as to the Company's ability to sustain profitable operations and
other factors  described in Note 2 raise  substantial  doubt about the Company's
ability to continue as a going  concern.  Management's  plans in regard to these
matters are  described in Note 2. The  financial  statements  do not include any
adjustments that might result from the outcome of this uncertainty.

As described in Note 2 to the consolidated financial statements, the Company has
reclassified  the 2004  consolidated  statements of operations and cash flows to
reflect the discontinued operations.


/s/ GRANT THORNTON LLP

Melville, New York
August 30, 2004, except for the reclassification of discontinued operations
described in Note 2, as to which the date is October 3, 2005


                                      F-3
<PAGE>

                     clickNsettle.com, Inc. and Subsidiaries

                           CONSOLIDATED BALANCE SHEET

                                  June 30, 2005

<TABLE>
<S>                                                                    <C>
                                     ASSETS

CURRENT ASSETS
    Cash and cash equivalents including $620,798 to be used to pay
       related party buyer                                             $   870,684
    Prepaid insurance and other current assets                              26,588
                                                                       -----------

           Total current assets                                        $   897,272
                                                                       ===========

                      LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES
    Accounts payable                                                   $    11,655
    Due to related party buyer of discontinued operations                  620,798
    Accrued expenses and other liabilities                                  88,090
                                                                       -----------
           Total current liabilities                                       720,543
                                                                       -----------

COMMITMENTS AND CONTINGENCIES (See Notes)

STOCKHOLDERS' EQUITY
    Preferred stock - $.001 par value; 5,000,000 shares authorized;
        0 shares issued
    Common stock - $.001 par value; 25,000,000 shares authorized;
        10,181,554 shares issued                                            10,182
    Additional paid-in capital                                          10,179,757
    Accumulated deficit                                                 (9,929,292)
    Common stock in treasury at cost, 252,498 shares                       (83,918)
                                                                       -----------

           Total stockholders' equity                                      176,729
                                                                       -----------

                                                                       $   897,272
                                                                       ===========
</TABLE>

The accompanying notes are an integral part of these statements.


                                      F-4
<PAGE>

                     clickNsettle.com, Inc. and Subsidiaries

                      CONSOLIDATED STATEMENTS OF OPERATIONS

                               Year ended June 30,

<TABLE>
<CAPTION>
                                                                            2005            2004*
                                                                        -----------      ----------
<S>                                                                     <C>              <C>
     Net revenues

     General and administrative expenses                                $   101,483         263,077

     Interest and investment income                                           1,697          54,198
                                                                        -----------      ----------

             Loss from continuing operations                                (99,786)       (208,879)
     Discontinued operations:
            Loss from operations of discontinued business, including
              loss on disposal of $531,294 in 2005                         (712,555)     $ (513,825)
                                                                        -----------      ----------

                                    NET LOSS                            $  (812,341)     $ (722,704)
                                                                        ===========      ==========

Net loss per common share- basic and diluted
             From continuing operations                                 $     (0.01)     $    (0.00)
             From discontinued operations                                     (0.08)          (0.09)
                                                                        -----------      ----------

                                    NET LOSS                            $     (0.09)     $    (0.09)
                                                                        ===========      ==========

Weighted-average shares outstanding - basic and diluted                   8,914,919       8,449,056
                                                                        ===========      ==========
</TABLE>

*Reclassified. See Note 2.

The accompanying notes are an integral part of these statements.


                                      F-5
<PAGE>

                     clickNsettle.com, Inc. and Subsidiaries

            CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
                             AND COMPREHENSIVE LOSS

                       Years ended June 30, 2005 and 2004

<TABLE>
<CAPTION>
                                                                                                                      Accumulated
                                                                                                                         other
                                                                  Common stock         Additional                    comprehensive
                                                             ----------------------     paid-in       Accumulated        income
                                                                Shares       Amount     capital         deficit          (loss)
                                                             -----------    -------   ------------    -----------    -------------
<S>                                                            <C>          <C>       <C>             <C>               <C>
Balances at June 30, 2003                                      1,450,259    $ 1,450   $ 10,111,577    $(8,394,247)      $43,960
Six-for-one forward stock split effectuated on
   December 22, 2003                                           7,251,295      7,252         (7,252)            --            --
                                                             -----------    -------   ------------    -----------       -------
                                                               8,701,554      8,702     10,104,325     (8,394,247)       43,960
Net loss                                                                                                 (722,704)
Change in unrealized gain on marketable securities                    --         --             --             --         7,462
                                                             -----------    -------   ------------    -----------       -------

Comprehensive loss


Balances at June 30, 2004                                      8,701,554      8,702     10,104,325     (9,116,951)       51,422

Exercise of stock options                                      1,480,000      1,480         62,682
Imputed contribution to capital for accounting services
   provided by Buyer                                                                        12,750
Net loss                                                                                                 (812,341)
Change in unrealized gain on marketable
   securities                                                         --         --             --             --       (51,422)
                                                             -----------    -------   ------------    -----------       -------

Comprehensive loss


Balances at June 30, 2005                                     10,181,554    $10,182   $ 10,179,757    $(9,929,292)
                                                              ==========    =======   ============    ===========

<CAPTION>
                                                              Common       Total
                                                             stock in   stockholders'   Comprehensive
                                                             treasury      equity           loss
                                                             --------   -------------   -------------
<S>                                                          <C>         <C>              <C>
Balances at June 30, 2003                                    $(83,918)   $1,678,822
Six-for-one forward stock split effectuated on
   December 22, 2003                                               --            --
                                                             --------    ----------
                                                              (83,918)    1,678,822
Net loss                                                                   (722,704)      $(722,704)
Change in unrealized gain on marketable securities                 --         7,462           7,462
                                                             --------    ----------       ---------

Comprehensive loss                                                                        $(715,242)
                                                                                          =========

Balances at June 30, 2004                                     (83,918)      963,580

Exercise of stock options                                                    64,162
Imputed contribution to capital for accounting services
   provided by Buyer                                                         12,750
Net loss                                                                   (812,341)      $(812,341)
Change in unrealized gain on marketable
   securities                                                      --       (51,422)        (51,422)
                                                             --------    ----------       ---------

Comprehensive loss                                                                        $(863,763)
                                                                                          =========

Balances at June 30, 2005                                    $(83,918)   $  176,729
                                                             ========    ==========
</TABLE>

The accompanying notes are an integral part of this statement.


                                      F-6
<PAGE>

                     clickNsettle.com, Inc. and Subsidiaries

                      CONSOLIDATED STATEMENTS OF CASH FLOWS

                               Year ended June 30,

<TABLE>
<CAPTION>
                                                                                        2005            2004*
                                                                                      ---------      -----------
<S>                                                                                   <C>            <C>
Cash flows from operating activities
    Net loss                                                                          $(812,341)     $  (722,704)
    Adjustments to reconcile net loss to net cash used in
        operating activities
            Gains on sales of marketable securities                                          --          (43,141)
            Increase (decrease) in assets and liabilities of discontinued               270,617           16,429
                   operations, net
            Imputed contribution to capital for accounting services provided             12,750
                   by Buyer
            Changes in operating assets and liabilities
                Increase in prepaid expenses and other current assets                   (26,588)
                Increase in accounts payable, accrued liabilities and other              99,745
                                                                                      ---------      -----------
                   liabilities

                  Net cash used in operating activities                                (455,817)        (749,416)
                                                                                      ---------      -----------

Cash flows from investing activities
    Purchases of marketable securities                                                       --       (1,486,432)
    Proceeds from sales of marketable securities and maturity of certificates of
    deposit                                                                                  --        1,180,757
    Net cash provided by (used in) investing activities of discontinued operations      531,470          (12,826)
                                                                                      ---------      -----------

                  Net cash provided by (used in) investing activities                   531,470         (318,501)
                                                                                      ---------      -----------
Cash flows from financing activities
    Proceeds from exercise of stock options                                              64,162
                                                                                      ---------
                  Net cash provided by financing activities                              64,162
                                                                                      ---------
                  NET INCREASE (DECREASE) IN CASH AND CASH
                      EQUIVALENTS                                                       139,815       (1,067,917)

Cash and cash equivalents at beginning of year                                          730,869        1,798,786
                                                                                      ---------      -----------

Cash and cash equivalents at end of year                                              $ 870,684      $   730,869
                                                                                      =========      ===========

Non-cash investing and financing activities

     Loss on sale of discontinued operations (See Note 2 for supplemental
     non-cash activities related to this transaction)                                 $ 419,768
</TABLE>

*Reclassified. See Note 2.

The accompanying notes are an integral part of these statements.


                                      F-7
<PAGE>

                     clickNsettle.com, Inc. and Subsidiaries

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                             June 30, 2005 and 2004

NOTE 1 - ORGANIZATION AND BASIS OF PRESENTATION

      clickNsettle.com,  Inc.  ("CLIK")  provided a broad  range of  Alternative
      Dispute   Resolution   ("ADR")   services,   primarily   arbitrations  and
      mediations, principally in the United States. CLIK incorporated on January
      12, 1994 and began  operations  on February 15, 1994. On October 31, 1994,
      National Arbitration & Mediation, Inc. ("NA&M"), which was primarily owned
      by  CLIK's  Chief  Executive  Officer,   was  acquired  by  and  became  a
      wholly-owned  subsidiary of CLIK. The  transaction  was accounted for as a
      transfer of assets between companies under common control, with the assets
      and  liabilities  of NA&M combined with those of CLIK at their  historical
      carrying  values.  NA&M  also  provided  a broad  range  of ADR  services,
      including  arbitrations  and  mediations.  NA&M began  operations in March
      1992.

      The accompanying  consolidated  financial  statements of clickNsettle.com,
      Inc.  and   Subsidiaries   include  the   accounts  of  its   wholly-owned
      subsidiaries, Michael Marketing LLC and clickNsettle.com LLC (collectively
      referred to herein as the  "Company").  The  Company  had  operated in one
      business  segment,  ADR. All  significant  intercompany  transactions  and
      balances were eliminated in consolidation.

      There is  substantial  doubt about the Company's  ability to continue as a
      going concern. See Note 2.

NOTE 2 - DISCONTINUED OPERATIONS AND GOING CONCERN

      In July  2004,  the  Board  of  Directors  decided  to  explore  strategic
      alternatives for the Company in an effort to protect shareholder value. As
      a result of the  numerous  accounting  scandals  in  recent  years and the
      passing  of the  Sarbanes-Oxley  Act of  2002 to  safeguard  shareholders,
      micro-cap companies such as the Company were faced with mounting legal and
      audit fees to meet the new compliance  requirements  needed to remain as a
      publicly  traded  entity.  In  addition  to  being  expensive  in terms of
      out-of-pocket  expenditures,  these  requirements were costly in that they
      are  time-consuming  and place a strain on the Company's limited personnel
      resources.

      On October 18, 2004, the Company entered into a definitive  asset purchase
      agreement (the "Asset Purchase  Agreement") with National  Arbitration and
      Mediation,  Inc. (the "Buyer"),  a company  affiliated  with the Company's
      Chief  Executive  Officer,  Roy  Israel.  Pursuant  to the Asset  Purchase
      Agreement,  the  Buyer  acquired  the  assets  of  the  Company's  dispute
      resolution  business (the "ADR  business").  In  consideration,  the Buyer
      assumed all  current and future  liabilities  and  commitments  of the ADR
      business.   Furthermore,   Mr.   Israel   agreed   not  to   trigger   his
      change-in-control  provision under his employment  contract as a result of
      the Buyer acquiring the ADR business. If such provision was triggered upon
      the sale or liquidation  of the ADR business,  the Company would have owed
      Mr. Israel, in one lump sum, approximately  $1,015,000,  which represented
      three times his then current base salary. Additionally, the Asset Purchase
      Agreement provided that a minimum of $200,000 in cash was to


                                      F-8
<PAGE>

                     clickNsettle.com, Inc. and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

                             June 30, 2005 and 2004

NOTE 2 (continued)

      remain with the Company  before  giving  affect to  transaction  costs.  A
      portion of this cash has been utilized by the Company to pay for the costs
      associated  with the sale of the ADR business and the balance will be used
      for continued  public  reporting  obligations and potentially to acquire a
      new operating business or enter into a merger transaction.

      The Board of Directors  received an opinion,  dated October 15, 2004, from
      an unrelated  party,  Capitalink,  L.C., that, as of that date, based upon
      and subject to the assumptions made, matters considered and limitations on
      its review as set forth in the  opinion,  the purchase  consideration  was
      fair,  from a  financial  point of  view,  to the  Company's  unaffiliated
      stockholders.

      On January 13, 2005, at the annual meeting of shareholders,  the Company's
      shareholders approved the transaction. Immediately thereafter, the Company
      completed the sale of the ADR business. In connection therewith, the Buyer
      assumed the current and future  commitments of the Company.  Specifically,
      the Company has been released from its lease  agreements  for office space
      in Great Neck and Brooklyn,  New York and from its  employment  agreements
      with its President and Chief Financial  Officer.  Additionally,  the Buyer
      has  guaranteed  the  payments  due on  the  remainder  of  the  Company's
      automobile  lease  (which  approximated  $18,700  in  total as of June 30,
      2005). The Buyer has assumed the remaining  payments due on the lease of a
      postage meter (which approximated $900 in total as of June 30, 2005) until
      such time as the lessor  issues a release  of  liability  to the  Company.
      Also, as of June 30, 2005, the Company  remained  contingently  liable for
      additional  payables and other items of approximately  $288,400 assumed by
      the  Buyer  but not  paid as of that  date.  See Note 9.  Furthermore,  in
      accordance with the Company's stock option plan, all outstanding  unvested
      employee  stock  options  vested  as of the  date  of the  sale of the ADR
      business.  As the Company did not retain any  employees  subsequent to the
      sale,  the former  employees  had three  months  from  January 13, 2005 to
      exercise such options in accordance  with the terms of the Company's stock
      option plan.  A total of  3,485,400  unexercised  employee  stock  options
      expired at the close of business on April 13, 2005.

      The  financial  statements  for the year  ended  June 30,  2004  have been
      reclassified to show the revenues, income and expenses relating to the ADR
      business as discontinued  operations.  The income and expenses relating to
      the  Company's  operations  of a public  shell  are  shown  as  continuing
      operations  for  the  fiscal  year  ended  June  30,  2004.The   financial
      statements  for the year ended June 30, 2005 have been  presented  to show
      all  revenues,  income and expenses  comprising  the results of operations
      through  January  13,  2005 as  discontinued  operations.  All  income and
      expenses  from  January  14,  2005  through  June 30,  2005  are  shown as
      continuing  operations  as they  represent  the results of  operating  the
      Company as a public shell.

      The loss from discontinued  operations,  including the loss on disposal of
      the  discontinued  operations,  for the years ended June 30, 2005 and 2004
      include the following:

                                                          2005          2004
                                                       ---------     ---------

      Loss from operations of discontinued business    ($181,261)    ($513,825)
                                                       ---------     ---------

      Loss from disposal:
          Loss on sale*                                ($419,768)           --
          Transaction costs of sale                     (111,526)           --
                                                       ---------     ---------
               Loss from disposal                      ($531,294)           --
                                                       ---------     ---------

        Loss from discontinued operations              ($712,555)    ($513,825)
                                                       =========     =========


                                      F-9
<PAGE>

                     clickNsettle.com, Inc. and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

                             June 30, 2005 and 2004

NOTE 2 (continued)

      *The loss on the sale was calculated as follows:

            Book value of liabilities assumed         $   667,438
            Book value of assets sold                  (1,087,206)
                                                      -----------
                      Loss on transaction             $   419,768
                                                      ===========

      The results from  discontinued  operations for the  approximately  six and
      one-half  months through  January 13, 2005 and for the year ended June 30,
      2004 follows:

<TABLE>
<CAPTION>
                                                                 From July 1, 2004          Year
                                                                      through               Ended
                                                                  January 13, 2005      June 30, 2004
                                                                 -----------------      -------------
<S>                                                                 <C>                  <C>
      Net revenues                                                  $ 1,808,400          $ 3,759,372
                                                                    -----------          -----------

      Operating costs and expenses
            Costs of services                                           395,754              860,325
            Sales and marketing expenses                                593,026            1,271,430
           General and administrative expenses                        1,037,600            2,058,503
           Loss on impairment of furniture and equipment                 15,885               85,721
                                                                    -----------          -----------
                                                                      2,042,265            4,275,979
                                                                    -----------          -----------
                           Loss from operations                        (233,865)            (516,607)
                                                                    -----------          -----------
      Other Income
           Realized gains on sales of marketable securities              45,701
           Interest and dividends                                         5,777                  100
           Other income                                                   1,126                2,682
                                                                    -----------          -----------
                                                                         52,604                2,782
                                                                    -----------          -----------

            Loss from operations of discontinued business           $  (181,261)         $  (513,825)
                                                                    ===========          ===========
</TABLE>

      Pursuant to the Asset  Purchase  Agreement,  as of January 13,  2005,  the
      total cash retained by the Company was $254,331 before unpaid  transaction
      costs,  taxes,  other  payables and accrued  liabilities.  This amount was
      determined based upon the Company's  financial  statements as of that date
      without adjustment for any subsequent realization of assets, incurrence of
      any additional  liabilities or resolution of  contingencies  by the Buyer.
      Although the  liabilities  and assets other than cash were  transferred to
      the  Buyer  as of  January  13,  2005,  the cash  balances  have yet to be
      transferred  as of June 30, 2005. As a result,  the  accompanying  balance
      sheet shows cash and cash equivalents of $870,684. However, as of June 30,
      2005,  the  Company  has a  balance  due to the  Buyer  in the  amount  of
      $620,798.  This amount includes interest due from the Company to the Buyer
      on the unpaid balance.  The interest rate charged is equal to the interest
      rate earned on invested  balances.  The interest charge for the year ended
      June 30,  2005 was $4,129  all of which is accrued  and unpaid at June 30,
      2005.  A portion of the total  balance due to the Buyer,  in the amount of
      $430,595, was transferred to the Buyer in August 2005.

      The  costs  of the  transaction,  which  have  been  paid by the  Company,
      included  legal,  accounting,  tax  advice  and the  cost of the  fairness
      opinion.  During  the year  ended  June 30,  2005,  the  Company  incurred


                                      F-10
<PAGE>

                     clickNsettle.com, Inc. and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

                             June 30, 2005 and 2004

NOTE 2 (continued)

      $111,526  of  such  costs,  which  are  included  in the  loss  on sale of
      discontinued  operations on the accompanying  statement of operations.  At
      June 30, 2005, all such amounts have been paid.

      Since the consummation of the sale, the Company has no operating business.
      Currently,  the Company is actively searching for a new operating business
      to acquire or to enter into a merger transaction.

      There can be no  assurances  that an operating  entity will be acquired or
      that a merger  transaction  will be consummated.  As a result of continued
      losses, the use of significant cash in operations,  limited cash and other
      resources  and the  uncertainty  as to the  Company's  ability to effect a
      merger or a similar  transaction  with the intent to  acquire a  different
      operating business, there is substantial doubt about the Company's ability
      to continue as a going concern. No adjustments have been made with respect
      to the  consolidated  financial  statements  to record the  results of the
      ultimate outcome of this uncertainty.

NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

      A summary of the significant  accounting and reporting policies applied on
      a consistent  basis which  conform with  accounting  principles  generally
      accepted in the United States of America follows:

      a.    Use of Estimates

            The   preparation  of  financial   statements  in  conformity   with
            accounting  principles  generally  accepted in the United  States of
            America  requires  management to make estimates and assumptions that
            affect the reported amounts of assets and liabilities and disclosure
            of contingent  assets and  liabilities  at the date of the financial
            statements  and the  revenues  and  expenses  during  the  reporting
            period. Actual results may differ from those estimates.

      b.    Revenue Recognition

            Since  January 13, 2005,  the Company has had no operating  business
            and did not  generate  revenues.  Prior to  January  13,  2005,  the
            Company operated an ADR business.  With respect thereto, the Company
            principally  derived its revenues from fees charged for arbitrations
            and   mediations.   Each  party  to  a  proceeding  was  charged  an
            administrative  fee,  which  generally  included  the first  hour of
            hearing/conference  time.  Additional  fees were billed based on the
            total  time  spent by the  hearing  officer.  Hearing  officer  time
            included,  but  was not  limited  to,  case  review  time,  decision
            preparation  time,  telephone or verbal  conference time, as well as
            actual  hearing/conference  time  expended.  The  Company  generally
            recognized  revenue when the  arbitration or mediation  occurred and
            was completed.  Fees received prior to such arbitration or mediation
            had been reflected as deferred revenue.

            In  the  event  an  arbitration  or  mediation  was  postponed,  the
            postponing   party  was  billed  an  adjournment  fee.  The  Company
            recognized adjournment fee revenue when the adjournment occurred.


                                      F-11
<PAGE>

                     clickNsettle.com, Inc. and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

                             June 30, 2005 and 2004

NOTE 3 (continued)

            In the event an  arbitration  or mediation  was settled prior to the
            hearing/conference  date,  each  party was billed a  settlement  fee
            which  was   recognized   when  the  Company  was  informed  of  the
            settlement.

            In the event an arbitration or mediation was cancelled  prior to the
            hearing/conference   date,   the   canceling   party  was  billed  a
            cancellation  fee which was recognized when the Company was informed
            of the cancellation.

      c.    Cash and Cash Equivalents

            Cash and cash  equivalents  consist of cash on hand and money market
            funds.  The  Company   considers  all  unrestricted   highly  liquid
            investments  purchased  with a maturity of less than three months to
            be cash equivalents.

      d.    Certificates of Deposit

            Certificates of deposit are recorded at cost.

      e.    Marketable Securities

            Investments  classified  as  marketable  securities  include  equity
            securities that are reported at their fair values.  Unrealized gains
            or losses on these  securities are reported as a separate  component
            of accumulated other comprehensive income (loss), net of related tax
            effects,  within  stockholders'  equity. The Company categorizes all
            equity securities as available-for-sale.

            Investment  income  consists of  interest,  dividends  and gains and
            losses  on  marketable   securities.   Interest  and  dividends  are
            recognized  when  earned.   Realized  gains  and  losses  on  sales,
            maturities or liquidation  of  investments in marketable  securities
            are determined on a specific  identification  basis.  Fair values of
            investments are based on quoted market prices.

      f.    Income Taxes

            The Company follows the asset and liability method of accounting for
            income  taxes by  applying  statutory  tax  rates in  effect  at the
            balance  sheet date to  differences  among the book and tax bases of
            assets and  liabilities.  The resulting  deferred tax liabilities or
            assets are adjusted to reflect changes in tax laws or rates by means
            of charges or credits to income tax expense.  A valuation  allowance
            is recognized to the extent a portion or all of a deferred tax asset
            may not be realizable.

      g.    Advertising Costs

            The cost of  advertising  is  expensed  when the  advertising  takes
            place. The Company incurred $79,013 and $169,184 for advertising and
            external   public   relations   costs  in  fiscal   2005  and  2004,
            respectively. Such amounts are charged to operations.


                                      F-12
<PAGE>

                     clickNsettle.com, Inc. and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

                             June 30, 2005 and 2004

NOTE 3 (continued)

      h.    Earnings (Loss) Per Common Share

            Basic  earnings  (loss) per share are based on the  weighted-average
            number  of  common  shares  outstanding  without   consideration  of
            potential common stock.  Diluted earnings (loss) per share are based
            on the weighted-average number of common and potential common shares
            outstanding.  The calculation takes into account the shares that may
            be issued upon exercise of stock  options and  warrants,  reduced by
            the shares that may be repurchased  with the funds received from the
            exercise, based on the average price during the period. Diluted loss
            per share is the same as basic loss per share,  as potential  common
            shares  of  921,490  and  6,255,288,  at June  30,  2005  and  2004,
            respectively,  would be  antidilutive  as the Company  incurred  net
            losses for the years ended June 30, 2005 and 2004.

      i.    Accounting for Stock Options

            In December 2002, the Financial  Accounting Standards Board ("FASB")
            issued  Statement  of  Financial   Accounting   Standards  No.  148,
            "Accounting   for   Stock-Based   Compensation   -  Transition   and
            Disclosure" ("SFAS No. 148"). SFAS No. 148 encourages,  but does not
            require,  companies  to  record  compensation  cost for  stock-based
            compensation plans at fair value. In addition, SFAS No. 148 provides
            alternative methods of transition for a voluntary change to the fair
            value-based   method  of   accounting   for   stock-based   employee
            compensation and amends the disclosure  requirements of Statement of
            Financial  Accounting Standards No. 123, "Accounting for Stock-Based
            Compensation" ("SFAS No. 123"). SFAS No. 148 requires disclosures in
            the summary of  significant  accounting  policies in both annual and
            interim  financial  statements  about the method of  accounting  for
            stock-based employee  compensation and the effect of the method used
            on reported results.

            The Company elected to adopt,  effective December 31, 2002, only the
            disclosure provisions of SFAS No. 148 and to continue to account for
            stock-based compensation using the intrinsic value method prescribed
            in Accounting Principles Board Opinion No. 25, "Accounting for Stock
            Issued to Employees"  and related  interpretations  (see Note 7(f)).
            Accordingly,  compensation  expense is not  recognized  for  options
            granted to employees  and to members of the board of directors  when
            such  options  are  granted to board  members in their  capacity  as
            directors.

            If the Company had elected to recognize  compensation  expense based
            upon the fair  value  at the  grant  date  for  options  granted  to
            employees and to members of the board of directors  consistent  with
            the  "fair  value"  methodology  prescribed  by SFAS  No.  123,  the
            Company's  net loss per share for the years  ended June 30, 2005 and
            2004 would be  increased to the pro forma  amounts  indicated in the
            table  which  follows.  The  fair  value  of each  option  grant  is
            estimated   on  the   date  of   grant   using   the   Black-Scholes
            option-pricing  model.  As of January 13, 2005, upon the sale of the
            Company's  operating  business,  in  accordance  with the  Company's
            Incentive  and  Nonqualified  Stock  Option Plan (the  "Plan"),  all
            outstanding  unvested employee stock options vested as of that date.
            As a result,  in the  following  table,  the pro forma  compensation
            expense for the year ended June 30, 2005  reflects the effect of the
            accelerated  vesting.  As the Company  did not retain any  employees
            subsequent to the sale,  the former  employees had three months from
            January 13, 2005 to exercise


                                      F-13
<PAGE>

                     clickNsettle.com, Inc. and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

                             June 30, 2005 and 2004

NOTE 3 (continued)

            such options in  accordance  with the terms of the  Company's  stock
            option plan. A total of 3,485,400 unexercised employee stock options
            expired at the close of business on April 13, 2005.

<TABLE>
<CAPTION>
                                                                                   2005          2004
                                                                                ---------     ---------
<S>                                                                             <C>           <C>
            Net loss
                As reported                                                     $(812,341)    $(722,704)
                Deduct: Total stock-based employee compensation
                           expense determined under fair value-based
                           method for all awards, net of related tax effects      (63,448)     (129,525)
                                                                                ---------     ---------

                Pro forma net loss                                              $(875,789)    $(852,229)
                                                                                =========     =========

            Net loss per common share
                Basic and diluted - as reported                                 $    (.09)    $    (.09)
                Basic and diluted - pro forma                                   $    (.10)    $    (.10)
</TABLE>

            No options were granted to consultants  for the years ended June 30,
            2005 and 2004.

      j.    Effect of Recently Issued Accounting Pronouncements

            In December 2004, the Financial  Accounting Standards Board ("FASB")
            issued  Statement  of  Financial   Accounting   Standard  No.  123R,
            Share-based  Payment  ("SFAS  No.123R").  SFAS No. 123R  establishes
            standards for the  accounting  for  transactions  in which an entity
            exchanges  its  equity  instruments  for  goods and  services.  This
            statement  focuses primarily on accounting for transactions in which
            an  entity  obtains   employee   services  in  share-based   payment
            transactions.  SFAS No.  123R  requires  that the fair value of such
            equity  instruments  be recognized  as an expense in the  historical
            financial  statements as services are  performed.  Prior to SFAS No.
            123R,  only  certain  pro  forma  disclosures  of  fair  value  were
            required.  SFAS No. 123R is effective for public  entities that file
            as  small  business  issuers  as of  the  beginning  of  the  annual
            reporting period that begins after December 15, 2005 and, thus, will
            be effective for us beginning  with the first quarter of fiscal year
            2007.  The  adoption  of this  statement  is not  expected to have a
            material  impact on the  financial  statements  of the Company.  See
            Accounting  for Stock Options above for  information  related to the
            pro forma  effects on our  reported  net loss and net loss per share
            when applying the fair value recognition  provisions of the previous
            SFAS No. 123 to stock-based employee compensation.

            In December 2004, the FASB issued Statement of Financial  Accounting
            Standard No. 153,  Exchanges of Nonmonetary Assets ("SFAS No. 153").
            This statement eliminates the exception for nonmonetary exchanges of
            similar  productive  assets and replaces it with a general exception
            for  exchanges  of  nonmonetary  assets that do not have  commercial
            substance.  SFAS No. 153 will be  effective  for  nonmonetary  asset
            exchanges occurring in fiscal periods beginning after June 15, 2005.
            We do not believe the  adoption of SFAS No. 153 will have a material
            impact on our financial statements.


                                      F-14
<PAGE>

                     clickNsettle.com, Inc. and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

                             June 30, 2005 and 2004

NOTE 4 - COMPREHENSIVE INCOME (LOSS)

      The components of comprehensive loss, net of tax effects, are as follows:

<TABLE>
<CAPTION>
                                                                    2005          2004
                                                                 ---------     ---------
<S>                                                              <C>           <C>
      Net loss                                                   $(812,341)    $(722,704)
                                                                 ---------     ---------

      Unrealized gain on marketable securities, net
          of tax effects of $0 in 2005 and 2004, respectively
             Unrealized gains arising in period                                   51,362
             Reclassification adjustment - loss included in
                 net loss                                          (51,422)      (43,900)
                                                                 ---------     ---------

                   Net unrealized gain                             (51,422)        7,462
                                                                 ---------     ---------

      Comprehensive loss                                         $(863,763)    $(715,242)
                                                                 =========     =========
</TABLE>

      Accumulated other  comprehensive  income represents the unrealized gain on
      marketable equity securities, net of tax effects of $0 in fiscal 2004.

NOTE 5 - MARKETABLE SECURITIES

      Proceeds on sales of marketable  securities  were $231,461 and  $1,180,757
      for the years ended June 30, 2005 and 2004,  respectively.  During  fiscal
      2005 and 2004, gross gains of $45,701 and $87,767, respectively, and gross
      losses of $0 and $44,626, respectively,  were realized on these sales. Net
      unrealized  gains on marketable  securities were $51,422 at June 30, 2004.
      During fiscal 2004, no income taxes were provided on the unrealized  gains
      due to the Company's net operating loss.

      Activities related to marketable securities in the accompanying statements
      of  operations  are reported in continuing  operations  for the year ended
      June 30, 2004 and in  discontinued  operations for the year ended June 30,
      2005. There were no such activities subsequent to January 13, 2005.


                                      F-15
<PAGE>

                     clickNsettle.com, Inc. and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

                             June 30, 2005 and 2004

NOTE 6 - INCOME TAXES

      Temporary  differences which give rise to deferred taxes are summarized as
      follows:

<TABLE>
<CAPTION>
                                                                      2005            2004
                                                                  -----------     -----------
<S>                                                               <C>             <C>
      Deferred tax assets
          Net operating,  capital and other loss carryforwards    $ 3,385,300     $ 3,029,000
          Provision for bad debts and impairment of
              furniture and equipment                                                 108,000
          Depreciation                                                                 40,000
          Deferred compensation                                                           300
          Other                                                        43,000          52,000
                                                                  -----------     -----------

                     Net deferred tax asset before
                         valuation allowance                        3,428,300       3,229,300

      Valuation allowance                                          (3,428,300)     (3,229,300)
                                                                  -----------     -----------

                     Net deferred tax asset                       $        --     $        --
                                                                  ===========     ===========
</TABLE>

      The  Company  has  recorded a full  valuation  allowance  to  reflect  the
      estimated amount of deferred tax assets which may not be realized.

      The Company's effective income tax rate differs from the statutory Federal
      income tax rate as a result of the following:

                                                            2005        2004
                                                         ---------   ---------

            Benefit at statutory rate                    $(201,815)  $(245,719)
            State and local benefit, net of Federal tax    (46,973)    (39,729)
            Nondeductible expenses and other - net          49,788      24,176
            Increase in the valuation allowance            199,000     261,272
                                                         ---------   ---------

                                                         $      --   $      --
                                                         =========   =========

      At June 30, 2005,  the Company had a net operating loss  carryforward  for
      Federal  income  tax  reporting   purposes   amounting  to   approximately
      $8,296,300, expiring from 2012 through 2025. Additionally, the Company has
      a net capital loss carryforward for Federal income tax reporting  purposes
      at June 30, 2005 of approximately $815,600 which expires from 2006 through
      2009. No income taxes were paid in the years ended June 30, 2005 and 2004.

      Under current tax law, the  utilization  of net  operating  losses will be
      restricted  if  significant  changes in the  Company's  ownership  were to
      occur.  In  addition,  their  use is  limited  to future  earnings  of the
      Company.


                                      F-16
<PAGE>

                     clickNsettle.com, Inc. and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

                             June 30, 2005 and 2004

NOTE 7 - STOCKHOLDERS' EQUITY

      a.    Capitalization

            On December 22, 2003, the Company  effected a 6-for-1  forward stock
            split.  All references to number of shares and per share data in the
            consolidated  financial  statements and accompanying notes have been
            restated.  The par value of the common stock  remained  unchanged at
            $.001 per share.

      b.    Preferred Stock

            The Company's board of directors has authorized  5,000,000 shares of
            $.001 par value preferred stock.

      c.    Series A Exchangeable Preferred Stock

            On February 15, 2000,  the Company issued 1,850 shares of its Series
            A Exchangeable  Preferred  Stock for an aggregate  purchase price of
            $1,850,000.  On April 5, 2001,  pursuant to approval by the board of
            directors,  the Company  redeemed  all of its Series A  Exchangeable
            Preferred  Stock at par value.  There were 1,800 shares  outstanding
            before the  redemption  and the Company  paid  $1,800,000  to redeem
            these shares.

            In connection  with the sale of the Series A Exchangeable  Preferred
            Stock,  the  Company  issued  warrants to the  preferred  holders to
            purchase an aggregate  of 112,500  shares of common stock at a price
            per share of $5.26. The warrants expired on August 15, 2005.

      d.    Private Placements

            On May 10, 2000, the Company entered into a Stock Purchase Agreement
            (the "Stock Purchase Agreement") with ISO Investment Holdings,  Inc.
            ("ISO"),  whereby the Company issued  1,285,140  common shares,  par
            value  $.001 per share,  to ISO at a price of  $3.1125  per share or
            $4,000,000. In connection therewith, the Company issued a warrant to
            ISO to purchase 360,000 common shares at an exercise price of $4.045
            per share,  exercisable  on or after May 10,  2000 and  expiring  on
            August 15,  2005.  The exercise  price and number of warrant  shares
            were subject to  adjustment in certain  circumstances  (stock split,
            dilutive issuances at less than market price, etc.).

            Pursuant  to the  Stock  Purchase  Agreement,  ISO has the  right to
            designate  one  individual  to  be  nominated  as a  member  of  the
            Company's   board  of   directors.   Additionally,   under   certain
            circumstances,  ISO is  entitled to  purchase,  upon the same terms,
            such number of  securities  to enable it to retain its fully diluted
            ownership  position in the Company that it held immediately prior to
            a  proposed  issuance,  sale or  exchange  of the  Company's  equity
            securities.

            Pursuant  to the  Stock  Purchase  Agreement,  ISO  has  one  demand
            registration right commencing May 10, 2002 and unlimited  incidental
            registration rights commencing immediately.  In the case of a demand
            for  registration  by ISO, the Company shall not be required to file
            any such registration


                                      F-17
<PAGE>

                     clickNsettle.com, Inc. and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

                             June 30, 2005 and 2004

NOTE 7 (continued)

            statement  unless the anticipated  aggregate gross offering price is
            at least $2,000,000. The registration rights granted under the Stock
            Purchase Agreement terminated on May 10, 2004.

      e.    Treasury Stock

            On March 12, 2004, the Company extended its March 1998 purchase plan
            (the  "Purchase  Plan"),  pursuant  to which the number of shares of
            common stock of the Company eligible for purchase under the Purchase
            Plan remained at an aggregate of 1,600,002 shares. The Purchase Plan
            expired on March 12, 2005.  There were no purchases during the years
            ended June 30, 2005 and 2004.  As of June 30, 2005,  the Company had
            purchased an aggregate of 252,498 shares under the Purchase Plan for
            a total cost of $83,918.

      f.    Stock Option Plan

            The Company has an Incentive and Nonqualified Stock Option Plan (the
            "Plan") for employees, officers, directors, consultants and advisors
            of the Company,  pursuant to which the Company may grant  options to
            purchase up to 6,000,000  shares of the Company's  common stock.  On
            December  12,  2003,  the Plan was amended to increase the number of
            shares of common stock available for grant to 7,500,000 shares.  The
            Plan is  administered  by the  board  of  directors,  which  has the
            authority  to  designate  the number of shares to be covered by each
            award and the vesting schedule of such award, among other terms. The
            option  period  during  which an option may be  exercised  shall not
            exceed  ten years from the date of grant and will be subject to such
            other  terms  and  conditions  of the  Plan.  Unless  the  board  of
            directors  provides  otherwise,   option  awards  terminate  when  a
            participant's  employment or services end, except that a participant
            may exercise an option to the extent that it was  exercisable on the
            date of termination for a period of time  thereafter.  The Plan will
            terminate automatically on April 1, 2006.

            Through  June 30,  2004,  directors  who were  not  officers  of the
            Company  received  annually,  on the last trading day of June, stock
            options  for 5,000  shares at an  exercise  price  equal to the fair
            market  value of the stock on the date of grant.  In December  2002,
            the Plan was  amended to increase  the number of options  granted to
            each non-employee  director from options to purchase 5,000 shares to
            options to purchase  15,000 shares.  No such options were granted on
            June 30, 2005.

            In accordance  with the Plan,  all unvested  employee  stock options
            vested as of the date of the sale of the ADR business on January 13,
            2005. As the Company did not retain any employees  subsequent to the
            sale, all employee options expired at the close of business on April
            13, 2005 unless they were exercised prior thereto.

            The Company's  stock option awards  granted to employees,  directors
            and consultants as of and for the years ended June 30, 2005 and 2004
            are summarized as follows:


                                      F-18
<PAGE>

                     clickNsettle.com, Inc. and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

                             June 30, 2005 and 2004

NOTE 7 (continued)

<TABLE>
<CAPTION>
                                                                   2005                     2004
                                                         -----------------------   -----------------------
                                                                       Weighted-                 Weighted-
                                                                        Average                   average
                                                                       exercise                  exercise
                                                           Shares        price       Shares       price
                                                         ----------    ---------   ----------    ---------
<S>                                                      <C>             <C>        <C>            <C>
      Outstanding at beginning of year                    5,762,776      $0.49      5,309,106      $0.56
      Awards granted                                             --         --        745,000      $0.11
      Awards exercised                                   (1,480,000)     $0.04             --         --
      Awards canceled/forfeited                          (3,833,802)     $0.55       (291,330)     $0.91
                                                         ----------                ----------

      Outstanding at end of year                            448,974      $1.42      5,762,776      $0.49
                                                         ==========                ==========

      Options exercisable at year-end                       448,974      $1.42      4,042,776      $0.66
                                                         ==========                ==========

      Weighted-average fair value of options granted
          during the year                                                   --                     $0.08
</TABLE>

      The following  information  applies to options outstanding and exercisable
      at June 30, 2005:

<TABLE>
<CAPTION>
                                           Outstanding                    Exercisable
                                ---------------------------------   ------------------------
                                             Weighted-
                                              average   Weighted-                  Weighted-
                                             remaining  average                    average
                                  Number      life in   exercise      Number       exercise
      Range of exercise prices  outstanding    years     price      exercisable     price
      ------------------------  -----------  ---------  ---------   -----------    ---------
<S>         <C>                   <C>          <C>        <C>         <C>            <C>
            $0.05 - $0.11         150,000      8.50       $0.08       150,000        $0.08
            $0.15 - $0.20          39,990      6.62       $0.18        39,990        $0.18
            $0.68 - $0.79          29,994      1.78       $0.70        29,994        $0.70
            $0.84 - $1.50          91,998      1.86       $1.03        91,998        $1.03
            $2.46 - $5.00         136,992      2.33       $3.66       136,992        $3.66
                                  -------                             -------

                                  448,974                             448,974
                                  =======                             =======
</TABLE>

      Stock  option  awards are granted at prices  equal to or above the closing
      bid price on the date of grant.  No options were  granted  during the year
      ended June 30,  2005.  For the year ended June 30, 2004,  230,000  options
      were  granted at 10% above the  closing  bid price of $0.14 on the date of
      grant.  During the year ended June 30, 2005, a total of 1,480,000  options
      were exercised by the Company's  President,  Chief  Financial  Officer and
      Director of Information  Technology at exercise prices ranging from $0.042
      to $0.046 per share. No options were exercised  during the year ended June
      30,  2004.  As of June 30,  2005,  5,499,026  shares  were  available  for
      granting of options under the Plan.

      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-average  assumptions  for  2004:  a  dividend  yield of  zero;  a
      risk-free  interest  rate of 2.82%;  an expected  term of 2.90  years;  an
      expected stock price volatility of 150.06%; and a forfeiture rate of 15%.


                                      F-19
<PAGE>

                     clickNsettle.com, Inc. and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

                             June 30, 2005 and 2004

NOTE 7 (continued)

      g.    Stock Warrants

            In  April  2000,  the  Company  entered  into  an  agreement  with a
            financial public relations firm whereby the Company granted warrants
            to  purchase  20,000  shares  of the  Company's  common  stock.  The
            warrants vested the earlier of six months from date of grant or upon
            termination of the agreement and were issued at a 25% premium to the
            market  price of the  common  stock as of the  date of  grant.  Once
            vested,  the warrants  were  immediately  exercisable.  The warrants
            expired April 11, 2005. In August 2000,  the Company  terminated the
            agreement  and no  additional  warrants  in  excess  of  the  20,000
            warrants were granted.

      h.    Common Stock Reserved

            At June 30, 2005,  the Company has  reserved for issuance  6,420,500
            shares of its common stock issuable  pursuant to the Company's stock
            option plan and the exercise of warrants  issued to consultants  and
            investors.  The  warrants,  which  comprise  472,500 of such  total,
            expired on August 15, 2005 without being exercised.

NOTE 8 - TRANSACTIONS WITH RELATED PARTIES

      On January  13,  2005,  the  Company  sold its ADR  business  to  National
      Arbitration  & Mediation,  Inc., a company  affiliated  with the Company's
      chief executive officer, Roy Israel. See Note 2.

      Pursuant to the Asset Purchase  Agreement,  the Buyer agreed to contribute
      accounting services to the Company after the sale of the ADR business. The
      value of services  performed  from  January 14, 2005 through June 30, 2005
      was $12,750  and a charge in that  amount has been  imputed to general and
      administrative  expenses in the accompanying  statement of operations with
      an equivalent offset to additional paid-in capital. Subsequent to June 30,
      2005, additional accounting services were provided by the Buyer to prepare
      the June 30, 2005 financial  statements and related  year-end SEC filings.
      Such amount approximates $17,500.

      Certain  members of the board of directors  performed  services as hearing
      officers  for the benefit of the  Company.  The related  expenditures  for
      these services for the years ended June 30, 2005 and 2004 were $25,176 and
      $38,050,  respectively.  Such  amounts  are  included  in  the  loss  from
      operations of the discontinued business.

NOTE 9 - COMMITMENTS AND CONTINGENCIES

      In  connection  with the sale of the ADR  business,  the Buyer assumed the
      current and future commitments of the Company.  Specifically,  the Company
      was released from its lease  agreements for office space in Great Neck and
      Brooklyn,  New York and from its employment  agreements with its President
      and Chief  Financial  Officer.  To the  extent  that the  Company  was not
      released  from its  commitments,  the  Buyer  has  guaranteed  any and all
      payments arising therefrom. As of June 30,


                                      F-20
<PAGE>

                     clickNsettle.com, Inc. and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

                             June 30, 2005 and 2004

NOTE 9 (continued)

            2005, the Company  remained  contingently  liable for  approximately
            $308,000 of payables  and  liabilities  assumed by the Buyer but not
            paid as of that date.

            Rent  expense  amounted to $112,716 and $211,429 for the years ended
            June 30,  2005 and 2004,  respectively,  net of  sublease  income of
            $40,046  and  $73,542  for the years  ended June 30,  2005 and 2004,
            respectively.  Such amounts are included in the loss from operations
            of the discontinued business.

NOTE 10 - EMPLOYEE RETIREMENT PLAN

      The Company had a 401(k) savings and  retirement  plan,  whereby  eligible
      employees  may  contribute  up to 98% of  their  salaries  subject  to the
      maximum allowed under the Internal Revenue Code. Commencing in March 2004,
      the  Company  contributed  25% of  each  employee's  contribution  up to a
      maximum  contribution  by the  employee  of 12%,  not to  exceed 3% of the
      employee's compensation. Such amounts, which are included in the loss from
      operations of the discontinued business, were $12,739 and $9,885 in fiscal
      years 2005 and 2004, respectively. This 401(k) savings and retirement plan
      was transferred to the Buyer as of January 13, 2005.

NOTE 11 - ESTIMATED FAIR VALUE OF FINANCIAL INSTRUMENTS

      At June 30, 2005, the Company's  financial  instruments  included cash and
      cash  equivalents,  accounts  payable,  accrued expenses and amount due to
      related party buyer.  The fair values of these cash and cash  equivalents,
      accounts  payable,  accrued expenses and amount due to related party buyer
      approximated  carrying  values because of the  short-term  nature of these
      instruments.

NOTE 12 - CREDIT CONCENTRATIONS

      Financial   instruments   that   potentially   subject   the   Company  to
      concentrations  of  credit  risk  consist  principally  of cash  and  cash
      equivalents.

      The  Company's  cash  and cash  equivalents  at North  Fork  Bank  consist
      primarily of demand deposits and a money market fund. As of June 30, 2005,
      such  amounts  on  deposit  were  within  the  Federally  insured  limits.
      Additionally, the Company maintains other money market accounts at Merrill
      Lynch,  Pierce,  Fenner & Smith Inc. and Ameritrade Inc. Such institutions
      insure these balances against their financial failure. Additionally,  SIPC
      (The Securities  Investor Protection  Corporation)  protects securities in
      the account up to $500,000.  As of June 30, 2005,  the Company's  cash and
      cash equivalents were within these insured limits.

      Through  January 13, 2005,  the Company sold its services  principally  to
      insurance  companies  and law firms.  In fiscal  years  2005 and 2004,  no
      customer exceeded 10% of net revenues.  The Company monitored  exposure to
      credit losses and maintained  allowances for anticipated losses considered
      necessary under the circumstances.


                                      F-21
<PAGE>

                     clickNsettle.com, Inc. and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

                             June 30, 2005 and 2004

NOTE 13 - BOSTON STOCK EXCHANGE LISTING

      On February 2, 2005, the Company was informed by the Boston Stock Exchange
      ("BSE") that the  Company's  listing  thereon would be suspended as of the
      close of trading  that day.  The  suspension  was due to the fact that the
      Company,  after the sale of its sole operating business,  was no longer in
      compliance  with the BSE's  requirements of $1,000,000 in total assets and
      $500,000  in  shareholders'  equity.  The BSE  agreed to  provide a 90-day
      extension  through  May 2,  2005.  As the  Company  was not able to regain
      compliance, the Company's stock was delisted from the BSE on May 2, 2005.

      The  Company's  common  stock  continues  to be quoted on the OTC Bulletin
      Board under the stock symbol CLIK.


                                      F-22
<PAGE>

                                    PART III

ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE
WITH SECTION 16(a) OF THE EXCHANGE ACT

      The  following  table  sets  forth the names,  ages and  positions  of all
directors and executive officers.  A summary of the background and experience of
each of these individuals is set forth after the table.

Name                           Age     Position
----                           ---     --------

Roy Israel                     45      Chief Executive Officer, President and
                                       Chairman of the Board of Directors

Kenneth G. Geraghty            54      Director

Randy Gerstenblatt             46      Director

Corey J. Gottlieb              42      Director

Willem F. Specht               44      Director

Patricia Giuliani-Rheaume      47      Vice President, Chief Financial Officer
                                       and Treasurer

            ROY ISRAEL has been our  Chairman of the Board of  Directors,  Chief
Executive  Officer,  and President  since  February 1994.  Immediately  prior to
holding such  positions,  Mr.  Israel was  President,  Director,  and founder of
National Arbitration & Mediation,  Inc. ("NA&M"),  a wholly-owned  subsidiary of
the Company until it merged with the Company in June 1999.

            PATRICIA  GIULIANI-RHEAUME  has  been  our  Vice  President,   Chief
Financial  Officer,  and Treasurer  since  February 1997.  Immediately  prior to
holding  such  positions,  Ms.  Giuliani-Rheaume  was  the  Vice  President  and
Corporate  Controller  of The Robert Plan  Corporation,  an  insurance  services
company,  since April 1991.  Prior thereto,  Ms.  Giuliani-Rheaume  was an audit
senior manager with KPMG Peat Marwick LLP. Ms.  Giuliani-Rheaume  is a certified
public  accountant  and a member of the AICPA and the New York State  Society of
CPAs.

            WILLEM F. SPECHT was our Director of  Information  Technology  since
May 1998 and previously held the position of Systems Analyst with us since April
1995.  Upon sale of the Company's sole  operating  business on January 13, 2005,
Mr. Specht resigned his position as Director of Information  Technology from the
Company as the Company no longer retained any employees. Mr. Specht continues to
serve as a member of the Board of Directors of the Company.

            KENNETH G. GERAGHTY has been the Executive  Vice President and Chief
Financial Officer of Insurance  Services Office,  Inc. since February 2000. From
March 1999 through  January 2000, Mr.  Geraghty was the Executive Vice President
and Chief  Administrative  Officer of Dycom  Industries,  Inc., a company  which
provides    engineering,    construction    and    maintenance    services    to
telecommunications  providers.  Prior to holding this position, Mr. Geraghty was
the Senior  Vice  President,  Strategic  Finance of  Massachusetts  Mutual  Life
Insurance  Company  from  December  1997 through  March 1999.  From October 1995
through May 1997, Mr.  Geraghty was the Vice  President,  Change  Management for
American  Express  Company.  Mr.  Geraghty  holds BS and MS degrees in  Chemical
Engineering and a MBA degree in Finance.


                                       16
<PAGE>

            RANDY  GERSTENBLATT  is  currently  the  Senior  Vice  President  of
ESPN/ABC  Sports Customer  Marketing and Sales.  Prior to holding this position,
Mr.  Gerstenblatt  was Vice President of ESPN Customer  Marketing and Sales from
January 2000 through  October 2000. From November 1997 through January 2000, Mr.
Gerstenblatt  was the Director of Integrated  Sales and Marketing at ESPN.  From
1991 through  November  1997,  he was the Director of Group Station Sales at ABC
National Television Sales.

            COREY J. GOTTLIEB is the  President/CEO  of Targeted  Media Partners
LTD, a sales,  marketing and  consulting  company for  established  and start-up
ventures in the commercial  advertising sector. From January 1998 through August
2001,  Mr.  Gottlieb was the Senior Vice  President & National Sales Manager for
Transportation  Displays Incorporated (TDI). Prior to holding this position, Mr.
Gottlieb  was Senior Vice  President  & National  Sales  Manager  for  Paramount
Pictures  Domestic  Television  Group for seven years and the first  Senior Vice
President  of Sales for the UPN  television  network.  Mr.  Gottlieb  holds a BS
degree in Finance and a minor in Computer Science.

Audit Committee

      Prior to January  13,  2005,  the  Company  maintained  a  separate  Audit
Committee.  Since  January 13, 2005,  when the Company  sold its sole  operating
business,  the entire Board is responsible for this function. As such, under the
definition of "independence" as set forth in NASDAQ Marketplace Rule 4350, we do
not have a fully independent audit committee.  As our common stock is traded via
the  Over-the-Counter  Bulletin  Board and is not  listed on or with a  national
securities exchange or national securities  association,  we are not required to
have a fully independent audit committee.  In addition,  Kenneth G. Geraghty has
been  designated as our audit  committee  financial  expert.  Mr. Geraghty is an
executive  officer of a company  that is an  affiliate of a holder of 13% of our
stock and, as such,  Mr.  Geraghty may be considered an affiliate of our company
and thereby deemed not to be  independent.  Mr.  Geraghty  disclaims  beneficial
ownership of such stock and the Board of Directors  concluded  that they believe
Mr. Geraghty to be independent.

Compliance with Section 16(a) of the Exchange Act

      Based  solely on our review of copies of Forms 3 and 4 received  by us and
representations  from  certain  reporting  persons,  we believe  that during the
fiscal year ended June 30, 2005, there was compliance with Section 16 (a) filing
requirements applicable to our officers and directors.

Code of Ethics

      We have adopted a Code of Ethics for our Senior Financial Officers.  Also,
prior to January 14, 2005,  a Code of Business  Conduct and Ethics was in effect
for our  employees.  We shall,  without  charge,  provide  to any  person,  upon
request,  a copy of our Code of Ethics for our Senior  Financial  Officers.  All
such requests should be mailed to:  clickNsettle.com,  Inc., 990 Stewart Avenue,
First Floor, Garden City, NY 11530, attention:  Patricia Giuliani-Rheaume,  VP &
CFO.

      As required by SEC rules,  we will report  within five  business  days the
nature of any change or waiver of our Code of Ethics  for our  Senior  Financial
Officers.

Nominating Committee

      As we are not  required  by  federal  securities  laws to have a  separate
Nominating Committee, the entire Board is responsible for this function.

Compensation Committee

      We previously established a Compensation  Committee,  the members of which
met the criteria for "independence"  according to the standard set by NASDAQ for
such committee  members.  However,  since January 13, 2005 when the Company sold
its sole operating business,  there are no employees of the Company.  Therefore,
there  is no  longer  a need  for a  Compensation  Committee  and  it  has  been
disbanded.


                                       17
<PAGE>

ITEM 10. EXECUTIVE COMPENSATION AND OTHER INFORMATION

            The  following  summarizes  the aggregate  compensation  paid during
fiscal year 2005 to our Chief Executive  Officer and any officer who earned more
than  $100,000 in salary and bonus (the  "Named  Persons").  Such  compensation,
which represents the aggregate  compensation paid for fiscal year 2005, reflects
amounts for the period from July 1, 2004 through  January 13, 2005,  the date of
the sale of the Company's sole operating business. No executive compensation was
paid by the Company for periods  subsequent  to January 13,  2005.  The value of
services  contributed  by Mr. Israel  subsequent to January 13, 2005 and through
June 30, 2005 has  neither  been  quantified  nor imputed as it was deemed to be
immaterial. See Note 8 to the consolidated financial statements.

                           Summary Compensation Table

<TABLE>
<CAPTION>
                                         Annual                          Long Term
                                      Compensation                     Compensation
                                                                       ------------

                                                                        Securities
Name and                                                 Other Annual   Underlying      All Other
Principal Position      Year      Salary       Bonus     Compensation   Options (1)   Compensation
------------------      ----     --------     -------    ------------   -----------   ------------
<S>                     <C>      <C>          <C>         <C>            <C>           <C>
Roy Israel,
President, Chief        2005     $157,530          --     $16,480(2)            --     $14,110(3)
Executive Officer
and Chairman of the     2004     $321,631          --     $22,907(2)       230,000     $14,110(3)
Board
                        2003     $302,288     $90,330     $22,196(2)     1,200,000     $14,110(3)
</TABLE>

(1)   Such option  amounts  have been  restated  to reflect the 1-for-3  reverse
      stock  split of our common  stock  effectuated  on August 20, 2001 and the
      6-for-1  forward stock split of our common stock  effectuated  on December
      22, 2003.

(2)   Such amount represents tax gross ups for Mr. Israel for medical,  life and
      disability payments.

(3)   Such amount represents premium payments on life insurance policies for the
      named executive officer.

                       Options Granted in Last Fiscal Year

      There were no options  granted to officers of the Company  during the year
ended June 30, 2005.

    Aggregated Option Exercises in Last Fiscal Year and FY-End Option Values

<TABLE>
<CAPTION>
(a)                                   (b)              (c)               (d)             (e)
                                                                          Number of
                                                                          Securities      Value of
                                                                          Underlying      Unexercised
                                                                          Unexercised     In-the-Money
                                                                          Options at      Options at
                                                                          FY-End (#)      FY-End ($)
                                      Shares Acquired  Value Realized     Exercisable/    Exercisable/
Name                                  On Exercise (#)  ($)                Unexercisable   Unexercisable
-------------------------------------------------------------------------------------------------------
<S>                                   <C>              <C>                     <C>             <C>
Roy Israel,
President, Chief Executive Officer    1,200,000        43,504(1)               0/0             0/0
and Chairman of the Board
</TABLE>

      (1)   Mr.  Israel  exercised  600,000  options on January  12,  2005 at an
            exercise  price of  $0.0417  when the market  price was  $0.06.  Mr.
            Israel  also  exercised  600,000  options  on April  13,  2005 at an
            exercise price of $0.0458 when the market price was $0.10.

Employment Contracts and Termination of Employment
and Change In Control Arrangements

      Roy Israel.  In March 2002, we entered into an employment  agreement  with
Mr. Israel  effective as of July 1, 2002. Such employment  agreement was assumed
by the  Buyer as part of the  purchase  of the ADR  business  from the  Company.
Furthermore,  Mr. Israel agreed not to trigger his  change-in-control  provision
under  his  employment  contract  as a result  of the  Buyer  acquiring  the ADR
business.  If such  provision was triggered  upon the sale or liquidation of the
ADR  business,  the  Company  would  have  owed Mr.  Israel,  in one  lump  sum,
approximately


                                       18
<PAGE>

$1,015,000, which represented three times his then current base salary. Although
Mr.  Israel  remains as CEO and Chairman of the Board,  he is not  receiving any
compensation  from the Company for these services from January 14, 2005 forward.
Moreover,  as of January 14, 2005,  the Company has no liability  for current or
future payments to Mr. Israel with respect to this contract.

            Prior  to the  sale of the ADR  business,  Mr.  Israel's  employment
agreement  provided for a current  annual base salary of  $338,316.  Previously,
however,  in an effort to  reduce  expenses,  as of July 14,  2004,  Mr.  Israel
voluntarily reduced his salary by 15% to $287,569.  Accordingly,  for the period
from July 1, 2004 through  January 13, 2005, Mr.  Israel's  salary was $157,530.
Pursuant to the  agreement,  he was  entitled to an annual base salary  increase
equal to the greater of 6% or an amount which reflects the increase in the Urban
Consumer Price Index,  and an annual bonus based on the achievement of specified
criteria with respect to revenues,  cash flow and/or pretax income  (loss).  For
the fiscal year ended June 30,  2005,  Mr.  Israel did not  receive a bonus.  In
addition, the agreement provided, among other things, that we shall pay up to an
aggregate  of $15,000  per policy  year for a key man life  insurance  policy in
favor of us for  $1,000,000  and life  insurance  in favor of the  estate of Mr.
Israel,  a disability  policy for coverage of 60% of his base salary (before the
voluntary  reduction),  and an  allowance  for  leasing an  automobile  (up to a
monthly lease payment of $1,000.) If this  agreement was  terminated  other than
for cause or as a result of a change in duties, Mr. Israel was to be entitled to
the greater of (i) his then current base salary (before the voluntary reduction)
and severance bonus for the remainder of the employment term or (ii) three times
his then current base salary  (before the  voluntary  reduction)  and  severance
bonus,  to be paid over a one-year  period.  The severance  bonus is 115% of the
bonus  paid for the full  fiscal  year  immediately  prior  to  termination.  In
addition,  all unvested  options shall  immediately  vest. If this agreement was
terminated due to a change in control, Mr. Israel was to be entitled to the same
severance  package as  previously  described but to be paid in one lump sum. Mr.
Israel's  employment  agreement  with us was to  expire  June 30,  2007 and then
automatically  renew for one-year terms unless terminated at least 90 days prior
to the end of an employment  term by either party.  If we were to give notice of
non-renewal of the agreement or we did not enter into a new employment agreement
with Mr. Israel,  he was entitled to receive one year of his base salary (before
the voluntary reduction) plus the severance bonus amount which was to be paid to
Mr. Israel during the one-year period  following the end of the employment term.
The agreement also contained a one-year  non-competition clause if the agreement
was terminated or upon expiration.  In the event of a breach of the agreement by
us, the non-competition clause was to be null and void.

      Patricia Giuliani-Rheaume. Ms. Giuliani-Rheaume's employment agreement was
assumed  by the  Buyer  as part of the  purchase  of the ADR  business  from the
Company.  Although Ms. Giuliani-Rheaume remains as CFO, she is not receiving any
compensation  from the Company for these services from January 14, 2005 forward.
The value of her accounting and reporting services, $10,500, for the period from
January 14, 2005  through  June 30,  2005,  has been  imputed as a charge to the
statement  of  operations,  with an  equivalent  offset  to  additional  paid-in
capital.  Moreover,  as of January 14, 2005,  the Company has no  liability  for
current  or  future  payments  to Ms.  Giuliani-Rheaume  with  respect  to  this
contract.

            Prior to the sale of the ADR business,  pursuant to this  agreement,
her annual base salary was  $155,000 and she was eligible for an annual bonus at
the discretion of the Company's Chief Executive Officer, subject to the approval
of the Compensation Committee of the Board of Directors. Previously, however, as
of July  14,  2004,  in an  effort  to  reduce  expenses,  Ms.  Giuliani-Rheaume
voluntarily reduced her salary by 15% to $131,750.  Accordingly,  her salary for
the period from July 1, 2004 through January 13, 2005 approximated  $72,257.  In
addition, the agreement provided,  among other things, that we were to pay for a
life insurance policy of $250,000,  full family health  insurance,  and a $400 a
month  allowance  for leasing an  automobile.  The  agreement  also  contained a
one-year  non-competition  clause if the agreement was terminated for any reason
or  upon  expiration.  If  the  agreement  was  terminated  without  cause,  Ms.
Giuliani-Rheaume was to receive a payment of severance of an amount equal to six
months of the base salary in effect at such time.

      Willem Specht. Upon the sale of the ADR business,  Mr. Specht resigned his
position as Director of Information  Technology  from the Company as the Company
no longer  retained any employees  and accepted a position  with the Buyer.  Mr.
Specht continues to serve as a member of the Board of Directors of the Company.

            Prior to the sale of the ADR  business,  pursuant to his  employment
agreement, Mr. Specht's salary and bonus were set at the discretion of the Chief
Executive Officer,  subject to the approval of the Compensation


                                       19
<PAGE>

Committee of the Board of Directors.  Mr.  Specht's  annual base salary had been
$131,250.  Previously,  however,  as of July 14,  2004,  in an  effort to reduce
expenses,  Mr.  Specht  voluntarily  reduced  his  salary  by 15%  to  $111,563.
Accordingly,  his salary for the period  from July 1, 2004  through  January 13,
2005 approximated $61,183. Mr. Specht's employment was terminable at will.


                                       20
<PAGE>

ITEM 11: Security Ownership of Certain Beneficial Owners and Management

      The  following  table  sets  forth,  as of  September  12,  2005,  certain
information with respect to the beneficial ownership of each class of our voting
equity securities by each director and director nominee, beneficial owners of 5%
or more of our  common  stock,  the  Named  Persons  and all our  directors  and
executive officers as a group:(1)

<TABLE>
<CAPTION>
                                                        Amount and Nature of
Name of Beneficial Owner(2)                            Beneficial Ownership(3)  Percent of Total
-----------------------------------------------        ----------------------   ----------------
<S>                                                           <C>                     <C>
Roy Israel(4)                                                 3,525,788               35.5%
President, Chief Executive Officer and Chairman
of the Board

Willem F. Specht                                                140,000                1.4%
Director

Corey J. Gottlieb (5)                                            54,998                  *
Director

Randy Gerstenblatt (6)                                           35,396                  *
Director

Kenneth G. Geraghty (7)                                       1,352,464               13.6%
Director

Patricia A. Giuliani-Rheaume                                    140,000                1.4%
Vice President, Chief Financial Officer and
Treasurer

ISO Investment Holdings, Inc.                                 1,322,464               13.3%

M. D. Sabbah (8)                                                585,000                5.9%

All Officers and Directors as a Group
(6 persons) (4)(5)(6)(7)                                      5,248,646               52.3%
</TABLE>

----------
*Less than one percent (1%).

(1)   Applicable  percentage  of ownership  is based on 9,929,056  shares of our
      common stock, which were outstanding on September 12, 2005, plus, for each
      person  or group,  any  securities  that  person or group has the right to
      acquire within sixty (60) days pursuant to options and warrants.

(2)   The address for each beneficial owner is c/o  clickNsettle.com,  Inc., 990
      Stewart Avenue, First Floor, Garden City, New York 11530.

(3)   Beneficial  ownership has been  determined  in accordance  with Rule 13d-3
      under  the  Securities  Exchange  Act of  1934,  as  amended,  and  unless
      otherwise indicated,  represents shares for which the beneficial owner has
      sole voting and investment power. The percentage of class is calculated in
      accordance with Rule 13d-3.

(4)   Includes123,806  shares owned by Mr.  Israel's  wife,  Carla  Israel,  the
      Secretary of our company.  Mr. Israel disclaims beneficial ownership as to
      such securities.

(5)   Includes options to purchase 35,000 shares of our common stock,  which are
      vested and exercisable.

(6)   Includes options to purchase 35,000 shares of our common stock,  which are
      vested and exercisable.

(7)   Includes options to purchase 30,000 shares of our common stock,  which are
      vested  and  exercisable.  The common  shares are owned by ISO  Investment
      Holdings,  Inc.  Mr.  Geraghty  disclaims  beneficial  ownership  of these
      securities.

(8)   This  information  was taken from an  Amendment  to Form 13D filed by M.D.
      Sabbah on June 2, 2000.  We are not aware of any  subsequent  filings with
      the SEC after this date.


                                       21
<PAGE>

ITEM 12: CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

      Since our inception, there have not been any material transactions between
us and any of our officers and directors, except as set forth herein. On January
13, 2005, the Company sold its ADR business to National Arbitration & Mediation,
Inc., a company affiliated with the Company's CEO, Roy Israel. See Note 2 to the
Financial Statements for additional details. Furthermore,  pursuant to the Asset
Purchase  Agreement,  the Buyer  agreed to provide  accounting  services  to the
Company after the sale of the ADR business.  The value of the services performed
from  January  14,  2005  through  June 30,  2005 was $12,750 and is included in
general and administrative expenses in the accompanying statement of operations.
Subsequent to June 30, 2005,  additional accounting services were contributed by
the Buyer to prepare the June 30, 2005 financial statements and related year-end
SEC filings.  Such amount  approximates  $17,500.  Additionally,  certain former
members of the board of directors performed services as hearing officers through
their  respective law firms for the benefit of the Company  through  January 13,
2005. The related  expenditures  for these services for the years ended June 30,
2005 and 2004 were $25,176 and $38,050, respectively.  Carla Israel, who was our
Sales Supervisor through January 13, 2005 and still remains the Secretary of the
Company,  is the wife of Roy Israel, our CEO. Her compensation from July 1, 2004
through  January  13,  2005 was  $37,869.  She  also  received  a car  allowance
(including insurance) of $4,282 from July 1, 2004 through January 13, 2005. Upon
the sale of the ADR  business,  Ms. Israel no longer  received any  compensation
from the Company.


                                       22
<PAGE>

ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K

A. Exhibits

Exhibit
Number                            Description of Document
-------                           -----------------------

3.1(a)      Certificate of Incorporation, as amended (1)

3.1(d)      Certificate of Amendment of Certificate of Incorporation (5)

3.1(e)      Certificate of Amendment of Certificate of Incorporation, as amended
            (6)

3.1(f)      Certificate  of Amendment of Certificate  of  Incorporation,  second
            amendment (7)

3.2         By-Laws of the Company, as amended (2)

4.1         Stock Purchase Agreement dated May 10, 2000 (4)

4.2         Stock Purchase Warrant dated May 10, 2000 (4)

4.3         Exchangeable Preferred Stock and Warrants Purchase Agreement (3)

10.1        1996 Stock Option Plan, amended and restated (2)

10.16       Asset Purchase Agreement dated October 18, 2004(8)

23.1        Consent of BP Audit Group, PLLC**

23.2        Consent of Grant Thornton LLC**

31.1        Rule 13a-14(a)/15d-14(a) Certification (CEO)**

31.2        Rule 13a-14(a)/15d-14(a) Certification (CFO)**

32.1        Section 1350 Certification (CEO)**

32.2        Section 1350 Certification (CFO)**

----------

(1)         Incorporated  herein in its entirety by  reference to the  Company's
            Registration  Statement on Form SB-2,  Registration No. 333-9493, as
            filed with the Securities and Exchange Commission on August 2, 1996.

(2)         Incorporated  herein in its entirety by  reference to the  Company's
            1998 Annual Report on Form 10-KSB.

(3)         Incorporated  herein in its entirety by  reference to the  Company's
            SB-2 filed on March 28, 2000.

(4)         Incorporated  herein in its entirety by  reference to the  Company's
            Form 8-K filed on May 17, 2000.

(5)         Incorporated  herein in its entirety by  reference to the  Company's
            Form 8-K filed on June 21, 2000.

(6)         Incorporated  herein in its entirety by  reference to the  Company's
            2001 Annual Report on Form 10-KSB.

(7)         Incorporated  herein in its entirety by  reference to the  Company's
            2004 Annual Report on Form 10-KSB.

(8)         Incorporated  herein in its entirety by  reference to the  Company's
            Form 8-K filed on October 20, 2004.

**          Filed herewith.


                                       23
<PAGE>

B. Reports on Form 8-K:

Form 8K and Form 8K-A were filed by the  Company  on June 30,  2005 and July 14,
2005, respectively, disclosing a change in the Company's auditors. See Item 8.

ITEM 14: PRINCIPAL ACCOUNTANT FEES AND SERVICES

      The  following  table  sets  forth the fees  billed or to be billed by our
independent auditors, BP Audit Group, PLLC and Grant Thornton LLP, respectively,
for the fiscal years ended June 30, 2005 and 2004:

                                                               FY 2005   FY 2004
                                                               -------   -------
Audit fees and quarterly reviews                               $38,000   $73,860
Financial information systems design and implementation fees
All other fees:
         Tax return preparation                                 10,000    19,640
         Audit related services
         Non-audit related services
                                                               -----------------
              Total Fees                                       $48,000   $93,500
                                                               -----------------

      The  Board of  Directors  considered  and  determined  that  the  services
performed for "financial information systems design and implementation fees" and
"all  other  fees" are  compatible  with  maintaining  the  independence  of the
independent auditors.

Policy  on Audit  Committee  Pre-Approval  of Audit  and  Permissable  Non-Audit
Services of Independent Auditor

      Prior to the sale of the ADR  business  on  January  13,  2005,  the Audit
Committee was responsible for  pre-approving  all audit and permitted  non-audit
services to be performed  for us by our  independent  auditor as outlined in its
Audit Committee charter. Prior to engagement of the independent auditor for each
year's  audit,  management  or the  independent  auditor  submits  to the  Audit
Committee for approval an aggregate  request of services expected to be rendered
during  the year,  which  the Audit  Committee  pre-approves.  During  the year,
circumstances  may arise when it may become  necessary to engage the independent
auditor for additional  services not contemplated in the original  pre-approval.
In those  circumstances,  the Audit  Committee  requires  specific  pre-approval
before engaging the independent  auditor.  The Audit Committee does not delegate
to  management  its  responsibility  to  pre-approve  services  performed by the
independent  auditor.  Subsequent  to the sale of the Company's  sole  operating
business on January 13, 2005, the entire Board of Directors has been responsible
for the Audit Committee functions.


                                       24
<PAGE>

                                   SIGNATURES

In  accordance  with  Section 13 or 15(d) of the Exchange  Act,  the  registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.

                                        clickNsettle.com, Inc.


Date: October 3, 2005                   By: /s/ Roy Israel
                                            -----------------------------
                                            Roy Israel, Chairman of the
                                            Board, CEO and President

In  accordance  with the Exchange  Act, this report has been signed below by the
following  persons on behalf of the  registrant and in the capacities and on the
dates indicated.


Date: October 3, 2005                   By: /s/ Roy Israel
                                            -----------------------------
                                            Roy Israel, Chairman of the
                                            Board, CEO and President


Date: October 3, 2005                   By: /s/ Patricia Giuliani-Rheaume
                                            -----------------------------
                                            Patricia Giuliani-Rheaume, Vice
                                            President, Chief Financial Officer
                                            and Treasurer


Date: October 3, 2005                   By: /s/ Kenneth G. Geraghty
                                            -----------------------------
                                            Kenneth G. Geraghty, Director


Date: October 3, 2005                   By: /s/ Randy Gerstenblatt
                                            -----------------------------
                                            Randy Gerstenblatt, Director


Date: October 3, 2005                   By: /s/ Corey J. Gottlieb
                                            -----------------------------
                                            Corey J. Gottlieb, Director


Date: October 3, 2005                   By: /s/ Willem F. Specht
                                            -----------------------------
                                            Willem F. Specht, Director


                                       25