<PAGE>

                     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, 1999

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

                         Commission File Number: 0-21419

                                 NAM CORPORATION
                                 ---------------
           (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.)


                       1010 NORTHERN BOULEVARD, SUITE 336
                           GREAT NECK, NEW YORK 10021
                           --------------------------
                    (Address of Principal Executive Offices)

                                 (516) 829-4343
                                 --------------
                (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                  NASDAQ Small Cap Market
Warrants                                      NASDAQ Small Cap Market

Title of each class                    Name of each exchange on which registered
-------------------                    -----------------------------------------
Common Stock $.001 Par Value                  Boston Stock Exchange
Warrants                                      Boston Stock Exchange




<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 files in response to Item 405 of
Regulation S-B is not 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.[ ]

State issuer's revenues for its most recent fiscal year.  $4,158,506
                                                          ----------

The aggregate market value of the voting stock held by non-affiliates per the
closing stock price of September 16, 1999 is $11,248,155.

As of September 16, 1999, 3,411,983 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.  --  Proxy statement to be filed by October 28, 1999





                                       2
<PAGE>



                                     PART I

         From time to time, including in this annual report on Form 10-KSB, NAM
Corporation (the "Company") may publish forward-looking statements relating to
such matters as anticipated financial performance, business prospects, future
operations, new products, research and development activities, Year 2000
information 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, the Company notes that a variety of factors
could cause the Company's actual results to differ materially from the
anticipated results or other expectations expressed in the Company's
forward-looking statements. The risks and uncertainties that may affect the
operations, performance, development and results of the Company's business
include, without limitation, the following; changes in the insurance industry;
the Company's inability to retain current or new hearing officers; changes in
the public court system; and the degree and timing of the market's acceptance of
the Company's electronic settlement and arbitration and mediation management
programs.

ITEM 1. DESCRIPTION OF BUSINESS

The Company

         The Company operates in one business segment as a provider of
alternative dispute resolution ("ADR") services principally to insurance
companies, law firms, corporations and municipalities. An ADR proceeding is
designed to replace the public court system as a forum for resolving civil
disputes. The Company offers its clients personalized attention and access to
qualified hearing officers (generally retired judges) to either mediate or
arbitrate their disputes. The Company believes it is one of the leading
providers of ADR services in New York State based upon the number of cases
processed since 1993. The Company operates from locations in New York,
Massachusetts, Pennsylvania and Tennessee, through which it has the ability to
provide ADR services on a nationwide basis with a roster of over 900 qualified
hearing officers.

         Additionally, as of the end of June 1999, the Company introduced
clickNsettle.com, an Internet based, interactive virtual court service that
offers an alternative to traditional litigation and provides litigants with the
ability to settle cases via the Internet. The service, with patent pending, can
be accessed 24 hours a day, 7 days a week and is being targeted to the
multi-billion dollar litigation market. Although additional amounts will be
expended in further developing and refining this service during most of fiscal
year 2000, Management believes that clickNsettle.com has the potential to be
successful for the following reasons: (1) designed to process a large volume of
cases electronically with a lower cost per case; (2) ability to broaden the
Company's client base as the program is beneficial to all litigants with
disputes that can be resolved with a monetary settlement; (3) easy accessibility
by potential users via the Internet; (4) ability to reach potential users on a
global basis; (5) lead generator for traditional ADR business; (6) ability to
benchmark data on settlements by injury and venue; and (7) reporting
capabilities to summarize and provide analysis of a client's entire ADR program
including traditional arbitration and mediation conferences and electronic
settlements over the Internet.


                                        3
<PAGE>


         The Company believes that the ADR business is a growing service
industry based upon the continuing inability of the public court system to
manage effectively its docket of civil cases. An ADR proceeding is intended to
streamline the traditional cumbersome public litigation process. As compared to
the public court system, an ADR proceeding generally offers litigants a faster
resolution, confidentiality, reduced expenses, flexibility in procedures and
solutions, and control over the process. The ADR proceeding also has the
potential to preserve business relations among the parties because its nature is
less adversarial and the potential for a prompt resolution.

         The Company's objective is to become a global leader within the ADR
industry. The Company intends to achieve this goal by employing the following
strategies. (1) The Company developed and is currently marketing and improving
its Internet settlement service, clickNsettle.com, which is designed to attract
a larger customer base on a global scale with lower incremental costs; (2) The
Company initiated an advertising campaign during the third quarter of fiscal
year 1998 intended to increase awareness of its services with respect to
litigants in most types of civil disputes, including complex commercial issues,
construction, employment, matrimonial and worker's compensation cases. Total
fiscal year 1999 and 1998 advertising and external public relations costs
incurred with respect thereto approximated $390,000 and $566,000, respectively;
(3) In order to increase business, the Company continues to pursue exclusive
relationships with corporations and law firms in order to obtain contracts on a
national and regional basis; (4) The Company continues to explore strategic
alliances with business entities that have the ability to promote NAM's
traditional and electronic ADR services to their customers; (5) The Company has
expanded into the international dispute resolution market as of the first
quarter of fiscal year 2000 and (6) The Company intends to promote its services
to parties involved in Year 2000 computer litigation as well as to litigants who
may not be able to commence timely actions in civil court as a result of the
volume and extent of cases submitted thereto with respect to Year 2000 computer
issues.

         The Company believes that the domestic ADR industry is, other than a
few national entities, generally fragmented into small ADR service providers.
The Company further believes that the trend in the ADR industry is towards
consolidation of providers who are capable of offering national and regional ADR
programs. Management believes that its current strategies and marketing plans
will enable the Company to exploit this trend.

         The Company was formed on January 12, 1994 under the laws of the State
of Delaware. On October 31, 1994 the Company 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 owned by the Company's Chief
Executive Officer and President, and the Company's Executive Vice President.
NA&M began operations in March 1992 as a provider of ADR services. NA&M was
merged into NAM as of the end of June 1999.


                                        4
<PAGE>


Services Offered

         clickNsettle.com: At the end of June 1999, the Company introduced
clickNsettle.com, an Internet based, interactive virtual court service that
offers an alternative to traditional litigation and provides litigants with the
ability to settle cases via the Internet. clickNsettle.com utilizes a direct
settlement format that allows disputing parties to enter "blind" and
confidential offers and demands, via the Internet, to settle cases. The service
provides disputants with the ability to negotiate a case with their adversary
without actually "tipping their hand" about what amount they would accept for
settlement. The demands and offers are secure and only the final settlement
amount is ever revealed. This ensures that neither party loses any bargaining
power if a settlement is not reached. In the event of non-settlement, the
parties may automatically submit the case for traditional arbitration and
mediation with the Company. The service, with patent pending, can be accessed 24
hours a day, 7 days a week and also provides detailed reporting of both
arbitration and mediation results and settlement statistics.

         Arbitration: The Company's arbitration procedure follows a format
essentially similar to a non-jury trial in the public court system. This
procedure is designed to grant the parties a forum in which to present their
cases, while at the same time sparing the litigants the time delays and some of
the cumbersome procedures commonly associated with public court trials. The
Company's hearings are generally governed by its rules of procedure. The
parties, however, may depart from these rules and proceed in the fashion they
deem desirable for the resolution of the case. The parties select a panel member
from the Company's list of hearing officers.

         The hearings are non-public, thereby providing a level of
confidentiality not readily available in the public court system. Subject to the
parties' agreement, the proceedings may include discovery, examination of
non-party witnesses, the filing of post-hearing briefs and other matters that
may arise in the conduct of non-jury trials.

         The arbitrations are usually one of the following: (i) a regular
arbitration, in which the hearing officer has authority to issue a ruling and/or
award a remedy without limitations; (ii) a "high/low" arbitration, where the
parties may choose to set the parameters of the award by pre-selecting the high
and low dollar limits that can be awarded by the hearing officer; and (iii) the
so-called "baseball" arbitration, which typically involves the submission by
each party of their last best figure and the reason why it should be accepted;
the hearing officer's binding recommendation is restricted to either one figure
or the other. These types of arbitration are not exclusive, and the hearing
officers may fashion remedies in accordance with whatever parameters are agreed
to by the parties.

         Generally arbitration decisions are binding in nature and, unless
otherwise stipulated by the parties, are appealable in only limited
circumstances in the public court system. The Company does not currently offer
any type of appeal procedure. The Company's arbitration decisions are generally
enforceable in the public court system by following prescribed filing procedures
in the applicable local jurisdiction.

         Mediation (Settlement Conferencing): The mediation method used by the
Company is settlement conferencing, in essence a non-binding process. The
principal advantage of settlement conferencing is that it provides an
opportunity for parties to reach an early, amicable resolution without undue
expense and time-consuming litigation. The voluntary process of settlement
conference mediation can be an effective tool for a wide variety of disputes,
including tort claims and commercial conflicts.


                                        5
<PAGE>


         Settlement conferences are attended by each party to the dispute and/or
a representative of each party and a hearing officer selected by the parties
from a list available in the applicable region. Each party may choose to submit
a settlement conference memorandum setting forth a brief summary of facts,
indicating, for example, why each party has or does not have liability and, if
applicable, a statement of the party's damage. At the settlement conference,
each party is given an opportunity to describe the facts of the case and explain
its position. Thereafter, the hearing officer meets privately with each side on
an alternating basis to evaluate their respective cases, and receives proposed
concessions that each party might make, and potential settlement figures that
each party may offer, with a view toward guiding the parties to the settlement
of their dispute. Settlement figures and possible concessions are typically not
discussed between a party and the hearing officer without the other party's
express consent to disclosing its position. In many instances, the settlement
conference procedure results in the resolution of all issues.

         Other ADR Services: In addition to mediations and arbitrations, the
Company offers, among other services, advisory opinions and specialized dispute
resolution programs depending on the parties' particular needs. The Company also
offers Case Resolution Days which are events usually scheduled at an insurance
company client's office in which the Company arranges for parties to hold high
volume direct settlement meetings without the participation of a hearing
officer. In the event that the individual meetings do not resolve the dispute,
the Company provides a hearing officer to mediate the dispute if the parties
wish to pursue settlement.

         On-Line Case Management Software Service: During fiscal year 1998, the
Company developed a service allowing its clients the ability to be "on-line"
with the Company. This enables clients to submit cases electronically and to
review the status of their cases from their offices. At the same time, clients
also have the ability to access the status of hearings, updated hearing officer
rosters and schedules, promotional materials and ADR news information. The
Company also maintains a website offering similar information and case
submission capability.

         Video Conferencing: The Company has the ability to offer video
conferencing capabilities. This service allows clients to participate in and
observe hearings without leaving their offices, resulting in the reduction of
certain costs to the client associated with the ADR process. This capability
allows the Company to provide services to a wider range of clients on a
geographical basis. In addition, the video conferencing equipment, which can be
purchased or leased directly from the Company, has applications beyond the ADR
area for clients.


Marketing and Sales

         At the end of the second quarter of fiscal year 1999, the Company
realigned its sales operations in order to enhance its ability to process a
higher volume of cases as well as to better market its services to potential
customers. Certain account representatives were appointed as regional marketing
supervisors, the main function of which is to actively pursue new business as
well as to increase the volume of business with existing clients through
in-person meetings, presentations, educational seminars relating to ADR services
and periodic monitoring of a client's ADR activity. The remaining account
representatives concentrate their time and efforts on processing case
submissions and working closely with clients on a daily basis to ensure the
highest level of customer satisfaction. Additionally, during the first quarter
of fiscal year 2000, the Company designated a team of account representatives to
concentrate their marketing efforts on its Internet case resolution service,
clickNsettle.com. As of September 16, 1999, the Company employed 17 account
representatives to market both its ADR and Internet case resolution services.
Account representatives are salaried employees.


                                        6
<PAGE>


         For the most part, account executives are supervised directly by the
Vice President of Marketing or the Executive Vice President of clickNsettle.com,
depending upon the product they are marketing. Account executives in the
regional offices may first report to a regional manager who then reports to the
Vice President of Marketing. Several of the employment agreements with regional
managers provide for additional compensation based on the profits of the
manager's operation.

         With regard to the hiring and training of account executives, they are
usually interviewed by the Vice President of Marketing or an Executive Vice
President. Account executives are trained over approximately a two-week period.
This training period may vary depending on the overall abilities of each
candidate, the level of prior experience and their aptitude to assimilate the
required marketing skills. The training includes the development of
sales/service techniques and the introduction to customers of the Company. After
this initial period, the new account executive's performance is closely
monitored. In addition, staff meetings are generally held weekly to review
progress against goals and to enhance marketing skills.

         The majority of clients of the Company are insurance carriers and law
firms. One insurance company customer represented approximately 9% and 12% of
total revenues for the years ended June 30, 1999 and 1998, respectively.
However, the Company works with more than 70 individual offices of the insurance
company, which in total equal the aforementioned percentages of revenue. The
next largest insurance company customer represented approximately 3% of revenues
for the years ended June 30, 1999 and 1998, respectively. The balance of the
revenue base is distributed among more than 2,200 clients in both fiscal years
1999 and 1998.

          The Company, when appropriate, seeks membership contracts with its
clients. Further, the Company is currently enhancing its efforts to obtain
volume commitments from existing and new clients.


Competition

         The ADR business is highly competitive, both on a national and regional
level. Management believes that barriers to entry in the ADR business are
relatively low, and new competitors can begin doing business relatively quickly.
The basis of this belief is that the provision of ADR services only requires the
consent of all parties to submit their dispute for resolution through a proposed
ADR provider. There are two types of competitors: not-for-profit and for-profit
entities. The Company believes the largest not-for-profit competitor is the
American Arbitration Association which has significant market share in complex
commercial cases. The insurance industry has also continued its support for
Arbitration Forums, a not-for-profit organization created to service primarily
the insurance subrogation market.

         The Company believes that the domestic ADR industry is, other than a
few national entities, generally fragmented into small ADR service providers.
The Company believes that Judicial Arbitration Mediation Services,
Inc./Endispute ("JAMS") is the largest for-profit ADR provider in the country.
The Company's competitors include, among others, JAMS, Resolute, Inc.,
Cybersettle, National Arbitration Forums and Island Arbitration and Mediation.
In addition, several public court systems, including the federal and certain
state courts in New York, the Company's major market, have instituted court
coordinated programs. To the extent that the public courts reduce case backlogs
and provide effective dispute resolution mechanisms, the Company's business
opportunities in such markets may be significantly reduced.


                                        7
<PAGE>


         Increased competition could decrease the fees the Company is able to
charge for its services, and limit the Company's ability to obtain experienced
hearing officers. This could have a materially adverse effect on the Company's
ability to be profitable in the future. In addition, the Company competes with
other ADR providers to retain the services of qualified hearing officers.

         As compared to the majority of its competitors, the Company believes
that it competes based primarily upon reputation, price, and the ability to
manage scheduling of hearings effectively. Management believes the Company has
certain advantages that enable it to better serve its clients. These advantages
include: (1) exclusive agreements with qualified hearing officers, who are
generally former judges; (2) an Internet case resolution service which enables
parties to resolve disputes anywhere, 24 hours a day, 7 days a week; (3)
software which provides detailed case management reporting that can be
customized to meet a client's needs; (4) account executives dedicated to
specified clients; (5) the ability to monitor and control the scheduling of
matters; and (6) videoconferencing capability that allows clients to participate
in or observe a proceeding without leaving their office. There can be no
assurance, however, that these perceived advantages will enable the Company to
compete successfully in the future.

Government Regulation

         ADR services that are offered by private companies, such as the
Company, are not presently subject to any form of local, state or federal
regulation. ADR services that are offered by the public courts are subject to
the rules set forth by each jurisdiction and the dictates of the individual
judge assigned to preside over the dispute.

Employees

         As of September 16, 1999, the Company employed 42 persons, including
one part-time employee; of these, five were in executive positions, three of
which devote substantially all their attention to sales; 21 were sales managers
and sales account representatives and the remaining 16 employees support
operations of the Company with respect to information technology, accounting,
scheduling, confirming, billing and other administrative duties. The Company
also currently utilizes the services of various temporary employees who are
eligible for long-term employment.

Hearing Officers

         As of September 16, 1999, the Company maintained relationships with
over 900 hearing officers. The Company has exclusive agreements with respect to
ADR proceedings with a number of these hearing officers. Such hearing officers
accounted for approximately 65% of the number of cases handled by the Company
for the year ended June 30, 1999. The balance of non-exclusive hearing officers
makes their services available to the Company on a case-by-case basis. With the
exception of the exclusive hearing officers, the remainder of the Company's
roster of hearing officers can provide their services to competing ADR
providers. Compensation to the hearing officers is based on the number of
proceedings conducted and the length of time of such proceedings.



                                        8
<PAGE>

ITEM 2.  DESCRIPTION OF PROPERTIES

         The Company currently maintains 3 leased facilities, all of which are
located in office buildings. The Company leases 6,330 square feet of space at
1010 Northern Boulevard, Great Neck, New York for its corporate headquarters and
for providing ADR services in the metropolitan New York area. The lease expires
December 2003. The Company also leases: (i) 1,000 square feet of space, which
lease expires February 2000, for its Philadelphia, Pennsylvania office and (ii)
1,320 square feet of space, which lease expires November 2000, for its North
Easton, Massachusetts office. The Company believes this space is adequate for
its reasonably anticipated future needs.

         The aggregate rental expense for all of the Company's offices was
$191,983 during the year ended June 30, 1999.


ITEM 3.  LEGAL PROCEEDINGS

         There is no material litigation currently pending against the Company.


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

         None.












                                        9
<PAGE>





                                     PART II

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

A. The Company's Common Stock and Warrants are quoted on the NASDAQ Small Cap
Market under the trading symbols "NAMC" and "NAMCW," respectively, and have been
quoted since the Company commenced public trading on November 18, 1996. The
Company voluntarily delisted its units, which consisted of one share of Common
Stock and one redeemable Warrant, from trading on January 26, 1998 in order to
avoid confusion in the marketplace and to avoid additional and future
administrative costs. Prior to November 18, 1996, there was no public market for
the Company's securities. The following table sets forth the range of high and
low closing sales prices (based on transaction data as reported by the NASDAQ
Small Cap Market) for each fiscal quarter during the periods indicated.
<TABLE>
<CAPTION>
                                             Units        Common Stock      Warrants
                                          High    Low      High    Low      High  Low
                                          -------------------------------------------
<S>                                       <C>     <C>     <C>      <C>      <C>   <C>
Fiscal Year 1999:
-----------------
First quarter (07/1/98-9/30/98)            NA      NA    $2.75    $1.25    $0.38  $0.13
Second quarter (10/01/98-12/31/98)         NA      NA     2.16     1.00     0.25   0.06
Third quarter  (01/01/99-03/31/99)         NA      NA     1.63     0.69     0.19   0.13
Fourth quarter (04/01/99-06/30/99)         NA      NA     1.75     0.81     0.44   0.09

Fiscal Year 1998:
-----------------
First quarter (07/1/97-9/30/97)          $4.72   $3.50   $3.88    $2.63    $1.38  $0.63
Second quarter (10/01/97-12/31/97)        5.13    3.50    4.25     2.81     1.41   0.88
Third quarter  (01/01/98-03/31/98)        4.50    3.75    4.00     2.00     1.25   0.44
Fourth quarter (04/01/98-06/30/98)         NA      NA     2.38     1.50     0.50   0.22
</TABLE>

         On September 16, 1999 the closing bid price for the Common Stock and
Warrants, as reported by the NASDAQ Small Cap Market, were $5.66 and $1.81,
respectively.

         As of September 16, 1999 there were in excess of 300 holders of the
Company's securities.

         The payment by the Company of dividends, if any, in the future rests
within the discretion of its Board of Directors and will depend, among other
things, upon the Company's earnings, capital requirements and financial
condition, as well as other relevant factors. The Company does not contemplate
or anticipate paying any dividends upon its Common Stock in the foreseeable
future.

B. In November 1996, the Company raised additional capital through an initial
public offering of its securities. Net proceeds after offering expenses
approximated $4,700,000 of which $1,305,000 had been utilized through June 30,
1998. During the year ended June 30, 1999, the Company additionally expended
approximately $1,383,000 for working capital and general corporate purposes,
including its advertising campaign. The remaining funds were invested in cash
and cash equivalents and marketable equity securities.


                                       10
<PAGE>
         The preceding information updates Form SR filed by the Company in
February 1997 pursuant to former Rule 463.

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

General

         The Company provides ADR services to insurance companies, law firms,
corporations and municipalities. To date, the Company has focused the majority
of its marketing efforts on developing relationships, and expanding existing
relationships, with insurance companies, law firms, corporations and
municipalities which the Company believes are some of the largest consumers of
ADR services.

         The Company opened for business in March 1992 in New York and currently
operates from locations in New York, Massachusetts, Pennsylvania and Tennessee.

         The Company's objective is to become a global leader within the ADR
industry. The Company intends to achieve this goal by employing the following
strategies. (1) The Company developed and is currently marketing and improving
its Internet settlement service, clickNsettle.com, which is designed to attract
a larger customer base on a global scale with lower incremental costs; (2) The
Company initiated an advertising campaign during the third quarter of fiscal
year 1998 intended to increase awareness of its services with respect to
litigants in most types of civil disputes, including complex commercial issues,
construction, employment, matrimonial and worker's compensation cases. Total
fiscal year 1999 and 1998 advertising and external public relations costs
incurred with respect thereto approximated $390,000 and $566,000, respectively;
(3) In order to increase business, the Company continues to pursue exclusive
relationships with corporations and law firms in order to obtain contracts on a
national and regional basis; (4) The Company continues to explore strategic
alliances with business entities that have the ability to promote NAM's
traditional and electronic ADR services to their customers; (5) The Company has
expanded into the international dispute resolution market as of the first
quarter of fiscal year 2000 and (6) The Company intends to promote its services
to parties involved in Year 2000 computer litigation as well as to litigants who
may not be able to commence timely actions in civil court as a result of the
volume and extent of cases submitted thereto with respect to Year 2000 computer
issues.

Future Trends

         Management believes that the ADR industry is, and will continue to be,
undergoing a consolidation of ADR service providers so as to better serve
clients requiring international, national and regional multi-state ADR programs.
The Company's objective is to expand its presence to exploit this trend. In
addition, ADR clients continue to seek volume discounts on the charges applied
by the Company for services rendered. The Company believes that this trend may
have an overall positive impact on the Company because the discounts are usually
applied only when an ADR client makes a commitment to refer a minimum number of
cases to the Company.


                                       11
<PAGE>
         The Company has and will continue to incur net losses in the short-term
future as a result of (a) design, development and continuing costs associated
with clickNsettle.com, its Internet case resolution program and (b) its
advertising campaign. With respect to clickNsettle.com, management has invested
a large portion of the Company's resources in developing and marketing the
product during fiscal year 1999. The Company anticipates incurring additional
expenses during the first three quarters of fiscal year 2000 for further
development of the system, computer hardware and software, legal, marketing,
printing and salary and related expenses including the hiring of an Executive
Vice President of clickNsettle.com in the first quarter of fiscal year 2000.
Management believes that by the end of fiscal year 2000, such costs are expected
to decelerate. Although the Company is actively promoting this product, there
can be no assurance that the revenues to be realized therefrom will exceed the
expenses to be incurred. Additionally, the Company's advertising campaign, which
commenced during the second half of fiscal year 1998, will continue through
fiscal year 2000. In connection therewith, the Company has hired public
relations and investor relations firms to assist in promoting its services,
including clickNsettle.com. Currently, advertisements are scheduled to appear on
television, over the Internet and in a variety of print media. The Company
believes that the campaign will continue to increase awareness of the Company
and its services. However, there can be no assurance that this effort will
result in increased revenues.

         In addition, the Company has enhanced the status and capability of its
present offices. Significant costs have been and will continue to be incurred in
connection with establishing, maintaining and operating offices, including
expenses such as leases, office equipment, furnishings and salaries for
management, sales and administrative personnel. The Company believes its
investment in these resources will ultimately be beneficial in that a higher
volume of business will be able to be processed in a more efficient manner when
and if the advertising and public relations campaign produces the desired
effect.

Year Ended June 30, 1999 Compared to Year Ended June 30, 1998
-------------------------------------------------------------

Results of Operations

         Revenues. Revenues increased 8% to $4,158,506 for the year ended June
30, 1999 from $3,847,975 for the year ended June 30, 1998. Both the number of
cases heard and the average dollars earned per case increased in the current
year from the prior year. At the end of the second quarter of fiscal year 1999,
the Company realigned its sales operations in order to enhance its ability to
process a higher volume of cases as well as to better market its services to
potential customers. This was evidenced by a 16% increase in revenues in the
fourth quarter of fiscal year 1999 as compared to the fourth quarter of fiscal
year 1998.

         Cost of Services. Cost of services increased 12% to $1,081,309 for the
year ended June 30, 1999 from $969,345 for the year ended June 30, 1998. The
higher volume of business serviced resulted in greater hearing officer fees.
Additionally, higher fees were incurred in fiscal year 1999 primarily due to a
compensation charge relating to stock options granted to a hearing officer as
well as payments to hearing officers in connection with the commencement of
exclusive arrangements with the Company. Without these charges, the cost of
services as a percentage of revenues remained stable at 25% for the fiscal years
ended June 30, 1999 and 1998, respectively. The ratio of cost of services to
revenues will fluctuate based on the number of hours per case, as well as the
ability (or inability) of an office to take advantage of volume arrangements
with hearing officers which usually lower the cost per case.


                                       12
<PAGE>
         Sales and Marketing. Sales and marketing costs decreased 2% to
$2,048,058 for the year ended June 30, 1999 from $2,090,591 for the year ended
June 30, 1998. Sales and marketing costs as a percentage of revenues decreased
to 49% for fiscal year 1999 from 54% for fiscal year 1998. The decrease largely
relates to advertising and external public relations expenditures. Such costs
decreased by approximately $176,000 from $566,000 in fiscal year 1998 to
$390,000 in fiscal year 1999. The decrease was largely due to the commencement
of an advertising campaign during the third quarter of the 1998 fiscal year
whereby the Company placed advertisements in a variety of media. The campaign
was aimed at quickly establishing NAM as a brand name within the dispute
resolution industry. As the Company believes it has made significant progress in
achieving this goal, Management has continued advertising to maintain the
Company's name recognition but at a reduced level. There can be no assurance
that such expenditures will produce higher revenues. Offsetting this decline was
an increase in sales salaries and related costs of approximately $102,000 as
sales management and the sales force was strengthened to pursue additional
business opportunities. Additionally, entertainment, promotions and travel
expenses increased by approximately $33,000 as a result of sales visits to
corporate headquarters of targeted clients throughout the country and
Company-sponsored events for clients to promote the NAM brand name.

         General and Administrative. General and administrative costs increased
17% to $2,256,309 for the year ended June 30, 1999 from $1,932,158 for the year
ended June 30, 1998. Furthermore, general and administrative costs as a
percentage of revenues increased to 54% for fiscal year 1999 from 50% for fiscal
year 1998. Most of the increase (approximately $185,000) relates to salary and
related items due to increases in staff for data processing and other
administrative functions, including temporary help, to support and develop
clickNsettle.com, as well as NAM's traditional arbitration and mediation
services. Secondly, there was an increase of approximately $67,000 relating to
costs incurred in connection with seminars/conferences sponsored by the Company
for marketing its services to potential clients in the arbitration and mediation
industry and for employee training. Higher expenses were also incurred for rent
(as the New York headquarters was expanded mid-year), legal fees and
depreciation.

         Other Income (Expenses). Other income (expenses) changed from income of
$514,985 for the year ended June 30, 1998 to an expense of ($67,595) for the
year ended June 30, 1999. Other income (expense) is composed primarily of
investment income and realized gains (losses) generated from investments. During
the 1999 fiscal year, the Company sold a substantial portion of its marketable
securities. As a result, net realized losses approximated ($166,000) for the
year ended June 30, 1999 as compared to $356,000 of realized gains for the year
ended June 30, 1998. In addition, investment income also declined as the Company
reduced its investment portfolio and conservatively decreased its equity
portfolio in favor of a larger concentration in money market funds.

         Income Taxes. Tax benefits resulting from net losses incurred for the
years ended June 30, 1999 and 1998 were not recognized as the Company recorded a
full valuation allowance against the net operating loss carryforwards during the
periods. As of June 30, 1999, the Company had net operating loss carryforwards
for Federal tax purposes of approximately $2,062,000 and net capital loss
carryforwards for Federal tax purposes of approximately $166,000.

         Net Loss. For the year ended June 30, 1999, the Company had a net loss
of ($1,294,765) or ($.39) loss per share as compared to a net loss of ($629,134)
or ($.19) loss per share for the year ended June 30, 1998. The loss increased
primarily due to lower investment income mainly as a result of losses realized
from the sale of marketable equity securities, as well as higher costs incurred
to develop, market and support its new electronic case resolution products and
anticipated future growth.


                                       13
<PAGE>


Year Ended June 30, 1998 Compared to Year Ended June 30, 1997
-------------------------------------------------------------

Results of Operations

         Revenues. Revenues increased 14% to $3,847,975 for the year ended June
30, 1998 from $3,377,062 for the year ended June 30, 1997. Management attributes
this increase in sales to a growing acceptance of the Company's services as
shown by the overall increase in the number of cases heard. Additionally, the
opening of the Midwest region in the third quarter of the 1997 fiscal year
contributed approximately $100,000 to the revenue growth in fiscal 1998.

         Cost of Services. Cost of services increased 14% to $969,345 for the
year ended June 30, 1998 from $853,048 for the year ended June 30, 1997. The
higher volume of business serviced resulted in greater hearing officer fees.
Cost of services as a percentage of revenue remained stable at 25% for both
fiscal years. The ratio of cost of services to revenues will fluctuate based on
the number of hours per case, as well as the ability (or inability) of an office
to take advantage of volume arrangements with hearing officers which usually
lower the cost per case.

         Sales and Marketing. Sales and marketing costs increased 48% to
$2,090,591 for the year ended June 30, 1998 from $1,412,348 for year ended June
30, 1997. Sales and marketing costs as a percentage of revenues increased to 54%
for fiscal year 1998 from 42% for fiscal year 1997. Most of this increase
relates to advertising costs which rose by approximately $472,000 to $566,000
for the year ended June 30, 1998. The increase was largely due to the
commencement of an advertising campaign during the third quarter of the 1998
fiscal year whereby the Company placed advertisements in a variety of media
(newspapers, law journals, insurance and business publications, outdoor, radio
and television). The objective of the campaign was to increase awareness of the
Company and its services. There can be no assurance that such expenditures will
produce higher revenues. The remaining increase (approximately $206,000) relates
to salary and related items. Firstly, higher sales commissions were incurred
based on the higher volume of business. Secondly, primarily during the second
half of fiscal year 1997 and into fiscal year 1998, personnel were hired to
staff and support the Company's expansion plans. In particular, sales management
was strengthened at the Company's headquarters in New York to better prepare the
Company for a higher volume of cases. Finally, the Midwest region opened during
the third quarter of fiscal 1997.

         General and Administrative. General and administrative costs increased
10% to $1,932,158 for the year ended June 30, 1998 from $1,761,994 for the year
ended June 30, 1997. Furthermore, general and administrative costs as a
percentage of revenues decreased slightly to 50% for fiscal year 1998 from 52%
for fiscal year 1997. Salary-related costs increased by approximately $189,000
as the Company expanded personnel, particularly at its headquarters in New York,
primarily during the second half of fiscal year 1997 and into fiscal year 1998.
All corporate activities, including marketing, finance, data processing, billing
and collections, purchasing and scheduling of hearings, are centralized in New
York. Management believes that this structure provides a uniform and
high-quality level of service for clients, in addition to enhancing the control
environment and producing a more streamlined and efficient approach as the
Company grows. Higher costs with respect to fees relating to being a public
company (approximately $18,000) were more than offset by a decline in
professional fees ($40,000).


                                       14
<PAGE>


         Other Income (Expenses). Other income (expenses) increased from $12,771
for the year ended June 30, 1997 to $514,985 for the year ended June 30, 1998.
In the current fiscal year, other income was composed primarily of investment
income and realized gains (losses) generated from investments. During the second
half of the 1998 fiscal year, the Company sold a portion of its marketable
securities and, as a result, net realized gains increased to approximately
$356,000 for the year ended June 30, 1998 from approximately $16,000 for the
year ended June 30, 1997. Also, in the prior year, in connection with the
initial public offering, the Company contributed warrants underlying units sold
by two executive officers and also agreed to pay the underwriting costs
associated with shares sold by them. With respect thereto, the Company expensed
$115,500 upon the consummation of the initial public offering in the second
quarter of fiscal year 1997. In addition, other expenses in that period also
included interest expense from a past private placement financing. This debt was
satisfied in full as of November 20, 1996 with proceeds from the Company's
initial public offering.

         Income Taxes. Tax benefits resulting from net losses incurred for the
years ended June 30, 1998 and 1997 were not recognized as the Company recorded a
full valuation allowance against the net operating loss carryforwards during the
periods. As of June 30, 1998, the Company had net operating loss carryforwards
for Federal tax purposes of approximately $1,110,000.

         Net Loss. For the year ended June 30, 1998, the Company had a net loss
of ($629,134) or ($.19) loss per share as compared to a net loss of ($637,557)
or ($.23) loss per share for the year ended June 30, 1997. The loss decreased
slightly as expenditures for a comprehensive advertising campaign and an
investment in the Company's infrastructure to support future growth were
partially offset by higher revenues and realized gains on marketable securities.


Liquidity and Capital Resources

         At June 30, 1999, the Company had a working capital surplus of
$1,925,911 as compared to $3,060,771 at June 30, 1998. Net cash used in
operating activities was $973,516 for the year ended June 30, 1999 versus
$688,132 for the year ended June 30, 1998. The decrease in working capital and
the increase in net cash used in operating activities occurred as a result of
(a) the loss from operations and (b) realized losses from the sales of
marketable securities.

         Net cash provided by investing activities was $1,332,497 for the year
ended June 30, 1999 versus $1,929,926 for the year ended June 30, 1998. During
fiscal 1999, various investments in government securities matured and the
Company sold a portion of its corporate bonds and equity securities. Such
proceeds were largely reinvested in money market funds.

         The Company anticipates that cash flows, together with cash and
marketable securities on hand, will be sufficient to fund the Company's
operations for the next year.


                                       15
<PAGE>


The Year 2000
-------------

         The Year 2000 issue is the result of computer programs being written
using two digits rather than four to define the applicable year. The Company has
substantially completed its evaluation of the impact of the Year 2000 issue on
its business and currently does not expect to incur significant costs in fiscal
year 2000 associated with Year 2000 compliance or that Year 2000 issues will
have a material impact on the Company's business, results of operations or
financial condition. The Company's financial reporting system is currently Year
2000 compliant. The relational database system used to manage the operations of
the Company is already capable of recognizing four digits to designate the year.
The Company has converted its usage of the date fields from two digits to four
digits with respect to its major operating system. The Company has also upgraded
its network operating systems and all servers, including its main system, email,
web site and file transfer protocol (ftp) servers to be Year 2000 compliant. The
Company has also contacted most of its major vendors that provide non-operating
systems (ie., those which supply payroll and benefit information, in particular)
to ensure that they have properly addressed Year 2000 issues.


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 DISCLOSURES

          None.








                                       16
<PAGE>


                   INDEX TO CONSOLIDATED FINANCIAL STATEMENTS


                                                                         Page
                                                                         ----

Report of Independent Certified Public Accountants                       F-2


Financial Statements

   Consolidated Balance Sheets                                           F-3

   Consolidated Statements of Operations                                 F-4

   Consolidated Statement 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-21






                                       F-1
<PAGE>



               REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS



Board of Directors and Stockholders
    NAM Corporation


We have audited the accompanying consolidated balance sheets of NAM Corporation
and Subsidiaries (the "Company") as of June 30, 1999 and 1998, and the related
consolidated statements of operations, changes in stockholders' equity and
comprehensive loss, and cash flows for the years 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 generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the consolidated financial position of NAM Corporation
and Subsidiaries as of June 30, 1999 and 1998, and the consolidated results of
their operations and their consolidated cash flows for the years then ended in
conformity with generally accepted accounting principles.




GRANT THORNTON LLP


Melville, New York
August 30, 1999




                                       F-2
<PAGE>
                        NAM Corporation and Subsidiaries

                           CONSOLIDATED BALANCE SHEETS

                                    June 30,

<TABLE>
<CAPTION>
                                      ASSETS                                                  1999                 1998
                                                                                          -----------            -------
<S>                                                                                           <C>                  <C>
CURRENT ASSETS
    Cash and cash equivalents                                                             $ 1,776,261           $ 1,417,280
    Marketable securities                                                                     436,283             1,950,880
    Accounts receivable (net of allowance for doubtful
       accounts of $110,000 and $90,000, respectively)                                        515,088               385,300
    Other receivables                                                                          86,496                17,945
    Prepaid expenses                                                                           79,918                45,080
                                                                                          -----------           -----------
         Total current assets                                                               2,894,046             3,816,485

FURNITURE AND EQUIPMENT - AT COST,
    less accumulated depreciation                                                             269,393               248,679

OTHER ASSETS                                                                                   37,514                44,392
                                                                                          -----------           -----------
                                                                                          $ 3,200,953           $ 4,109,556
                                                                                          ===========           ===========
                       LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES
    Accounts payable                                                                      $   313,740           $   315,323
    Accrued liabilities                                                                       249,551               163,641
    Accrued payroll and employee benefits                                                     166,620               126,361
    Deferred revenues                                                                         238,224               150,389
                                                                                          -----------           -----------

         Total current liabilities                                                            968,135               755,714

COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' EQUITY
    Preferred stock - $.001 par value; 5,000,000 shares
      authorized; none issued                                                                    -                     -
    Common stock - $.001 par value; 15,000,000 shares authorized; shares
      issued and outstanding, 3,370,739 in 1999 and 3,334,978 in 1998                           3,371                 3,335
    Additional paid-in capital                                                              4,797,637             4,778,179
    Accumulated deficit                                                                    (2,663,446)           (1,368,681)
    Accumulated other comprehensive income (loss)                                              95,256               (58,888)
    Unearned compensation - stock bonus plan                                                     -                     (103)
                                                                                          -----------           -----------
         Total stockholders' equity                                                         2,232,818             3,353,842
                                                                                          -----------           -----------
                                                                                          $ 3,200,953           $ 4,109,556
                                                                                          ===========           ===========
</TABLE>

The accompanying notes are an integral part of these statements.



                                       F-3
<PAGE>

                        NAM Corporation and Subsidiaries

                      CONSOLIDATED STATEMENTS OF OPERATIONS

                               Year ended June 30,
<TABLE>
<CAPTION>
                                                                                           1999                   1998
                                                                                        -----------           -----------
<S>                                                                                         <C>                   <C>
Net revenues                                                                            $ 4,158,506           $ 3,847,975
                                                                                        -----------           -----------

Operating costs and expenses
    Cost of services                                                                      1,081,309               969,345
    Sales and marketing expenses                                                          2,048,058             2,090,591
    General and administrative expenses                                                   2,256,309             1,932,158
                                                                                        -----------           -----------

                                                                                          5,385,676             4,992,094
                                                                                        -----------           -----------

         Loss from operations                                                            (1,227,170)           (1,144,119)

Other income (expenses)
    Investment (loss) income                                                                (85,581)              510,063
    Other income                                                                             17,986                 4,922
                                                                                        -----------           -----------

                                                                                            (67,595)              514,985
                                                                                        -----------           -----------

         Loss before income taxes                                                        (1,294,765)             (629,134)

Income taxes                                                                                  -                     -
                                                                                        -----------           -----------

         NET LOSS                                                                       $(1,294,765)          $  (629,134)
                                                                                        ===========           ===========

Net loss per common share - basic and diluted                                                $(.39)                $(.19)
                                                                                             =====                 =====

Weighted average shares outstanding - basic and diluted                                   3,337,623             3,334,978
                                                                                        ===========           ===========
</TABLE>

The accompanying notes are an integral part of these statements.




                                       F-4
<PAGE>



                        NAM Corporation and Subsidiaries

            CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
                             AND COMPREHENSIVE LOSS

                       Years ended June 30, 1999 and 1998
<TABLE>
<CAPTION>
                                                                                                             Accumulated
                                                  Common stock               Additional                         other
                                            -----------------------           paid-in        Accumulated    comprehensive
                                              Shares         Amount           capital          deficit      income (loss)
                                            ----------      -------          ---------      -------------  --------------
<S>                                         <C>               <C>              <C>              <C>             <C>
Balances at July 1, 1997                    3,334,978       $3,335          $4,772,569      $  (739,547)     $  79,224

Compensation related to stock
   option plan                                                                   5,610
Net loss                                                                                       (629,134)
Change in unrealized gain (loss) on
   marketable securities                                                                                      (138,112)
Earned portion of stock bonus plan
                                            ---------       ------          ---------       -----------      ---------


Comprehensive loss


Balances at June 30, 1998                   3,334,978        3,335           4,778,179       (1,368,681)       (58,888)

Compensation related to stock
   option plan                                                                  19,494
Shares issued pursuant to restricted
   stock award                                 35,761           36                 (36)
Net loss                                                                                     (1,294,765)
Change in unrealized gain (loss) on
   marketable securities                                                                                       154,144
Earned portion of stock bonus plan
                                            ---------       ------          ---------       -----------      ---------


Comprehensive loss

Balances at June 30, 1999                   3,370,739       $3,371          $4,797,637      $(2,663,446)     $  95,256
                                            =========       ======          ==========      ===========      =========
</TABLE>




<PAGE>
                               [RESTUBBED TABLE]
<TABLE>

                                                 Unearned
                                              compensation -         Total
                                                  stock          stockholders'     Comprehensive
                                                bonus plan         equity              loss
                                            -----------------    -----------       -------------
<S>                                                <C>               <C>              <C>
Balances at July 1, 1997                         $(205)           $4,115,376

Compensation related to stock
   option plan                                                         5,610
Net loss                                                            (629,134)      $  (629,134)
Change in unrealized gain (loss) on
   marketable securities                                            (138,112)         (138,112)
Earned portion of stock bonus plan               102                     102
                                                 ---              ----------       -----------


Comprehensive loss                                                                 $  (767,246)
                                                                                   ===========

Balances at June 30, 1998                       (103)              3,353,842

Compensation related to stock
   option plan                                                        19,494
Shares issued pursuant to restricted
   stock award
Net loss                                                          (1,294,765)      $(1,294,765)
Change in unrealized gain (loss) on
   marketable securities                                             154,144           154,144
Earned portion of stock bonus plan               103                     103
                                                 ---              ----------       -----------


Comprehensive loss                                                                 $(1,140,621)
                                                                                   ===========

Balances at June 30, 1999                        $ -              $2,232,818
                                                 ====             ==========
</TABLE>



The accompanying notes are an integral part of this statement.



                                       F-5
<PAGE>
                        NAM Corporation and Subsidiaries

                      CONSOLIDATED STATEMENTS OF CASH FLOWS

                               Year ended June 30,
<TABLE>
<CAPTION>
                                                                                             1999                  1998
                                                                                         -----------           ------------
<S>                                                                                         <C>                    <C>
Cash flows from operating activities
   Net loss                                                                              $(1,294,765)          $  (629,134)
   Adjustments to reconcile net loss to net cash used in
     operating activities
       Depreciation and amortization                                                         101,948                75,488
       Provision for bad debts                                                                20,000                10,000
       Losses (gains) on sales of marketable securities                                      166,259              (356,390)
       Losses on sales of furniture and equipment                                                490                   129
       Earned portion of stock bonus plan                                                        103                   102
       Compensation related to stock option plan                                              19,494                 5,610
       Changes in operating assets and liabilities
         (Increase) decrease in accounts receivable                                         (149,788)               12,960
         (Increase) decrease in other receivables                                            (13,125)               16,545
         (Increase) decrease in prepaid expenses                                             (34,838)                9,602
         (Increase) decrease in other assets                                                  (1,715)                7,848
         Increase in accounts payable and accrued liabilities                                 84,327               195,189
         Increase (decrease) in accrued payroll and employee benefits                         40,259               (47,754)
         Increase in deferred revenues                                                        87,835                11,673
                                                                                        ------------          ------------
       Net cash used in operating activities                                                (973,516)             (688,132)
                                                                                         -----------           -----------
Cash flows from investing activities
   Purchases of marketable securities                                                     (1,334,887)           (2,313,195)
   Proceeds from sales of marketable securities                                            2,267,481             2,311,367
   Proceeds from maturities of marketable securities                                         570,000             2,075,000
   Increase in receivable for securities sold                                                (55,426)                -
   Decrease in payable for securities purchased                                                -                   (15,263)
   Purchases of furniture and equipment                                                     (115,471)             (133,113)
   Sales of furniture and equipment                                                              800                 5,130
                                                                                       -------------         -------------
       Net cash provided by investing activities                                           1,332,497             1,929,926
                                                                                          ----------            ----------
       NET INCREASE IN CASH AND CASH
          EQUIVALENTS                                                                        358,981             1,241,794
Cash and cash equivalents at beginning of year                                             1,417,280               175,486
                                                                                          ----------           -----------
Cash and cash equivalents at end of year                                                 $ 1,776,261           $ 1,417,280
                                                                                          ==========            ==========
</TABLE>

The accompanying notes are an integral part of these statements.



                                       F-6
<PAGE>



                        NAM Corporation and Subsidiaries

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                             June 30, 1999 and 1998



NOTE 1 - ORGANIZATION AND NATURE OF BUSINESS

     NAM Corporation ("NAM") provides a broad range of Alternative Dispute
     Resolution ("ADR") services, including arbitration and mediation, in the
     United States. NAM incorporated on January 12, 1994 and began operations on
     February 15, 1994. On October 31, 1994, National Arbitration & Mediation,
     Inc. ("NA&M"), which was owned by NAM's Chief Executive Officer and
     Executive Vice President, was acquired by and became a wholly-owned
     subsidiary of NAM. 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 NAM 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.

     In June 1999, NA&M was merged into NAM, along with several other
     wholly-owned subsidiaries, National Video Conferencing Inc. and NAMSYS
     Corporation. Additionally, Michael Marketing LLC and clickNsettle.com LLC,
     wholly-owned limited liability companies, were formed in June 1999 in
     Delaware. Michael Marketing, Inc., a Delaware corporation formed in
     November 1991, formerly a wholly-owned subsidiary, was merged into Michael
     Marketing LLC in June 1999.


NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

     A summary of the significant accounting and reporting policies applied on a
     consistent basis which conform with generally accepted accounting
     principles follow:

     a.  Basis of Presentation

         The accompanying consolidated financial statements of NAM Corporation
         and Subsidiaries include the accounts of its wholly-owned subsidiaries,
         Michael Marketing LLC, clickNsettle.com LLC and its merged entities,
         NA&M, National Video Conferencing Inc. and NAMSYS Corporation,
         effective in 1999, (collectively referred to herein as the "Company").
         The Company operates in one business segment, ADR. All significant
         intercompany transactions and balances were eliminated in
         consolidation.



                                       F-7
<PAGE>

                        NAM Corporation and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

                             June 30, 1999 and 1998



NOTE 2 (continued)

     b.  Use of Estimates

         The preparation of financial statements in conformity with generally
         accepted accounting principles 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.
         Estimates are used when accounting for the allowance for uncollectible
         accounts receivable, depreciation, taxes and contingencies, among
         others.

     c.  Revenue Recognition

         The Company principally derives its revenues from fees charged for
         arbitration and mediation services. Each party to a proceeding is
         charged an administrative fee, a portion of which is nonrefundable when
         each party agrees to utilize the Company's services. The Company
         recognizes revenue when the arbitration or mediation occurs. Fees
         received prior to the arbitration or mediation are reflected as
         deferred revenue.

     d.  Cash and Cash Equivalents

         Cash and cash equivalents consist of cash on hand, money market funds
         and short-term notes with a maturity at date of purchase of three
         months or less.

     e.  Marketable Securities

         Investments classified as marketable securities include fixed
         maturities (bonds and redeemable preferred stocks) and equity
         securities (common and nonredeemable preferred stocks) which 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 fixed maturity and
         equity securities as available-for-sale in order to provide the Company
         flexibility to respond to various factors, including changes in market
         conditions and tax planning considerations.




                                       F-8
<PAGE>

                        NAM Corporation and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

                             June 30, 1999 and 1998



NOTE 2 (continued)

         Investment income, consisting of interest and dividends, is recognized
         when earned. Realized gains and losses on sales, maturities or
         liquidation of investments are determined on a specific identification
         basis. The amortization of premiums and accretion of discounts for
         fixed maturity securities are computed on a straight-line basis. Fair
         values of investments are based on quoted market prices or on dealer
         quotes.

     f.  Furniture and Equipment

         Furniture and equipment are stated at cost, less accumulated
         depreciation. Depreciation is computed using the straight-line method
         to allocate the cost of those assets over their expected useful lives
         which generally range from five to seven years. Leasehold improvements
         are amortized over the life of the remaining lease.

     g.  Product Development Costs

         Product development costs include expenses incurred by the Company to
         develop, enhance, manage and operate the Company's website and its
         internet case resolution service, click Nsettle.com. Product
         development costs are expensed as incurred.

     h.  Income Taxes

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

     i.  Advertising Costs

         The cost of advertising is expensed when the advertising takes place.
         During the second half of fiscal 1998, the Company commenced an
         advertising campaign intended to increase awareness of its services
         with respect to litigants in most types of civil disputes, including
         complex commercial issues, construction, employment, matrimonial and
         worker's compensation cases. The Company incurred $389,553 and $566,084
         for advertising and external public relations costs in fiscal 1999 and
         1998, respectively.

                                       F-9
<PAGE>

                        NAM Corporation and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

                             June 30, 1999 and 1998



NOTE 2 (continued)

     j.  Earnings (Loss) Per Common Share

         In fiscal 1998, the Company adopted Statement of Financial Accounting
         Standards No. 128 ("SFAS No. 128"), "Earnings Per Share," which
         requires public companies to present basic earnings per share and, if
         applicable, diluted earnings per share. Basic earnings per share are
         based on the weighted average number of common shares outstanding
         without consideration of potential common stock. Diluted earnings 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, reduced by
         the shares that may be repurchased with the funds received from the
         exercise, based on the average price during the period. Diluted
         earnings per share is the same as basic earnings per share as potential
         common shares would be antidilutive as the Company incurred net losses
         for the years ended June 30, 1999 and 1998.


NOTE 3 - COMPREHENSIVE INCOME (LOSS)

     In fiscal 1999,  the Company  adopted  Statement  of  Financial  Accounting
     Standards No. 130 ("SFAS No. 130"), "Reporting  Comprehensive Income." SFAS
     No.  130   establishes   new  rules  for  the   reporting  and  display  of
     comprehensive income and its components;  however, the adoption of SFAS No.
     130 had no impact on the Company's net loss or stockholders'  equity.  SFAS
     No. 130 requires unrealized gains or losses on marketable securities which,
     prior to adoption,  were reported separately in stockholders' equity, to be
     included in  accumulated  other  comprehensive  income  (loss).  Prior year
     financial  statements have been reclassified to conform to the requirements
     of SFAS No. 130.

     Accumulated other comprehensive loss represents the unrealized gain (loss)
     on marketable equity securities, net of tax effects of $0 in 1999 and 1998.




                                      F-10
<PAGE>



                        NAM Corporation and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

                             June 30, 1999 and 1998



NOTE 3 (continued)

     The components of comprehensive loss, net of tax effects, are as follows:
<TABLE>
<CAPTION>
                                                                                     1999               1998
                                                                               ----------------     ------------
<S>                                                                                  <C>                <C>
       Net loss                                                                    $(1,294,765)      $(629,134)
       Unrealized gain (loss) on marketable securities, net of
           tax effects of $ 0 in 1999 and 1998, respectively
             Unrealized gains (losses) arising in period                                95,256         (59,963)
             Reclassification adjustment - gain (loss) included
                in net loss                                                             58,888         (78,149)
                                                                                   -----------       ---------

                  Net unrealized gain (loss)                                           154,144        (138,112)
                                                                                   -----------        --------

       Comprehensive loss                                                          $(1,140,621)      $(767,246)
                                                                                    ==========       =========
</TABLE>





                                      F-11
<PAGE>

                        NAM Corporation and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

                             June 30, 1999 and 1998



NOTE 4 - MARKETABLE SECURITIES

     Marketable securities are carried at fair value. A summary of investments
     in marketable securities and a reconciliation of amortized cost to the fair
     value follow:
<TABLE>
<CAPTION>
                                                                              Gross             Gross
                                                          Amortized        unrealized        unrealized          Fair
                                                            cost              gains            losses            value
                                                       ------------        -----------    --------------      -----------
<S>                                                       <C>                  <C>              <C>              <C>
      June 30, 1999

          Equity securities                            $   341,027           $95,256      $      -            $   436,283
                                                        ----------            ------       -------------       ----------

             Total marketable securities               $   341,027           $95,256      $      -            $   436,283
                                                        ==========            ======       =============       ==========


      June 30, 1998
          Fixed maturities
            U.S. Treasury securities and
              obligations of U.S. government
              corporations and agencies                $   669,889         $     209      $         (75)      $   670,023
            Corporate preferred securities                 250,000             5,620             -                255,620
                                                        ----------           -------      --------------       ----------

                                                           919,889             5,829               (75)           925,643

          Equity securities                              1,089,879            38,083          (102,725)         1,025,237
                                                         ---------            ------          --------          ---------

             Total marketable securities                $2,009,768           $43,912         $(102,800)        $1,950,880
                                                         =========            ======          ========          =========
</TABLE>
     Proceeds on sales of securities were $2,267,481 and $2,311,367 for the
     years ended June 30, 1999 and 1998, respectively. During fiscal 1999 and
     1998, gross gains of $235,431 and $386,155, respectively, and gross losses
     of $401,690 and $29,765, respectively, were realized on these sales. Net
     unrealized gains (losses) on marketable securities were $95,256 and
     $(58,888) at June 30, 1999 and 1998, respectively. During fiscal 1999 and
     1998, no income taxes (benefits) were provided on the unrealized gains
     (losses) due to the Company's net operating loss.






                                      F-12
<PAGE>

                        NAM Corporation and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

                             June 30, 1999 and 1998

NOTE 5 - FURNITURE AND EQUIPMENT

     Furniture and equipment consist of the following:
                                                               June 30,
                                                      ------------------------
                                                       1999              1998
                                                     ---------        ---------
      Furniture                                      $ 186,060        $ 169,717
      Equipment                                        382,011          307,311
      Leasehold improvements                            21,993             -
                                                     ---------         --------

                                                       590,064          477,028
      Less accumulated depreciation                   (320,671)        (228,349)
                                                      --------         --------

                                                     $ 269,393        $ 248,679
                                                     =========        =========

     Depreciation expense for the years ended June 30, 1999 and 1998 was $93,467
and $80,288, respectively.


NOTE 6 - INCOME TAXES

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

                                                        1999            1998
                                                     ------------     --------

      Deferred tax assets
          Net operating loss and other
           carryforwards                              $ 840,000       $ 406,000
          Provision for bad debts                        44,000          36,000
          Deferred compensation                          39,000          21,000
          Deferred rent and other                        33,000          10,000
          Depreciation                                    9,000            -
                                                      ---------       ---------
                                                        965,000         473,000
      Deferred tax liabilities
          Depreciation                                     -              6,000
                                                      ---------       ---------
      Net deferred tax asset before valuation
           allowance                                    965,000         467,000

      Valuation allowance                              (965,000)       (467,000)
                                                      ---------       ---------

             Net deferred tax asset                   $    -          $   -
                                                      =========       =========





                                      F-13
<PAGE>

                        NAM Corporation and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

                             June 30, 1999 and 1998



NOTE 6 (continued)

     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:
<TABLE>
<CAPTION>
                                                                    1999                   1998
                                                                 -----------             -------
<S>                                                                 <C>                    <C>
      Benefit at statutory rate                                   $(440,220)              $(213,906)
      State and local benefit, net of Federal tax                   (74,750)                (42,096)
      Nondeductible expenses/nontaxable (income) - net               16,592                 (24,668)
      Increase in the valuation allowance                           498,378                 280,670
                                                                  ---------               ---------

                                                                  $    -                  $    -
                                                                  =========               =========
</TABLE>
     The provision for Federal income taxes has been determined on the basis of
     a consolidated tax return. At June 30, 1999, the Company had a net
     operating loss carryforward for Federal income tax reporting purposes
     amounting to approximately $2,062,000, expiring from 2012 through 2019.
     Additionally, the Company has a net capital loss carryforward for Federal
     income tax reporting purposes amounting to $166,000 expiring in 2004. No
     Federal income taxes were paid in the years ended June 30, 1999 and 1998.


NOTE 7 - STOCKHOLDERS' EQUITY

     a.  Redeemable Warrants

         In November 1996, the Company completed an initial public offering
         ("IPO") which consisted of 1,400,000 units, each unit consisting of one
         share of common stock and one redeemable warrant. Each redeemable
         warrant entitles the holder to purchase one share of common stock at
         $6.00 per share, subject to adjustment, at any time from issuance until
         November 13, 2001. Such warrants are redeemable by the Company, with
         the prior written consent of the underwriter, at a redemption price of
         $.05 commencing November 13, 1997 provided that the average closing bid
         price of the common stock equals or exceeds $9.00, subject to
         adjustment, for a specified period of time. In addition, there was an
         overallotment option for 210,000 units which was exercised by the
         underwriter.


                                      F-14
<PAGE>

                        NAM Corporation and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

                             June 30, 1999 and 1998

NOTE 7 (continued)

         In connection with the IPO, the Company sold to the underwriter, for
         nominal consideration, warrants to purchase from the Company 140,000
         units (the "underwriter's warrants"). The underwriter's warrants are
         initially exercisable at $5.80. The shares of common stock and
         redeemable warrants issuable upon exercise of the underwriter's
         warrants are identical to those offered to the public. The
         underwriter's warrants contain provisions providing for adjustment of
         the number of warrants and exercise price under certain circumstances.
         The underwriter's warrants grant to the holders thereof certain rights
         of registration of the securities issuable upon exercise of the
         underwriter's warrants.

     b.  Stock Award Plan

         In June 1994, the Company adopted an Executive Stock Bonus Plan. Under
         the plan, the Company granted shares to three employees pursuant to
         their employment agreements. All of the shares vest after providing two
         to five years of service to the Company from the grant date. Unearned
         compensation based on the estimated market value per share at date of
         grant of $0.01 was recorded and shown as a separate component of
         stockholders' equity. The Company recognized compensation expense of
         $103 and $102 during the years ended June 30, 1999 and 1998,
         respectively, representing the amortization of unearned compensation
         over the vesting period. As of June 30, 1999, 36,744 awards are
         outstanding, all of which will vest in July 1999 provided such
         employees are employed by the Company at that time.

         In addition, in September 1994, the Company granted the manager of a
         regional office restricted common stock for the purchase price of $0.17
         per share, pursuant to his employment agreement. Of the total shares
         granted, 7,152 vested and were issued in June 1996, while the remaining
         35,761 shares vested in June 1999.




                                      F-15
<PAGE>

                        NAM Corporation and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

                             June 30, 1999 and 1998



NOTE 7 (continued)

     c.  Stock Option Plan

         In May 1996, the Company adopted an Incentive and Nonqualified Stock
         Option Plan (the "Plan") for employees, officers, directors,
         consultants and advisors of the Company, pursuant to which the Company
         may grant options to purchase up to 750,000 shares of the Company's
         common stock. The Plan was amended in December 1998 to increase the
         number of shares of common stock authorized for issuance thereunder
         from 750,000 shares to 2,000,000 shares. The Plan is administered by
         the board of directors, which has the authority to designate the number
         of shares to be covered by each award and the vesting schedule of such
         award, among other terms. The option period during which an option may
         be exercised shall not exceed ten years from the date of grant and will
         be subject to such other terms and conditions of the Plan. Unless the
         board of directors provides otherwise, option awards terminate when a
         participant's employment or services end, except that a participant may
         exercise an option to the extent that it was exercisable on the date of
         termination for a period of time thereafter. The Plan will terminate
         automatically on April 1, 2006.

         Directors who are not officers of the Company receive annually, on the
         last trading day of June, stock options for 1,000 shares at an exercise
         price equal to the fair market value of the stock on the date of grant.
         In December 1998, the Plan was amended to increase the number of
         options granted annually to each non-employee director from options to
         purchase 1,000 shares to options to purchase 2,500 shares.

         On May 11, 1998, the Company's Board of Directors approved the
         repricing of outstanding stock options previously granted to employees.
         The repricing provided for the exercise price of 230,500 options to be
         reduced from a range of $3.00 to $4.38 per share to a range of $1.63 to
         $2.25 per share, to reflect current fair value. The repricing did not
         affect the term or vesting period of the options.




                                      F-16
<PAGE>

                        NAM Corporation and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

                             June 30, 1999 and 1998

NOTE 7 (continued)

         The Company's stock option awards granted to employees, directors and
         consultants as of and for the years ended June 30, 1999 and 1998 are
         summarized as follows:
<TABLE>
<CAPTION>
                                                                     1999                             1998
                                                          --------------------------         --------------------------
                                                                            Weighted-                          Weighted-
                                                                             average                            average
                                                                            exercise                           exercise
                                                           Shares             price           Shares             price
                                                           -------          --------         --------          --------
<S>                                                         <C>               <C>             <C>                 <C>
          Outstanding at beginning of year                 373,500           $2.01           155,500            $ 3.18
          Awards granted                                   590,500           $2.02           451,500            $ 2.22
          Awards exercised                                    -                                 -
          Awards canceled                                  (55,000)          $1.71          (233,500)           $ 3.20
                                                          --------                          --------

          Outstanding at end of year                       909,000           $2.03           373,500            $ 2.01
                                                           =======                          ========

          Options exercisable at year-end                  201,500           $3.37            37,000            $ 2.49
                                                           =======                         =========

          Weighted-average fair value
               of options granted during
               the year                                                      $ .75                              $  .99
</TABLE>
         The following information applies to options outstanding and
exercisable at June 30, 1999:
<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>
          $.81 to $1.69                      615,000          7.64            $1.40            51,500           $1.60
          $1.78 to $2.25                     196,000          6.81            $2.02            80,000           $2.01
          $3.00 to $4.00                      37,000          6.89            $3.41            20,000           $3.00
          $5.00 to $10.00                     61,000          8.00            $7.62            50,000           $7.50
                                            --------                                         --------

                                             909,000                                          201,500
                                             =======                                          =======
</TABLE>

         Stock option awards are granted at prices equal to or above the closing
         bid price on the date of grant. As of June 30, 1999, 1,091,000 shares
         were available for granting of options under the Plan.




                                      F-17
<PAGE>
                        NAM Corporation and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

                             June 30, 1999 and 1998



NOTE 7 (continued)

         The Company accounts for stock-based compensation under the guidelines
         of APB Opinion No. 25 ("APB No. 25"), "Accounting for Stock Issued to
         Employees," as allowed by Statement of Financial Accounting Standards
         No. 123 ("SFAS No. 123"), "Accounting for Stock-Based Compensation."
         Accordingly, no compensation expense was recognized concerning options
         granted to key employees and to members of the board of directors, as
         such options were granted to board members in their capacity as
         directors. Compensation expense of $19,494 and $5,610 was recognized in
         fiscal 1999 and 1998, respectively, for options granted to consultants.

         If the Company had elected to recognize compensation expense based upon
         the fair value at the grant date for options granted to key 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
         and net loss per share for the years ended June 30, 1999 and 1998 would
         be reduced to the pro forma amounts indicated below:
<TABLE>
<CAPTION>
                                                                                       1999                    1998
                                                                                    -----------             ----------
<S>                                                                                     <C>                     <C>
          Net loss
              As reported                                                           $(1,294,765)              $(629,134)
              Pro forma                                                              (1,520,232)               (762,728)

          Net loss per common share - basic and diluted
              As reported                                                               $  (.39)                  $(.19)
              Pro forma                                                                    (.46)                   (.23)
</TABLE>
         These pro forma amounts may not be representative of future disclosures
         because they do not take into effect pro forma compensation expense
         related to awards made before 1996. The fair value of each option grant
         is estimated on the date of grant using the Black-Scholes option
         pricing model with the following weighted-average assumptions for 1999
         and 1998, respectively: dividend yields of zero for both years;
         risk-free interest rates ranging from 4.51% to 5.50% in 1999 and 5.52%
         to 5.94% in 1998; expected terms of 4 years in 1999 and 2 to 5 years in
         1998; and expected stock price volatility of 74.61% in 1999 and 64.15%
         in 1998.



                                      F-18
<PAGE>
                        NAM Corporation and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

                             June 30, 1999 and 1998


NOTE 8 - TRANSACTIONS WITH RELATED PARTIES

     Certain members of the board of directors perform services for the benefit
     of the Company. The related expenditures for these services for the years
     ended June 30, 1999 and 1998 were $49,038 and $75,425, respectively.

     In June 1999, the Company purchased from NAM's Chief Executive Officer the
     rights to a time-share property to be used as part of an employee incentive
     program. The sales price of $18,450 was established at the current market
     value of the time share.


NOTE 9 - COMMITMENTS AND CONTINGENCIES

     a.  Leases

         As of June 30, 1999, the Company has lease agreements for equipment and
         office space. Rent expense amounted to $220,542 and $205,308 for the
         years ended June 30, 1999 and 1998, respectively. The minimum lease
         payments under noncancelable leases as of June 30, 1999 are as follows:

                           2000                    $197,500
                           2001                     187,200
                           2002                     173,400
                           2003                     176,300
                           2004                      89,300
                                                   --------

                                                   $823,700

     b.  Employment/Consulting Agreements

         The Company's employment agreement with its Chief Executive Officer
         expires June 30, 2002 and provides for an annual base salary of
         $225,000 as of July 1, 1997, an annual cost of living increase of the
         greater of 6% per annum or the increase in the Urban Consumer Price
         Index and an annual bonus at the discretion of the Company's Board of
         Directors. If this agreement is terminated as a result of a change in
         duties of the executive or due to a change in control, the officer will
         be entitled to a lump-sum severance payment equal to three times his
         then current base salary.




                                      F-19
<PAGE>

                        NAM Corporation and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

                             June 30, 1999 and 1998



NOTE 9 (continued)

         The Company has also entered into employment agreements with two
         officers expiring through June 14, 2001. Such contracts are cancelable
         at any time without further liability to the Company with the exception
         of one contract which provides for six months of severance pay. Minimum
         salary commitments under these contracts follow:

                           2000                    $186,397
                           2001                     112,260
                                                    -------

                                                   $298,657
                                                   ========

         The Company has also entered into employment agreements with certain of
         its regional office managers. Certain of these agreements provide for
         additional compensation based on the profits of the manager's
         operation.

         In July 1996, the Company entered into a financial public relations
         consulting agreement with two individuals who are founders of the
         Company, current stockholders and former directors. The agreement has a
         four-year term and provides for annual payments of $48,000 payable in
         equal monthly payments of $4,000 through November 2000. In November
         1998, the agreement was amended to reduce the fee as of October 1998 to
         $2,000 per month. The related expense for the year ended June 30, 1999
         and 1998 was $30,000 and $48,000, respectively.

     c.  Advertising

         As of March 1999, the Company signed a noncancellable, two-year media
         agreement to advertise its services on televised sports events in New
         York. Minimum commitments under the contract are approximately $115,000
         and $59,000 in 2000 and 2001, respectively.

     d.  Legal

         The Company is subject to various forms of litigation in the normal
         course of business. It is the opinion of management that the outcome of
         such litigation will not have a material adverse effect on the
         Company's financial condition and results of operations.

                                      F-20



<PAGE>


                        NAM Corporation and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

                             June 30, 1999 and 1998



NOTE 10 - EMPLOYEE RETIREMENT PLAN

     Effective January 1, 1999, the Company implemented a non-contributory
     401(k) savings and retirement plan, whereby eligible employees may
     contribute 15% of their salaries up to the maximum allowed under the
     Internal Revenue Code. Although the Company may make discretionary
     contributions, none were made in 1999.


NOTE 11 - ESTIMATED FAIR VALUE OF FINANCIAL INSTRUMENTS

     At June 30, 1999 and 1998, the Company's financial instruments included
     cash and cash equivalents, marketable securities, receivables and accounts
     payable. The fair values of cash and cash equivalents, receivables and
     accounts payable approximated carrying values because of the short-term
     nature of these instruments. The estimated fair values of marketable
     securities were determined based on broker quotes or quoted market prices.


NOTE 12 - CREDIT CONCENTRATIONS

     Financial instruments that potentially subject the Company to
     concentrations of credit risk consist principally of cash and cash
     equivalents, marketable securities and accounts receivable.

     The Company maintains its cash which consists primarily of demand deposits
     and an insured money market fund with one financial institution. Such
     balances generally do not exceed the Federally insured limits.
     Additionally, the Company maintains its cash equivalents and all other
     investments with two financial institutions.

     The Company primarily sells it services to insurance companies and law
     firms. One insurance company customer represented approximately 12% of
     total revenues for the year ended June 30, 1998. However, the Company works
     with more than 70 individual offices of the insurance company, which, in
     total, equal the aforementioned percentages of revenue. In fiscal 1999, no
     customer exceeded 10% of total revenue. The Company monitors exposure to
     credit losses and maintains allowances for anticipated losses considered
     necessary under the circumstances.

                                      F-21

<PAGE>

                                    PART III

ITEM 9. (Directors, Executive Officers, Promoters and Control Persons,
Compliance with Section 16(a) of the Exchange Act); ITEM 10. (Executive
Compensation); ITEM 11 (Security Ownership of Certain Beneficial Owners and
Management); and ITEM 12 (Certain Relationships and Related Transactions) will
be incorporated in the Company's Proxy Statement to be filed within 120 days of
June 30, 1999, and are incorporated herein by reference.


ITEM 13.  EXHIBITS AND REPORTS ON FORM 8-K

Exhibit
Number                       Description of Document
------                       -----------------------
3.1       Certificate of Incorporation, as amended  (1)
3.2       By-Laws of the Company, as amended (4)
10.1      1996 Stock Option Plan, amended and restated (4)
10.2      Employment Agreement between Company and Roy Israel (3)
10.2.1    Amendment to Employment Agreement between Company and Roy Israel (4)
10.3      Employment Agreement between Company and Cynthia Sanders (4)
10.4      Employment Agreement between Company and Daniel Jansen (1)
10.5      Employment Agreement between Company and Patricia Giuliani-Rheaume (2)
10.7      Lease Agreement for Great Neck, New York facility (1)
10.7.1    Amendment to Lease Agreement for Great Neck, New York facility **
11        Consent of Independent Certified Public Accountants**
27        Financial Data Schedule**

------------
(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  1997
     Annual Report on Form 10-KSB.

(3)  Incorporated herein in its entirety by reference to the Company's Quarterly
     Report on Form 10-QSB for the quarter ended March 31, 1998.

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

**   Filed herewith.

Reports on Form 8-K: None during the fourth quarter.




<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.

                                  NAM CORPORATION


Date:   September 24, 1999        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 24, 1999        By: /s/Roy Israel
                                      ------------------------------------------
                                      Roy Israel, Chairman of the
                                      Board, CEO and President

Date:   September 24, 1999        By: /s/ Patricia Giuliani-Rheaume
                                      ------------------------------------------
                                      Patricia Giuliani-Rheaume, Vice President,
                                      Chief Financial Officer and Treasurer


Date:   September 24, 1999        By: /s/Cynthia Sanders
                                      ------------------------------------------
                                      Cynthia Sanders, Executive Vice President
                                      and Director


Date:   September 24, 1999        By: /s/ Daniel P. Jansen
                                      ------------------------------------------
                                      Daniel P. Jansen, National Accounts
                                      Manager and Director

Date:   September 24, 1999        By: /s/ Anthony J. Mercorella
                                      ------------------------------------------
                                      Anthony J. Mercorella, Director

Date:   September 24, 1999        By: /s/ Ronald Katz
                                      ------------------------------------------
                                      Ronald Katz, Director