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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, 2006

|_|   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. $0

The aggregate  market value of the voting stock held by  non-affiliates  per the
closing stock price of September 7, 2006 is $334,629.


As of September 7, 2006, 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 our operations as a publicly reporting shell company and
prospective  merger  candidates  which may include such  matters as  anticipated
financial  performance,   business  prospects,  future  operations  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,  the name of the Company was changed from
NAM Corporation to clickNsettle.com, Inc.

      On January 13, 2005, the Company sold the assets of its dispute resolution
business (the "ADR business") to National  Arbitration and Mediation,  Inc. (the
"Buyer"),  a company owned by the Company's Chief Executive Officer, Roy Israel.
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. In consideration,  the Buyer assumed all current and future  liabilities
and commitments of the ADR business. 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.
Additionally,  the Buyer  guaranteed  the payments  due on the  remainder of the
Company's automobile lease and paid all the remaining payments on the lease of a
postage meter. The Company remained  contingently  liable for payables and other
obligations assumed by the Buyer of approximately  $127,100 as of June 30, 2006.
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. Accordingly, the only options outstanding subsequent to April
13, 2005 are those that had been granted to directors,  consultants and advisors
of which 448,974 options are outstanding as of June 30, 2006.

      The loss from discontinued  operations,  including the loss on disposal of
the discontinued operations, for the year ended June 30, 2005 follows:

                                       3
<PAGE>

                                      2005

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

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)
                                                                    ===========

*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 follow:

                                                               From July 1, 2004
                                                                     through
                                                                January 13, 2005
                                                                ----------------
Net Revenues                                                         $ 1,808,400
                                                                    -----------

Operating costs and expenses
         Costs of services                                              395,754
         Sales and marketing expenses                                   593,026
         General and administrative expenses                          1,037,600
         Loss on impairment of furniture and equipment                   15,885
                                                                    -----------
                                                                      2,042,265
                                                                    -----------
                   Loss from operations                                (233,865)
                                                                    -----------
Other Income
         Investment income                                               45,701
         Interest and dividends                                           5,777
         Other income                                                     1,126
                                                                    -----------
                                                                         52,604
                                                                    -----------
                    Loss from operations of discontinued business   $  (181,261)
                                                                    ===========

      As part of the  agreement of sale,  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
was 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 were  transferred  thereafter.  As such, the
Company  incurred  interest  expense on the unpaid  balance.  The interest  rate
charged was equal to the interest rate earned on invested balances. The interest
charges  for the years  ended  June 30,  2006 and 2005 was  $3,250  and  $4,129,
respectively.  The cash balances were fully  transferred from the Company to the
Buyer during the period from August 2005 through February 2006.

                                       4
<PAGE>

      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 for fiscal year 2005.

      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.  The Company's controlling shareholders have begun negotiations for
the sale of their  stock to a  third-party  entity.  If such sale  takes  place,
control of the Company will shift to such entity. There can be no assurance that
such a sale will take place.

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 the 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.
                                       5
<PAGE>

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

      As  part  of the  agreement  of  sale,  the  Buyer  agreed  to  contribute
accounting services to the Company after the sale of the ADR business. Since the
sale of the ADR business,  the Company has 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.

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.

                                       6
<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." The  following  table sets forth the range of
high and low closing sales prices (based on transaction  data as reported by the
NASD's  Over-the-Counter  Bulletin  Board) for each  fiscal  quarter  during the
periods indicated.

                                                                   Common Stock
                                                                  High       Low
                                                                  --------------
Fiscal Year 2006
First quarter (07/1/05-9/30/05)                               $   0.15  $   0.13
Second quarter                                                    0.15      0.08
(10/01/05-12/31/05)
Third quarter                                                     0.10      0.07
(01/01/06-03/31/06)
Fourth quarter                                                    0.09      0.07
(04/01/06-06/30/06)

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

      On  September  7, 2006,  the  closing bid price for our common  stock,  as
reported by the Over-the-Counter Bulletin Board, was $0.066.

      As of August 16, 2006, there were  approximately 441 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.

Year Ended June 30, 2006 Compared to Year Ended June 30, 2005

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, 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.  The Company's controlling shareholders have begun negotiations for
the sale of their  stock to a  third-party  entity.  If such sale  takes  place,
control of the Company will shift to such entity. There can be no assurance that
such a sale will take place.

                                       7
<PAGE>

      Loss from continuing  operations.  The loss from continuing operations was
$92,804 for the year ended June 30, 2006 versus  $99,786 for the year ended June
30, 2005. 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 and accounting
fees and legal costs.  The loss  decreased  from fiscal year 2005 to fiscal year
2006  despite  the fact that the prior  year  period  includes  such  income and
expense  items for  approximately  5.5 months from January 14, 2005 through June
30, 2005 while the current year period  includes  such income and expense  items
for the full year.  The  decline  is,  for the most  part,  due to the fact that
legal, auditing and insurance 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.  Offsetting  this  decrease is an
increase in accounting services that were contributed by the Buyer (with no cash
outlay by the  Company)  pursuant to the  agreement  for the purchase of the ADR
business.  The value of such services increased from $12,750 for the 2005 fiscal
year to $33,000 for the 2006 fiscal year.  The increase was due to the fact that
the prior year period covered  services  performed from January 14, 2005 through
June 30, 2005,  while the current year period covered  services  performed for a
full year from  July 1,  2005  through  June 30,  2006.  Such  values  have been
recorded as imputed  charges on the  statements  of operations  with  equivalent
offsets to additional paid-in capital.

      Loss  from  discontinued  operations.  Loss from  discontinued  operations
decreased  from  $712,555  for the year ended  June 30,  2005 to $0 for the year
ended June 30, 2006. 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.  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. Such amount
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.

      Income  Taxes.  Tax benefits  resulting  from net losses  incurred for the
years  ended June 30,  2006 and 2005 were not  recognized  as we recorded a full
valuation  allowance  against the net operating  loss  carryforwards  during the
periods. As of June 30, 2006, we had net operating carryforwards for Federal tax
purposes of  approximately  $8,984,800  and net capital loss  carryforwards  for
Federal  tax  purposes  of  approximately  $284,293,  both with  full  valuation
allowances.  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.

      Net Loss.  For the year ended June 30, 2006,  we had a net loss of $92,804
as compared to a net loss of $812,341 for the year ended June 30, 2005. The loss
decreased  primarily due to the  non-recurring  loss of $712,555 incurred in the
prior year from discontinued operations of the ADR business as well as the lower
cost structure for a publicly reporting shell as opposed to a publicly reporting
operating business.

Liquidity and Capital Resources

      At June 30, 2006, the Company had a working capital surplus of $116,925 as
compared to $176,729 at June 30, 2005. The decrease in working capital  occurred
primarily as a result of the net loss.  Since January 13, 2005,  the Company has
no operating business.

                                       8
<PAGE>

      Net cash used in  operating  activities  was  $741,464 for the fiscal year
ended June 30, 2006 versus  $455,817 for the year ended June 30, 2005. Cash used
in continuing  operations  increased by $727,585 principally because the Company
paid all of the amount due the Buyer of the ADR business  during the period from
August 2005 through  February  2006.  Offsetting  this increase was a decline of
$441,938 as such amount was used by discontinued operations in the prior year.

      Net cash provided by investing  activities  was $0 for the year ended June
30, 2006 versus  $531,470  for the year ended June 30,  2005.  There was no cash
provided by investing  activities from continuing  operations in both years. The
change  in  cash  from  investing  activities  of  discontinued  operations  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,
2006 was $0 versus $64,162 during the year ended June 30, 2005. During the prior
year, the  President/CEO,  Chief  Financial  Officer and Director of Information
Technology exercised stock options in January and April 2005.

      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.  The Company's controlling shareholders have begun negotiations for
the sale of their  stock to a  third-party  entity.  If such sale  takes  place,
control of the Company will shift to such entity. There can be no assurance that
such a sale will take place.

      As a  result  of  continued  losses,  the  use of  cash  to  operate  as a
publicly-held  shell company and the uncertainty as to the Company's  ability to
effect a merger  or a  similar  transaction  with the  intent  to  acquire a new
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,  2006  and  2005
consolidated  financial statements which have been prepared assuming the Company
will  continue  as a going  concern.  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
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, 2006.

                                       9
<PAGE>

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.

                                  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 will 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
acquires a new  operating  business or enters into a merger  transaction,  it is
expected that such  transaction will be accomplished by the issuance of stock of
the Company, resulting in significant dilution.

We have No Revenues but we Continue to have Costs and Expenses and we have Going
Concern Considerations

      There  has not been any  revenue  since  January  13,  2005.  If we do not
acquire  another  operating  business,  no future  revenues  will be  generated.
Moreover,  the  Company  will  continue  to incur  costs  for  continued  public
reporting  obligations.  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, 2006 and 2005 consolidated  financial statements
which have been prepared  assuming the Company will continue as a going concern.
As a result  of  continued  losses,  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.

                                       10
<PAGE>

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 7, 2006. 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  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.

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.

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

      Not applicable.

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  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.

                                       11

<PAGE>



                   INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

                                                                            Page
                                                                            ----

Report of Independent Registered Public Accounting Firm                      F-2

Consolidated Financial Statements

     Consolidated Balance Sheet                                              F-3

     Consolidated Statements of Operations                                   F-4

     Consolidated Statements of Changes in Stockholders' Equity
        and Comprehensive Loss                                               F-5

     Consolidated Statements of Cash Flows                                   F-6

     Notes to Consolidated Financial Statements                       F-7 - F-18

                                      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,  2006 and the  related
consolidated  statements  of  operations,  changes in  stockholders'  equity and
comprehensive  loss, and cash flows for each of the years in the two-year period
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 audits.

We conducted our audits in accordance  with the standards of the Public  Company
Accounting Oversight Board (United States). Those standards require that we plan
and  perform  the  audits 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 audits 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  audits  provide  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, 2006 and the consolidated
results of their  operations and their  consolidated  cash flows for each of the
years in the two-year period 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 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, there is substantial doubt about the Company's ability
to  continue  as  a  going  concern.  The  accompanying  consolidated  financial
statements do not include any adjustments  that might result from the outcome of
this uncertainty.

/s/ BP AUDIT GROUP, PLLC

Farmingdale, New York
August 17, 2006


                                      F-2
<PAGE>


                     clickNsettle.com, Inc. and Subsidiaries

                           CONSOLIDATED BALANCE SHEET

                                    June 30,

<TABLE>
<CAPTION>
                                 ASSETS                             2006
                                                                    ----
<S>                                                             <C>
CURRENT ASSETS
    Cash and cash equivalents                                   $    129,220
    Prepaid insurance and other current assets                        12,278
                                                                ------------

         Total current assets                                   $    141,498
                                                                ============


                  LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES
    Accounts payable                                            $      8,073
    Accrued expenses and other liabilities                            16,500
                                                                ------------
         Total current liabilities                                    24,573
                                                                ------------
</TABLE>

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                                        10,212,757
Accumulated deficit                                              (10,022,096)
Common stock in treasury at cost, 252,498 shares                     (83,918)
                                                                ------------

     Total stockholders' equity                                      116,925
                                                                ------------

                                                                $    141,498
                                                                ============
The accompanying notes are an integral part of these statements.

                                      F-3
<PAGE>


                                      clickNsettle.com, Inc. and Subsidiaries

                                       CONSOLIDATED STATEMENTS OF OPERATIONS

                                                Year ended June 30,

<TABLE>
<CAPTION>
                                                                        2006           2005
                                                                     -----------    -----------
<S>                                                                  <C>            <C>
     Net revenues                                                             --             --

    General and administrative expenses                              $    98,176    $   101,483

     Interest and investment income                                        5,372          1,697
                                                                     -----------    -----------

             Loss from continuing operations                             (92,804)       (99,786)
     Discontinued operations:
          Loss from operations of discontinued business, including
            loss on disposal of $531,294 in 2005                                       (712,555)
                                                                     -----------    -----------

                                  NET LOSS                           $   (92,804)   $  (812,341)
                                                                     ===========    ===========

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

                                    NET LOSS                         $     (0.01)   $     (0.09)
                                                                     ===========    ===========

Weighted-average shares outstanding - basic and diluted                9,929,056      8,914,919
                                                                     ===========    ===========
</TABLE>

The accompanying notes are an integral part of these statements.

                                      F-4
<PAGE>


                     clickNsettle.com, Inc. and Subsidiaries

           CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
                             AND COMPREHENSIVE LOSS

                        Year ended June 30, 2006 and 2005
<TABLE>
<CAPTION>
                                                                                                              Accumulated
                                                                                                                other
                                                              Common stock         Additional                comprehensive  Common
                                                              ------------           paid-in    Accumulated      income     stock in
                                                          Shares      Amount         capital      deficit        (loss)     treasury
                                                          ------      ------         -------      -------        ------     --------

<S>                                                       <C>         <C>       <C>            <C>             <C>         <C>
Balances at July 1, 2004                                  8,701,554   $ 8,702   $ 10,104,325   $ (9,116,951)   $  51,422   $(83,918)
Exercise of stock options                                 1,480,000     1,480         62,682
Imputed contribution of capital for accounting services                               12,750
     provided by Buyer
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)                (83,918)


Imputed contribution to capital for accounting services
       provided by Buyer                                                              33,000
Net loss                                                                                            (92,804)
                                                          =========   =======   ============   =============      ======   =========


Comprehensive loss

Balances at June 30, 2006                                10,181,554   $10,182   $ 10,212,757   $(10,022,096)               $(83,918)
                                                          =========   =======   ============   =============               =========


                                                             Total
                                                          stockholders'  Comprehensive
                                                             equity          loss
                                                          ------------    ---------
Balances at July 1, 2004                                  $    963,580
Exercise of stock options                                       64,162
Imputed contribution of capital for accounting services         12,750
     provided by Buyer
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                                      176,729


Imputed contribution to capital for accounting services
     provided by Buyer                                          33,000
Net loss                                                       (92,804)   $ (92,804)
                                                          ------------    ---------

Comprehensive loss                                                        $ (92,804)
                                                                          =========
Balances at June 30, 2006                                 $    116,925
                                                          ============
</TABLE>



The accompanying notes are an integral part of this statement.


                                      F-5
<PAGE>


                                      clickNsettle.com, Inc. and Subsidiaries

                                       CONSOLIDATED STATEMENTS OF CASH FLOWS

                                                Year ended June 30,

<TABLE>
<CAPTION>
                                                                                                  2006         2005*
                                                                                                ---------    ---------

Cash flows from operating activities
<S>                                                                                             <C>          <C>
    Net loss                                                                                    $ (92,804)   $(812,341)
    Loss from discontinued operations                                                                          712,555
                                                                                                ---------    ---------
    Loss from continuing operations                                                               (92,804)     (99,786)
    Adjustments to reconcile net loss from continuing
      operations to net cash used in operating activities
          Imputed contribution to capital for accounting services provided
                  by Buyer                                                                         33,000       12,750
          Changes in operating assets and liabilities
               Decrease (increase) in prepaid expenses and other current assets                    14,310      (26,588)
              Decrease in amount due to related party buyer of discontinued operations           (620,798)
              (Decrease) increase in accounts payable, accrued expenses and other liabilities
                                                                                                  (75,172)      99,745
                                                                                                ---------    ---------

                Net cash used in continuing operations                                           (741,464)     (13,879)
                Net cash used in discontinued operations                                                      (441,938)
                                                                                                ---------    ---------
                Net cash used in operating activities                                            (741,464)    (455,817)
                                                                                                ---------    ---------

Cash flows from investing activities
    Net cash provided by investing activities of discontinued operations                                       531,470
                                                                                                             ---------

                Net cash provided by investing activities                                                      531,470
                                                                                                             ---------
Cash flows from financing activities
    Proceeds from exercise of stock options                                                                     64,162
                                                                                                             ---------
                Net cash provided by financing activities                                                       64,162
                                                                                                             ---------
                NET (DECREASE) INCREASE IN CASH AND CASH
                   EQUIVALENTS                                                                   (741,464)     139,815

Cash and cash equivalents at beginning of year                                                    870,684      730,869
                                                                                                ---------    ---------

Cash and cash equivalents at end of year                                                        $ 129,220    $ 870,684
                                                                                                =========    =========

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-6
<PAGE>


                     clickNsettle.com, Inc. and Subsidiaries

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                             June 30, 2006 and 2005


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.

      Prior  to  January  1,  2006,  the  accompanying   consolidated  financial
      statements  of  clickNsettle.com,   Inc.  and  Subsidiaries  included  the
      accounts  of its  wholly-owned  subsidiaries,  Michael  Marketing  LLC and
      clickNsettle.com  LLC (collectively  referred to herein as the "Company").
      As  of  January  1,  2006,  the  Company  transferred   ownership  of  its
      wholly-owned  subsidiary,  Michael Marketing LLC, to National  Arbitration
      and Mediation,  Inc. (see Note 2 below).  Such subsidiary was inactive and
      had no operations  or net assets.  Previously,  the Company  dissolved its
      other  wholly-owned  subsidiary,  clickNsettle.com  LLC,  as it  was  also
      inactive  and had no  operations  or net assets.  As such,  the Company no
      longer owns any subsidiaries.

      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

      On January 13, 2005, the Company sold the assets of its dispute resolution
      business (the "ADR business") to National Arbitration and Mediation,  Inc.
      (the "Buyer"),  a company owned by the Company's Chief Executive  Officer,
      Roy  Israel.   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.  In  consideration,  the Buyer
      assumed all  current and future  liabilities  and  commitments  of the ADR
      business. 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.
      Additionally,  the Buyer  guaranteed  the payments due on the remainder of
      the Company's  automobile lease and paid all the remaining payments on the
      lease of a postage meter.  The Company  remained  contingently  liable for
      payables  and other  obligations  assumed  by the  Buyer of  approximately
      $127,100 as of June 30, 2006. See Note 9. Furthermore,  in accordance with
      the Company's stock option plan, all outstanding unvested employee


                                      F-7
<PAGE>


                     clickNsettle.com, Inc. and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

                             June 30, 2006 and 2005

NOTE 2 (continued)

      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.  Accordingly,  the only options outstanding
      subsequent to April 13, 2005 are those that had been granted to directors,
      consultants and advisors.

      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 forward 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 year ended June 30, 2005 includes the
      following:

                                                       2005

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

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)
                                                   ===========

*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
                                                   ===========

                                      F-8
<PAGE>


                     clickNsettle.com, Inc. and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

                             June 30, 2006 and 2005

Note 2 (continued)

     The results from discontinued operations for the approximately six and
     one-half months through January 13, 2005 follow:

                                                      From July 1,
                                                      2004 through
                                                     January 13, 2005
                                                     ----------------
Net revenues                                           $ 1,808,400
                                                       -----------

Operating costs and expenses
     Costs of services                                     395,754
     Sales and marketing expenses                          593,026
    General and administrative expenses                  1,037,600
    Loss on impairment of furniture and equipment           15,885
                                                       -----------
                                                         2,042,265
                                                       -----------
                  Loss from operations                    (233,865)
                                                       -----------
Other Income
    Realized gains on sales of marketable securities        45,701
    Interest and dividends                                   5,777
    Other income                                             1,126
                                                       -----------
                                                            52,604
                                                       -----------
     Loss from operations of discontinued business     $  (181,261)
                                                       ===========

      As part of the agreement of sale,  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. The
      liabilities and assets other than cash were transferred to the Buyer as of
      January 13, 2005, while the cash balances were transferred thereafter.  As
      such, the Company  incurred  interest  expense on the unpaid balance.  The
      interest  rate charged was equal to the  interest  rate earned on invested
      balances.  The interest  charge for the years ended June 30, 2006 and 2005
      was  $3,250  and  $4,129,  respectively.  The  cash  balances  were  fully
      transferred  from the  Company to the Buyer  during the period from August
      2005 through February 2006.

      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 for
      fiscal year 2005.

      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.  The Company's  controlling  shareholders
      have  begun  negotiations  for the  sale of their  stock to a  third-party
      entity.  If such sale takes  place,  control of the Company  will shift to
      such entity. There can be no assurance that such a sale will take place.

                                      F-9
<PAGE>


                     clickNsettle.com, Inc. and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

                             June 30, 2006 and 2005

Note 2 (continued)

      As a result of continued losses,  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.

      The Company has  revised  the  statement  of cash flows for the year ended
      June  30,  2005  to  separately  disclose  the  operating,  investing  and
      financing  portions  of the cash flows  attributable  to its  discontinued
      operations, which was previously reported on a combined basis.

NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

      A summary of the significant  accounting and reporting policies applied on
      a consistent  basis which conforms 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.    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.

      c.    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.


                                      F-10
<PAGE>


                     clickNsettle.com, Inc. and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

                             June 30, 2006 and 2005

NOTE 3 (continued)

            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.

      d.    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  between 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.

      e.    Advertising Costs

            The cost of  advertising  is  expensed  when the  advertising  takes
            place. The Company incurred $79,013 for advertising  costs in fiscal
            2005. Such amount was charged to operations.

      f.    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  448,974  and  921,490,   at  June  30,  2006  and  2005,
            respectively,  would be  antidilutive  as the Company  incurred  net
            losses for the years ended June 30, 2006 and 2005.

      g.    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.

                                      F-11
<PAGE>


                     clickNsettle.com, Inc. and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

                             June 30, 2006 and 2005

NOTE 3 (continued)

            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(e)).
            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, 2006 and
            2005 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  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.  Accordingly,  the  only  options  outstanding
            subsequent  to April 13,  2005 are those  that had been  granted  to
            directors, consultants and advisors.

<TABLE>
<CAPTION>
                                                                                          2006          2005
                                                                                        ----------    ---------

Net loss
<S>                                                                                     <C>           <C>
    As reported                                                                         $  (92,804)   $(812,341)
    Deduct: Total stock-based employee compensation
                 expense determined under fair value-based method for all awards, net
                 of related tax effects                                                                 (63,448)
                                                                                        ----------    ---------

    Pro forma net loss                                                                  $  (92,804)   $(875,789)
                                                                                        ==========    =========

Net loss per common share
    Basic and diluted - as reported                                                     $        (.01)$    (.09)
    Basic and diluted - pro forma                                                       $        (.01)$    (.10)
</TABLE>

            No options were granted to consultants  for the years ended June 30,
            2006 and 2005.

      h.    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 the Company  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.

                                      F-12
<PAGE>


                     clickNsettle.com, Inc. and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

                             June 30, 2006 and 2005


NOTE 4 - COMPREHENSIVE INCOME (LOSS)

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

                                                           2006         2005
                                                          --------    ---------

Net loss                                                  $(92,804)   $(812,341)
                                                          --------    ---------

Unrealized gain on marketable securities, net
    of tax effects of $0 in 2006 and 2005, respectively
      Unrealized gains arising in period
      Reclassification adjustment - loss included in
          net loss                                                      (51,422)
                                                          --------    ---------

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

Comprehensive loss                                        $(92,804)   $(863,763)
                                                          ========    =========

NOTE 5 - MARKETABLE SECURITIES

      Proceeds on sales of  marketable  securities  were  $231,461  for the year
      ended June 30, 2005.  During fiscal 2005, gross gains of $45,701 and gross
      losses of $0 were realized on these sales.

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

                                      F-13
<PAGE>


                     clickNsettle.com, Inc. and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

                             June 30, 2006 and 2005

NOTE 6 - INCOME TAXES

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

<TABLE>
<CAPTION>
                                                             2006            2005
                                                          -----------    -----------
<S>                                                       <C>            <C>
Deferred tax assets
    Net operating, capital and other loss carryforwards   $ 3,494,400    $ 3,385,300
    Other                                                      43,000         43,000
                                                          -----------    -----------

             Net deferred tax asset before
                valuation allowance                         3,537,400      3,428,300

Valuation allowance                                        (3,537,400)    (3,428,300)
                                                          -----------    -----------

             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:

                                                  2006       2005
                                              ---------    ---------
Benefit at statutory rate                     $ (31,553)   $(201,815)
State and local benefit, net of Federal tax      (5,568)     (46,973)
Nondeductible expenses and other - net          (71,979)      49,788
Increase in the valuation allowance             109,100      199,000
                                              ---------    ---------

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

      At June 30, 2006,  the Company had a net operating loss  carryforward  for
      Federal  income  tax  reporting   purposes   amounting  to   approximately
      $8,984,800, expiring from 2012 through 2026. Additionally, the Company has
      a net capital loss carryforward for Federal income tax reporting  purposes
      at June 30, 2006 of approximately $284,293 which expires from 2007 through
      2009. No income taxes were paid in the years ended June 30, 2006 and 2005.

      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-14
<PAGE>


                     clickNsettle.com, Inc. and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

                             June 30, 2006 and 2005

NOTE 7 - STOCKHOLDERS' EQUITY

      a.    Preferred Stock

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

      b.    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, 2006 and 2005.  As of June 30, 2006,  the Company had
            purchased an aggregate of 252,498 shares under the Purchase Plan for
            a total cost of $83,918.

      c.    Stock Option Plan

            The Company had an Incentive and Nonqualified Stock Option Plan (the
            "Plan") for employees, officers, directors, consultants and advisors
            of the Company, pursuant to which the Company had been able to grant
            options to purchase up to 7,500,000  shares of the Company's  common
            stock.  The Plan was  administered by the board of directors,  which
            had 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 was
            not to exceed  ten years  from the date of grant and was  subject to
            such other  terms and  conditions  of the Plan.  Unless the board of
            directors  provided  otherwise,  option  awards  terminated  when  a
            participant's   employment   or  services   ended,   except  that  a
            participant could have exercised an option to the extent that it was
            exercisable  on  the  date  of  termination  for a  period  of  time
            thereafter.  The Plan terminated automatically on April 1, 2006. The
            outstanding  stock  options  as of  April 1,  2006  are  exercisable
            through the termination date of each option agreement.

            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.  Accordingly, the
            only options outstanding subsequent to April 13, 2005 are those that
            had been granted to directors, consultants and advisors.


                                      F-15
<PAGE>


                     clickNsettle.com, Inc. and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

                             June 30, 2006 and 2005

NOTE 7 (continued)

            The Company's  stock option awards  granted to employees,  directors
            and consultants as of and for the years ended June 30, 2006 and 2005
            are summarized as follows:

<TABLE>
<CAPTION>
                                                                   2006                             2005
                                                      ---------------------------     -----------------------------
                                                                         Weighted-                        Weighted-
                                                                          average                          average
                                                                         exercise                         exercise
                                                         Shares            price          Shares             price
                                                         ------            -----          ------             -----

<S>                                                      <C>               <C>          <C>                 <C>
          Outstanding at beginning of year               448,974           $1.42        5,762,776           $0.49
          Awards granted
          Awards exercised                                                             (1,480,000)          $0.04
          Awards canceled/forfeited                                                    (3,833,802)          $0.55
                                                      ------------------               ----------

          Outstanding at end of year                     448,974           $1.42          448,974           $1.42
                                                      ===========                         =======

          Options exercisable at year-end                448,974           $1.42          448,974           $1.42
                                                      ==========                          =======

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

            The  following   information  applies  to  options  outstanding  and
            exercisable at June 30, 2006:

<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>              <C>
              $ 0.05 - $  0.11                150,000         7.50             $0.08           150,000          $0.08
              $ 0.15 - $  0.20                 39,990         5.62             $0.18            39,990          $0.18
              $ 0.68 - $  0.79                 29,994         0.78             $0.70            29,994          $0.70
              $ 0.84 - $  1.50                 91,998         0.97             $1.03            91,998          $1.03
              $ 2.46 - $ 5.00                 136,992         1.33             $3.66           136,992          $3.66
                                              -------                                          -------

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

            Stock  option  awards were  granted at prices  equal to or above the
            closing  bid price on the date of grant.  No  options  were  granted
            during the years ended June 30, 2006 and 2005. 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, 2006. As of June 30, 2006,  there were no shares  available
            for  granting  of options  under the Plan as the plan  automatically
            terminated on April 1, 2006.

            The fair value of each  option  grant was  estimated  on the date of
            grant using the Black-Scholes option pricing model.

                                      F-16
<PAGE>


                     clickNsettle.com, Inc. and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

                             June 30, 2006 and 2005

NOTE 7 (continued)


      d.    Common Stock Reserved

            At June 30, 2006, the Company  reserved for issuance  448,974 shares
            of its common stock for the remaining  options still outstanding and
            exercisable  pursuant to the Company's  stock option plan.  See Note
            7(c) above.

NOTE 8 - TRANSACTIONS WITH RELATED PARTIES

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

      As  part  of the  agreement  of  sale,  the  Buyer  agreed  to  contribute
      accounting services to the Company after the sale of the ADR business. The
      value of services  performed  during the year ended June 30, 2006 and from
      January  14,  2005   through  June  30,  2005  was  $33,000  and  $12,750,
      respectively.  Charges of such  amounts  have been  imputed to general and
      administrative  expenses in the accompanying statements of operations with
      equivalent offsets to additional paid-in capital.

      Prior to the sale of the ADR business on January 13, 2005, certain members
      of the board of directors  performed  services as hearing officers for the
      benefit of the Company. The related expenditure for these services for the
      year ended June 30, 2005 was $25,176.  Such amount is included in the loss
      from operations of the discontinued business for fiscal year 2005.

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.  The Company remained  contingently liable for
      payables  and other  obligations  assumed  by the  Buyer of  approximately
      $127,100 as of June 30, 2006.

      Rent expense amounted to $112,716 for the year ended June 30, 2005, net of
      sublease  income of $40,046.  Such  amounts are  included in the loss from
      operations of the discontinued business for fiscal year 2005.

NOTE 10 - ESTIMATED FAIR VALUE OF FINANCIAL INSTRUMENTS

      At June 30, 2006, the Company's  financial  instruments  included cash and
      cash equivalents,  accounts payable and accrued expenses.  The fair values
      of these cash and cash equivalents,  accounts payable and accrued expenses
      approximated  carrying  values because of the  short-term  nature of these
      instruments.


                                      F-17
<PAGE>


                     clickNsettle.com, Inc. and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

                             June 30, 2006 and 2005

NOTE 11 - 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, 2006,
      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. This institution insures such balances
      against its financial failure. Additionally, SIPC (The Securities Investor
      Protection Corporation) protects securities in the account up to $500,000.
      As of June 30, 2006, the Company's cash and cash  equivalents  were within
      these insured limits.


                                      F-18


<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                    46      Chief Executive Officer, President and
                                      Chairman of the Board of Directors
Kenneth G. Geraghty           55      Director
Randy Gerstenblatt            47      Director
Corey J. Gottlieb             43      Director
Willem F. Specht              45      Director
Patricia Giuliani-Rheaume     48      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.  Currently,  Mr.
Israel is the President and Chief Executive Officer of National  Arbitration and
Mediation, Inc.

                  PATRICIA  GIULIANI-RHEAUME has been our Vice President,  Chief
Financial   Officer,   and  Treasurer  since  February  1997.   Currently,   Ms.
Giuliani-Rheaume  is the Vice President and Chief Financial  Officer of National
Arbitration and Mediation, Inc.

                  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 the 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.  Currently,  Mr.  Specht  is  the  Director  of  Information
Technology of National Arbitration and Mediation, Inc.

                  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.

                  RANDY  GERSTENBLATT  has been the  Senior  Vice  President  of
Corporate Alliances at Six Flags, Inc. since January 2006. Prior to holding this
position, Mr. Gerstenblatt was Senior Vice President of ESPN/ABC Sports Customer
Marketing  and  Sales  from  October  2000  through  January  2006  and was Vice
President of ESPN Customer Marketing and Sales from January 2000 through October
2000.

                  COREY J.  GOTTLIEB  has been the Chief  Operating  Officer  of
National  Arbitration and Mediation,  Inc. since May 2006. Prior to holding this
position,  Mr. Gottlieb was 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).

                                       12
<PAGE>

Audit Committee

            Since  January 13, 2005,  when the Company  sold its sole  operating
business,  the  entire  Board  has  been  responsible  for the  Audit  Committee
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, 2006, 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

            Since  January 13, 2005,  when the Company  sold its sole  operating
business,  there have been no employees of the Company and, therefore,  there is
no need for a Compensation Committee.

ITEM 10. EXECUTIVE COMPENSATION AND OTHER INFORMATION

                  The  following  summarizes  the  aggregate  compensation  paid
during  fiscal  year 2006 to our Chief  Executive  Officer  and any  officer who
earned  more  than  $100,000  in salary  and bonus  (the  "Named  Persons").  No
executive compensation was paid by the Company for periods subsequent to January
13, 2005. As such,  the amounts shown below for fiscal year 2005  represents the
aggregate  compensation  paid for fiscal year 2005 and 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.  The value of services  contributed by Mr.
Israel subsequent to January 13, 2005 and through June 30, 2006 has neither been
quantified  nor  imputed  as it was deemed to be  immaterial.  See Note 8 to the
consolidated financial statements.

                                       13
<PAGE>

                           Summary Compensation Table


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

Name and
                                                                                     Securities
                                                                      Other Annual   Underlying           All Other
Principal Position         Year            Salary        Bonus        Compensation   Options          Compensation
-------------------   -------------    ------------  -----------      ------------   --------         ------------
<S>                        <C>        <C>                              <C>     <C>                    <C>       <C>
Roy Israel,
President, Chief           2006
Executive Officer
and Chairman of the        2005       $157,530                         $16,480 (1)                    $  14,110 (2)
Board
                           2004       $321,631                         $22,907 (1)       230,000      $  14,110 (2)
--------------------- --------------- --------------- --------------- --------------- --------------- ---------------
</TABLE>

(1) Such amount  represents  tax gross ups for Mr. Israel for medical,  life and
disability payments.
(2) 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, 2006.

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

Mr. Israel  exercised  1,200,000  options  during the fiscal year ended June 30,
2005.  There were no  options  exercised  during the fiscal  year ended June 30,
2006. All outstanding  employee  options  (including  options owned by officers)
expired on April 13, 2005.

Employment  Contracts  and  Termination  of  Employment  and  Change In  Control
Arrangements

            No executive officer has an employment agreement with the Company.

                                       14
<PAGE>

ITEM 11: Security Ownership of Certain Beneficial Owners and Management

      The  following  table  sets  forth,  as  of  September  7,  2006,  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)

                                              Amount and Nature of    Percent of
          Name of Beneficial Owner(2)        Beneficial Ownership(3)   Total
-------------------------------------        -----------------------   ---------

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%

Jay Gottlieb (9)                                       539,543              5.4%

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

----------
*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 7, 2006, 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)   Includes  123,806  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, the Chairman,  Director and President of ISO
      Investment  Holdings,   Inc.,  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.

(9)   This information was taken from Form 13G filed May 23, 2006.

                                       15
<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  and
Mediation,  Inc., a company  affiliated with the Company's CEO, Roy Israel.  See
Note 2 to the Financial  Statements for  additional  details.  Furthermore,  the
Buyer agreed to provide accounting services to the Company after the sale of the
ADR  business  with no cash  outlay by the  Company.  The value of the  services
performed  for the year ended June 30, 2006 and for the period from  January 14,
2005  through  June 30,  2005 was  $33,000  and  $12,750,  respectively,  and is
included in general and administrative  expenses in the accompanying  statements
of  operations.  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 expenditure for
these services for the year ended June 30, 2005 was $25,176.  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.


                                       16
<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 (3)
3.1 (e)           Certificate of Amendment of Certificate of Incorporation,
                  as amended (4)
3.1 (f)           Certificate of Amendment of Certificate of Incorporation,
                  second amendment (5)
3.2               By-Laws of the Company, as amended (2)
10.1              1996 Stock Option Plan, amended and restated (2)
23.1              Consent of BP Audit Group, PLLC**
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 Form 8-K
      filed on June 21, 2000.

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

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

**    Filed herewith.

B. Reports on Form 8-K:
None.

                                       17
<PAGE>

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, for the fiscal years ended June 30,
2006 and 2005:

                                                               FY 2006   FY 2005
                                                               -------   -------
Audit fees and quarterly reviews                               $27,679   $40,251
Financial information systems design and implementation fees
All other fees:
         Tax return preparation                                  6,500     7,910
         Audit related services
         Non-audit related services
                                                               -------   -------
              Total Fees                                       $34,179   $48,161
                                                               -------   -------

      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.

                                       18
<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:   September 18, 2006                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:   September 18, 2006                By: /s/ Roy Israel
                                              -----------------------------
                                              Roy Israel, Chairman of the
                                              Board, CEO and President

Date:   September 18, 2006                By: /s/ Patricia Giuliani-Rheaume
                                              -----------------------------
                                              Patricia Giuliani-Rheaume,
                                              Vice President, Chief Financial
                                              Officer and Treasurer

Date:   September 18, 2006                By: /s/ Kenneth G. Geraghty
                                              -----------------------------
                                              Kenneth G. Geraghty, Director

Date:    September 18, 2006               By: /s/ Randy Gerstenblatt
                                              -----------------------------
                                              Randy Gerstenblatt, Director

Date:    September 18, 2006               By: /s/ Corey J. Gottlieb
                                              -----------------------------
                                              Corey J. Gottlieb, Director

Date:    September 18, 2006               By: /s/ Willem F. Specht
                                              -----------------------------
                                               Willem F. Specht, Director

                                       19