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

                                 --------------

                                   FORM 10-QSB

[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT 
     OF 1934

                For the quarterly period ended December 31, 1998

[ ] 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                    (I.R.S. Employer
 of Incorporation or Organization)                Identification No.)

                             1010 Northern Boulevard
                           Great Neck, New York 11021
                    ----------------------------------------
                    (Address of Principal Executive Offices)

                                 (516) 829-4343
                           ----------------------------
                           (Issuer's Telephone Number,
                              Including Area Code)

                                 --------------

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 report), and (2) has been
subject to such filing requirements for the past 90 days. Yes X  No
                                                             ---   ---

As of February 10, 1999, 3,334,978 shares of common stock of the issuer were
outstanding.

Transitional small business disclosure format (check one):  Yes   No X
                                                               ---  ---

<PAGE>





                                 NAM CORPORATION
                                      INDEX

PART I.   FINANCIAL INFORMATION                                           Page
                                                                          ----

 ITEM 1.  UNAUDITED FINANCIAL STATEMENTS

                  Consolidated Balance Sheets at December 31,
                   1998 and June 30,1998                                    3

                  Consolidated Statements of Operations for
                   the three and six month periods ended
                   December 31, 1998 and 1997                               4

                  Consolidated Statements of Changes in
                   Stockholders' Equity for the six month
                   periods ended December 31, 1998 and 1997                 5

                  Consolidated Statements of Cash Flows
                   for the six month periods ended
                   December 31, 1998 and 1997                               6

                  Notes to Consolidated Financial Statements                7

 ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF
          FINANCIAL CONDITION AND RESULTS OF
          OPERATIONS                                                        9



PART II.  OTHER INFORMATION

                  Item 2.  Changes in Securities
                           and Use of Proceeds                             14

                  Item 6.  Exhibits and Reports on Form 8-K                15

                                       2

<PAGE>

                        NAM Corporation and Subsidiaries
                     CONSOLIDATED BALANCE SHEETS (UNAUDITED)
<TABLE>
<CAPTION>
                                                                                December 31,           June 30,
                                                                                    1998                 1998
                                                                                -----------          -----------
<S>                                                                             <C>                  <C>              
                                         ASSETS

CURRENT ASSETS
  Cash and cash equivalents                                                     $ 2,104,576          $ 1,417,280
  Marketable securities                                                             392,797            1,950,880
  Accounts receivable (net of allowance for doubtful accounts of $90,000)           434,838              385,300
  Other receivables                                                                  29,353               17,945
  Prepaid expenses                                                                  104,536               45,080
                                                                                -----------          -----------

     Total current assets                                                         3,066,100            3,816,485

FURNITURE AND EQUIPMENT - AT COST, less accumulated depreciation                    254,889              248,679

OTHER ASSETS                                                                         48,831               44,392
                                                                                ------------         -----------

                                                                                $ 3,369,820          $ 4,109,556
                                                                                ===========          ===========

                          LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES                                                             
  Accounts payable                                                                $ 300,912            $ 315,323
  Accrued liabilities                                                               202,476              163,641
  Accrued payroll and employee benefits                                              43,147              126,361
  Deferred revenues                                                                 169,267              150,389
                                                                                -----------          -----------

     Total current liabilities                                                      715,802              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;
    3,334,978 shares issued and outstanding                                           3,335                3,335
  Additional paid-in capital                                                      4,795,933            4,778,179
  Accumulated deficit                                                            (2,291,082)          (1,368,681)
  Accumulated other comprehensive income (loss)                                     145,832              (58,991)
                                                                                -----------          -----------

     Total stockholders' equity                                                   2,654,018            3,353,842
                                                                                -----------          -----------

                                                                                $ 3,369,820          $ 4,109,556
                                                                                ===========          ===========
</TABLE>


        The accompanying notes are an integral part of these statements.

                                       3
<PAGE>


                        NAM Corporation and Subsidiaries
                CONSOLIDATED STATEMENT OF OPERATIONS (UNAUDITED)
<TABLE>
<CAPTION>


                                                               Three months ended December 31,     Six months ended December 31,
                                                                    1998            1997               1998              1997
                                                                 -----------     -----------        -----------      ------------
<S>                                                              <C>             <C>                <C>              <C>        
Net revenues                                                     $1,114,307      $1,111,230         $2,112,256       $ 1,974,955
                                                                 ----------      ----------         ----------       -----------

Operating costs and expenses
  Cost of services                                                  295,614         280,639            565,788           505,108
  Sales and marketing expenses                                      428,257         427,420          1,118,863           816,971
  General and administrative expenses                               558,024         488,359          1,100,676           969,757
                                                                 ----------      ----------         ----------       -----------

                                                                  1,281,895       1,196,418          2,785,327         2,291,836
                                                                 ----------      ----------         ----------       -----------

           Loss from operations                                    (167,588)        (85,188)          (673,071)         (316,881)

Other income (expenses)                                          
   Investment income (loss)                                          29,194          40,852           (259,432)           83,515
   Other income                                                       9,073           2,833             10,102             3,243
                                                                 ----------      ----------         ----------       -----------

                                                                     38,267          43,685           (249,330)           86,758
                                                                 ----------      ----------         ----------       -----------

            Loss before income taxes                               (129,321)        (41,503)          (922,401)         (230,123)

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

            NET LOSS                                             $ (129,321)      $ (41,503)        $ (922,401)       $ (230,123)
                                                                 ==========       =========         ==========        ==========

Net loss per common share - basic and diluted                    $    (0.04)      $   (0.01)        $    (0.28)       $    (0.07)
                                                                 ==========       =========         ==========        ==========

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

The accompanying notes are an integral part of these statements.


                                       4
<PAGE>


                        NAM Corporation and Subsidiaries
           CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
                   Six months ended December 31, 1998 and 1997

<TABLE>
<CAPTION>

                                                                                                                    
                                                                                        Additional                  
                                                                   Common stock          paid-in         Accumulated
                                                              Shares     Amount          capital           deficit   
                                                            --------------------------------------------------------
<S>                                                         <C>         <C>          <C>                <C>         
Balances at July 1, 1997                                    3,334,978   $ 3,335      $ 4,772,569        $ (739,547) 

Compensation related to stock option plan                                                  2,805                    
Net loss                                                                                                  (230,123) 
Change in unrealized gain on marketable securities                                                                  
Earned portion of stock bonus plan                                                                                  
                                                                                                                    

Comprehensive loss                                                                                                  
                                                                                                                    

                                                            --------------------------------------------------------
Balances at December 31, 1997                               3,334,978   $ 3,335      $ 4,775,374        $ (969,670) 
                                                            --------------------------------------------------------


Balances at July 1, 1998                                    3,334,978   $ 3,335      $ 4,778,179      $ (1,368,681) 

Compensation related to stock option plan                                                 17,754                    
Net loss                                                                                                  (922,401) 
Change in unrealized (loss) gain on marketable securities                                                           
Earned portion of stock bonus plan                                                                                  
                                                                                                                    

Comprehensive loss                                                                                                  
                                                                                                                    

                                                            ========================================================
Balances at December 31, 1998                               3,334,978   $ 3,335      $ 4,795,933      $ (2,291,082) 
                                                            ========================================================

</TABLE>
<PAGE>

(RESTUBBED TABLE)
<TABLE>
<CAPTION>
                                                             Accumulated                                         
                                                               other             Total         Compre-         
                                                            comprehensive     stockholders'    hensive         
                                                            income (loss)        equity         loss           
                                                           -----------------------------------------------
<S>                                                            <C>           <C>              <C>              
Balances at July 1, 1997                                       $ 79,019      $ 4,115,376                       
                                                                                                               
Compensation related to stock option plan                                          2,805                       
Net loss                                                                        (230,123)      $ (230,123)     
Change in unrealized gain on marketable securities               98,743           98,743           98,743      
Earned portion of stock bonus plan                                   51               51               51      
                                                                                         -----------------     
                                                                                                               
Comprehensive loss                                                                             $ (131,329)     
                                                                                         -----------------     
                                                                                                               
                                                           ------------------------------                
Balances at December 31, 1997                                 $ 177,813      $ 3,986,852                 
                                                           ------------------------------                
                                                                                                               
                                                                                                               
Balances at July 1, 1998                                      $ (58,991)     $ 3,353,842                       
                                                                                                               
Compensation related to stock option plan                                         17,754                       
Net loss                                                                        (922,401)      $ (922,401)     
Change in unrealized (loss) gain on marketable securities       204,772          204,772          204,772      
Earned portion of stock bonus plan                                   51               51               51      
                                                                                         -----------------     
                                                                                                               
Comprehensive loss                                                                             $ (717,578)     
                                                                                         -----------------     
                                                                                                               
                                                           ==============================               
Balances at December 31, 1998                                 $ 145,832      $ 2,654,018                
                                                           ==============================               
                                                                                                               
</TABLE>


The accompanying notes are an integral part of these statements.

                                       5
<PAGE>

                        NAM Corporation and Subsidiaries
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                          Six months ended December 31,
<TABLE>
<CAPTION>

                                                                                    1998                   1997
                                                                                -----------            -----------
<S>                                                                             <C>                     <C>
Cash flows from operating activities
   Net loss                                                                     $  (922,401)            $ (230,123)
   Adjustments to reconcile net loss to net cash used in operating
    activities
      Depreciation and amortization                                                  49,350                 33,134
      Losses on sales of marketable securities                                      303,130                  1,039
      Losses on sales of furniture and equipment                                        523                      -
      Earned portion of stock bonus plan                                                 52                     51
      Compensation related to stock option plan                                      17,754                  2,805
      Changes in operating assets and liabilities
         (Increase) in accounts receivable                                          (49,538)               (63,499)
         (Increase) decrease in other receivables                                   (11,408)                20,488
         (Increase) in prepaid expenses                                             (59,456)               (18,490)
         (Increase) decrease in other assets                                         (8,734)                 4,998
         Increase (decrease) in accounts payable and accrued liabilities             24,424                (29,479)
         (Decrease) in accrued payroll and employee benefits                        (83,214)               (70,215)
         Increase (decrease) in deferred revenues                                    18,878                   (963)
                                                                                -----------             ----------
      Net cash used in operating activities                                        (720,640)              (350,254)
                                                                                -----------             ----------

Cash flows from investing activities
   Purchases of marketable securities                                              (818,813)            (1,393,118)
   Proceeds from maturities of marketable securities                                570,000              1,545,000
   Proceeds from sales of marketable securities                                   1,708,647                479,724
   Increase in payable for securities purchased                                           -                 38,662
   Purchases of furniture and equipment                                             (51,898)               (93,149)
                                                                                -----------             ----------
       Net cash provided by investing activities                                  1,407,936                577,119
                                                                                -----------             ----------

Cash flows from financing activities
                                                                                -----------             ----------
       Net cash provided by financing activities                                          -                      -
                                                                                -----------             ----------

       NET INCREASE IN CASH AND CASH EQUIVALENTS                                    687,296                226,865

Cash and cash equivalents at beginning of period                                  1,417,280                175,486

                                                                                ===========             ==========
Cash and cash equivalents at end of period                                      $ 2,104,576             $  402,351
                                                                                ===========             ==========

</TABLE>


The accompanying notes are an integral part of these statements.



                                           6


<PAGE>


                        NAM CORPORATION and SUBSIDIARIES

                     Notes to Consolidated Financial Statements
                       Six months ended December 31, 1998
                                  (Unaudited)

1. The consolidated balance sheet as of December 31, 1998 and the related
consolidated statements of operations for the six month periods ended December
31, 1998 and 1997 have been prepared by NAM Corporation, including the accounts
of its wholly-owned subsidiaries. In the opinion of management, all adjustments
necessary to present fairly the financial position as of December 31, 1998 and
for all periods presented, consisting of normal recurring adjustments, have been
made. Results of operations for the six month period ended December 31, 1998 are
not necessarily indicative of the operating results expected for the full year.

These consolidated financial statements should be read in conjunction with the
consolidated financial statements and notes thereto for the year ended June 30,
1998 included in the Company's Annual Report on Form 10-KSB. The accounting
policies used in preparing these consolidated financial statements are the same
as those described in the June 30, 1998 consolidated financial statements.

2. During the first quarter of fiscal 1999, the Company adopted Statement of
Financial Accounting Standards (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 earnings or stockholders' equity. SFAS No.
130 requires unrealized gains or losses on marketable securities and unearned
compensation related to a stock bonus plan, 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.

The components of comprehensive loss are as follows:

                                            Three months ended December 31,
                                                 1998            1997
                                                 ----            ----
   Net loss                                   ($129,321)      ($41,503)
   Change in unrealized gain (loss)
     on marketable securities                   162,486        (14,188)
   Unearned compensation - stock
     option plan                                     25             26 
                                              ---------      ---------

     Comprehensive income (loss)               $ 33,190       ($55,665)
                                              ---------      ---------


                                       7
<PAGE>


                                             Six months ended December 31,
                                                1998             1997 
                                                ----             ---- 
   Net loss                                   ($922,401)      ($230,123)
   Change in unrealized gain (loss)
     on marketable securities                   204,772          98,743
   Unearned compensation - stock
     option plan                                     51              51 
                                              ---------      ----------

                  Comprehensive loss          ($717,578)      ($131,329)
                                             ----------      ----------

The components of accumulated other comprehensive income (loss) are as follows:

                                               December 31,     June 30,
                                                 1998            1998   
                                               ------------    ----------


  Unrealized gain (loss) on
    marketable equity securities               $145,883        ($58,888)
  Unearned compensation - stock
     option plan                                    (51)           (103)
                                                -------        --------

Accumulated other comprehensive
     income (loss)                             $145,832        ($58,991)
                                               --------        --------


3. 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.

4. Certain prior period amounts were reclassified to conform with the current
period presentation.

                                       8
<PAGE>



                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS


     The following Management's Discussion and Analysis of Financial Condition
and Results of Operations contains forward-looking statements within the meaning
of the Private Securities Litigation Reform Act of 1995 (the "Act"). The Company
desires to avail itself of certain "safe harbor" provisions of the Act and
therefore is including this special note to enable it to do so. The
forward-looking statements contained herein involve certain risks and
uncertainties. The Company's actual results and experience could differ
materially from those anticipated in these forward-looking statements as a
result of many factors, including changes in the markets and/or regions
currently served by the Company and in those markets and/or regions that the
Company may expand into; 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 NAMSYS
software program.

General

     The Company provides alternative dispute resolution ("ADR") services to
insurance companies, law firms, self-insured corporations, municipalities and
individuals. To date, the Company has focused the majority of its marketing
efforts on developing relationships, and expanding existing relationships, with
large corporations and law firms 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 has
offices in New York, Pennsylvania, Massachusetts, Tennessee, South Carolina and
Illinois.

         With the ability to provide ADR services nationwide, the Company's
objective is to offer a viable, cost efficient and timely alternative to the
court system and become one of the leading providers of ADR services. The
Company intends to achieve this goal by employing the following strategies: (1)
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
advertising and external public relations costs incurred with respect thereto
approximated $293,000 for the six months ended December 31, 1998; (2) in order
to increase business, the Company is currently pursuing exclusive relationships
with corporations and law firms in order to obtain contracts on a regional and
national basis; (3) the Company is attempting to broaden its client base by
attracting more complex cases; (4) the Company has developed the NAMSYS software
that it intends to market to high volume users of ADR services; (5) the Company
is also developing an ADR internet product that is intended to complement its
existing arbitration and mediation services; and (6) the Company is exploring
strategic alliances with business entities that have the ability to promote
NAM's ADR services to their customers.

                                       9
<PAGE>

Second Quarter Ended December 31, 1998 Compared to Second Quarter Ended December
31, 1997

     Revenues. Revenues increased slightly to $1,114,307 for the second quarter
ended December 31, 1998 from $1,111,230 for the comparable prior period. The
number of cases heard in the current period decreased from the prior year.
However, an increase in the average dollars earned per case more than offset
this decline. At the end of the second quarter, 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. Management
believes the steps taken will enable the Company to regain its momentum in
servicing an increasing number of cases when comparing like-periods year to
year.

     Cost of Services. Cost of services increased 5% to $295,614 for the second
quarter ended December 31, 1998 from $280,639 for the second quarter ended
December 31, 1997. The increase of $14,975 relates primarily to a non-recurring
charge for the granting and vesting of stock options with respect to a hearing
officer. Without this charge, the cost of services as a percentage of revenues
remained stable at 25% in both periods. 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 slightly to
$428,257 for the second quarter ended December 31, 1998 from $427,420 for the
second quarter ended December 31, 1997. Sales and marketing costs as a
percentage of revenues remained stable at 38% for both periods.

         General and Administrative. General and administrative costs increased
14% to $558,024 for the second quarter ended December 31, 1998 from $488,359 for
the second quarter ended December 31, 1997. A portion of the increase relates to
costs incurred in connection with an annual conference sponsored by the Company
for the benefit of the ADR industry. Secondly, after the second quarter of the
1998 fiscal year, additional staff were hired for data processing and other
support functions. Finally, higher printing costs were incurred in the second
quarter of fiscal year 1999 relating to the Company's brochures and other
marketing materials. General and administrative costs as a percentage of
revenues increased to 50% in the second quarter of fiscal year 1999 from 44% for
the comparable prior period.

     Other Income. Other income declined 12% to $38,267 for the second quarter
ended December 31, 1998 from $43,685 for the second quarter ended December 31,
1997. Other income is composed primarily of investment income and realized gains
(losses) generated from investments. The decrease in other income is mainly due
to the decrease in the average invested portfolio during the current period.


                                       10
<PAGE>

         Income Taxes. Tax benefits resulting from net losses incurred for the
three-month periods ended December 31, 1998 and 1997 were not recognized as the
Company recorded a full valuation allowance against the net operating loss
carryforwards during the periods.

         Net Loss. For the three months ended December 31, 1998, the Company had
a net loss of ($129,321) as compared to a net loss of($41,503) for the three
months ended December 31, 1997. The loss increased primarily due to higher
general and administrative costs incurred to support the Company's anticipated
future growth.


Six Months  Ended  December 31, 1998  Compared to Six Months Ended  December 31,
1997

     Revenues. Revenues increased by 7% to $2,112,256 for the six months ended
December 31, 1998 from $1,974,955 for the comparable prior period. The number of
cases heard in the current six month period increased slightly from the prior
year. Furthermore, there was an increase in the average dollars earned per case.
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.
Management believes the steps taken will enable the Company to regain its
momentum in servicing an increasing number of cases when comparing like-periods
year to year.

     Cost of Services. Cost of services increased 12% to $565,788 for the six
months ended December 31, 1998 from $505,108 for the six months ended December
31, 1997. The increase relates primarily to a non-recurring charge for the
granting and vesting of stock options with respect to a hearing officer as well
as one-time 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 declined from 26% in the first six months
of fiscal year 1998 to 25% in the first six months of fiscal year 1999. 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 37% to $1,118,863
for the six months ended December 31, 1998 from $816,971 for the six months
ended December 31, 1997. Sales and marketing costs as a percentage of revenues
increased to 53% for the first six months of fiscal year 1999 from 41% for the
first six months of fiscal year 1998. This increase largely relates to
advertising and public relations expenditures. Such costs increased by
approximately $260,000 during the six months ended December 31, 1998 from the
comparable prior year period. 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. The campaign
was aimed at quickly making NAM a brand name. As the Company believes it has
made significant progress in achieving this goal, Management intends to continue
advertising to maintain the Company's name recognition but at a reduced level.
As a result, advertising expense for the remainder of the 1999 fiscal year is
expected to decline substantially from the expenditures in the comparable prior
periods. The remaining increase in sales and marketing primarily pertains to
salaries and related items (approximately $30,000). Firstly, higher sales
commissions were incurred based on the higher volume of business. Secondly,
marketing and public relations personnel were hired after the first quarter of
the 1998 fiscal year in connection with the advertising campaign.

                                       11
<PAGE>



         General and Administrative. General and administrative costs increased
14% to $1,100,676 for the six months ended December 31, 1998 from $969,757 for
the six months ended December 31, 1997. A portion of the increase relates to
costs incurred in connection with two seminars/conferences sponsored by the
Company for the benefit of the ADR industry. The remaining increase relates
primarily to salary and related items due to increases in staff after the first
quarter of the 1998 fiscal year for data processing and other support functions.
General and administrative costs as a percentage of revenues increased to 52% in
the first six months of fiscal year 1999 from 49% for the comparable prior
period.

     Other Income (Expenses). Other income (expenses) changed from income of
$86,758 for the six months ended December 31, 1997 to an expense of ($249,330)
for the six months ended December 31, 1998. Other income (expense) is composed
primarily of investment income and realized gains (losses) generated from
investments. During the first half of the 1999 fiscal year, the Company sold a
substantial portion of its marketable securities. As a result, net realized
losses increased to approximately $303,000 in the first six months of fiscal
year 1999 from $1,000 in the comparable prior period. In addition, investment
income also declined as a result of the lower average invested portfolio during
the current period.

         Income Taxes. Tax benefits resulting from net losses incurred for the
six-month periods ended December 31, 1998 and 1997 were not recognized as the
Company recorded a full valuation allowance against the net operating loss
carryforwards during the periods.

         Net Loss. For the six months ended December 31, 1998, the Company had a
net loss of ($922,401) as compared to a net loss of ($230,123) for the six
months ended December 31, 1997. The loss increased primarily due to greater
expenditures for the advertising campaign and losses realized from the sale of
marketable securities, as well as higher general and administrative costs
incurred to support the Company's anticipated future growth.


                                       12
<PAGE>




Liquidity and Capital Resources

     At December 31, 1998, the Company had working capital surplus of $2,350,298
compared to $3,060,771 at June 30, 1998. The decrease in working capital
occurred as a result of (1) the loss from operations and (2) realized losses
from the sales of marketable securities. Net cash used in operating activities
was $720,640 for the six months ended December 31, 1998 versus $350,254 in the
prior comparable period.

     Net cash provided by investing activities was $1,407,936 for the six months
ended December 31, 1998 versus $577,119 in the comparable prior period. During
the first half of fiscal year 1999, various investments in government securities
matured and the Company sold a large portion of its corporate bonds and equity
securities. Such proceeds were 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.

The Year 2000

     The Company continues to evaluate the impact of the Year 2000 issue on its
business and currently does not expect to incur significant costs 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
Year 2000 issue is the result of computer programs being written using two
digits rather than four to define the applicable year. 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 also converted
its usage of the date fields from two digits to four digits with respect to its
major operating system. The final components of the system are anticipated to be
Year 2000 compliant before the end of the fiscal year. The Company has also
contacted most of its major vendors to ensure that they have appropriate plans
to address Year 2000 issues.




                                       13
<PAGE>


                            PART II - OTHER INFORMATION

Item 1.           Legal Proceedings.
                           An action entitled National Arbitration Forum, Inc.
                  v. NAM Corporation, pending in Federal District Court of
                  Minnesota, was commenced on February 4, 1999 against the
                  Company seeking (i) to cancel the Company's registered
                  trademark National Arbitration & Mediation, (ii) an order
                  declaring plaintiff's use of its trademark does not infringe
                  upon the Company's mark, and (iii) unspecified damages. This
                  action arose out of the Company's efforts to enforce its
                  trademark rights against the plaintiff. The Company believes
                  it has meritorious defenses to such claims and intends to
                  defend the action vigorously.

Item 2.           Changes in Securities and Use of Proceeds.

                           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 $1,315,000 had been utilized through June 30, 1998 as
                  disclosed in the Company's Form 10-KSB. During the six months
                  ended December 31, 1998, the Company additionally expended
                  approximately $1,100,700 for working capital and general
                  corporate purposes, including its advertising campaign.

Item 3.           Defaults upon Senior Securities.
                           Not applicable.

Item 4.           Submission of matters to a Vote of Security Holders.
                           On December 17, 1998, the Company held its annual
                  meeting of shareholders. At the meeting, shareholders voted on
                  four proposals. The following represents the results of the
                  voting, both in person and by proxy:

                  Election of Directors:

                  Roy Israel                      3,078,856 votes for; 
                                                  0 votes against; 
                                                  15,150 votes withheld.

                  Cynthia Sanders                 3,074,856 votes for;
                                                  0 votes against;
                                                  19,150 votes withheld.

                  Daniel Jansen                   3,075,756 votes for; 
                                                  0 votes against; 
                                                  18,250 votes withheld.

                  Anthony Mercorella              3,078,856 votes for; 
                                                  0 votes against; 
                                                  15,150 votes withheld.

                  Ronald Katz                     3,079,256 votes for; 
                                                  0 votes against; 
                                                  14,750 votes withheld.

                                       14
<PAGE>


                  For ratification of appointment of Grant Thornton LLP as the
                  Company's independent accountants for fiscal year 1999:
                           3,071,619 votes for; 
                           13,787 votes against; 
                           8,600 abstenations.

                  For approval of the amendment to the Amended and Restated 1996
                  Incentive and Nonqualified Stock Option Plan to increase the
                  number of shares of common stock authorized for issuance
                  thereunder from 750,000 shares to 2,000,000 shares:
                           1,718,140 votes for; 
                           83,651 votes against; 
                           42,785 abstenations; 
                           1,249,430 not voted.

                  For approval of the amendment to the Amended and Restated 1996
                  Incentive and Nonqualified Stock Option Plan 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:
                           2,975,370 votes for;
                           72,851 votes against; 
                           42,785 abstenations.

Item 5. Other information.
                           Not applicable.

Item 6. Exhibits and Reports on Form 8-K.

        (a)                Exhibits.
<TABLE>
<CAPTION>
            Exhibit
            Number    Description of Document
            ------    -----------------------
            <S>       <C>
             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)
             27       Financial Data Schedule **
</TABLE>
                                       15
<PAGE>

---------

(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 December 31, 1997.

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


**  Filed herewith.



(b) Reports on Form 8-K. None.



                                   SIGNATURES

In accordance with the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

                               NAM CORPORATION

Date: February 10, 1999    By: /s/ Roy Israel 
                               ----------------------------------
                               Roy Israel, President and CEO

Date: February 10, 1999    By: /s/ Patricia A. Giuliani-Rheaume   
                               ----------------------------------
                               Patricia A. Giuliani-Rheaume,
                               Vice President, Treasurer and CFO