<PAGE>   1
                     U.S. SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                                   FORM 10-KSB

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

For the fiscal year ended December 31, 1999

[ ]   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
      EXCHANGE ACT OF 1934

For the transition period from _______ to _______

                          Commission File No.: 0-22936
                                               -------

                              Crown NorthCorp, Inc.
                              ---------------------
                 (Name of small business issuer in its charter)

              Delaware                                 22-3172740
              --------                                 ----------
   (State or other jurisdiction of                  (I.R.S. Employer
    incorporation or organization)                 Identification No.)

                     1251 Dublin Road, Columbus, Ohio 43215
                     --------------------------------------
               (Address of principal executive offices) (Zip Code)

                                 (614) 488-1169
                                 --------------
                           (Issuer's telephone number)

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

                                      NONE

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

                     Common Stock, par value $.01 per share

         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 issuer 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 disclosure of delinquent filers 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 registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB. [X]

         Issuer's revenues for the fiscal year ended December 31, 1999 were
$5,455,216.

         The aggregate market value of the voting and non-voting common equity
held by non-affiliates of the Registrant as of March 24, 2000 was $955,456.

         As of March 24, 2000 the issuer had 10,579,060 shares of its common
stock outstanding.

         Transitional Small Business Disclosure Format.  Yes [ ]   No [X]

<PAGE>   2


                              CROWN NORTHCORP, INC.

                                   FORM 10-KSB
                      FOR THE YEAR ENDED DECEMBER 31, 1999

                                      INDEX

<TABLE>
<CAPTION>
                  PART I.                                                                           PAGES
                                                                                                    -----

<S>             <C>                                                                               <C>
Item 1.           Description of Business.....................................................        1

Item 2.           Description of Property.....................................................        3

Item 3.           Legal Proceedings...........................................................        4

Item 4.           Submission of Matters to a Vote of Security Holders.........................        4

                  PART II.

Item 5.           Market for Common Equity and Related Stockholder Matters....................        4

Item 6.           Management's Discussion and Analysis........................................        5

Item 7.           Financial Statements........................................................  F-1 thru F-18

Item 8.           Changes in and Disagreements with Accountants on Accounting
                  and Financial Disclosure....................................................        13

                  PART III.

Item 9.           Directors, Executive Officers, Promoters and Control Persons;
                  Compliance with Section 16(a) of the Exchange Act..........................         13

Item 10.          Executive Compensation.....................................................        14

Item 11.          Security Ownership of Certain Beneficial Owners
                  and Management.............................................................        17

Item 12.          Certain Relationships and Related Transactions.............................        18

Item 13.          Exhibits and Reports on Form 8-K...........................................        19
</TABLE>


<PAGE>   3
                                     PART I
                                     ------

ITEM 1. - DESCRIPTION OF BUSINESS
---------------------------------

BUSINESS OVERVIEW

Crown NorthCorp, Inc is a financial services firm providing comprehensive
services to the commercial real estate industry. Third-party asset management
and loan servicing are principal businesses of the company. Crown also provides
mortgage banking and financial advisory services.

The company is incorporated under the laws of the state of Delaware and was
formed in 1994 through the combination of Crown Revenue Services, Inc. and
NorthCorp Realty Advisors. Crown's corporate headquarters is in Columbus, Ohio.
The company also has offices in Atlanta, Georgia; Austin and Dallas, Texas; and
Chantilly, Virginia. At December 31, 1999, the company had 37 full-time
employees.

The company's primary revenues are from servicing contracts pursuant to which
Crown provides management services for commercial real estate and loan assets,
the servicing of individual loans and loan portfolios, due diligence reviews,
asset underwriting, risk management services and the administration of various
corporate and partnership interests. Under these agreements, Crown's revenues
may include recurring management or servicing fees, disposition fees associated
with transactions and incentive fees based on the overall performance of
particular assets under management.

THIRD-PARTY ASSET MANAGEMENT. Crown manages loan and real estate assets for
clients which include investment banking firms, partnerships and investment
consortiums. Among the services it provides are risk management, in-depth asset
analysis and underwriting and land management. A substantial portion of the
assets under the company's management are large commercial real estate loans
secured by interests in hotels, office buildings, shopping centers and
multifamily properties. In many cases, a client asks Crown to reposition or
rehabilitate an asset to enhance its value or prepare it for disposition.
Crown's asset management contracts are generally for indefinite terms and
provide for the management of additional assets from time to time under varying
compensation methods. Contracts with one customer, an investment banking firm,
accounted for 33% of 1999 revenues.

LOAN SERVICING. The company services loans and other real estate interests for
both individual clients and investors in securitized transactions. The company's
highly developed servicing systems and procedures have resulted in favorable
ratings from two nationally recognized rating agencies, Standard and Poor's
Corporation and Fitch IBCA. Operating as a rated servicer, the company services
a wide range of commercial real estate interests, including many complex
financing arrangements. Crown's servicing capabilities are a fundamental element
of all of the company's businesses.


                                       1
<PAGE>   4


CAPITAL STRUCTURE

Throughout its history, many of the company's competitors in the financial
services industry have been significantly larger and better capitalized than
Crown. In 1999, the company took several actions related to its capital
structure. It retained an investment banking firm to help it explore strategic
and financial alternatives. Crown sold its corporate headquarters to increase
liquidity, reduce operating expenses and remove owned real estate from its
balance sheet. See "Note 3 - Property and Equipment - to the Consolidated
Financial Statements." It also sold its European operations to increase
liquidity, reduce operating costs and concentrate financial and human resources
on the company's domestic asset management and servicing businesses. See "Note 2
- Discontinued Operations and Dispositions - to the Consolidated Financial
Statements." These actions led to a series of transactions closed in December
1999 whereby the company, using a combination of cash on hand and borrowed
funds, redeemed its Series AA, Series BB and Series B preferred stock and
settled certain other obligations. See "Item 6 - Management's Discussion and
Analysis." These closings also terminated all voting agreements affecting
Crown's common stock as well as all agreements pertaining to the composition of
the company's Board of Directors. While these transactions resulted in
significant expenses and reduced the size of the company, Crown believes it is
now better positioned to grow and develop its core businesses and to seek
strategic alliances or capital investments related to those businesses.

RECENT DEVELOPMENTS

In conjunction with the December 1999 transactions to change the capital
structure of the company, Crown augmented its asset management, financial
advisory and mortgage banking services by assuming the assets and operations of
DRS Realty Services, Inc., a commercial real estate services company. The
executive officers of DRS have become executive officers of Crown. See "Item 9 -
Directors, Executive Officers, Promoters and Control Persons."

Over the past three years, the company had limited authorization to refinance
multifamily loans under Fannie Mae's Delegated Underwriting and Servicing
Program. The company sold its interests in this program in December 1999. Cash
that had been used to collateralize Crown's obligations under the DUS Program
was then used in January 2000 to repay debt incurred in the capital
restructuring pursuant to the terms of that financing facility. This repayment
substantially reduced the company's liquidity. This limited liquidity constrains
the company's operations.

Within the constraints of its limited financial capacity, Crown has begun to
further develop its mortgage banking and financial advisory business. Operations
in these areas are designed to complement and grow the company's servicing and
asset management businesses. For example, Crown, either directly or in
conjunction with strategic partners, will seek to originate commercial real
estate loans for sale to correspondents, with Crown retaining the servicing for
those loans.


                                       2
<PAGE>   5


COMPETITIVE ENVIRONMENT

As noted above, many of Crown's competitors are much larger and better
capitalized than the company. While the company feels the quality of its asset
management services and rated servicing systems are effective competitive tools,
the company's business prospects and potential profitability are nevertheless
significantly affected by its ability to align with capital partners and to
attract new capital. Until it obtains additional capital resources, for example,
Crown will be unable to make the investments in asset portfolios that are often
required to secure new asset management or servicing business. Crown, though, is
actively seeking to obtain new business through means that do not require the
commitment of capital.

In summary, Crown believes that the steps it has taken to restructure its
capitalization, develop additional capacity in its core business operations and
reduce operating expenses increase the likelihood that the company will return
to profitable operations in the foreseeable future. The expenses attributable to
the capital restructuring and related transactions significantly affected 1999
operating results. Repayment of debt associated with the capital restructing has
substantially reduced Crown's liquidity. The company believes, though, it is now
better prepared to attempt to expand business in each of its core business lines
and to attract capital resources necessary to compete for financial service
business.

ITEM 2. - DESCRIPTION OF PROPERTY
---------------------------------

OFFICES

Crown sold its corporate headquarters in Columbus, Ohio in May 1999 and now
leases a portion of the space in the building. See "Note 3 - Property and
Equipment - to the Consolidated Financial Statements." The company also leases
office space in Atlanta, Georgia and Dallas and Austin, Texas and has assumed
DRS' obligations under a lease of office space in Chantilly, Virginia. See "Note
5 - Leases - to the Consolidated Financial Statements."

INVESTMENT POLICIES

REAL ESTATE; INTERESTS IN REAL ESTATE; ENTITIES PRIMARILY ENGAGED IN REAL ESTATE
ACTIVITIES . A principal business of Crown is third-party asset management. The
company conducts this business by managing real estate and interests in real
estate for the account of others. Generally, the company does not invest in real
estate, real estate interests or entities--including partnerships and joint
ventures--engaged in real estate activities for its own account. It will,
though, make such investments as management believes to be necessary and prudent
to secure or retain asset management business. For example, in 1998, in
conjunction with entering into an asset management agreement for the Telereit
transaction in Sweden, Crown invested approximately $2.5 million in exchange for
an indirect ownership interest in Telereit Holding AB. The company recovered
this investment in 1999 as part of the disposition of its European operations.
Crown must expand its capital base before making similar investments in the
future.

                                       3
<PAGE>   6

REAL ESTATE MORTGAGES. The company generally does not originate or invest in
commercial mortgage loans for its own account. Crown has in the past originated
loans which were purchased at closing by a loan conduit program. This conduit
program ceased operations in 1998. Crown also had a limited license to refinance
certain loans for sale to Fannie Mae under that agency's DUS Program with Crown
retaining a portion of the credit risk for the loans. Crown sold its DUS
business in December 1999. In the future, Crown intends to engage in commercial
real estate mortgage brokerage or banking activities for the account of others
that complement and support the company's asset management and loan servicing
business.

Crown from time to time seeks to acquire the rights to service mortgage loan
assets through the negotiated purchase of or successful bid for the servicing
rights themselves. Here again, Crown does not anticipate engaging in this
activity until it increases its capital resources through strategic alliances or
other means.

ITEM 3. - LEGAL PROCEEDINGS
---------------------------

The company is a party to routine litigation incidental to its business.
Management does not believe that the resolution of this litigation will
materially affect the financial position or liquidity of the company.

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

None.
                                     PART II
                                     -------

ITEM  5. - MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
-------------------------------------------------------------------

COMMON STOCK

The company's common stock trades under the symbol "ASET" on the OTC Bulletin
Board administered by the National Association of Securities Dealers, Inc.

Records maintained by the National Quotation Bureau show the following high and
low bid prices for the common stock:

                  QUARTER ENDED             HIGH             LOW
                  -------------             ----             ---
                  March 31, 1998           $3.25            $1.625
                  June 30, 1998            $3.25            $1.75
                  September 30, 1998       $2.375           $1.50
                  December 31, 1998        $1.75            $1.00
                  March 31, 1999           $1.31            $.93
                  June 30, 1999            $1.18            $.31
                  September 30, 1999       $.375            $.18
                  December 31, 1999        $.31             $.03

                                       4
<PAGE>   7

These quotations reflect inter-dealer prices, without retail mark-up, mark-down
or commission and may not represent actual transactions.

At March 24, 2000, there were approximately 2,630 holders of record of shares of
the common stock.

During its 1999 and 1998 fiscal years, the company made no payments of cash
dividends or returns of capital on common shares.

The company does not anticipate paying dividends on the common stock in the
foreseeable future. Instead, management anticipates that any earnings will be
used in the operations of the company.

At December 31, 1999, Crown had 30,000,000 authorized shares of common stock and
1,000,000 authorized shares of preferred stock.

ITEM 6. - MANAGEMENT'S DISCUSSION AND ANALYSIS
----------------------------------------------

THE COMPANY'S BUSINESSES

The company derives its primary revenues from the financial services it offers
to owners and operators of commercial real estate interests. These revenues
include third-party asset management and disposition fees, loan servicing fees,
fees for due diligence or underwriting reviews, incentive fees based on the
overall performance of a contract or pool of assets and interest income. While
Crown curtailed mortgage lending operations in 1999, it intends to become more
active in mortgage lending for correspondents. Crown utilizes strategic
acquisitions and alliances to expand and diversify its core business lines as
well as to provide access to capital resources. Management continues to actively
pursue strategic alliances and other transactions that would maximize the value
of the company's core businesses and expand its capital base.

FORWARD LOOKING STATEMENTS

The statements contained in this report that are not purely historical are
forward-looking statements within the meaning of Section 21E of the Exchange
Act, including statements regarding the company's expectations, hopes,
intentions or strategies regarding the future. Forward-looking statements
include terminology such as "anticipate," "believe," "has the opportunity,"
"seeking to," "attempting," "would," "contemplated," "believes," "in the future"
or comparable language. All forward-looking statements included in this document
are based on information available to the company on the date hereof, and the
company assumes no obligation to update any such forward-looking statements. It
is important to note that the company's actual results could differ materially
from those in such forward-looking statements. The factors listed below are
among those that could cause actual result to differ materially from those in
forward-looking statements. Additional risk factors are listed from time to time
in the company's reports on Forms 10-QSB, 8-K and 10-KSB.

                                       5
<PAGE>   8

Among the risk factors that could materially and adversely affect the future
operating results of the company are:

-        If Crown cannot improve its liquidity through profitable operations,
         increased revenues, reduced expenses or other means, its ability to
         operate will be impaired.

-        Crown is operating at a loss. These losses will continue until the
         company is able to realize additional revenues in some or all of its
         business lines.

-        The company may not develop sufficient capital resources through
         profitable operations, the raising of additional capital or other means
         to more successfully compete with larger and better capitalized
         competitors.

-        Many of the company's asset management contracts are for an indefinite
         term, cancelable upon thirty days' notice. If a significant number of
         these contracts are terminated or modified, this may adversely affect
         the company's revenues, liquidity and profitability.

-        The company presently derives approximately one-third of its revenues
         from one customer. If this customer relationship is terminated or
         reduced, this may adversely affect the company's revenues, liquidity
         and profitability.

-        The company currently operates as a rated servicer. If the company no
         longer were to receive ratings, or if its ratings were downgraded, its
         ability to retain existing business and to obtain new business in many
         commercial real estate markets could be limited.

OUTLOOK

Crown intends to continue to offer the commercial real estate industry a
comprehensive array of financial services, including third-party asset
management, loan servicing, mortgage banking and financial advisory services. To
better position itself to deliver these services, the company has taken actions
to reduce its size, simplify its capital structure and to augment its core
business units. Presently, though, the company has limited liquidity and capital
resources. To continue to operate, the company must increase its liquid assets
and capital through revenues from new business, investments in the company by
strategic partners or both.

The company continues to derive significant revenues from third-party asset
management. During 1999, Crown's principal investment banking client continued
to place additional assets with the company for management. In 1999, Crown also
undertook significant asset management work for a shareholder. The company's
asset management activities generally include work on large commercial real
estate assets such as loans secured by hotels, office buildings, shopping
centers and multifamily projects. In many cases, these assets are not performing
according to their terms at the time they are assigned to Crown. For the
foreseeable future, the company anticipates that it will continue to derive its
primary revenues


                                       6
<PAGE>   9

from third party asset management contracts. Crown is actively seeking ways to
increase revenues in this area.

Loan servicing has been and will remain a core business of the company.
Generally, Crown services the assets placed with it for management. The company
believes its renewed emphasis on mortgage banking activities will provided
additional sources of loan servicing business. Other opportunities to grow
servicing business lie in negotiated transactions, competitive bidding and
investments in assets to be serviced. In the latter case, Crown's limited
capital resources require that it align itself with sources of capital or a
strategic partner to pursue such opportunities.

Crown continues to maintain favorable servicer ratings with both Standard and
Poor's Corporation and Fitch IBCA. The company believes that its ability to
operate as a rated servicer is of significant marketing value as Crown seeks to
secure additional management and servicing business. The company intends to
continue to devote substantial resources to maintaining its capabilities as a
rated servicer.

In August 1999, Crown sold its European operations to increase liquidity, reduce
operating costs and concentrate financial and human resources on domestic asset
management and servicing opportunities in commercial real estate markets. The
company believes that profitable financial services opportunities exist in
Europe and it will explore these as sufficient resources become available. At
this time, Royal Investments Corp. ("Royal"), a company wholly owned by Mr.
Roark is doing business in Europe and is funding Crown's salary and benefits
expenses for Mr. Roark. See "Item 12 - Certain Relationships and Related
Transactions."

While mortgage banking activities were curtailed during 1999 following the
termination of a loan conduit program in which the company participated, Crown
is again developing its loan origination capabilities as a means to expand asset
management and servicing business. The company intends to originate commercial
mortgage loans for sale to third parties and to retain the servicing rights to
those loans.

Crown intends to return to profitability primarily by increasing revenues from
its core asset management and servicing businesses. It is more actively
marketing its capabilities as a rated servicer and is developing its commercial
loan origination capability. Additionally, Crown has taken steps to reduce
operating costs by selling certain assets and moving certain offices and will
continue to evaluate means to control operating expenses. Crown recognizes,
however, that the foregoing efforts may not be sufficient to overcome continued
operating deficits. Therefore, Crown is actively seeking a merger partner or
strategic alliance that could enhance the company's capital, revenues or
liquidity. There can be no assurance, however, that Crown's actions will produce
the intended results or lead to profitable operations.

RESULTS OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 1999 COMPARED TO THE YEAR
ENDED DECEMBER 31, 1998.

Total revenues from continuing operations decreased $459,021 to $5.5 million in
1999 from $5.9 million in 1998, with the largest decreases being attributable to
management and incentive


                                       7
<PAGE>   10

fees and the cessation of the mortgage origination activities in 1998.
Private-sector asset management contracts with various clients, including
investment banking firms and partnerships, continue to provide a significant
portion of the company's revenue. Disposition fees increased $279,824 due to the
sale of several large assets in the fourth quarter. Crown is continuing its
efforts to increase the revenues it receives from its core asset management
business and related activities.

Management fees are recorded as services required under a contract are performed
and, as defined in the applicable contracts, are derived either from percentages
of the aggregate value of assets under management or from original base monthly
amounts. Management fees increased $533,522 to $2,635,394 in 1999 from
$2,101,872 in 1998. The book value of assets under management increased to $1.4
billion at December 31, 1999 as compared to $993 million at December 31, 1998.
Generally, completed and discontinued contracts are being replaced with
contracts yielding lower fees.

Disposition fees are recorded as revenue when the disposition of an asset has
been consummated and the asset owner has received the gross proceeds from the
disposition. Disposition fees are generally based on a percentage of the
proceeds of an asset disposition, as defined by the contracts, or a fixed amount
per disposition. Disposition fee revenues increased $279,824 to $970,389 in 1999
from $691,015 in 1998. Disposition fees of $160,000 realized in the fourth
quarter of 1999 were from an asset in which Crown had an equity interest.

Certain contracts provide for incentive fees if the company achieves net cash
collections in excess of thresholds established in the contracts. Incentive fees
decreased $682,064 to $159,811 in 1999 from $841,875 in 1998. The decrease was
attributable to the resolution in 1998 of a number of assets under an
incentive-based contract.

Loan servicing fees primarily reflect loan servicing fees generated from Fannie
Mae and Ginnie Mae loan portfolios. Loan servicing fees decreased $142,674 to
$293,342 in 1999 from $436,016 in 1998. This decrease primarily was due to
payoffs of serviced loans.

Mortgage origination fees decreased by $631,216 to ($1,001) in 1999 from
$630,215 in 1998. The decrease was due to the curtailment of these activities in
1998 following the termination of a loan conduit program in which the company
participated.

Other fees primarily include interest income and net servicing revenues. Other
fees increased $378,514 to $427,028 in 1999 from $48,514 in 1998. This increase
was predominantly due to earned interest and brokerage fees related to cash
management.


                                       8
<PAGE>   11

Operating and administrative expense changes were as follows:
<TABLE>
<CAPTION>

                                    1999             1998              $ CHANGE     % CHANGE
                                    ----             ----              --------     --------
<S>                             <C>               <C>               <C>             <C>
Personnel                           $4,423,627       $4,373,634        $49,993          1
Insurance, Professional and         $1,090,881       $640,156          $450,472        70
         Other
Occupancy                           $679,944         $752,696          ($72,752)      (10)
Amortization and                    $354,113         $320,093          $34,020         11
         Depreciation
Special non-recurring
         charges                    $1,642,684       $658,986          $983,698       149
Total                               $8,191,249       $6,745,565        $1,444,684      21
</TABLE>

Operating and administrative expenses increased approximately $1.44 million to
$8.19 million in 1999 from $6.75 million in 1998. Increases in personnel
expenses were primarily due to payment of certain severance and accrued vacation
expenses associated with the reduction of personnel.

Insurance, professional and other costs increased by $450,472 to $1,090,881 in
1999 from $640,156 in 1998. Included in this category are (i) a loss of $51,156
due to foreign currency transactions related to the European operations sold in
the third quarter 1999 and (ii) a gain of $30,263, representing the current
year's allocation of the total gain of $259,410 to be recognized from the sale
leaseback transaction in May 1999 involving the company's headquarters. Costs
incurred in 1998 were $1,314,156, which costs were reduced by $674,000 in 1998
to reflect favorable credit experience with the company's loan servicing
portfolio under the Fannie Mae Program.

Occupancy cost decreased $72,752 to $679,944 in 1999 from $752,696 in 1998. The
decrease was primarily attributable to the sale of the corporate headquarters.

Amortization and depreciation expenses increased $34,020 to $354,113 in 1999
from $320,093 in 1998. While depreciation of real property was eliminated upon
the headquarters sale in May 1999, the company began amortizing over a
three-year period capitalized development costs of computer software used in its
business.

Special, non-recurring expenses of $1,642,684 were incurred in 1999 in
conjunction with the redemption of three series of preferred stock and the
settlement of certain other obligations. This sum includes: loan, advisory,
legal and other professional fees associated with the restructuring; the
settlement of the employment contract of the former President and Chief
Operating Officer of the company; a payment in settlement of the company's
obligations to an investment banking firm; and various other expenses the
company incurred during its exploration of strategic and financial alternatives.

Loss from continuing operations before interest expense increased by $1,904,705
to $2,736,033 in 1999 from $831,328 in 1998 primarily because of the special,
non-recurring charges of $1,642,684.


                                       9
<PAGE>   12

Interest expense decreased $17,658 to $213,985 in 1999 from $231,643 in 1998.
The overall decrease was primarily caused by reduced bank borrowings because of
additional cash resources available from the prior year's issuance of the Series
AA Preferred and the Series BB Preferred.

Discontinued operations losses totaling $125,315 represent the net loss from the
disposition of European operations.

LIQUIDITY AND CAPITAL RESOURCES

Cash and cash equivalents increased by $278,308 to $2,210,451 in 1999 from
$1,932,143 in 1998. In January 2000, the company repaid the remaining $1,680,000
balance of a credit facility pursuant to the terms of that facility. This
repayment substantially reduced the company's liquidity. The company presently
has no bank credit facilities. Crown is actively pursuing such facilities to
enhance its liquidity and operating capacity. The company is also seeking to
improve its liquidity by generating new business revenues, raising additional
capital or entering into strategic alliances with capital partners.

Crown is incurring operating cash deficits and is funding those deficits using
cash resources on hand. For the foreseeable future, the company expects to fund
current operations with cash provided by operations and the establishment of
bank credit facilities. In 1999, Crown improved its liquidity through the sale
of certain assets. The company does not anticipate being able to employ similar
strategies for the foreseeable future. Crown continues to attempt to develop new
sources of revenue, to expand revenues from its existing client base and to
reduce operating expenses. As noted above, the company is also seeking
additional capital resources as a means of funding or eliminating operating
deficits.

HISTORICAL CASH FLOWS

Cash increased $278,308 in 1999 compared to a $1.2 million increase in 1998. The
1999 amount increased primarily because $1.7 million in restricted cash was
reclassified as a cash equivalent. Operating accounts and overnight investments
decreased by $1.5 million in 1999, primarily due to the redemption of the Series
AA and BB Preferred and the 1999 operating loss, including recapitalization
costs.

Cash flows from operating activities required the use of funds of $1,316,781 in
1999. Operating activities used $1,192,819 in 1998. As discussed above, during
1999, Crown incurred a significantly larger net operating loss than in 1998. In
1999, $1,642,684 in cash was used to defray recapitalization costs.

Investing activities provided cash of $8,271,163 in 1999. Similar activities
utilized cash of $1,465,878 in 1998. The change was due primarily to the
availability of $3,706,106 in previously restricted cash, $1,548,214 from the
sale of the headquarters building, $488,687 from the sale of the Fannie Mae DUS
loan portfolio and $3,055,652 from the sale of the company's European
operations. See "Note 2 - Discontinued Operations and Dispositions - to the
Consolidated Financial Statements."

                                       10
<PAGE>   13

Financing activities used $6,686,235 in cash in 1999. In 1998, financing
activities were a source of $3,935,723 of cash. The 1999 uses included
$4,111,236 for principal payments on notes payable and $4,099,999 for redemption
of Series AA Preferred and Series BB Preferred. Proceeds from notes receivable
from affiliate generated $2,425,000 in cash. In addition, in the fourth quarter
of 1999, the company redeemed the remaining $900,000 of Series B Preferred by
utilizing the same amount of restricted cash on hand.

YEAR 2000 OPERATIONS

As 2000 approached, there was significant concern among users of data processing
systems that certain computer components may incorrectly interpret dates beyond
1999, which could cause computer system failures or errors. Crown assessed both
its proprietary and third-party computer systems and applications and determined
they presented no Year 2000 processing issues. In fact, Crown's computer
hardware and software did perform without disruption as Year 2000 processing
began. The company has continued normal computer processing without significant
costs attributable to Year 2000 issues.



                                       11
<PAGE>   14


ITEM  7.  -  FINANCIAL STATEMENTS
---------------------------------

                          INDEX TO FINANCIAL STATEMENTS
                          -----------------------------
<TABLE>
<CAPTION>

                                                                                                                   PAGE
                                                                                                                   ----
<S>                                                                                                             <C>
Independent Auditors' Report..............................................................................          F-1

Consolidated Balance Sheets, December 31, 1999 and 1998...................................................          F-2

Consolidated Statements of Operations for the years ended
  December 31, 1999 and 1998..............................................................................          F-3

Consolidated Statements of Shareholders' Equity for the years
   ended December 31, 1999 and 1998.......................................................................          F-4

Consolidated Statements of Cash Flows for the years ended
   December 31, 1999 and 1998.............................................................................          F-5

Notes to Consolidated Financial Statements for the years
   ended December 31, 1999 and 1998.......................................................................          F-7
</TABLE>

                                       12
<PAGE>   15
INDEPENDENT AUDITORS' REPORT


To the Shareholders of
Crown NorthCorp, Inc. and Subsidiaries

We have audited the accompanying consolidated balance sheets of Crown NorthCorp,
Inc. and subsidiaries as of December 31, 1999 and 1998, and the related
consolidated statements of operations, shareholders' equity 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
in the United States of America. 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, such consolidated financial statements present fairly, in all
material respects, the financial position of Crown NorthCorp, Inc. and
subsidiaries as of December 31, 1999 and 1998, and the results of their
operations and their cash flows for the years then ended in conformity with
accounting principles generally accepted in the United States of America.

As discussed in Note 1 to the financial statements, in 1998 the Company changed
its method of accounting for costs of computer software developed or obtained
for internal use to conform with Statement of Position 98-1.

/s/ Deloitte & Touche  LLP


March 24, 2000


                                      F-1
<PAGE>   16

CROWN NORTHCORP, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS, DECEMBER 31, 1999 AND 1998
<TABLE>
<CAPTION>
ASSETS                                                                                                     1999            1998

<S>                                                                                                <C>             <C>
CURRENT ASSETS:
  Cash and cash equivalents                                                                        $  2,210,451    $  1,932,143
  Receivables:
    Accounts receivable trade - net of allowance of $135,000 in 1999 and $100,000 in 1998               454,036       1,161,749
    Affiliated entities                                                                                  32,130         408,026
    Prepaid expenses and other assets                                                                    93,859         122,794
    Net assets of discontinued operations                                                                                21,767
                                                                                                   ------------    ------------

           Total current assets                                                                       2,790,476       3,646,479

PROPERTY AND EQUIPMENT - Net                                                                            268,794       1,696,210

RESTRICTED CASH                                                                                         500,000       4,206,106

GOODWILL - Net of accumulated amortization of $251,304 in 1999 and $253,976 in 1998                     189,974         433,802

OTHER ASSETS:
  Investments in partnerships and joint ventures                                                         81,212       2,998,788
  Loan servicing rights - net of accumulated amortization of $93,629 in 1999 and $316,848 in 1998       434,326         972,028
  Capitalized software cost - net of accumulated amortization of $129,422 in 1999 and $72,932 in
    1998                                                                                                410,696         400,837
  Contract incentive fee receivable                                                                      19,496          92,209
                                                                                                   ------------    ------------

           Total other assets                                                                           945,730       4,463,862
                                                                                                   ------------    ------------

TOTAL                                                                                              $  4,694,974    $ 14,446,459
                                                                                                   ============    ============

LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES:
  Current portion of long-term obligations                                                         $    200,000    $    630,286
  Accrued breakup fees                                                                                  250,000
  Accounts payable                                                                                       96,033         187,946
  Accrued settlement                                                                                    146,810
  Accrued compensation, benefits and payroll taxes                                                                      510,500
  Accrued expenses - other                                                                              202,074         263,566

                                                                                                   ------------    ------------
            Total current liabilities                                                                   894,917       1,592,298

LONG-TERM OBLIGATIONS:
  Notes and bonds payable - less current portion                                                      1,680,000       2,170,225
  Notes payable - affiliates                                                                                            765,725
  Allowance for loan losses                                                                             500,000         576,000
  Deferred gain on sale leaseback                                                                       229,146
  Other                                                                                                                  34,000
                                                                                                   ------------    ------------
            Total long-term obligations                                                               2,409,146       3,545,950

REDEEMABLE PREFERRED STOCK                                                                              500,000       1,400,000

SHAREHOLDERS' EQUITY:
  Common stock                                                                                          112,609         110,651
  Convertible preferred stock:
    Series AA
    Series BB
  Additional paid-in capital                                                                          6,068,208       9,993,864
  Accumulated deficit                                                                                (5,222,853)     (2,147,520)
  Accumulated other comprehensive income (loss)                                                                         (48,457)
  Treasury stock, at cost                                                                               (67,053)           (327)
                                                                                                   ------------    ------------

            Total shareholders' equity                                                                  890,911       7,908,211
                                                                                                   ------------    ------------


TOTAL                                                                                              $  4,694,974    $ 14,446,459
                                                                                                   ============    ============
</TABLE>

See notes to consolidated financial statements.

                                      F-2
<PAGE>   17


CROWN NORTHCORP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998
<TABLE>
<CAPTION>
                                                              1999            1998
<S>                                                       <C>             <C>
REVENUES:
  Management fees                                         $  2,635,394    $  2,101,872
  Disposition fees                                             970,389         691,015
  Incentive fees                                               159,811         841,875
  Loan servicing fees                                          293,342         436,016
  Mortgage origination                                                         630,215
  Interest income                                              753,485         793,438
  Income from partnerships and joint ventures                  215,767         371,292
  Other                                                        427,028          48,514
                                                          ------------    ------------
            Total revenues                                   5,455,216       5,914,237
                                                          ------------    ------------
OPERATING AND ADMINISTRATIVE EXPENSES:
  Personnel                                                  4,423,627       4,373,634
  Insurance, professional and other                          1,090,881         640,156
  Occupancy                                                    679,944         752,696
  Amortization and depreciation                                354,113         320,093
  Special non-recurring charges, net                         1,642,684         658,986
                                                          ------------    ------------
           Total operating and administrative expenses       8,191,249       6,745,565
                                                          ------------    ------------

LOSS FROM CONTINUING OPERATIONS BEFORE INTEREST EXPENSE     (2,736,033)       (831,328)

INTEREST EXPENSE                                               213,985         231,643
                                                          ------------    ------------
LOSS FROM CONTINUING OPERATIONS                             (2,950,018)     (1,062,971)

DISCONTINUED OPERATIONS:
  Loss from operations                                         (11,606)       (108,182)
  Loss on sale                                                (113,709)
                                                          ------------    ------------
NET LOSS                                                  $ (3,075,333)   $ (1,171,153)
                                                          ============    ============


LOSS PER SHARE, BASIC AND DILUTED:
  Continuing operations                                   $      (0.26)   $      (0.32)
  Discontinued operations:
    Loss from operations                                                         (0.01)
    Loss on sale                                                 (0.01)
                                                          ------------    ------------
           Total loss per share                           $      (0.27)   $      (0.33)
                                                          ============    ============


WEIGHTED AVERAGE SHARES OUTSTANDING                         11,200,022      11,000,743
                                                          ============    ============

</TABLE>

See notes to consolidated financial statements.


                                      F-3
<PAGE>   18


CROWN NORTHCORP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998
<TABLE>
<CAPTION>
                                                                                        Convertible Preferred Stock
                                                                                ---------------------------------------------
                                                      Common Stock                   Series AA                  Series BB
                                               ---------------------------      ---------------------    --------------------
                                                  Shares                        Shares                    Shares
                                                  Issued        Amount          Issued         Amount     Issued       Amount
                                                  ------        ------          ------         ------     ------       ------
<S>                                          <C>             <C>             <C>             <C>         <C>         <C>
BALANCE, DECEMBER 31, 1997                      10,830,982      $108,310

Comprehensive loss:
  Net loss
  Foreign currency translation adjustment

           Total comprehensive loss
Issuance of common stock                           234,138         2,341           1
Issuance of preferred stock
Issuance of treasury shares                                                                                 1
                                                ----------      --------        ------         ------     ------       ------
BALANCE, DECEMBER 31, 1998                      11,065,120       110,651           1           $            1          $

Comprehensive loss:
  Net loss
  Foreign currency translation adjustment

           Total comprehensive loss
Issuance of common stock                           195,824         1,958
Shares reacquired                                                                 (1)                      (1)
Issuance of treasury shares
                                                ----------      --------        ------         ------     ------       ------

BALANCE, DECEMBER 31, 1999                      11,260,944      $112,609                       $                       $
                                                ==========      ========        ======         ======     ======       =======
</TABLE>


<TABLE>
<CAPTION>


                                                                         Accumulated
                                            Additional                       Other                                       Total
                                              Paid-In      Accumulated   Comprehensive         Treasury Stock        Shareholders'
                                              Capital        Deficit     Income (Loss)        Shares       Amount        Equity
                                            ----------     -----------   -------------    ------------    --------       ------
<S>                                         <C>          <C>             <C>            <C>                <C>          <C>
BALANCE, DECEMBER 31, 1997                  $ 4,209,752    $ (976,367)                      (40,093)     $(13,364)    $ 3,328,331

Comprehensive loss:
  Net loss                                                 (1,171,153)                                                 (1,171,153)
  Foreign currency translation adjustment                  ----------      $(48,457)                                      (48,457)
                                                                          ---------                                   -----------
           Total comprehensive loss                        (1,171,153)       48,457                                    (1,219,610)
Issuance of common stock                        196,159                                                                   198,500
Issuance of preferred stock                   5,576,048                                                                 5,576,048
Issuance of treasury shares                      11,905                                      39,683        13,037          24,942
                                            -----------   -----------     ---------      ----------      --------     -----------
BALANCE, DECEMBER 31, 1998                    9,993,864    (2,147,520)      (48,457)           (410)         (327)      7,908,211

Comprehensive loss:
  Net loss                                                 (3,075,333)                                                 (3,075,333)
  Foreign currency translation adjustment                 -----------        48,457                                        48,457
                                                                          ---------                                   -----------
           Total comprehensive loss                        (3,075,333)       48,457                                    (3,026,876)
Issuance of common stock                        107,617                                                                   109,575
Shares reacquired                            (4,132,997)                                  1,481,663      (167,002)     (4,299,999)
Issuance of treasury shares                      99,724                                     800,000       100,276         200,000
                                            -----------   -----------     ---------      ----------     ---------     -----------

BALANCE, DECEMBER 31, 1999                   $6,068,208   $(5,222,853)     $               (682,073)     $(67,053)    $   890,911
                                             ==========   ===========     =========      ==========     =========     ===========
</TABLE>



See notes to consolidated financial statements.

                                      F-4
<PAGE>   19


CROWN NORTHCORP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998
<TABLE>
<CAPTION>
                                                                                    1999           1998
<S>                                                                             <C>            <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net loss                                                                       $(2,950,018)   $(1,062,971)
  Foreign currency translation adjustment                                             48,457
                                                                                 -----------    -----------
  Total comprehensive net loss                                                    (2,901,561)    (1,062,971)
  Adjustments to reconcile net loss to net cash used in operating activities:
    Depreciation and amortization                                                    571,402        594,678
    Decrease in reserve for loan losses                                              (76,000)      (674,000)
    Equity in income from investment in partnerships and joint ventures              135,256       (360,891)
    Loss on abandoned offering                                                                      819,061
    Accretion of deferred gain                                                       (30,263)
    Gain on sale of DUS portfolio                                                   (142,698)
    Deferred income taxes                                                                            10,394
    Payment of board of directors fees by issuance of common stock                   109,575         72,500
    Change in operating assets and liabilities - net of effects from purchases
      and divestitures of subsidiaries:
      Accounts receivable                                                          1,083,609        290,600
      Income tax refund receivable                                                                   96,345
      Loan servicing rights                                                                        (135,546)
      Prepaid expenses and other assets                                              234,994          5,233
      Accounts payable and accrued expenses                                         (301,095)      (848,222)
                                                                                 -----------    -----------
           Net cash used in continuing operating activities                       (1,316,781)    (1,192,819)

           Net cash provided by (used in) discontinued operating activities           10,161        (32,366)
                                                                                 -----------    -----------
           Net cash used in operating activities                                  (1,306,620)    (1,225,185)
                                                                                 -----------    -----------

CASH FLOWS FROM INVESTING ACTIVITIES:
  Decrease in restricted cash                                                      3,706,106        344,660
  Distributions from partnerships and joint ventures                                 (75,389)        53,989
  Investment in partnerships and joint ventures                                                  (1,425,464)
  Increase in other assets                                                                         (253,696)
  Purchase of property and equipment                                                (140,455)       (77,573)
  Proceeds from sale of corporate office                                           1,548,214
  Proceeds from sale of DUS portfolio                                                488,687
  Proceeds from sale of discontinued operations                                    2,744,000
  Purchase of loan servicing rights                                                                (107,794)
                                                                                 -----------    -----------
            Net cash provided by (used in) investing activities                    8,271,163     (1,465,878)
                                                                                 -----------    -----------

CASH FLOWS FROM FINANCING ACTIVITIES:
  Issuance of preferred stock - net                                                               5,576,048
  Issuance of common stock                                                           200,000        150,942
  Principal payments on notes payable                                             (4,111,236)    (2,553,206)
  Proceeds from notes payable                                                      2,225,000      2,181,000
  Redemption of redeemable preferred stock                                          (900,000)      (600,000)
  Redemption of Series AA preferred stock                                         (3,299,999)
  Redemption of Series BB preferred stock                                           (800,000)
  Abandoned offering costs                                                                         (819,061)
                                                                                 -----------    -----------
            Net cash provided by (used in) financing activities                   (6,686,235)     3,935,723
                                                                                 -----------    -----------
EFFECT OF EXCHANGE RATE CHANGES ON CASH                                                             (48,457)
                                                                                 -----------    -----------
NET INCREASE IN CASH DURING THE YEAR                                                 278,308      1,196,203

CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR                                     1,932,143        735,940
                                                                                 -----------    -----------


CASH AND CASH EQUIVALENTS AT END OF YEAR                                         $ 2,210,451    $ 1,932,143
                                                                                 ===========    ===========

REDEMPTION OF PREFERRED STOCK THROUGH NOTE PAYABLE                               $   200,000
                                                                                 ===========
</TABLE>
See notes to consolidated financial statements.

                                      F-5
<PAGE>   20

CROWN NORTHCORP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998 (CONTINUED)

                                1999       1998

SUPPLEMENTAL INFORMATION:

  CASH PAID FOR INTEREST    $149,379   $219,083
                            ========   ========

See notes to consolidated financial statements.



                                      F-6
<PAGE>   21
CROWN NORTHCORP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998


1.    BUSINESS DESCRIPTION AND SIGNIFICANT ACCOUNTING POLICIES

      PRINCIPLES OF CONSOLIDATION - The accompanying consolidated financial
      statements include the accounts of Crown NorthCorp and its majority owned
      subsidiaries (collectively, the Company). All significant intercompany
      balances and transactions have been eliminated.

      BUSINESS DESCRIPTION - The Company is a specialty financial services
      company providing comprehensive asset management and risk management
      services to owners and operators of commercial real estate interests.
      Assets managed are located throughout the United States and Canada and
      include commercial and residential real estate, performing and
      nonperforming real estate and commercial loans, partnership investments
      and other miscellaneous assets.

      DISCONTINUED OPERATIONS - The Company sold its European operations. See
      (Note 2).

      LOSS FROM OPERATIONS - The Company incurred a net loss from continuing
      operations of approximately $2,950,000 and $1,171,000 in 1999 and 1998,
      respectively. Should losses continue to occur, the Company will continue
      to have difficulty satisfying liabilities as they come due. Management has
      taken actions to reduce its size, simplify its capital structure and
      increase its core business units. Accordingly, management believes that
      the Company will be able to return to profitable operations, realize its
      assets and satisfy its liabilities in the normal course of business.

      CONCENTRATIONS - Private-sector contracts with one customer accounted for
      33% and 25% of revenues for 1999 and 1998, respectively, and approximately
      23% and 15% of total accounts receivable at December 31, 1999 and 1998,
      respectively. Certain private-sector contracts are generally cancelable
      with 30 days notice.

      CASH AND CASH EQUIVALENTS - The Company considers all highly liquid
      instruments with an original maturity of three months or less to be cash
      equivalents.

      DEPRECIATION - Property and equipment are recorded at cost. Depreciation
      is computed using the straight-line method over estimated useful lives of
      five to forty years.

      GOODWILL - The excess purchase price over the fair value of identifiable
      assets acquired is recorded as goodwill in the accompanying financial
      statements. Goodwill is being amortized over its estimated life of 4 to 10
      years using the straight-line method. At each balance sheet date, a
      determination is made by management to ascertain whether the goodwill has
      been impaired based on several criteria, including, but not limited to,
      sales trends, undiscounted operating cash flows and other operating
      factors.

      LOAN SERVICING RIGHTS - The Company records an asset upon the sale of a
      loan with servicing retained and allocates the cost of the loan to the
      servicing rights and to the loans based on their relative fair values.
      Fair values are estimated using discounted cash flows based on a current



                                      F-7
<PAGE>   22

      market interest rate. The resulting gain on sale of loans is included in
      mortgage origination. The Company also purchases mortgage servicing rights
      and records such rights at the cost to purchase.

      The cost of loan servicing rights is amortized in proportion to, and over
      the period of, estimated net servicing revenues. Impairment of loan
      servicing rights is assessed based on the fair value of those rights. The
      carrying amount of loan servicing rights approximates the fair value.

      CAPITALIZED SOFTWARE COST - In March 1998, the American Institute of
      Certified Public Accountants issued Statement of Position 98-1 "Accounting
      for the Costs of Computer Software Developed or Obtained for Internal Use"
      which the Company adopted in 1998. This statement provides guidance on
      accounting for costs of computer software developed or obtained for
      internal use. Capitalized software costs are amortized using a straight
      line basis over 4 to 5 years. During 1999 and 1998, the Company
      capitalized costs of approximately $66,000 and $275,000, respectively, for
      computer software developed for internal use. Net of amortization,
      adoption of this statement reduced 1998 net loss and net loss per share
      from continuing operations by approximately $250,000 and $.02,
      respectively.

      LOAN SERVICING FEES - Loan servicing fees are recognized as earned under
      the terms of the related servicing contract.

      INVESTMENTS IN PARTNERSHIPS AND JOINT VENTURES - Certain of the Company's
      general partner and joint venture investments (ranging from 1% to 50%) are
      carried at cost, adjusted for the Company's proportionate share of
      undistributed earnings and losses because the Company exercises
      significant influence over their operating and financial activities.

      RESERVE FOR LOAN LOSSES - The Company established an allowance for loan
      losses to provide for estimated losses in the acquired mortgage portfolios
      serviced. The Company sold the mortgage portfolio in December 1999 (see
      Note 2). The reserve balance at December 31, 1999 was established to
      offset losses incurred or sustained by the purchaser by reason of or
      associated with the mortgage loans.

      MANAGEMENT FEES - Management fees are recorded as services required under
      the contracts are performed, and are based on a percentage applied to the
      aggregate value of the assets managed, as assigned in the contracts, or on
      original base monthly amounts, as defined in the contracts. Upon each
      disposition, withdrawal or addition of an asset or asset group, the
      management fee is adjusted to reflect the change in aggregate value of the
      assets. Management fees are calculated on a daily basis as set forth in
      the contracts.

      DISPOSITION FEES - Disposition and bonus fees, less retainages, are
      recorded as revenue when the disposition of an asset has been consummated
      and the gross proceeds from the disposition have been received by the
      asset owner. Disposition fees are generally based on a percentage of the
      proceeds of an asset disposition, as defined by the contracts, or a fixed
      amount per disposition.

      INCENTIVE FEES - Certain contracts provide for incentive fees if the
      Company achieves net cash collections in excess of thresholds established
      in the contracts. Upon substantial achievement of related thresholds,
      long-term contract revenues are recognized on the percentage-of-completion
      method based on assets realized relative to total contract assets, net of
      any anticipated losses. Billings for long-term contracts are rendered
      periodically, as permitted by contract terms.

                                      F-8
<PAGE>   23

      MORTGAGE ORIGINATION FEES - The Company receives fees to originate and
      process certain loans. Upon closing the loan, the Company immediately
      sells the loan and recognizes origination fees as income.

      INCOME TAXES - Deferred tax assets and liabilities are reflected at
      currently enacted income tax rates applicable to the period in which the
      deferred tax assets or liabilities are expected to be realized or settled.
      As changes in the tax laws or rates are enacted, deferred tax assets and
      liabilities are adjusted through the provision for income taxes.

      LOSS PER COMMON SHARE - Loss per share for 1999 and 1998 is computed as
      follows:

<TABLE>
<CAPTION>
                                                                       1999               1998
<S>                                                                    <C>                 <C>
Net loss from continuing operations                                    $(2,950,018)        $(1,062,971)
Series AA convertible preferred stock
  dividends at issuance                                                                     (1,997,268)
Series BB convertible preferred stock
  dividends at issuance                                                                       (500,000)
                                                                       -----------         -----------
Net loss applicable to common stock                                     (2,950,018)         (3,560,239)
Weighted average shares outstanding                                     11,200,022          11,000,743
                                                                       -----------         -----------
Loss per share from continuing operations                              $     (0.26)        $     (0.32)
                                                                       ===========         ===========
</TABLE>
      As the Company incurred net losses in 1999 and 1998 there are no potential
      common shares to be included in the computation of diluted per-share
      amounts, in accordance with Statement of Financial Accounting Standards
      ("SFAS") No. 128 "Earnings per Share".

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

      RECENTLY ISSUED ACCOUNTING STANDARD - SFAS No. 133 "Accounting for
      Derivative Instruments and Hedging Activities" was issued in June 1998 and
      will require adoption beginning January 1, 2001. This new statement
      establishes accounting and reporting standards for derivative instruments
      and for hedging activities, and requires companies to recognize all
      derivatives as either assets or liabilities in the balance sheet and to
      measure such instruments at fair value. The Company does not anticipate
      the statement materially impacting its financial position, results of
      operations or cash flows.

      RECLASSIFICATIONS - Certain reclassifications of prior year amounts have
      been made to conform with current year presentation.


                                      F-9
<PAGE>   24
2.    DISCONTINUED OPERATIONS AND DISPOSITIONS

      In August 1999, the Company sold its European segment which had interests
      in HMR Sweden, L.L.C., Catella/Crown NorthCorp Joint Venture AB and a
      related asset management contract for total consideration of approximately
      $3,500,000. The selling price was payable in cash and the cancellation of
      indebtedness to an affiliate of a shareholder-director of approximately
      $980,000, of which $726,000 was paid from sale proceeds and the remaining
      amount due in the form of a note payable. The remaining funds were
      substantially used to pay down long-term debt (see Note 4). The sale
      resulted in a loss of $113,709 ($.01 per share). Revenues for the European
      segment were approximately $450,000 and $1,065,00 in 1999 and 1998,
      respectively.

      In December 1999, the Company sold its portfolio of loans serviced under
      the Fannie Mae Delegated Underwriting and Servicing Program (DUS) for net
      proceeds of $488,687. Pursuant to the sale agreement, $500,000 must be
      retained as a cash reserve, to offset losses incurred or sustained by the
      purchaser by reason of or associated with the mortgage loans. These funds
      must be held in an escrow account until all of the mortgage loans have
      been paid off. The transaction resulted in a gain on sale of $142,968.

3.    PROPERTY AND EQUIPMENT

      Property and equipment consists of the following at December 31, 1999 and
      1998:


                                                     1999              1998

       Land                                                      $   271,845
       Building and improvements                                   1,137,112
       Furniture and equipment                    $ 1,323,742      1,276,877
                                                  -----------    -----------
            Total property and equipment            1,323,742      2,685,834
       Less accumulated depreciation               (1,054,948)      (989,624)
                                                  -----------    -----------
       Property and equipment - net               $   268,794    $ 1,696,210
                                                  ===========    ===========

        In May 1999, the Company sold its corporate headquarters for net
        proceeds of approximately $1,548,214. On that same date, the Company
        entered into a lease of a portion of the space in the building. Pursuant
        to the lease, the Company makes annual rental payments of approximately
        $160,000 for an initial term of five years, provided however, that the
        Company may terminate the lease upon six months' notice under certain
        terms and conditions. The transaction resulted in a deferred gain of
        $259,410 which is being accreted to income over the initial lease term
        as a reduction of rent expense. The Company recognized an accreted
        income of $30,263 in 1999.

                                      F-10
<PAGE>   25


4.    NOTES AND BONDS PAYABLE

      Long-term debt consists of the following at December 31, 1999 and 1998:
<TABLE>
<CAPTION>
                                                                                      1999              1998
<S>                                                                                <C>                 <C>
Promissory Note -14% at December 31, 1999,
  due November 24, 2004                                                              $ 1,680,000
Six-Month Adjustable Rate Industrial Development Revenue
  Bonds, annual principal payments and semi-annual interest payments, 3.65%
  interest rate at December 31, 1998
 based on terms of the indenture, due April 2015, paid off in 1999                                      $ 1,295,000
Convertible Secured Promissory Note - affiliate, interest based upon cash flow
 with a floor rate of 6.5%, periodic
 payments of principal and interest, due on August 31, 2008 paid off in 1999                                979,754
Installment Note payable, prime plus 0.5% to 8.25% at
  December 31, 1998), monthly payments of $23,021 plus
  interest, remaining principal and interest due February 1, 2002, paid                                     874,815
   off in 1999
Installment Note payable-prime (7.75% at December 31, 1998),
  due February 2002, paid off in 1999                                                                       416,667
Promissory Note for preferred redemption to former shareholders,
  prime (8.5% at December 31, 1999) due December 22, 2000, see Note 8                    200,000
                                                                                      -----------       -----------
  Total                                                                                 1,880,000         3,566,236
 Less current portion                                                                     200,000           630,286
                                                                                      -----------       -----------

Long-term debt                                                                        $ 1,680,000       $ 2,935,950
                                                                                      ===========       ===========
</TABLE>




      The scheduled sinking fund redemption and principal repayments of
      long-term debt are as follows:

      Year ending December 31:
        2000                                  $  200,000
        2004                                   1,680,000
                                              ----------
            Total                              1,880,000
                                              ----------
  Less current portion                           200,000

Total long-term portion                       $1,680,000
                                              ==========

      At December 31, 1999 and 1998, the fair value of the Company's long-term
      debt approximates its recorded value, based on current market interest
      rates and remaining maturities. The Company subsequently repaid the
      $1,680,00 promissory note in 2000 with the proceeds from cash on hand at
      December 31, 1999.

5.    LEASES

      The Company, in its operations, leases office facilities and equipment.
      All leases in effect at December 31, 1999, which expire on various dates
      through 2004, have been classified as operating leases. Rent expense was
      approximately $425,000 and $412,000 in 1999 and 1998, respectively.

                                      F-11
<PAGE>   26

      The future minimum operating lease payments as of December 31, 1999 are as
      follows:



                                          Equipment        Offices
      Year ending December 31:
        2000                                 $ 117,342        $ 175,150
        2001                                     9,676          173,800
        2002                                                    160,000
        2003                                                    160,000
        2004                                                     63,560
                                             ---------        ---------
      Total                                  $ 127,018        $ 732,510
                                             =========        =========
6.    RELATED PARTY TRANSACTIONS

      In August 1999, the Company sold its interests in HMR., an affiliate
      controlled by a director-shareholder of the Company (See Note 2). The
      Company purchased the equity investment in 1998 for approximately $2.5
      million in exchange for a 14.23% ownership interest in HMR. The Company
      funded its investment through a combination of cash on hand and a loan
      ($980,392) from another affiliate controlled by the director-shareholder.
      HMR has 13.09% ownership in Telereit Holding AB (Telereit) a Swedish real
      estate investment trust which holds approximately $614 million in a
      portfolio of assets in Sweden. In consideration of the
      director-shareholder's investment in Telereit and the loan from the
      affiliate controlled by the director-shareholder, the Company agreed to
      pay 25% of its management and disposition fees and 75% of its incentive
      fees received under the asset management agreement, net of the Company's
      expenses, to the director-shareholder. The Company had an interest in an
      asset management agreement with Telereit which the Company also sold in
      August 1999 (see Note 2). During 1999 and 1998, the Company paid no amount
      to the director-shareholder under the agreement. During 1999 and 1998, the
      Company recorded income from its investment in the partnership of $2,140
      and $94,704, respectively.

      In 1999, in connection with the sale of the Company's European segment,
      the indebtedness of approximatley $980,000, payable to an affiliate
      controlled by the director-shareholder was cancelled (see Note 2). The
      note accrued interest in an amount equal to the greater of 6.5% per annum
      on the outstanding principal amount or an amount based on cash
      distributions. During 1999 and 1998, the Company paid interest of $37,350
      and $38,893, respectively, for an effective rate of interest of 11.9%.
      Under the terms of a pledge agreement the note was secured by a portion of
      the Company's interest in the affiliate. A bank, on behalf of the Company,
      issued letters of credit aggregating approxi- mately $625,000 to partially
      secure Telereit's obligations under a credit facility. During 1999, the
      letters of credit were returned to the bank. The Company maintained a
      restricted cash account, approximately $640,000 at December 31, 1998,
      related to the letters of credit.

      The Company conducts some of its operations through various joint ventures
      and other partnership forms that are principally accounted for using the
      equity method. Included in the Company's revenues for 1999 and 1998 are
      equity in income (loss) of related companies of approximately $213,600 and
      $276,600, respectively. The Company also provides services for the
      ventures and included in revenues for 1999 and 1998 are management,
      incentive, retainer and disposition fees of approximately $160,000 and
      $902,000, respectively, related thereto.

      Payments to members of the Board of Directors were made in the form of
      common stock issuances totaling $109,575 and $72,500 in 1999 and 1998,
      respectively.

                                      F-12
<PAGE>   27

7.    SHAREHOLDERS' EQUITY

      At December 31, 1999 and 1998, the Company has 30,000,000 authorized
      shares of its $.01 par value common stock ("Common Stock") and 1,000,000
      authorized shares of preferred stock.

      In March 1997, the Company entered into a stock purchase agreement (the
      "SPA") with Harbert Equity Fund I, L.L.C. ("Harbert Fund") to invest up to
      $5 million in Common Stock. The Harbert Fund invested $1 million in the
      Company in March 1997 and additional sums in October and December 1997. On
      December 31, 1997 the Company and the Harbert Fund entered into Amendment
      No. 2 to the SPA (the "SPA Amendment") pursuant to which the Harbert Fund
      agreed to purchase one share of the Company's Series AA Non-Voting
      Convertible Preferred Stock, par value $.01 per share (the "Series AA
      Preferred") on the terms and conditions set forth in the SPA Amendment.
      The liquidation preference was $3,647,185, plus a 12% cumulative dividend
      from January 26, 1998, the date the transaction was consummated. The
      holders of the Series AA Preferred had the option to convert the Series AA
      Preferred into 3,473,510 shares of the Common Stock at any time. The
      quoted price per common share at the date of issuance of the Series AA
      Preferred was $1.625, resulting in an effective dividend upon issuance of
      $1,997,268. In December 1999, the Company redeemed the Series AA
      Preferred and acquired the common stock held by Harbert Fund in exchange
      for a payment to Harbert Fund of $3,300,000 in cash and $200,000 in the
      form of a one-year promissory note from the Company guaranteed by a
      director of the Company.

      In March 1998, the Company entered into a stock purchase agreement (the
      "Conti SPA") with an affiliate of ContiFinancial Corporation ("Conti")
      whereby Conti invested $2 million in exchange for one share of the
      Company's Non-Voting Series BB Convertible Preferred Stock, par value $.01
      per share (the "Series BB Preferred") on the terms and conditions set
      forth in the Conti SPA, and a warrant to purchase up to 200,000 shares of
      the Company's common stock at $2 per share. The warrant was to vest and
      expire based upon the occurrence of certain stipulated events. The
      liquidation preference was $2,000,000, plus a 12% cumulative dividend from
      the issuance date. The holders of the Series BB Preferred had the option
      to convert the Series BB Preferred into 1,000,000 shares of the Common
      Stock at any time. The quoted price per common share at the date of
      issuance of the Series BB Preferred was $2.50, resulting in an effective
      dividend upon issuance of $500,000. In December 1999, the Company redeemed
      the Series BB Preferred and acquired the common stock held by Conti and
      Conti forfeited its warrants, all in exchange for a payment to cash of
      $800,000.

      In December 1996, in connection with an acquisition, the Company issued
      2,000 shares of Series B Non-Voting, Non-Convertible Redeemable Preferred
      Stock (the "Series B Preferred"), with a par value of $.01 per share. No
      dividends of any type were to be paid on the shares. The liquidation value
      of each Series B Preferred share was $1,000. During 1998 the Company
      redeemed 600 shares for $600,000. The Company redeemed the remaining 900
      shares for $900,000 in December 1999.

                                      F-13
<PAGE>   28

      In December 1996, also in connection with an acquisition, the Company
      issued 500 shares of Series C Non-Voting, Convertible Redeemable Preferred
      Stock (the "Series C Preferred"), with a par value of $.01 per share. The
      shareholder is entitled to non-cumulative quarterly cash dividends at the
      rate of 8% per annum on the liquidation preference. The liquidation
      preference is $1,000 per Series C Preferred share. Each Series C Preferred
      share is convertible into 666.67 fully paid shares of Common Stock. The
      shares can be converted, at the option of the holder, during a 45-day
      conversion period after the 30-day period in which the average Common
      Stock closing share price equals or exceeds $1.50. The shares can be
      redeemed, at the option of the Company, following the expiration of the
      conversion period at a conversion price equal to the liquidation
      preference plus the full amount of any unpaid, declared dividends. The
      Company is required to redeem the Series C Preferred shares as follows:

                   SHARES TO BE REDEEMED         AMOUNT        REDEMPTION DATE

                            250                $ 250,000      December 31, 2001
                            250                  250,000      December 31, 2002
                            ---                ---------
          Total             500                $ 500,000
                            ===                =========

      During 1996, primarily in connection with certain business acquisitions,
      the Company issued warrants entitling the holders to purchase 403,983
      shares of Common Stock at prices ranging from $0.63 to $1.00 per share
      over periods ranging from 18 months to 5 years after issuance. During
      1998, 39,683 warrants were exercised at $0.63 per share. During 1999,
      274,300 warrants expired or were forfeited and at December 31, 1999,
      65,700 warrants are exercisable. No warrants were exercised in 1999. The
      weighted average exercise price was $0.73 and $0.83 at December 31, 1999
      and 1998, respectively.

      During 1998, the Company issued warrants to an employee entitling the
      holder to purchase up to 25,000 shares of common stock at $1.44 per share.
      As of December 31, 1999 and 1998 there are 25,000 exercisable warrants
      which expire November 30, 2003.

      During 1998, the Company issued warrants to an employee entitling the
      holder to purchase up to 50,000 shares of common stock at $2 per share.
      The warrants vest annually and expire December 1, 2003. Any unvested
      shares at the date of a change in control of the Company vest immediately.
      During 1999 the Company issued additional warrants entitling the holder to
      purchase up to 25,000 shares of common stock at $1.3125 per share. The
      warrants expire in December 2003. At December 31, 1999 and 1998, the
      number of exercisable warrants was 45,000 and 10,000, respectively.

      During 1997 the Company issued warrants to an employee entitling the
      holder to purchase up to 1,000,000 shares of Common Stock at $1.05 per
      share. The warrants were to vest and expire annually through 2003 pursuant
      to a schedule based on the anniversary dates of an employment agreement
      and the Company achieving annual plan goals. At December 31, 1998, there
      were 200,000 exercisable warrants. In 1999, all exercisable warrants and
      rights to warrants were forfeited.

      A stock option plan for the outside directors of the Company was approved
      by the Company's shareholders in 1995. Under the plan, each outside
      director may be granted options for 100,000



                                      F-14
<PAGE>   29

      shares of the Company's Common Stock at an option price equal to the
      Common Stock's market value on the date of the grant. The options vest
      over a four-year period if the Company achieves certain stock price
      thresholds. No options have been granted under this plan as of December
      31, 1999.

      The Company applies Accounting Principals Board ("APB") Opinion No. 25 and
      related interpretations in accounting for its stock options. Based on an
      estimated volatility of 146%, a weighted average life of 5.2 years (4.9
      years in 1998), and a discount rate of 6%, compensation cost, under the
      method of determination per SFAS 123, would have been approximately $2,700
      and $40,000 higher than reported in the consolidated statements of
      operations, resulting in a net loss from continuing operations of
      $3,078,000 and $1,127,000 and a loss per share, basic and diluted, of
      $0.27 and $0.34, for 1999 and 1998, respectively.

8.    BENEFIT PLANS

      The Company sponsors a defined contribution retirement plan for certain of
      its employees who had attained the age of 21 and had provided six months
      of service. The Company matches 25% of the first 4% of the employees'
      contributions and employer contributions were $24,391 and $28,561 in 1999
      and 1998, respectively.

      The Company has a profit sharing stock retirement plan (the "Plan")
      covering U.S. employees. The Plan is designed to provide employees with
      increased ownership of the Company's stock. The number of shares allocated
      to the Plan is discretionary. No amounts were awarded under the Plan in
      1999 or 1998.

9.    INCOME TAXES

      For the year ended December 31, 1998, the components of income tax expense
      consisted of the following:

          Current                                         $ (10,394)
          Deferred                                           10,394
                                                          ---------
          Total income tax (benefit) expense              $       0
                                                          =========



                                      F-15
<PAGE>   30

      The income tax (benefit) expense differs from the amount computed by
      applying the statutory Federal income tax rate of 34% to pretax earnings
      (loss) from continuing operations as follows:

                                                     1999             1998

        Income tax benefit at statutory rate      $(1,045,613)    $ (398,192)
        Non-deductible foreign losses                  42,607         51,963
        Non-deductible amortization                    15,980         15,980
        Non-deductible meals and entertainment          7,516         15,161
        Valuation allowance                         1,296,300        269,900
        Other - net                                  (316,790)        45,188
                                                  -----------     ----------

        Total income tax benefit                  $         0     $        0
                                                  ===========     ==========

      The Company has approximately $4,498,000 of operating loss carryforwards
      available at December 31, 1999 which expire in varying amounts from 2002
      thru 2019.

      Included in loss before taxes is a loss of $153,000 in 1998, from a
      subsidiary with operations in Europe.

      At December 31, 1999 and 1998 the Company had recorded a net deferred tax
      asset as follows:

                                      1999           1998
Assets:
  Current:
    Collection allowance          $    45,900    $    34,000
Long-term:
  Loss carryforward                 1,529,000        421,000
  Other                                18,300          8,600
  Valuation allowance              (1,566,200)      (269,900)
                                  -----------    -----------

            Total assets               27,000        193,700
                                  -----------    -----------

Liabilities - long-term:
  Depreciation and amortization                      (52,700)
  Deferred loan servicing             (27,000)      (141,000)
                                  -----------    -----------

            Total liabilities         (27,000)      (193,700)
                                  -----------    -----------


Net deferred tax asset            $         0    $         0
                                  ===========    ===========


                                      F-16
<PAGE>   31

10.   CONTINGENCIES

      The Company has certain contingent liabilities resulting from litigation
      and claims incident to the ordinary course of business. Management
      believes that the probable resolution of such contingencies will not
      materially affect the financial statements of the Company.

11.   MORTGAGE SERVICING FOR OTHERS

      Mortgage loans serviced for others are not included in the accompanying
      consolidated balance sheets. The unpaid principal balances of mortgage
      loans serviced for others was approximately $1,406 million and $1,234
      million at December 31, 1999 and 1998, respectively.

      Custodial escrow balances maintained in connection with the foregoing loan
      servicing, excluded from the accompanying consolidated balance sheet, were
      approximately $44.6 million and $102 million at December 31, 1999 and
      1998, respectively.

      Mortgage servicing rights of $243,340 were capitalized in 1998 (none in
      1999). Amortization of mortgage servicing rights was $191,713 and $235,293
      in 1999 and 1998, respectively.

12.   SEGMENT INFORMATION

      The Company presently operates in one segment as determined in accordance
      with SFAS No. 131 "Disclosures about Segment of an Enterprise and Related
      Information".

      In 1998 the Company's management recognized three primary business
      segments: domestic asset management, domestic mortgage origination, and
      European operations. The segments were created in July 1997 in connection
      with a restructuring of the Company. Effective December 31, 1998 the
      Company and the conduit program funding sponsor terminated the Company's
      correspondent lending relationship and the Company ceased its domestic
      mortgage origination operations. The European operation segment was
      discontinued in 1999 (see Note 2).

      The accounting policies for the business segments were the same as those
      described in the summary of significant accounting policies. There were no
      intersegment sales. The Company evaluated performance based on operating
      earnings of the respective business units.

      Summarized financial information concerning the Company's reportable
      segments for 1998 is shown in the following table:
<TABLE>
<CAPTION>
                                                DOMESTIC      DOMESTIC
                                                 ASSET         MORTGAGE     EUROPEAN
                                               MANAGEMENT    ORIGINATION    OPERATIONS     OTHER        TOTAL
<S>                                         <C>           <C>            <C>            <C>          <C>
Revenues                                      $ 5,291,522    $ 622,715   $                            $ 5,914,237
(Loss) earnings before income tax                 225,668     (629,653)                 $(658,986)     (1,062,971)
Interest income                                   783,376       10,062                                    793,438
Interest expense                                  185,626       46,017                                    231,643
Amortization and depreciation                     478,421       86,625        29,632                      354,113
Assets                                         10,730,414                  3,718,579                   14,446,459
</TABLE>



                                      F-17
<PAGE>   32

      The amount in "Other" in the table above represents the net abandoned
      offering expense, abandoned acquisition credit and the restructuring
      credit which could not be allocated to any identified business segment.

13.   SPECIAL CHARGES

      The following special charges were incurred by the Company during the
      years presented:


                                                        1999            1998

          Officer severance                          $ 450,000
          Loan and breakup fees                        510,000
          Professional fees                            489,183
          Abandoned offering expenses                                $ 819,061
          Abandoned acquisition and restructuring
            credits (Note)                                            (160,075)
          Other                                        193,501
                                                     ----------      ---------
          Total special charges, net                 $1,642,684      $  658,98
                                                     ==========      =========


        On December 22, 1999 the Company entered into an agreement with its
        former President and Chief Operating Officer which called for his
        resignation from all positions with the Company, the extinguishment of
        related warrants to acquire stock of the Company and mutual releases for
        a settlement of $450,000.

        Additionally, the Company incurred expenses related to loan fees and
        professional fees associated with the 1999 restructuring of the
        Company.

        The Company was a cosponsor of Strategic Realty Capital Corp. (SRCC), a
        real estate investment trust (REIT). On March 24, 1998 SRCC filed with
        the Securities Exchange Commission to register shares in an initial
        public offering. Due to the unfavorable market conditions for publicly
        traded REITs, the offering has been cancelled. The charge of $819,061
        reflects the Company's portion of expenses related to SRCC's planned
        public offering pursuant to a cost-sharing arrangement with the
        co-sponsors. The Company funded the costs from cash reserves and amounts
        due from the co-sponsors. During 1998 the Company recognized a $100,000
        credit which reflected a negotiated settlement of contractual expenses
        accrued under an expense reimbursement agreement.

        In June 1997, management implemented a restructuring plan for the
        Company's operations which, among other items, encompassed consolidating
        offices and exiting certain lines of business. The Company incurred
        total restructuring charges of $494,409, which was recorded in 1997. The
        restructuring plan was completed during the first quarter 1998 with
        losses being less than anticipated. As a result the Company recognized a
        restructuring credit of $60,075 in 1998.

                                      F-18
<PAGE>   33


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

None

                                    PART III
                                    --------

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

The company currently has three directors. All directors of the company hold
office until the next annual meeting of the stockholders and until their
successors have been duly elected and qualified.

James F. Russell II, Kevin C. Donahue and Sam Stern have entered into employment
contracts with the company for five-year terms beginning January 1, 2000. All
other officers of Crown do not serve a term of years but serve at the pleasure
of the Board of Directors. In addition, Crown has entered into an agreement with
Grace Jenkins calling for payments under certain circumstances in the event of a
change of control of the company.

The directors and executive officers of the company as of March 28, 2000 are as
follows:

<TABLE>
<CAPTION>
NAME                                AGE              POSITION WITH COMPANY
----                               -----             ---------------------
<S>                              <C>              <C>
Ronald E. Roark                     49               Chairman and Director
James F. Russell II                 51               President and Chief Executive Officer
Kevin C. Donahue                    42               Executive Vice President and Chief Operating Officer
Sam Stern                           47               Executive Vice President, Treasurer and Chief Financial Officer
Gordon V. Smith                     67               Director
David K. Conrad                     44               Director
Grace Jenkins                       47               Executive Vice President
Richard A. Brock                    50               Senior Vice President
Stephen W. Brown                    49               Secretary
</TABLE>

Set forth below are the principal occupations and affiliations during at least
the last five years of the directors and executive officers. All information is
as of March 28, 2000.

RONALD E. ROARK has served as Chairman of the Board of Directors of the company
since August 4, 1994 and as Chief Executive Officer of the company from
September 13, 1994 to March 28, 2000. He served as Acting President and Chief
Operating Officer from August 31, 1996 to April 21, 1997. Since 1995 he has
served as President of Royal and, since 1979, has been President of Brookville
Associates, Inc.

JAMES F. RUSSELL II was appointed the company's President and Chief Executive
Officer on


                                       13
<PAGE>   34

March 28, 2000. He served as President and Chief Executive Officer of DRS
beginning in March 1999. From 1995 through 1998, Mr. Russell was Group Vice
President of WMFG National Commercial Lending Division. From 1991 to 1995, he
was a Tax Principal in the Real Estate Services Group of Arthur Andersen LLP.

KEVIN C. DONAHUE was appointed the company's Executive Vice President and Chief
Operating Officer effective March 28, 2000. He served as Executive Vice
President and Chief Operating Officer of DRS beginning in March 1999. From 1996
through 1998, Mr. Donahue served as Director of New Business Development for
J.E. Robert Companies. From 1994 to 1996, he served as Crown's Director of
Acquisitions and Due Diligence.

SAM STERN was appointed the company's Executive Vice President, Treasurer and
Chief Financial Officer effective March 28, 2000. He served in similar
capacities with DRS beginning in March 1999. From 1995 to 1998, Mr. Stern served
as a Portfolio Manager for J.E. Robert Companies. In 1993 and 1994, he was a
Senior Asset Manager with Ameribanc Savings Bank FSB.

GORDON V. SMITH has served as a director of Crown since October 1, 1996. He has
been Chairman of the Board of Miller and Smith Holding, Inc. since 1964. From
1985 to 1994, he served as Chairman and Chief Executive Officer of Providence
Savings and Loan Association, F.A. Mr. Smith has served as a director of Bank
Plus since 1996 and as its Chairman since 1998.

DAVID K. CONRAD has served as a director of Crown since January 5, 2000. Mr.
Conrad is a partner in the law firm of Bricker & Eckler LLP and has been
affiliated with that firm since 1980. The firm provides legal services to the
company.

GRACE JENKINS has served as Executive Vice President of Crown since March 6,
1997. She served as a Vice President of the company from September 13, 1994 to
that date. Since November 1991, she has served Crown in various capacities
related to administration and management information systems.

RICHARD A. BROCK has served as Senior Vice President of Crown since March 6,
1997. He was Chief Financial Officer from that date to September 1, 1999. He
also served as Treasurer from September 13, 1994 to September 1, 1999. He has
served Crown in various financial and asset management capacities since 1991.

STEPHEN W. BROWN has served as Secretary of Crown since September 13, 1994 and
as Corporate Counsel since August 1996. Since March 1992, he has served Crown in
various asset management capacities and as a legal counsel.

ITEM  10.  -  EXECUTIVE COMPENSATION
------------------------------------

The following table sets forth information for the year ended December 31, 1999
with respect to the Chief Executive Officer, each of the four most highly
compensated executive officers other than the Chief Executive Officer and
certain other individuals.

                                       14
<PAGE>   35
<TABLE>
<CAPTION>

                               YEAR ENDED                                                   ALL OTHER
          NAME                DECEMBER 31           SALARY               BONUS            COMPENSATION
          ----                -----------           ------               -----            ------------
<S>                            <C>              <C>                    <C>                <C>
Ronald E. Roark,                  1999             $300,000               $0                 $10,000
Chairman and                      1998             $300,000               $0                 $10,000
CEO (1)                           1997             $300,000               $0                 $10,000

Grace Jenkins,                    1999             $113,716             $25,000              $10,000
Executive Vice President(2)       1998             $103,716               $0                 $10,000
                                  1997              $98,905               $0                 $10,000

Richard A. Brock, Senior          1999             $111,573             $20,000              $10,000
Vice President                    1998             $104,930               $0                 $10,000
                                  1997             $105,452               $0                 $10,000

Ray L. Druseikis,                 1999              $99,144               $0                 $6,950
Treasurer, Controller             1998              $89,311               $0                 $5,400
and Chief Financial               1997              $80,059               $0                   $0
Officer (3)

Stephen W. Brown,                 1999              $70,568               $0                 $2,933
Secretary and Corporate           1998              $67,368               $0                 $2,800
Counsel                           1997              $65,040               $0                 $2,710

Harold E. Cooke,                  1999             $750,843               $0                 $10,000
President and                     1998             $227,400            $150,000              $10,000
COO (4)                           1997             $196,324               $0                 $10,000


John S. Koczela,                  1999             $152,949             $75,000              $7,916
Executive Vice                    1998             $184,807             $20,000              $61,701
President (5)                     1997             $125,000             $30,000              $44,411
</TABLE>


(1)      Mr. Roark has served as Chairman of the company since August 4, 1994
         served as its CEO from September 13, 1994 through March 28, 2000. The
         company pays family medical coverage premiums, an automobile allowance
         and disability insurance premiums on his behalf. Royal is funding
         Crown's salary and benefit expenses for Mr. Roark. See "Item 12 -
         Certain Relationships and Related Transactions ." Mr. Roark's annual
         salary was reduced to $200,000, commencing January 1, 2000.

                                       15
<PAGE>   36

(2)      Ms Jenkins has served as Executive Vice President of Crown since March
         6, 1997. The company and Ms. Jenkins have entered into an agreement
         effective January 1, 1999 providing for a performance-based bonus,
         warrants to purchase up to 75,000 shares of common stock at prices
         ranging from $1.3125 to $2.00 per share and for continued salary
         payments for up to one year in the event of a change of control of
         Crown.

(3)      Mr. Druseikis served as Treasurer, Controller and Chief Financial
         Officer of Crown until his resignation February 11, 2000.

(4)      Mr. Cooke served as President and COO of the company from April 22,
         1997 until December 22, 1999. The figure for 1999 includes a payment of
         $450,000 from the company to Mr. Cooke in settlement of his employment
         contract.

(5)      Mr. Koczela served as Executive Vice President of Crown from March 6,
         1997 to September 3, 1999, administering the company's European
         operations. Mr. Koczela holds warrants to purchase 25,000 shares of
         common stock at $1.4375 per share.

Each director who is not an employee of Crown is paid an annual retainer of
$12,000, payable quarterly, $500 for each meeting of the Board of Directors and
$500 for each committee meeting attended, plus expenses. The company makes
retainer and attendance payments to directors quarterly in the form of common
stock based on the closing price of the common stock on the last day of a
quarter.


                                       16
<PAGE>   37

ITEM  11.  -  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
----------------------------------------------------------------------------

The following table sets forth security ownership information regarding the
common stock as of March 28, 2000 by: (i) each person known by the company to
own beneficially more than 5% of the shares of the common stock; (ii) each
director of the company; (iii) each of the executive officers of the company
named in Item 10 above and (iv) all directors and executive officers of the
company as a group. Except as otherwise noted below, each of the shareholders
identified in the table has sole voting and investment power over the shares
beneficially owned by each such shareholder. Also, unless otherwise indicated,
the address of each beneficial owner is in care of the company, 1251 Dublin
Road, Columbus, Ohio 43215.

<TABLE>
<CAPTION>
                             NAME                               NUMBER OF SHARES            APPROXIMATE
                             ----                               OF COMMON STOCK             PERCENT OF CLASS
                                                                ----------------            ----------------
<S>                                                               <C>                           <C>
Ronald E. Roark (1)(2)                                                  4,629,300                     43.4%
Tucker Holding Company, Ltd. (2)                                        4,207,500                     39.4%
Asdale Limited (3)                                                       976,924                       9.1%
The Gordon V. and Helen C. Smith Foundation (4)                         1,795,100                     16.8%
Gordon V. Smith (4)                                                     1,795,100                     16.8%
David K. Conrad (5)                                                         500                        (9)
Grace Jenkins (6)                                                         55,000                       (9)
Richard A. Brock (7)                                                      25,000                       (9)
Stephen W. Brown (8)                                                      10,000                       (9)
James F. Russell II                                                       -----                       -----
Kevin C. Donahue                                                          -----                       -----
Sam Stern                                                                 -----                       -----
All directors and executive officers as a group                         6,514,900                      61%
(9 persons)
</TABLE>

(1)      Includes (a) 4,207,500 shares held by Tucker Holding Company, Ltd., of
         which Mr. Roark is the managing member, (b) 400,000 shares held by
         Royal, of which Mr. Roark is president, as trustee and (c) 4,600 shares
         held by his wife and (d) 17,200 shares held by Trident Air Services,
         Inc., of which Mr. Roark is president.

(2)      Tucker holds 4,207,500 shares of common stock. Until January 27, 1997,
         Mr. Roark held an 80% ownership interest in Tucker and Louis J.
         Castelli, formerly the President and Chief Operating Officer of the
         company, held a 20% ownership interest. On that date, Messrs. Roark and
         Castelli entered into a securities purchase agreement whereby Mr. Roark
         agreed to purchase Mr. Castelli's remaining ownership interest in
         Tucker for a total of $400,000. The remaining balance of $62,500 is due
         on or before September 1, 2000. Tucker has pledged 130,432 shares of
         common stock to secure the remaining obligations under this agreement.

(3)      The mailing address for Asdale Limited is 44 Lowndes Street, London
         SW1X 9HX, England.

                                       17
<PAGE>   38

(4)      The mailing address for The Gordon V. and Helen C. Smith Foundation and
         Mr. Smith is c/o Miller and Smith Holding, Inc., 1568 Springhill Road,
         McLean, Virginia 22102. Mr. Smith holds 1,256,423 shares of common
         stock. The Smith Foundation holds 538,677 shares of common stock. Mr.
         Smith, as President of the Smith Foundation, may be deemed the
         beneficial owner of such shares. Mr. Smith disclaims such beneficial
         ownership.

(5)      The mailing address for Mr. Conrad is c/o Bricker & Eckler LLP, 100
         South Third Street, Columbus, Ohio 43215.

(6)      Represents warrants to acquire 10,000 shares of common stock at $.63
         per share, 20,000 shares of common stock at $2.00 per share and 25,000
         shares at $1.3125 per share.

(7)      Represents warrants to acquire 25,000 shares of common stock at $.63
         per share.

(8)      Represents warrants to acquire 10,000 shares of common stock at $.63
         per share.

(9)      Less than 1%.

TERMINATION OF CERTAIN AGREEMENTS

VOTING AGREEMENTS. Mr. Roark and Tucker had entered into voting agreements with
the holders of the company's Series AA and Series BB Convertible Preferred
Stock. Those agreements terminated when the company redeemed those series in
December 1999.

AGREEMENT REGARDING COMPOSITION OF BOARD OF DIRECTORS. Under the terms of the
Series AA Preferred and the voting agreement referred to above, the holder of
that series had the right to designate a majority of Crown's Board of Directors.
That right terminated with the redemption of that series in December 1999.

ITEM  12.  -  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
------------------------------------------------------------

In conjunction with entering into an asset management agreement with Telereit
Holding AB for a portfolio of assets in Sweden and placing the transaction,
Crown in 1998 made an equity investment in Telereit Holding through HMR Sweden,
L.L.C., an affiliate of a director-shareholder. HMR Sweden, in turn, invested in
Telereit Holding. In August 1999, HMR Sweden transferred to Crown, in complete
redemption of Crown's interests in HMR, those shares and owner's debt
representing Crown's equity investment in Telereit Holding. As part of its
disposition of European operations, Crown sold those shares and owner's debt to
Catella Holding AB for $3,470,000 cash. From the proceeds of sale, the company
repaid MarRay Investments, LLC, another affiliate of that director-shareholder,
$979,754 in satisfaction of indebtedness the company incurred in conjunction
with its investment in Telereit. The company also paid the director-shareholder
from the proceeds the sum of $726,000 in satisfaction of the company's
obligations to it under a certain payment of fees agreement


                                       18
<PAGE>   39

entered into between the director-shareholder and Crown in consideration of
HMC's investment in Telereit and the loan from MarRay.

Also in conjunction with the sale of European operations, Crown entered into an
agreement with Royal Investments Corp., a company wholly owned by Mr. Roark.
Pursuant to this agreement, Royal acquired for no consideration Crown's European
operations that remained after the sale to Telereit, which consisted primarily
of non-operating companies. Royal funds Crown's salary and benefit expenses for
Mr. Roark. See "Item 10 - Executive Compensation."

In December 1999, Crown redeemed the Series AA Preferred with a payment of $3.3
million cash and delivery of a $200,000 promissory note. Mr. Smith has
guaranteed Crown's obligations under this note.

The company conducts some of its operations through joint ventures and
partnerships and provides certain services to those entities. See "Note 7 -
Related Party Transactions - to Consolidated Financial Statements."

ITEM 13. - EXHIBITS AND REPORTS ON FORM 8-K
-------------------------------------------

a)       The following exhibits are filed as part of this report:

<TABLE>
<CAPTION>
Exhibit
Number             Exhibit                                    Method of Filing
-------            ------                                     ----------------

<S>     <C>                                                 <C>
3.3      Restated Certificate of Incorporation                Filed herewith.

3.4      Bylaws                                               Filed herewith.

4.2      Certificate of Designation for Series B              Incorporated by reference to
         Crown Preferred Stock, par value $.01 per share,     NorthCorp, Inc.'s Form
         8-K filed of Crown NorthCorp, Inc.                   January 24, 1997.

4.3      Certificate of Designation for Series C              Incorporated by reference to Crown
         Convertible Preferred Stock, par value               NorthCorp, Inc.'s Form 8-K filed
         $.01 per share, of Crown NorthCorp,                  January 24, 1997.
         Inc.

4.4      Certificate of Designation for Series AA             Incorporated by reference to
         Crown Convertible Stock, par value $.01 per          NorthCorp, Inc.'s Form 8-K
         filed share, of Crown NorthCorp, Inc.                February 20, 1998.
</TABLE>



                                       19
<PAGE>   40
<TABLE>
<S>     <C>                                                 <C>
4.5      Certificate of Designation for Series BB             Incorporated by reference to
         Crown Convertible Preferred Stock, par value         NorthCorp, Inc.'s Form
         10-KSB filed $.01 per share, of Crown                March 30, 1998.
         NorthCorp, Inc.

10.79    Purchase and sale agreement between                  Incorporated by reference to Crown
         Crown NorthCorp, Inc. and Catella                    NorthCorp, Inc.'s Form 10-QSB filed
         Boardroom Consulting AB                              November 22, 1999.

10.80    Purchase and sale agreement between                  Incorporated by reference to Crown
         Crown NorthCorp, Inc. and Catella                    NorthCorp, Inc.'s Form 10-QSB filed
         Holding AB                                           November 22, 1999.

10.81    Crown NorthCorp, Inc.'s receipt of                   Filed herewith.
         various documents from Harbert Equity
         Fund I, L.L.C.

10.82    Purchase and sale agreement between                  Filed herewith.
         ContiWest Corporation and Crown
         NorthCorp, Inc.

21.4     Subsidiaries of Crown NorthCorp, Inc.                Filed herewith.

27       Financial Data Schedule                              Filed herewith.

b)       REPORTS ON FORM 8-K
         -------------------

         None
</TABLE>


                                       20
<PAGE>   41
                                   SIGNATURES

         Pursuant to the requirements of Section 13 or 15 (d) 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.


                                                 Crown NorthCorp, Inc.


Date:    March 29, 2000                 By:     /s/ James F. Russell II
                                             ------------------------------
                                                James F. Russell II
                                                Chief Executive Officer

         Pursuant to the requirements of the Securities Exchange Act of 1934,
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:    March 29, 2000                 By:      /s/ Ronald E. Roark
                                             ------------------------------
                                                 Ronald E. Roark
                                                 Chairman of the Board

Date:    March 29, 2000                 By:      /s/ James F. Russell II
                                             ------------------------------
                                                James F. Russell II
                                                President and  Chief Executive
                                                Officer
                                                (Principal Executive Officer)

Date:    March 29, 2000                 By:      /s/ Sam Stern
                                             ------------------------------
                                                 Sam Stern
                                                 Executive Vice President,
                                                 Treasurer and Chief Financial
                                                 Officer
                                                 (Principal Accounting Officer)


                                      S-1
<PAGE>   42
Date:    March 29, 2000                 By:      /s/ Stephen W. Brown
                                             ------------------------------
                                                 Stephen W. Brown
                                                 Secretary


Date:    March 29, 2000                 By:      /s/ David K. Conrad
                                             ------------------------------
                                                 David K. Conrad
                                                 Director


Date:    March 29, 2000                 By:      /s/ Gordon V. Smith
                                             ------------------------------
                                                 Gordon V. Smith
                                                 Director

                                      S-2
<PAGE>   43
                                INDEX TO EXHIBITS
                                -----------------

3.3      Restated Certificate of Incorporation. (1)

3.4      Bylaws. (1)

4.2      Certificate of Designation for Series B Preferred Stock, par value $.01
         per share, of Crown NorthCorp, Inc. (2)

4.3      Certificate of Designation for Series C Convertible Preferred Stock,
         par value $.01 per share, of Crown NorthCorp, Inc. (2)

4.4      Certificate of Designation for Series AA Convertible Preferred Stock,
         par value $.01 per share, of Crown NorthCorp, Inc. (3)

4.5      Certificate of Designation for Series BB Convertible Preferred Stock,
         par value $.01 per share, of Crown NorthCorp, Inc. (4)

10.79    Purchase and sale agreement between Crown NorthCorp, Inc. and Catella
         Boardroom Consulting AB (5)

10.80    Purchase and sale agreement between Crown NorthCorp, Inc. and Catella
         Holding AB (5)

10.81    Crown NorthCorp, Inc.'s receipt of various documents from Harbert
         Equity Fund I, L.L.C. (1)

10.82    Purchase and sale agreement between ContiWest Corporation and Crown
         NorthCorp, Inc. (1)

21.4     Subsidiaries of Crown NorthCorp, Inc. (1)

27       Financial Data Schedule (1)
-----------
(1)      Filed herewith.

(2)      Incorporated by reference to Crown NorthCorp, Inc.'s Form 8-K filed
         January 24, 1997.
(3)      Incorporated by reference to Crown NorthCorp, Inc.'s Form 8-K filed
         February 20, 1998.
(4)      Incorporated by reference to Crown NorthCorp, Inc.'s Form 10-KSB filed
         March 30, 1998.
(5)      Incorporated by reference to Crown NorthCorp, Inc.'s Form 10-QSB filed
         November 22, 1999.