<PAGE>   1
                UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549

                                    FORM 10-Q

         [X]      Quarterly Report Pursuant to Section 13 or 15(d) of the
                        Securities Exchange Act of 1934

                  For the quarterly period ended December 31, 2000

                                       or

         [ ]      Transition Report Pursuant to Section 13 or 15 (d) of the
                         Securities Exchange Act of 1934

                          Commission file No. 33-17679

                          NORTH AMERICAN DATACOM, INC.
             (Exact name of registrant as specified in its charter)

         Delaware                                     84-1067694
 (State of incorporation)                (I.R.S. Employer Identification Number)


               751 County Road 989, Building 1000, Iuka, MS 38852
              (Address of principal executive offices) (Zip Code)

                                 (662) 424-5050

                         (Registrant's Telephone Number)

         Indicate by check mark whether the registrant: (1) has filed all
reports required to be filed by Section 13 or 15 (d) of the Securities Exchange
Act of 1934 during the proceeding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.

                                 YES [X] NO [ ]

         As of January 31, 2001, the Company had approximately 98,656,448
outstanding shares of common stock





                                        1

<PAGE>   2

                                      INDEX

<TABLE>

<S>                                                                                <C>
PART I - CONDENSED FINANCIAL INFORMATION

Item 1.  Unaudited Condensed Financial Information

      Condensed Consolidated Balance Sheets.........................................3

      Condensed Consolidated Statements of Operations...............................4

      Condensed Consolidated Statements of Comprehensive Income.....................5

      Condensed Consolidated Statements of Changes in Stockholders' Equity..........6

      Condensed Consolidated Statements of Cash Flows...............................7

      Notes to Condensed Consolidated Financial Statements.......................8-12

Item 2.  Management's Discussion and Analysis of

         Financial Condition and Results of Operations..........................12-17

Item 3.  Quantitative and Qualitative Disclosures about Market Risk................18

PART II - OTHER INFORMATION

      ITEMS 1 through 6.........................................................18-19

      Signatures...................................................................20
</TABLE>

                                        2

<PAGE>   3

                          NORTH AMERICAN DATACOM, INC.
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                                    UNAUDITED


<TABLE>
<CAPTION>
                                                                                   UNAUDITED
                                                                                  DECEMBER 31,      JUNE 30,
                                                                                      2000            2000
                                                                                  ------------    ------------
<S>                                                                               <C>             <C>
                                     ASSETS
Current Assets:
     Cash and Cash Equivalents                                                    $     78,140    $     20,948
     Accounts Receivable, Net of Allowance of $2,400 for December 31
             and June 30, 2000                                                          46,153          37,848
     Notes Receivable, Net of Long-term Maturities                                          --           2,920
     Inventories                                                                         3,538             438
     Employee Advances                                                                   2,555         102,555
                                                                                  ------------    ------------
              Total Current Assets                                                     130,386         164,709
                                                                                  ------------    ------------
Investments (Note 3)                                                                        --          90,000
Property and Equipment:
     Conduit and Optic Fiber                                                        14,432,996      14,396,891
     Computers and Equipment                                                           727,033         717,416
     Communications Equipment and Wireless Towers                                      635,821         371,688
     Software                                                                          162,587              --
     Other Equipment                                                                    83,737          77,278
     Vehicle                                                                            33,541              --
     Leasehold Property and Improvements                                                15,960          15,880
     Office Furniture                                                                    3,231           3,231
                                                                                  ------------    ------------
              Total Property and Equipment                                          16,094,906      15,582,384
     Less Accumulated Depreciation and Amortization                                    (64,565)        (35,945)
                                                                                  ------------    ------------
              Net Property and Equipment                                            16,030,341      15,546,439
                                                                                  ------------    ------------
Advance to Affiliate (Note 5)                                                          200,000              --
Other Assets (Note 6)                                                                  444,818         449,832
                                                                                  ------------    ------------
              Total Assets                                                        $ 16,805,545    $ 16,250,980
                                                                                  ============    ============

                      LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities:
     Trade Note Payable, Net of Unamortized Discount (Note 4)                     $ 14,941,699    $ 15,152,173
     Accounts Payable                                                                  572,412          24,034
     Accrued Expenses                                                                  312,175         275,552
     Convertible Notes Payable                                                          33,541              --
                                                                                  ------------    ------------
              Total Current Liabilities                                             15,859,827      15,451,759
Payable to Director                                                                     23,917          23,917
                                                                                  ------------    ------------
              Total Liabilities                                                     15,883,744      15,475,676
                                                                                  ------------    ------------
Commitments and Contingencies
Stockholders' Equity (Note 7)
     Convertible Preferred Stock, No Par Value; 400,000 Shares Authorized                   --              --
     Series B Convertible Preferred Stock, $.0001 Par Value; 6% Cumulative;
           5,000 Shares Authorized; 1,126 and 300 Shares Issued and Outstanding
           as of December 31, 2000 and June 30, 2000, Respectively                   1,125,904         300,000
     Common Stock, $.0001 Par Value; 150,000,000 Shares Authorized;
           98,656,448 and 97,992,758 Shares Issued and Outstanding as of
           December 31, 2000 and June 30, 2000, Respectively                             9,865           9,798
     Additional Paid in Capital                                                      3,880,963       2,667,567
     Other Accumulated Comprehensive Income                                           (189,200)        (99,200)
     Retained Earnings (Accumulated Deficit)                                        (3,905,730)     (2,102,861)
                                                                                  ------------    ------------
              Total Stockholders' Equity                                               921,801         775,304
                                                                                  ------------    ------------
              Total Liabilities and Stockholders' Equity                          $ 16,805,545    $ 16,250,980
                                                                                  ============    ============
</TABLE>

    See accompanying notes to consolidated financial statements (unaudited).


                                       3
<PAGE>   4

                          NORTH AMERICAN DATACOM, INC.
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                    UNAUDITED

<TABLE>
<CAPTION>
                                                    FOR THE THREE MONTHS ENDED       FOR THE SIX MONTHS ENDED
                                                           DECEMBER 31,                    DECEMBER 31,
                                                       2000            1999            2000            1999
                                                   ------------    ------------    ------------    ------------
<S>                                                <C>             <C>             <C>             <C>
Net Service Revenues                               $     85,366    $     74,221    $    156,373    $     98,210

Cost of Services                                         48,212           7,329          96,226           7,329
                                                   ------------    ------------    ------------    ------------
Gross Profit                                             37,154          66,892          60,147          90,881

Selling, General and Administrative Expenses            798,090         322,144       1,513,954         524,923
                                                   ------------    ------------    ------------    ------------
Operating Loss                                         (760,936)       (255,252)     (1,453,807)       (434,042)

Other Income (Expense), Net                            (172,848)          2,437        (349,063)          6,303
                                                   ------------    ------------    ------------    ------------
Loss Before Income Tax Expense (Benefit)               (933,784)       (252,815)     (1,802,870)       (427,739)

     Income Tax Expense (Benefit)                            --              --              --              --
                                                   ------------    ------------    ------------    ------------
Net Loss                                           $   (933,784)   $   (252,815)   $ (1,802,870)   $   (427,739)
                                                   ============    ============    ============    ============
Basic and Diluted Loss per Common Share (Note 1)   $      (0.01)   $      (0.01)   $      (0.02)   $      (0.01)
                                                   ============    ============    ============    ============
Weighted Average Number of Common Shares
     Outstanding - Basic and Diluted (Note 1)        98,638,724      31,372,129      98,491,320      17,701,065
                                                   ============    ============    ============    ============
</TABLE>

    See accompanying notes to consolidated financial statements (unaudited).




                                       4
<PAGE>   5

                          NORTH AMERICAN DATACOM, INC.
                CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
                                    UNAUDITED

<TABLE>
<CAPTION>
                                                         FOR THE THREE MONTHS ENDED     FOR THE SIX MONTHS ENDED
                                                               DECEMBER 31,                    DECEMBER 31,
                                                            2000           1999             2000           1999
                                                          ---------      ---------      -----------      ---------
<S>                                                       <C>            <C>            <C>              <C>
Net loss                                                  $(933,784)     $(252,815)     $(1,802,870)     $(427,739)

Net change in unrealized loss on investments (Note 3)       (60,000)       (41,650)         (90,000)       (41,650)
                                                          ---------      ---------      -----------      ---------
Comprehensive loss                                        $(993,784)     $(294,465)     $(1,892,870)     $(469,389)
                                                          =========      =========      ===========      =========
</TABLE>

    See accompanying notes to consolidated financial statements (unaudited).


                                       5
<PAGE>   6

                           NORTH AMERICAN DATACOM, INC.
           CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
                                   (UNAUDITED)


<TABLE>
<CAPTION>
                                                                                                         Net
                                     Series B Preferred     Common Stock                              Unrealized
                                           Stock                      Par    Additional  Accumulated    Loss on    Stockholders'
                                     Shares    Amount      Shares    Value      PIC        Deficit    Investments      Equity
                                     ------  ----------  ----------  ------  ----------  -----------  -----------    ----------
<S>                                  <C>     <C>         <C>         <C>     <C>         <C>           <C>           <C>
Balances, June 30, 2000                 300  $  300,000  97,992,758  $9,798  $2,667,567  $(2,102,861)  $ (99,200)    $  775,304
                                      -----  ----------  ----------  ------  ----------  -----------   ---------     ----------
     Issuance of Series B preferred
        stock                           500     500,000          --      --          --           --          --        500,000
     Sale of common stock                --          --     317,500      32     634,968           --          --        635,000
     Sale of common stock                --          --     150,000      15     442,110           --          --        442,125
     Exercise of stock options
         to acquire common stock         --          --      11,542       1       9,999           --          --         10,000
     Exercise of stock options
         to acquire common stock         --          --     115,423      12       9,988           --          --         10,000
     Issuance of shares for services     --          --       1,000      --       2,000           --          --          2,000
     Net unrealized loss from
        investments                      --          --          --      --          --           --     (30,000)       (30,000)
     Net loss for the period ended
       September 30, 2000                --          --          --      --          --     (869,086)         --       (869,086)
                                      -----  ----------  ----------  ------  ----------  -----------   ---------     ----------
Balances, September 30, 2000            800  $  800,000  98,588,223  $9,858  $3,766,632  $(2,971,947)  $(129,200)    $1,475,343
                                      -----  ----------  ----------  ------  ----------  -----------   ---------     ----------
     Issuance of shares for services     --          --      20,225       2      44,188           --          --         44,190
     Issuance of shares for
         financial services rendered     --          --      30,000       3      59,997           --          --         60,000
     Issuance of shares for
         financial services rendered     --          --       3,000       1       8,842           --          --          8,843
     Exercise of stock options
         to acquire common stock         --          --      15,000       1       1,304           --          --          1,305
     Issuance of Series B preferred
         stock                          326     325,904          --      --          --           --          --        325,904
     Net change in unrealized loss
         from investments                --          --          --      --          --           --     (60,000)       (60,000)
     Net loss for the period ended
       December 31, 2000                 --          --          --      --          --     (933,784)         --       (933,784)
                                      -----  ----------  ----------  ------  ----------  -----------   ---------     ----------
Balances, December 31, 2000           1,126  $1,125,904  98,656,448  $9,865  $3,880,963  $(3,905,731)  $(189,200)    $  921,801
                                      =====  ==========  ==========  ======  ==========  ===========   =========     ==========
</TABLE>

    See accompanying notes to consolidated financial statements (unaudited).





                                       6
<PAGE>   7

                          NORTH AMERICAN DATACOM, INC.
                      CONSOLIDATED STATEMENT OF CASH FLOWS
                                    UNAUDITED

<TABLE>
<CAPTION>
                                                                              FOR THE SIX MONTHS ENDED
                                                                                   DECEMBER 31,
                                                                                 2000         1999
                                                                              -----------    ---------
<S>                                                                           <C>            <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss                                                                      $(1,802,870)   $(427,739)
Adjustments to reconcile net loss to cash used in operations:
          Depreciation and amortization (Note 4)                                  405,480       12,000
          Changes in operating assets and liabilities, net of acquisitions:
              Increase in accounts receivable                                      (8,305)      (8,318)
              Decrease in notes receivable                                          2,920      (72,415)
              Increase in inventory                                                (3,100)          --
              Increase in other assets and employee advances                       92,680     (218,108)
              Increase in accounts payable and accrued expenses                   700,033      654,894
                                                                              -----------    ---------
Net cash used in operations                                                      (613,162)     (59,686)
                                                                              -----------    ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
          Purchase of property and equipment                                     (512,522)    (847,747)
          Advance to affiliate (Note 5)                                          (200,000)          --
                                                                              -----------    ---------
Net cash used in investing activities                                            (712,522)    (847,747)
                                                                              -----------    ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
          Proceeds from sale of common stock (Note 7)                           1,098,432      513,791
          Payments on trade note payable                                         (575,000)          --
          Proceeds from sale of preferred stock (Note 7)                          825,904           --
          Proceeds from issuance of convertible notes payable                      33,541       81,915
                                                                              -----------    ---------
Net cash provided by financing activities                                       1,382,876      595,706
                                                                              -----------    ---------
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
         for the period                                                            57,192     (311,727)
CASH AND CASH EQUIVALENTS, beginning of period                                     20,948      722,353
                                                                              -----------    ---------
CASH AND CASH EQUIVALENTS, end of period                                      $    78,140    $ 410,626
                                                                              ===========    =========

------------------------------------------------------------------------------------------------------
Supplemental schedule of non-cash operating activities:
    Issuance of common stock for payment of accounts payable                  $   115,032    $      --
</TABLE>



    See accompanying notes to consolidated financial statements (unaudited).



                                       7
<PAGE>   8

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                    UNAUDITED

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

BASIS OF PRESENTATION

The accompanying unaudited consolidated financial statements have been prepared
in accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-Q and Article 10 of
Regulation S-X. Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, the accompanying unaudited
condensed consolidated financial statements include all adjustments, consisting
only of normal recurring adjustments, necessary for the fair presentation of the
Company's financial position as of December 31, 2000 and the results of its
operations and cash flows for the three-and-six-month periods ended December 31,
2000 and 1999. These financial statements should be read in conjunction with the
Company's audited consolidated financial statements as of June 30, 2000
including notes thereto, included in the Company's 1999 Annual Report on Form
10-K for fiscal year ended June 30, 2000.

NATURE OF BUSINESS

The Company intends to provide communications and information technology
services with an emphasis on wideband fiber optic and wireless
telecommunications services that support enterprise data storage solutions,
primary for customers in southern United States.

PRINCIPLES OF CONSOLIDATION

The consolidated financial statements include the accounts of the Company and
its wholly-owned subsidiaries. All material intercompany accounts and
transactions are eliminated.

USE OF ESTIMATES

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

Certain estimates used by management are particularly susceptible to significant
changes in the economic environment. These include estimates of the realization
of long-lived assets and deferred tax assets. Each of these estimates, as well
as the related amounts reported in the financial statements, are sensitive to
near term changes in the factors used to determine them. A significant change in
any one of those factors could result in the determination of amounts different
from those reported in the consolidated financial statements and the effect of
such differences could be material.

INVESTMENTS

Investments are classified as available-for-sale and are reported at estimated
fair value, with unrealized gains and losses, net of taxes, reported as a
separate component of stockholders' equity.

Realized gains and losses, and declines in value judged to be other than
temporary, are included in other income. The cost of securities sold is based on
the specific identification method and interest earned is included in other
income.

REVENUE RECOGNITION

Revenue is recognized when services are rendered.

TAXES ON INCOME

Income taxes are calculated using the liability method specified by Statement of
Financial Accounting Standards No. 109, Accounting for Income Taxes ("SFAS
109"). Under SFAS 109, the Company provides for estimated income taxes payable
or refundable on current year income tax returns as well as the estimated future
tax effects attributable to temporary differences and carry forwards.
Measurement of deferred



                                       8
<PAGE>   9

income taxes is based upon enacted tax laws and tax rates, with the measurement
of deferred income tax assets reduced by estimated amounts of tax benefits not
likely to be realized.

EARNINGS PER SHARE

Basic and diluted loss per share of common stock have been computed based upon
the weighted average number of shares outstanding during the quarter ending
December 31, 2000 and, after giving effect to the merger stock split, the
quarter ending December 31, 1999. Common stock equivalents consisting of stock
options, convertible notes, convertible preferred stock and warrants were not
considered in either period, as their effect would be anti-dilutive.

The following details the Company's actual common stock equivalents (in
post-merger shares):

<TABLE>
<CAPTION>
                                             December 31,
                                          2000         1999
                                       ----------   ----------
<S>                                    <C>          <C>
         Stock options                 14,469,216   11,659,966
         Convertible notes                 47,208    1,903,130
         Warrants                              --       80,000
         Convertible preferred stock    1,052,000   23,318,779
                                       ----------   ----------
                                       15,568,424   36,961,875
                                       ==========   ==========
</TABLE>

PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment are stated at cost. Major renewals and
improvements are capitalized, while maintenance and repairs are expensed when
incurred. Depreciation is computed over the estimated useful lives of
depreciable assets using the straight-line method. Useful lives for property and
equipment are as follows:

<TABLE>
<CAPTION>
                                                                      YEARS
                                                                      -----
<S>                                                               <C>
         Conduit and optic fiber                                       25
         Communications equipment and wireless towers                 3-10
         Computers                                                      5
         Other Equipment                                              3-10
         Leasehold improvements                                   Term of lease
</TABLE>

The carrying values of long-lived assets are periodically reviewed by the
Company and impairments would be recognized if the expected future operating
non-discounted cash flows derived from an asset were less than its carrying
value.

FAIR VALUE OF FINANCIAL INSTRUMENTS

The carrying amounts of the Company's financial instruments, consisting of cash
and cash equivalents, notes and accounts receivable, accounts payable and
payable to director approximate their respective fair values.

BUSINESS LINES

Fiber Optic and Broadband Wireless Network: The Company is building a fiber
optic and broadband wireless communications network, which will allow for the
high-speed transmission of large amounts of data. It is expected that
businesses, government agencies and institutions will use the Company network as
a preferred alternative to existing telephone and satellite data transmission
systems. The Company installed a wireless network connecting Iuka to Atlanta and
Memphis. This wireless network currently operates at a DS-3 bandwidth level.

Internet Access: As of December 31, 2000, the Company provides Internet service
in Mississippi, Tennessee and Alabama. Internet services provided by the Company
include basic dial-up access to the Internet through standard computer modems,
high speed Internet access, and the design and hosting of websites for
customers.

Remote Data Storage: During fiscal 2000, the Company took delivery of equipment
that will allow third parties to store and access data stored in digital form on
computer systems maintained and operated by the Company in its facility in Iuka,
Mississippi. As of December 31, 2000, the Company has started its operation with
an initial agreement. This agreement will provide revenues for the EDS line
beginning next quarter.



                                       9
<PAGE>   10

Telecommunication Projects and Consulting: The Company plans to assist
corporations, government agencies and institutions in the design and
installation of their own internal telecommunications networks. The Company
plans to use state-of-the-art technology, which will enable its clients to
transfer and receive large amounts of data at high speed between both internal
and external sources.

At present, the Company operates two segments, internet access, including
paging, and remote data and storage to consumers and small businesses.

2. RECENT ACCOUNTING PRONOUNCEMENTS

In June 1998, the Financial Accounting Standards Board issued SFAS No. 133,
Accounting for Derivative Instruments and Hedging Activities ("SFAS 133"). SFAS
133 requires companies to recognize all derivatives contracts as either assets
or liabilities in the balance sheet and to measure them at fair value. If
certain conditions are met, a derivative may be specifically designated as a
hedge, the objective of which is to match the timing of gain or loss recognition
on the hedging derivative with the recognition of (i) the changes in the fair
value of the hedged asset or liability that are attributable to the hedged risk
or (ii) the earnings effect of the hedged forecasted transaction. For a
derivative not designated as a hedging instrument, the gain or loss is
recognized in income in the period of change.

In June 2000, the FASB issued Statement of Financial Accounting Standards No.
138, "Accounting for Derivative Instruments and Certain Hedging Activities (an
amendment of FASB Statement No. 133)." The adoption of SFAS 138 did not have a
material impact on the results of operations, financial position and liquidity
of the Company. SFAS 133, as amended by 138, was effective for all fiscal
quarters of all fiscal years beginning after June 15, 2000.

The Financial Accounting Standards Board issued Interpretation
("Interpretation") No. 44, "Accounting for Certain Transactions involving Stock
Compensation, an Interpretation of APB Opinion No. 25" which is effective July
1, 2000. Interpretation No. 44 clarifies (a) the definition of employee for
purposes of applying Opinion 25, (b) the criteria for determining whether a
stock compensation plan qualifies as a non-compensatory plan, (c) the accounting
consequence of various modifications to the terms of a previously fixed stock
option or award, and (d) the accounting for an exchange of stock compensation
awards in a business combination. Adoption of the provisions of the
Interpretation has not had a significant impact on our financial statements.

In December 1999, the SEC issued Staff Accounting Bulletin ("SAB") No. 101, --
Revenue Recognition, which outlines the basic criteria that must be met to
recognize revenue and provides guidance for presentation of revenue and for
disclosure related to revenue recognition policies in financial statements filed
with the Securities and Exchange Commission. We believe that adopting the
provisions of SAB No. 101 will not have a material impact on our financial
position or results of operations.

In September 2000, the Financial Accounting Standards Board issued SFAS No. 140,
Accounting for Transfers and Servicing of Financial Assets and Extinguishment of
Liabilities ("SFAS 140"). SFAS 140 revises the standards for accounting for
securitizations and other transfers of financial assets and collateral and is
effective for fiscal years beginning after December 15, 2000. We believe that
adopting SFAS 140 will not have a material impact on our financial position or
results of operations.

3. INVESTMENTS:

The Company's investments are classified as available-for-sale. The amortized
cost, gross unrealized gains (losses) and estimated fair value, less the option
price of $.12 per share, for these investments were as follows at December 31,
2000 and June 30, 2000. The Company has exercised its option rights, but has not
yet been issued stock by NYRR, as legal issues are being worked out by Company
counsel.

<TABLE>
<CAPTION>
                         Cost         Gross Unrealized     Estimated
December 31, 2000        Basis         Gains (Losses)     Fair Value
---------------------------------------------------------------------
<S>                     <C>              <C>                <C>
New York Regional
Rail Corporation
Stock Options           $250,000         $(250,000)         $     0

June 30, 2000

New York Regional
Rail Corporation
Stock Options           $250,000         $(160,000)         $90,000
</TABLE>




                                       10
<PAGE>   11

4. PROPERTY, PLANT AND EQUIPMENT:

In March 2000, the Company acquired 504 miles of fiber optic conduit for $15.1
million from Qwest. The purchase price was to be paid over a 12-month period
ending March 31, 2001. Accordingly, imputed interest of $723,109 was recorded as
a discount which is being amortized as an interest charge over the term of the
payable. For the three-and-six-month quarterly periods ending December 31, 2000
the interest charge associated with this payable was $182,263 and $364,526,
respectively. The Company currently is past due in its payments on this
obligation and is actively negotiating with the vendor for modifications of the
repayment terms. Management believes it will be successful in its negotiations
with Qwest and that ultimately an agreement will be in place.

On August 15, 2000, the Company entered into an agreement with a subsidiary of
Norfolk Southern Company to lay fiber optic conduit between Atlanta, Georgia and
Chattanooga, Tennessee and from Chattanooga to Memphis, Tennessee. The agreement
calls for payments of approximately $29 million over the course of the
agreement, approximately $2.9 million of which was due on October 15, 2000 with
the balance due in specified installments as the conduit is installed. The
contractor is two months late on its installation. The Company has therefore not
made any payments due under this agreement. The Company and the contractor are
currently in negotiations relating to new terms for the payments and completion
of the installation.

5. ADVANCE TO AFFILIATE

In July 2000, the Company and Global Fiber Optic and Wireless Communications,
Ltd. ("Global") each advanced $200,000 for developing a joint venture to provide
a 4,000 mile fiber optic communications and internet network for Turkey. The
Company and Global plan to each have a fifty percent interest in the joint
venture formed. The Company will be required to provide electronic and
communications technologies, while Global will provide rights-of-way and other
real estate as needed in Turkey. Currently the advances are being used by the
proposed joint venture to purchase rights-of-way and other assets to be utilized
in the future operations of the joint venture.

6. OTHER ASSETS

Other assets consist of the following items as of:

<TABLE>
<CAPTION>
                                           DECEMBER 31,      JUNE 30,
                                              2000             2000
                                            --------         --------
<S>                                        <C>               <C>
FCC License, net of amortization of
 $26,723 and $14,389, respectively          $343,277         $355,611
Deposits                                      17,000                0
Prepaid expenses                              22,751           32,431
Deferred income tax asset                     61,790           61,790
                                            --------         --------
Total                                       $444,818         $449,832
                                            ========         ========
</TABLE>

7. STOCKHOLDERS' EQUITY:

In May 2000, the Board authorized 500,000 shares of Series B Preferred Stock. In
June 2000, the Company authorized the sale of up to 5,000 shares of Series B
convertible preferred stock for $1,000 per share to a principal shareholder.
Each share is convertible into 500 shares of Rule 144 restricted common stock of
the Company. Each share carries a $60 dividend payable in July annually with
these dividends accumulating if not paid and has a right upon liquidation to be
redeemed before any common shareholders. If dividends are not current the
holders will have 500 voting rights for each share held. There are no redemption
rights for retiring this issue. In September 2000, the Company sold 500 shares
of Series B Preferred Stock to a principal shareholder for $500,000. During
December 2000, the Company sold 326 shares of Series B Preferred Stock to a
principal shareholder for $325,904. The conversion of the newly issued preferred
shares was changed to reflect current market prices. Each of the new shares will
be convertible into 2,000 shares of Rule 144 restricted common stock of the
Company.

In July 2000, $10,000 of stock options were exercised for 11,542 shares of
common stock.

In July 2000, the Company awarded 1,000 shares of its common stock to three
individuals for non-cash prize from a logo contest held for local-area students.

In August 2000, $10,000 of stock options were exercised for 115,423 shares of
common stock.



                                       11
<PAGE>   12

In August 2000, the Company sold 317,500 shares of common stock for a total
purchase price of $635,000 to a private investor. In October 2000, the company
issued 30,000 shares of common stock for costs and services totaling $59,997 to
the investor pursuant to the agreement.

In September 2000, the Company closed the private placement of 150,000 shares of
common stock for a total purchase price of approximately $442,125. The Company
agreed to pay certain fees associated with the placement through the issuance of
an additional 3,000 shares of common stock and the payment of $13,700 in cash.
The agreement provided that the Company shall file a registration statement with
the SEC for the resale of the 150,000 shares by October 5, 2000. For each
fifteen day period following this deadline in which the registration statement
is not filed with the SEC, the Company was required to make a payment to the
private investor equal to an amount payable in cash or common stock based upon
the closing OTC bid price of the shares of the Company's common stock as of the
end of each fifteen day period. The Company has since filed a registration
statement for the resale of such shares, and paid additional shares of common
stock to such private investors pursuant to the agreement. The registration was
effective on January 31, 2001. In October, November, and December 2000, the
Company issued 20,225 total shares of common stock valued at $44,188 as payment
in full pursuant to the terms of an agreement previously entered into by the
Company and such investors.

In December 2000, $1,305 of stock options were exercised for 15,000 shares of
common stock.

8. SUBSEQUENT EVENTS:

The Company's S-1 filing with the SEC became effective January 31, 2001.

9. LIQUIDITY:

The accompanying financial statements have been prepared on a going concern
basis, which contemplates continuity of operations and realization of assets and
satisfaction of liabilities in the normal course of business. At December 31,
2000, the Company has negative working capital with obligations totaling
$15,859,827 due within one year of which approximately $12.09 million is past
due (Note 4). In addition, losses totaling $3,905,730 have been generated since
inception. These matters raise substantial doubt about the company's ability to
continue on as a going concern. The continuation of the Company as a going
concern is dependent upon the Company raising additional capital, and attaining
and maintaining profitable operations. The Company has identified potential
sources of capital and potential joint venture and/or strategic partners and
believes that they will be able to secure the necessary capital to put their
business plan into operation.

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

         The following is management's discussion and analysis of certain
significant factors that have affected the Company's financial condition and
results of operations during the periods included in the accompanying unaudited
balance sheets and statements of operations.

ACQUISITIONS

         The Company was organized in September 1998 as North American Software
Associates, Limited, a Delaware corporation. The Company was organized to
provide a variety of telecommunications services. On April 1, 1999, the Company
acquired all of the assets of Freedom 2000, a local Internet Service Provider
(ISP), in exchange for 577,123 shares of restricted common stock of the Company.
On December 3, 1999, the Company acquired all of the common stock of Action
Communications, Inc. ("Action"), a provider of digital and alpha numeric paging
services, in exchange for 1,731,339 shares of restricted common stock of the
Company. The Action transaction has been treated for accounting purposes as a
purchase of assets and liabilities, and revenues and expenses of Action prior to
December 3, 1999 have not been consolidated. Effective December 21, 1999, North
American Software Associates, Limited ("NAS") was acquired by Pierce
International, Inc. in a share exchange transaction and in March 2000 the
Company changed its name to North American DataCom, Inc. The transaction with
Pierce International, Inc. has been accounted for as a reverse acquisition since
the former shareholders of NAS owned controlling interest in the Company
immediately following the transaction and management of Pierce International,
Inc. was replaced by management of NAS.



                                       12
<PAGE>   13

OVERVIEW

         The Company intends to provide broad-based communications and
information technology services with an emphasis on wideband fiber optic and
wireless telecommunications services that support Enterprise Data Storage(EDS)
solutions. The Company plans to deploy a 3,000 mile fiber optic network in the
states of Tennessee, Mississippi, Louisiana, Alabama, Georgia and Florida, that
is based on advanced, state-of-the-art technology. The Company plans to use this
network to provide a breadth of services to telecommunication companies, ISPs
and large organizations, including government agencies and departments. The
Company plans to provide superior quality and secure broadband communications to
facilitate data storage services. The Company's Enterprise Data Storage business
(EDS) will focus mainly on archiving, using two highly secure "Major Centers" at
our facilities located in Iuka, Mississippi. In addition, the Company plans to
operate five collocation data storage "Satellite Centers" to provide mirroring
and archiving services that are directly connected by its fiber optic network to
its Major Center in Iuka.

         The Company currently provides Internet access services and digital and
alpha numeric paging services. To date, the Company's startup revenues have been
derived from these services.

SEGMENT INFORMATION

         In September 2000 the Company retained Cap Gemini/Ernst and Young to
revise the Company's existing Business Plan and Business Model. The revised
business plan and model were completed in December. The revised 5 year plan
calls for a $725 million capital investment for the seven EDS Centers and the
3,000 route mile Fiber optic network. Revenues at the end of 5 years are
projected to be over $500 million.

         Current Capital markets dictated that the Company divide the Business
plan and model into six independent network segments. The Company decided that
Segment 1, Memphis to Iuka to Atlanta, was tactically and strategically the most
important and therefore would be constructed first. The capital budget to
develop and operate the Segment 1 network and EDS business is planned at
approximately $75,000,000 through its first 18 months of operation,
approximately July 2002.

         Segment 1 of the Company's Business plan consists of approximately 550
miles of the network from Atlanta to Memphis. Segment 1 serves 12 of the 49
smaller cities with populations less than 100,000, and serves 3 of the 13 medium
size cities with populations between 100,000 and 500,000. The Company has
identified Tier Two markets consisting of those population centers that are not
in the primary 100 largest areas but are uniquely located along railroad
rights-of-way where fiber optic transmission facilities can be easily accessed
and maintained. The Company's focus is to provide such services to Tier 2
markets in the southeast, initially from Atlanta to Memphis. The present fiber
optic infrastructure in this rural region is inadequate compared to other parts
of the country. The Company believes that by developing its network in an
underserved area, it will be well positioned to benefit in the future from
expected traffic growth. Segment 1 also intends to serve 3 of the largest 7
cities in the Company's planned network. The Major Center, and two of the five
Satellite Centers are expected to be operational in Segment 1. The first two
Satellite centers are planned to be in Chattanooga and Memphis. The Company
currently expects to start generating revenues from Segment 1 in July 2001, and
expects to have a positive cash flow in mid 2002, and to be profitable by
year-end 2002.

RESULTS OF OPERATIONS:

         The Company acquired Freedom 2000, its Internet service provider, in
April 1999 and the Company acquired Action Communications, Inc., its digital and
alpha numeric paging provider, in December 1999. Only one month of the revenues
and expenses from Action is reflected in the Company's results of operations for
the quarter ended December 31, 1999. As a result, management does not believe
that the Company's results of operation for the quarter ended December 31, 1999
are directly comparable to results of operation for the quarter ended December
31, 2000. The Management believes the results are not indicative of possible
results in the future.

         The Company's historical net service revenues consist primarily of
monthly fees from customers subscribing to the Company's Internet service
provider services or the Company's digital and alphanumeric paging services. Net
service revenues increased to $85,366 in the three month quarterly period ended
December 31, 2000 from $74,221 for the three month quarterly period ended
December 31, 1999, an increase of approximately 15%. This growth in net service
revenues was primarily the result of having operations generating approximately
$19,044 of revenues for the paging services in the three month quarter ended
December 31, 2000, as compared with one month of paging operations for the same
three month quarterly period in 1999. In addition, the Company provided Internet
access service to approximately 1404



                                       13
<PAGE>   14

customers at December 31, 2000 as compared with only about 708 customers at
December 31, 1999.

         The Company's cost of internet and paging services consist primarily of
paging airtime, postage and delivery expenses and allocated overhead costs. Cost
of services increased to $48,212 for the three month quarter ended December 31,
2000 from $7,329 for the three month quarter ended December 31, 1999. This
increase in cost of services was primarily due to an increase in customers, net
services provided, and increasing cost concerning telecommunications services.
Cost of service, as a percent of net service revenue, increased from 9.9% for
the three month quarter ended December 31, 1999 to 56.5% for the same quarterly
period in 2000. As a result, gross profit for the three month quarter ended
December 31, 2000 was $37,154, as compared with $66,892 for the three month
quarter ended December 31, 1999.

         The Company incurred selling, general and administrative expenses of
approximately $798,090 for the three month quarter ended December 31, 2000
compared with $322,144 for the three month quarter ended December 31, 1999, an
increase of approximately 148%. These expenses consisted primarily of the
addition of management and technical staff for the fiber optic business. The
telephone expenses, insurance expenses, payroll expenses, legal and professional
services and rent expense increased due to the staff increase. The staffing
increase was 21 employees, a total of 32 employees at December 31, 2000 compared
to 11 employees at December 31, 1999. Approximately much more of general and
administrative expense for the three month quarter ended December 31, 2000 was
incurred by the Company in order to pursue its broadband telecommunications
network and enterprise data center business plans.

         The Company incurred approximately $172,848 in other expense for the
three month quarter ended December 31, 2000 as compared with $2,437 of other
income for the three month quarter ended December 31, 1999. Other income
(expense) was primarily associated with investment income, interest expense and
various miscellaneous expenses. Imputed interest of approximately $182,263 was
recorded in the three month quarter ended December 31, 2000 relating to a
contract to acquire rights-of-way and fiber conduit which provided for payments
over a period of months without stated interest.

LIQUIDITY:

         The Company's primary liquidity needs consist of funding constructing
and equipping the Company's enterprise data storage center, constructing the
Company's fiber optic and broadband network, and cash flow losses from
operations. For the three month quarter ended December 31, 2000, the Company
used approximately $613,162 of net cash in operations. For the three month
quarter ended December 31, 2000, the Company used approximately $712,522 for the
purchase of property and equipment. These funds were provided by the sale of
equity, and the placement of notes, and working capital.

         Management has developed a new Business plan for Segment 1 construction
in response to current capital market conditions. Management plans that the
Company will require approximately $65,000,000 in capital over the next twelve
months to fund the following Segment 1 capital needs. Estimated expenditures
include, but are not limited to, approximately $37,000,000 to acquire network
rights-of-way plus the installation of conduit and fiber optic cable, $5,000,000
for optical electronics and software, $5,000,000 for operation support systems
and network operation center software, $7,000,000 for Tier IV enterprise data
storage center construction and improvements, and $11,000,000 in working capital
and financing costs. Actual costs and estimates may vary from Management's
current expectations.

         In March 2000, the Company entered into an agreement with Qwest
Communications to purchase approximately 500 miles of fiber conduit from New
Orleans to Mobile, Alabama and from Pensacola, Florida to Jacksonville, Florida.
The total purchase price under this agreement is approximately $15,120,000.
Payments totaling approximately are currently due or past due under the
agreement. Payments regarding the agreement were due quarterly through March 31,
2001. In January 2001, the Company met with Qwest Communications Corp in order
to amend the agreement and modify the payment terms to conform to the Company's
revised Interim Business Plan. This matter is under discussion but not yet
resolved.

         In August 2000, the Company entered into an agreement with Norfolk
Southern affiliates, Thoroughbred Technology & Communications (T-CUBED), to lay
fiber conduit from Atlanta, Georgia to Chattanooga, Tennessee and from
Chattanooga to Memphis, Tennessee. The total cost of this conduit is
approximately $29,000,000. The Company has not made payments due under this
agreement and Management is reviewing the contract with T-CUBED in order to
modify some of the terms of the agreement.

            Management plans to fund this capital requirement through the
private placement of approximately $25 million of new equity, approximately $15
million of



                                       14
<PAGE>   15

equipment financing and the balance through real estate financing. A
construction loan for some interim funding is being discussed. In addition, the
Company plans to fund some of its capital needs through joint venture
arrangements with strategic business partners and vendor financing Discussions
are underway.

         In order to fund working capital needs, in September 2000, Robert
Crawford, the Company's president, director and principal shareholder purchased
from the Company 500 shares of Series B cumulative convertible preferred for a
purchase price of $1,000 per share. Each share of the Series B cumulative
convertible preferred stock is convertible into 500 shares of Rule 144
restricted common stock commencing July 1, 2001, and is entitled to an annual
dividend of $60. In December 2000, the Company sold 326 shares of Series B
Preferred Stock to a principal shareholder for $325,904. Each of the newly
preferred shares is convertible into 2000 Rule 144 restricted common shares
reflecting the current market conditions.

         In order to fund working capital needs, in July 2000 the Company agreed
to sell 317,500 shares of common stock for a total purchase price of $635,000.
In August 2000, the Company closed the placement of these shares, and the Board
of Directors authorized the issuance of the 317,500 shares of common stock to
satisfy the agreement. Costs incurred for this transaction totaled $59,997 and
were paid in exchange for 30,000 shares of Rule 144 common stock. The Company
further agreed to register the resale of such shares with the SEC. The S-1
registration became effective on January 31, 2001.

         In September 2000, the Company closed a private placement of 150,000
shares of common stock for a total purchase price of approximately $442,125. The
Company agreed to pay certain fees associated with the placement through the
issuance of an additional 3,000 shares of Rule 144 restricted common stock and
the payment of $13,700 in cash. The terms of the agreement provide that the
Company shall file a registration statement with SEC for the resale of the
150,000 shares. Additional payments of 22,225 shares of common stock were made
to the investor due to late SEC filing pursuant to the agreement. The S-1
registration was effective on January 31, 2001.

         The Company's capital needs are substantial and the Company has no
present commitments to fund those needs. As reflected in the Company's financial
statements for fiscal year ended June 30, 2000 filed with the Company's Annual
Report on Form 10-K, the accountant's opinion includes a going concern
qualification. As stated in note 10 to the unaudited financial statements, as of
December 31, 2000 the Company has negative working capital with obligations
totaling $15,859,827 due within one year of which approximately $12.1 million is
past due. In addition, the Company has sustained start up losses totaling
$3,905,730 since inception. The inability of the Company to secure additional
capital and financing and the inability of the Company to attain and maintain
profitable operations would have a material adverse effect on whether the
Company would be successful in implementing its proposed business plan and
continue as a going concern.

RISKS AFFECTING FUTURE RESULTS:

         A number of risk factors exist that may impair or prevent the Company
from accomplishing its proposed business plan in some or all respects. Those
risk factors include the following matters among others:

         The Company is a Start Up with Historical Losses. Substantially all of
the Company's historical revenues have been derived from its Internet access
provider services and its digital and alpha paging services. The Company now has
customers and will have revenues from its fiber optic and wireless broadband
network in the next quarter. The Company has experienced operating losses in
each fiscal quarter since it was founded and will likely continue to experience
such losses. Because the Company's start-up operating history is extremely
limited, and the Company has just begun to commence operations on its fiber
optic and wireless broadband network and its enterprise data storage facility,
it is difficult to evaluate the Company's business operations and prospects.

         The Company Needs Substantial Additional Capital-Insolvency. The
Company's present operations do not provide sufficient cash flow to pay its
debts as they become due. The Company had negative working capital of
approximately at and expects it will need to obtain additional capital of
approximately $65,000,000 to finance its operating and capital needs over the
next twelve months. See "Liquidity." The failure of the Company to obtain
additional capital will significantly restrict the Company's proposed operations
and may make it impossible for the Company to pursue its proposed business plan.

         Default on Certain Obligations. In March 2000, the Company entered into
an agreement with Qwest Communications to purchase 500 miles of fiber conduit
from New Orleans to Mobile, Alabama and from Pensacola, Florida to Jacksonville,
Florida. The



                                       15
<PAGE>   16

total purchase price under this agreement is approximately $15,000,000. Payments
totaling approximately $12,000,000 are currently due or past due under the
agreement. The Company has not made any of the payments due under this
agreement, but no default has been declared. The Company's obligations under
this agreement are personally guaranteed by the Company's president. The Company
is negotiating with Qwest to amend the contract and develop new payment
schedules. The Company has also entered into a contract to lay fiber conduit
between Atlanta and Memphis, through Chattanooga, at a total cost of
approximately $29,000,000, of which 10% was due on October 15, 2000. The Company
has not made the payments due under this contract. The Company is negotiating
with contractors to amend the contract and develop new payment schedules.

         The Company Leases its Facilities. The Company's primary facility in
Iuka, Mississippi is leased by the Company from the Mississippi Development
Authority, (MDA). This facility is critical to the Company's proposed business
plan because it already contains many of the features necessary to establish an
enterprise data storage facility. A new 20 year lease has been agreed to, in
principle, by the Company and MDA with certain terms to be resolved. Management
believes and expects that it will be executed by the end of February.

         The Company Experiences General Risks Associated with Business. The
future success of the Company is heavily dependent on its ability to develop,
promote and sustain strong government relationships, reach agreements with
certain third parties necessary for the telecommunications needs of its
operations and attract and retain customers at suitable prices. The Company's
business involves competition with existing companies. There can be no assurance
that the business of the Company will ever be profitable.

         The Company will Likely Experience Customer Concentration. Until and
unless the Company secures multiple customer relationships, it is likely that
the Company will experience periods during which it will be highly dependent on
one or a limited number of customers. Dependence on a single or a few customers
will make it difficult to satisfactorily negotiate attractive prices for the
Company's services and will expose the Company to the risk of substantial losses
if a single dominant customer stops conducting business with the Company.

         The Company Must Comply with Telecommunications Regulations. Most of
the Company's proposed business services and products are subject to regulation
at the federal and state levels. These regulations are in some cases uncertain
and are often undergoing change. The failure of the Company to comply with these
regulations could have a materially adverse effect on the Company.

         The Company Must Comply with Environmental Regulations. The Company's
intended operations, especially the construction and operation of a fiber optic
network, are subject to various federal, state and local laws and regulations
relating to the protection of the environment. These environmental laws and
regulations, which have become increasingly stringent, are implemented
principally by the Environmental Protection Agency and comparable state
agencies, and govern the management of hazardous wastes, the discharge of
pollutants into the air and into surface and underground waters, and the
manufacture and disposal of certain substances. There are no material
environmental claims currently pending or, to the Company's knowledge,
threatened against the Company. In addition, the Company believes that its
operations are in material compliance with current laws and regulations. The
Company estimates that any expenses incurred in maintaining compliance with
current laws and regulations will not have a material effect on the Company's
earnings or capital expenditures. However, there can be no assurance that
current regulatory requirements will not change, that currently unforeseen
environmental incidents will not occur, or that past non-compliance with
environmental laws will not be discovered on the Company's properties.

         The Company's Operating Results are Likely to Fluctuate Widely. The
Company expects that its operating results for the foreseeable future are likely
to fluctuate widely from quarter to quarter and from year to year. This is
especially true while the Company is building its fiber optic and wireless
broadband network. Fluctuation of results may occur due to a variety of factors
including, demand for and market acceptance of the Company's products and
services, reliability of service and network availability, the ability to
increase bandwidth as necessary, customer retention, capacity utilization of the
Company's enterprise data storage facility, the timing of customer needs, the
timing and magnitude of capital expenditures, changes in pricing policies or
practices of competitors, and changes in governmental regulations.

         The Company will Face Significant Competition. The Company's market is
intensely competitive. There can be no assurance that the Company will have the
resources to compete successfully in the future. Current and potential
competitors include national, foreign and regional internet service providers,
global, regional and local telecommunications companies and the Regional Bell
Operating Companies,



                                       16
<PAGE>   17

providers of server hosting and data storage services, and other technology
services and products companies. Most of these competitors will have
substantially greater resources than the Company.

         The Company is Entering a New Market. The market for Internet system
and network management solutions has only recently begun to develop, is evolving
rapidly and is characterized by an increasing number of market entrants. This
market may not prove to be viable or, if it becomes viable, may not continue to
grow. The Company currently incurs costs in excess of its revenues. If the
Company cannot attract and retain a customer base, it will not be able to
increase its sales and revenues nor create economies of scale to offset its
fixed and operating costs.

         The Company Must be able to Manage Growth. In order for the Company to
accomplish its proposed business plan, it must experience rapid growth in
building its enterprise data storage facilities and network infrastructure,
expand its service offering, expand its geographical coverage, expand its
customer base and increase the number of employees. This growth is expected to
place a significant strain on the Company's financial, management, operational
and other resources, including its ability to ensure customer satisfaction. This
expansion will require significant time commitments from senior management and
involve the efficient management of multiple relationships with a growing number
of third parties. The Company's ability to manage its growth effectively will
require the Company to continue to expand operating and financial procedures and
controls, to upgrade operational, financial and management information systems
and to attract, train, motivate and retain key employees. The ability to
attract, hire and retain qualified employees in today's competitive employment
market is another significant challenge which the Company faces. If the
Company's executives are unable to manage growth effectively, the Company's
business could be materially adversely affected.

         System Failures Could Lead to Significant Costs. The Company must
protect its network infrastructure and equipment against damage from human
error, physical or electronic security breaches, power loss and other facility
failures, fire, earthquake, flood, telecommunications failure, sabotage,
vandalism and similar events. Despite extensive precautions the Company has
taken, a natural disaster or other unanticipated problems at the Company's
facilities could result in interruptions in services or significant damage to
customer equipment or data. Any damage to or failure of the Company's systems or
service providers could result in reductions in, or terminations of, services
supplied to the Company's customers, which could have a material adverse effect
on the Company's business.

         The Company will Depend on Network Interconnections with Third Parties.
The Company will rely, in part, on a number of public and private network
interconnections to allow its customers to connect to other networks. If the
networks with which the Company interconnects were to discontinue their
interconnections, the Company's ability to exchange traffic would be
significantly constrained. Furthermore, the Company's business could be harmed
if these networks do not add more bandwidth to accommodate increased traffic.
Some of these networks will likely require the payment of fees for the right to
maintain interconnections. There usually is nothing to prevent any networks from
increasing fees or denying access. In such cases, the Company's ability to
pursue the proposed business plan could be materially adversely affected.

         Some of the Company's Business may be Subject to International Risks.
The Company is pursuing international business opportunities, especially with
respect to the Country of Turkey. Risks inherent in international operations
include unexpected changes in regulatory requirements, export restrictions,
tariffs and other trade barriers; challenges in staffing and managing foreign
operations; differences in technology standards; employment laws and practices
in foreign countries; longer payment cycles and problems in collecting accounts
receivable; political instability; changes in currency exchange rates and
imposition of currency exchange controls and potentially adverse tax
consequences.

SAFE HARBOR STATEMENT UNDER PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995

         This Quarterly Report on Form 10-Q and other reports and statements
issued on behalf of the Company may include forward-looking statements in
reliance on the safe harbor provided by the Private Securities Litigation Reform
Act of 1995. Forward-looking statements include the use of forward-looking words
such as "plans," "estimates," "believes," "expects," "may," "will," "should,"
"anticipates" and "proposes" and the negative or other variations of such terms
or comparable terminology, or by discussion of strategy or business plans that
involve risks and uncertainties. These forward-looking statements are subject to
substantial risks and uncertainties, including those discussed above, and actual
results may differ materially from those contained in any such forward-looking
statement. The Company undertakes no obligation to update or revise any such
forward-looking statements to reflect subsequent events or circumstances.



                                       17
<PAGE>   18

ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS

         The Company has not entered into any transaction using derivative
financial instruments and believes that its exposure to market risk associated
with other financial instruments is not material. The Company's cash equivalents
are maintained primarily in money market risks maturing in less than three
months. Accordingly, the Company does not believe that it has any significant
exposure to interest rate risk. The Company currently operates only in the
United States and all sales are made in U.S. dollars. Accordingly, the Company
does not have any material exposure to foreign currency rate fluctuations.

PART II - OTHER INFORMATION

         ITEM 1. LEGAL PROCEEDINGS

         The Company is not currently involved in any lawsuits.

         ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS.

         In July 2000, holders of stock options exercised the options and
acquired 11,542 shares of common stock at an aggregate exercise price of
$10,000.

         In July 2000, the Company awarded 1,000 shares of its common stock to
three individuals as a non-cash prize in connection with a logo contest held for
local area students.

         In August 2000, holders of stock options exercised the options and
acquired 115,423 shares of common stock at an aggregate exercise price of
$10,000.

         In August 2000, the Company closed a private placement of 317,500
shares of common stock for a total purchase price of $635,000 to a private
investor. Costs for this placement was $59,997 and was paid in exchange for
30,000 shares of Rule 144 restricted common stock.

         In September 2000, the Company sold 500 shares of Series B cumulative
convertible preferred stock to the Company's president, director and principal
shareholder for a purchase price of $1,000 per share. Each share of the Series B
cumulative convertible preferred stock is convertible into 500 shares of Rule
144 restricted common stock commencing July 1, 2001, and is entitled to an
annual dividend of $60.

         In September 2000, the Company closed the private placement of 150,000
shares of common stock for a total purchase price of approximately $442,125. The
Company paid certain fees associated with this placement through the issuance of
3,000 shares of Rule 144 restricted common stock and the payment of $13,700 in
cash. The terms of the transaction provide that the Company file a registration
statement with SEC for the resale of the 150,000 shares by October 5, 2000.
Delays in filing the registration statement with the SEC after October 5, 2000
required the Company to make a payment in cash or common stock based upon the
closing OTC bid price of the shares of Company's common stock as of the end of
each fifteen day period. The Company filed a registration statement and paid
22,225 shares of Rule 144 restricted common stock for said filing delays. The
registration was effective on January 31, 2001, which prevented further
additional payments.

         In December 2000, the Company sold 326 shares of Series B cumulative
convertible preferred stock to the Company's president, director and principal
shareholder for a purchase price of $1,000 per share. Each share of the Series B
cumulative convertible preferred stock is convertible into 2000 shares of Rule
144 restricted common stock commencing July 1, 2001, and is entitled to an
annual dividend of $60.

         In December 2000, holder of stock options exercised the options and
acquired 15,000 shares of common stock for at an aggregate exercise price of
$1,305 pursuant to an amended option agreement dated December 2000. The sales
and issuances of securities in the transactions described above were deemed by
the Company to be exempt from registration under the Securities Act of 1933 in
reliance upon Section 4(2) of the Securities Act, Regulation D promulgated
thereunder, Rule 701 promulgated thereunder and, in the case of the issuance of
common stock as a prize in a logo contest, on the basis that no "sale" as
defined in the Securities Act occurred.



                                       18
<PAGE>   19

         ITEM 3. DEFAULTS UPON SENIOR SECURITIES. None.

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

         No shareholders meetings were held during the Company's quarter ended
December 31, 2000.

         ITEM 5. OTHER INFORMATION. Not applicable.

         ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.

                  Index to Exhibits:

                  10.1     Right of First Refusal Agreement effective August 1,
                           2000 between the State of Mississippi and the
                           Company, incorporated herein by reference to Exhibit
                           10.2 to the Company's Annual Report on Form 10-K for
                           the fiscal year ended June 30, 2000.

                  10.2     Fiber Optic Conduit Agreement dated August 15, 2000
                           between Thoroughbred Technology and
                           Telecommunications, Inc. and North American Infotech,
                           LLC, incorporated herein by reference to Exhibit 10.3
                           to the Company's Annual Report on Form 10-K for the
                           fiscal year ended June 30, 2000.

                  10.3     Right of Way Entry Agreement dated August 15, 2000
                           among Norfolk Southern Railway Company, Inc and North
                           American Infotech, LLC., incorporated herein by
                           reference to Exhibit 10.4 to the Company's Annual
                           Report on Form 10-K for the fiscal year ended June
                           30, 2000.

                  10.4     Right of Way Sublease Agreement dated July 6, 2000
                           between Tishomingo Railroad Company, Inc. and North
                           American Infotech, LLC, incorporated herein by
                           reference to Exhibit 10.5 to the Company's Annual
                           Report on Form 10-K for the fiscal year ended June
                           30, 2000.

         Current Reports on Form 8-K:

         No current reports on Form 8-K were filed by the Company during the
quarter ended December 31, 2000.



                                       19
<PAGE>   20

                                   SIGNATURES

          Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.


                                    NORTH AMERICAN DATACOM, INC.
                                           (Registrant)

DATE: February 13, 2001
                                    /s/ Robert R. Crawford
                                    --------------------------------------------
                                    Robert R. Crawford
                                    President
                                    Chief Executive Officer



                                    /s/ David A. Cray
                                    --------------------------------------------
                                    David A. Cray, Vice President
                                    Corporate Treasurer




                                       20