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                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-QSB


                   Quarterly Report Under Section 13 or 15 (d)
                     of the Securities Exchange Act of 1934


                For the Quarterly Period Ended September 30, 2004


                         Commission File Number 0-13839


                            CAS MEDICAL SYSTEMS, INC.

        (Exact name of small business issuer as specified in its charter)


          Delaware                                              06-1123096
-------------------------------                              ----------------
(State or other jurisdiction of                              (I.R.S. employer
 incorporation or organization)                             identification no.)


              44 East Industrial Road, Branford, Connecticut 06405
                    (Address of principal executive offices)


                                 (203) 488-6056
                (Issuer's telephone number, including area code)


Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes [X]  No [ ]

State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date: Common Stock, $.004 par value:
9,843,173 shares as of November 8, 2004.

Transitional Small Business Disclosure Format (check one):  Yes [ ]  No [X]
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<PAGE>

INDEX
-----

PART 1        Financial Information                                     Page No.
------        ---------------------                                     --------

     Item 1   Financial Statements (unaudited)

              Condensed Balance Sheets as of September 30, 2004
              and December 31, 2003                                         4

              Condensed Statements of Income for the Three and Nine
              Months Ended September 30, 2004 and September 30, 2003        6

              Condensed Statements of Cash Flows for the Nine
              Months Ended September 30, 2004 and September 30, 2003        7

              Notes to Condensed Financial Statements                       8

     Item 2   Management's Discussion and Analysis of Financial
              Condition and Results of Operations                          11

     Item 3   Controls and Procedures                                      14

PART II       Other Information
-------       -----------------

     Item 6   Exhibits                                                     15

 Signatures                                                                16


                                        2
<PAGE>

                         PART I.- FINANCIAL INFORMATION
                         ------------------------------

ITEM 1. FINANCIAL STATEMENTS
----------------------------


     The financial statements included herein have been prepared by CAS Medical
Systems, Inc. (the "Company"), without audit, pursuant to the rules and
regulations of the Securities and Exchange Commission. Certain information and
footnote disclosures normally included in financial statements prepared in
accordance with accounting principles generally accepted in the United States of
America have been condensed or omitted pursuant to such rules and regulations.
It is recommended that these condensed financial statements be read in
conjunction with the financial statements and notes thereto included in the
Company's Annual Report filed on Form 10-KSB for the year ended December 31,
2003.

     In the opinion of the Company, all adjustments necessary to fairly present
the financial position of CAS Medical Systems, Inc. as of September 30, 2004,
and the results of its operations and its cash flows for the three and nine
month periods ended September 30, 2004 and September 30, 2003, have been
included in the accompanying unaudited financial statements. The results of
operations for the nine months ended September 30, 2004 are not necessarily
indicative of the expected results for the full year.

     Certain 2003 balances have been reclassified to conform to the current year
presentation.














                                        3
<PAGE>

                            CAS Medical Systems, Inc.

                            Condensed Balance Sheets
                            ------------------------
                                   (Unaudited)

Assets
------                                          September 30,    December 31,
                                                     2004            2003
                                                 -----------     -----------
Current Assets:
     Cash and cash equivalents                   $ 1,425,788     $   881,087
     Accounts receivable, net of allowance
       of $93,000 at September, 30, 2004 and
       $50,000 at December 31, 2003                2,722,891       3,307,059
     Inventories                                   3,214,419       2,270,616
     Deferred income tax assets                      347,155         347,155
     Other current assets                            130,113         489,451
                                                 -----------     -----------

Total current assets                               7,840,366       7,295,368

Property and Equipment:
     Land and improvements                           535,000         535,000
     Building and improvements                     1,472,162       1,472,162
     Machinery and equipment                       2,882,983       2,504,313
                                                 -----------     -----------
                                                   4,890,145       4,511,475

     Less accumulated depreciation                 2,547,268       2,287,978
                                                 -----------     -----------
     Property and equipment, net                   2,342,877       2,223,497
                                                 -----------     -----------

Intangible and other assets, net                     185,477         209,210

Deferred income tax assets                           182,652         182,652
                                                 -----------     -----------

Total assets                                     $10,551,372     $ 9,910,727
                                                 ===========     ===========


The accompanying notes are an integral part of these financial statements.

                                        4
<PAGE>

                            CAS Medical Systems, Inc.

                            Condensed Balance Sheets
                            ------------------------
                                   (Unaudited)


                                                  September 30,    December 31,
Liabilities and Stockholders' Equity                  2004             2003
------------------------------------              ------------     ------------

Current Liabilities:
      Current portion of long-term debt           $     57,348     $    475,185
      Notes payable                                       --            219,619
      Accounts payable                               1,138,139        1,007,617
      Income taxes payable                             434,136             --
      Accrued expenses                                 636,054          434,963
                                                  ------------     ------------
            Total current liabilities                2,265,677        2,137,384
                                                  ------------     ------------
Long-term debt, less current portion                 1,050,314        1,534,523

Stockholders' Equity:
      Common stock, $.004 par value;
        19,000,000 shares authorized; 9,915,573
        and 9,712,577 shares issued, including
        treasury shares at September 30, 2004           39,663           38,851
      Additional paid-in capital                     3,007,654        2,870,769
      Common stock held in treasury,
         at cost - 86,000 shares                      (101,480)            --
      Retained earnings                              4,289,544        3,329,200
                                                  ------------     ------------
      Total stockholders' equity                     7,235,381        6,238,820
                                                  ------------     ------------
Total liabilities and stockholders' equity        $ 10,551,372     $  9,910,727
                                                  ============     ============


The accompanying notes are an integral part of these financial statements.

                                        5
<PAGE>

                            CAS Medical Systems, Inc.

                         Condensed Statements of Income
                         ------------------------------
                                   (Unaudited)
<TABLE><CAPTION>
                                                                  Three Months Ended                Nine Months Ended
                                                                     September 30,                    September 30,
                                                                 2004            2003             2004            2003
                                                             -----------     -----------      -----------     -----------
<S>                                                          <C>             <C>              <C>             <C>
REVENUES:
      Net product sales                                      $ 5,004,851     $ 3,629,938      $14,372,567     $11,932,322

OPERATING EXPENSES:
      Cost of product sold                                     2,562,885       2,302,695        7,624,570       6,971,265
      Research & development                                     209,479         229,869          729,994         654,390
      Selling, general & administrative                        1,581,052       1,415,359        4,606,940       4,146,472
                                                             -----------     -----------      -----------     -----------
      Total operating expenses                                 4,353,416       3,947,923       12,961,504      11,772,127
                                                             -----------     -----------      -----------     -----------
      Operating income (loss)                                    651,435        (317,985)       1,411,063         160,195
                                                             -----------     -----------      -----------     -----------
INTEREST EXPENSE, net                                             13,314          24,589           62,504         112,425
PROCEEDS FROM LIFE INSURANCE                                        --              --               --           500,000
                                                             -----------     -----------      -----------     -----------
      Income (loss) before income taxes                          638,121        (342,574)       1,348,559         547,770

INCOME TAXES (BENEFIT)                                           221,430        (103,500)         388,215           2,500
                                                             -----------     -----------      -----------     -----------
      Net income (loss)                                      $   416,691     $  (239,074)     $   960,344     $   545,270
                                                             ===========     ===========      ===========     ===========
Weighted average number of common shares outstanding:
      Basic                                                    9,829,573       9,655,349        9,792,429       9,648,539

      Diluted                                                 11,027,432       9,655,349       11,032,739      10,253,674

Earnings (loss) per common share:
      Basic                                                  $      0.04     ($     0.02)     $      0.10     $      0.06
                                                             ===========     ===========      ===========     ===========
      Diluted                                                $      0.04     ($     0.02)     $      0.09     $      0.05
                                                             ===========     ===========      ===========     ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.

                                        6
<PAGE>

                            CAS Medical Systems, Inc.

                       Condensed Statements of Cash Flows
                       ----------------------------------
                                   (Unaudited)
<TABLE><CAPTION>
                                                                  Nine Months Ended
                                                                    September 30,
                                                                2004            2003
                                                            -----------     -----------
<S>                                                         <C>             <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net income                                                $   960,344     $   545,270
  Adjustments to reconcile net income to net cash
     provided by operating activities:
        Depreciation and amortization                           375,313         352,075
        Provision for bad debt                                   43,000            --
        Changes in operating assets and liabilities:
           Accounts receivable                                  541,168          67,873
           Inventories                                         (943,803)        598,888
           Other current assets                                 359,338         147,319
           Accounts payable, accrued expenses and
              income taxes payable                              765,748         167,256
                                                            -----------     -----------

     Net cash provided by operating activities                2,101,108       1,878,681

CASH FLOWS FROM INVESTING ACTIVITIES:
  Purchase of property and equipment                           (398,783)        (94,995)
  Purchase of intangible assets                                 (72,176)           --
  Capitalized software costs                                        --          (25,020)
                                                            -----------     -----------

  Net cash used in investing activities                        (470,959)       (120,015)

CASH FLOWS FROM FINANCING ACTIVITIES:
  Repayments under notes payable                               (219,619)           --
  Repayments of long-term debt                                 (902,046)       (346,299)
  Repayments under line of credit                                  --          (600,000)
  Purchase of common stock for treasury                        (101,480)           --
  Proceeds from issuance of common stock                        137,697           7,950
                                                            -----------     -----------

  Net cash used in financing activities                      (1,085,448)       (938,349)
                                                            -----------     -----------

  Net increase in cash and cash equivalents                     544,701         820,317

CASH AND CASH EQUIVALENTS, beginning of period                  881,087         325,670
                                                            -----------     -----------

CASH AND CASH EQUIVALENTS, end of period                    $ 1,425,788     $ 1,145,987
                                                            ===========     ===========

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
  Cash paid during the period for interest                  $    75,177     $   118,081
  Cash paid during the period for income taxes             ($   171,794)    $   189,753
</TABLE>

The accompanying notes are an integral part of these financial statements.

                                        7
<PAGE>

                            CAS Medical Systems, Inc.
                     Notes to Condensed Financial Statements
                                   (Unaudited)

(1)  Business

     The Company is a Delaware corporation organized in 1984. The Company
designs, manufactures and markets medical products, specifically blood pressure
measurement equipment, apnea monitoring equipment and products for other patient
applications, including neonatal intensive care. The Company's products are
designed to improve the quality of patient care and provide exceptional value
and performance. Markets for the Company's products include hospital, alternate
site, emergency medical services and homecare. The Company's products are sold
through its direct sales force, via distributors and pursuant to Original
Equipment Manufacturer ("OEM") agreements both internationally and in the United
States. The Company has several other products in various stages of development
that it believes will add to and complement its current product lines.

(2)  Inventories

     Inventories are stated at the lower of cost or market. The Company provides
valuation allowances for any material that has become obsolete or may become
unsaleable based upon estimates of future demand and sale price in the market.
Judgments with respect to salability and usage of inventory, estimated market
value, and recoverability upon sale are complex and subjective. Such assumptions
are reviewed periodically and adjustments are made, as necessary, to reflect
changed conditions. At September 30, 2004 and December 31, 2003, inventory
consisted of the following:

                                              September 30,    December 31,
                                                  2004             2003
                                              ------------     ------------

     Raw Material                             $  1,939,620     $  1,281,620
     Work-In-Process                               275,263          434,055
     Finished Products                             999,536          554,941
                                              ------------     ------------
                                              $  3,214,419     $  2,270,616
                                              ============     ============


(3)  Accrued Warranty Costs

     The Company warranties its products for up to three years and records the
estimated cost of such product warranties at the time the sale is recorded.
Estimated warranty costs are based upon actual past experience of product
returns and the related estimated cost of labor and material to make the
necessary repairs. If actual future product return rates or the actual costs of
material and labor differ from the estimates, adjustments to the accrued
warranty liability would be made.

                                            Nine Months Ended  Nine Months Ended
                                              September 30,      September 30,
                                                  2004               2003
                                              ------------       ------------

     Opening balance                          $    122,000       $     95,000
     Additions                                      94,475            144,270
     Warranty costs incurred                       (94,475)          (144,270)
                                              ------------       ------------
     Ending balance                           $    122,000       $     95,000
                                              ============       ============


(4)  Earnings per Common Share

     The Company computes earnings per common share in accordance with SFAS No.
128, "Earnings Per Share."

                                        8
<PAGE>

Under SFAS No. 128, basic earnings per share is calculated by dividing net
income by the weighted average number of shares of common stock outstanding
during the period. No dilution for any potentially dilutive securities is
included. Diluted earnings per share assumes the exercise or conversion of
dilutive securities using the treasury stock method. For the three months ended
September 30, 2004 and September 30, 2003, certain options and warrants to
purchase 165,750 and 1,078,908 shares, respectively, of the Company's common
stock were not included in the computation of diluted earnings per share because
their exercise price was greater than the average market price of the common
shares and, therefore, their inclusion would have been anti-dilutive. For the
nine months ended September 30, 2004 and September 30, 2003, options and
warrants to purchase 165,750 and 673,068 shares, respectively, of the Company's
common stock were excluded from the computation.

The following summarizes the Company's calculation of basic and diluted earnings
per share:
<TABLE><CAPTION>
                                                Three Months Ended              Nine Months Ended
                                                   September 30                    September 30
                                               2004            2003            2004            2003
                                           -----------     -----------     -----------     -----------
<S>                                        <C>             <C>             <C>             <C>
Net income (loss)                          $   416,691     $  (239,074)    $   960,344     $   545,270

Weighted average shares outstanding          9,829,573       9,655,349       9,792,429       9,648,539
Add:  dilutive effect of outstanding
  warrants and options                       1,197,859            --         1,240,310         605,135
                                           -----------     -----------     -----------     -----------
Total weighted average shares of
    dilutive securities outstanding         11,027,432       9,655,349      11,032,739      10,253,674
                                           ===========     ===========     ===========     ===========

Earnings (loss) per share - basic          $      0.04     $     (0.02)    $      0.10     $      0.06
Earnings (loss) per share - dilutive       $      0.04     $     (0.02)    $      0.09     $      0.05
                                           ===========     ===========     ===========     ===========
</TABLE>

(5)  Stock-Based Compensation

     The Company primarily grants qualified stock options for a fixed number of
shares to employees with an exercise price equal to the fair market value of the
shares at the date of the grant. The Company has adopted the disclosure only
provisions of SFAS No. 123, "Accounting for Stock-Based Compensation," as
amended by SFAS No. 148, "Accounting for Stock-Based Compensation Transition and
Disclosure." SFAS No. 123 encourages, but does not require, companies to record
compensation cost for stock-based employee compensation plans at fair value. The
Company has chosen to continue to account for stock-based compensation using the
intrinsic value method prescribed in Accounting Principles Board Opinion No. 25,
"Accounting for Stock Issued to Employees," and related interpretations where,
generally, when the exercise price of stock options equals the market price of
the underlying stock on the date of grant, no compensation expense is recorded.
Had compensation cost for the stock option awards been determined using the fair
value method under SFAS No. 123, the Company's net income and earnings per share
would have been changed to the following pro forma amounts:

                                   Three Months Ended       Nine Months Ended
                                      September 30            September 30
                                    2004        2003        2004        2003
                                 ---------   ---------   ---------   ---------
Net income (loss):
     As reported                 $ 416,691   $(239,074)  $ 960,344   $ 545,270
     Compensation expense for
     stock options based on
     fair value, net of income
     taxes                          25,541      25,080      52,182      62,175
                                 ---------   ---------   ---------   ---------
     Pro forma                   $ 391,150   ($264,154)  $ 908,162   $ 483,095
                                 =========   =========   =========   =========

                                        9
<PAGE>

Earnings (loss) per share:
        As reported - Basic         $ 0.04    $ (0.02)    $ 0.10    $ 0.06
        Pro forma - Basic           $ 0.04    $ (0.03)    $ 0.09    $ 0.05
        As reported - Diluted       $ 0.04    $ (0.02)    $ 0.09    $ 0.05
        Pro forma - Diluted         $ 0.04    $ (0.03)    $ 0.08    $ 0.05


(6)  Capital Stock

     On June 2, 2004, the Company's stockholders approved the CAS Medical
Systems, Inc. 2003 Equity Incentive Plan (the "Incentive Plan"). Under the
Incentive Plan, 1,000,000 shares of common stock have been reserved for
issuance. Awards that may be granted under the Incentive Plan include options,
restricted stock and restricted stock units, and other stock-based awards. The
purposes of the Incentive Plan are to make available to our key employees and
directors, certain compensatory arrangements related to growth in value of our
stock so as to generate an increased incentive to contribute to the Company's
financial success and prosperity; to enhance the Company's ability to attract
and retain exceptionally qualified individuals whose efforts can affect the
Company's financial growth and profitability; and align in general the interests
of our employees and directors with the interests of our stockholders.

     On June 2, 2004, the Company's stockholders approved the CAS Medical
Systems, Inc. Employee Stock Purchase Plan (the "Purchase Plan"). Under the
Purchase Plan, 150,000 shares of common stock have been reserved for issuance.
The initial offering period began on July 1, 2004. The Purchase Plan offers the
Company's employees an opportunity to participate in a payroll-deduction based
program designed to incentivize them to contribute to the Company's success and
prosperity.

     During the second quarter of 2004, the Company purchased 86,000 shares of
its common stock at fair value from a former employee for $101,480.


(7)  Financing Arrangements

     During August 2004, the Company renewed its $3,000,000 line-of-credit with
its bank lender. Amounts borrowed under this line-of credit are payable on
demand. The line-of-credit matures in September 2005. Borrowings under the
line-of-credit bear interest at the bank's base rate (4.75% at September 30,
2004) which may change from time to time. At September 30, 2004, there were no
amounts outstanding under the line-of-credit facility. Under the terms of the
agreement, the Company is permitted to borrow based upon a formula using
accounts receivable and inventories. Any borrowings under this agreement are
secured by substantially all assets of the Company.

(8)  Income Taxes

     The provision for income taxes of $388,000 for the three and nine month
periods ended September 30, 2004 reflect an annual expected effective rate of
approximately 35% for 2004 reduced by an income tax benefit pertaining to state
research and development tax credits. As such, the combined estimated federal
and state effective tax rate is lower than the statutory rate. The effective
income tax rate for the nine months ended September 30, 2003 was lower than the
statutory rate primarily because the proceeds from a life insurance policy on a
key employee were not taxable.

(9)  Grant Awards

      The Company has been awarded various grants by the National Institute of
Neurological Disorders and Stroke of the NIH under its Small Business Innovative
Research Program. Grants under this program are being used to support
development of a new technology, Near-Infrared Spectroscopy ("NIRS") that can
non-invasively measure

                                       10
<PAGE>

the brain oxygenation level of a neonatal patient. In accordance with the terms
of these grants, the Company is being reimbursed for certain qualifying
expenditures. The Company is pursuing additional NIH grants to support its NIRS
research. Grants received under this program include a phase II award received
by the Company during September

2000 in the amount of $836,000 for development in the area of neonatal
application of NIRS. During May 2004, the Company was awarded a phase II grant
approximating $1,000,000 for continued development of NIRS in the adult
population.

     Other miscellaneous grants for research in various applications of NIRS
cerebral oximetry have been awarded to the Company including $200,000 awarded
during 2003. During March 2004, the Company was awarded a $100,000 grant for
developing a new generation of automated non-invasive blood pressure ("NIBP")
monitors, which will incorporate advanced NIBP algorithms that compensate for
arterial stiffness.

     During the three months ended September 30, 2004 and September 30, 2003,
approximately $160,000 and $92,000, respectively, of such research and
development ("R&D") costs were reimbursed under the grants. During the nine
months ended September 30, 2004 and September 30, 2003, approximately $304,000
and $321,000, respectively, of such costs were reimbursed. Funding provided to
the Company is being recorded as a reduction in R&D expenses. The Company
recognizes the reimbursement on an accrual basis as the qualifying costs are
incurred.

(10) Guarantees

     Pursuant to our certificate of incorporation and bylaws, we have agreed to
indemnify our officers and directors for certain events or occurrences while the
officer or director is or was serving, at our request, in such capacity. The
maximum potential amount of future payments we could be required to make
pursuant to these provisions is unlimited; however, we have a Directors and
Officers insurance policy that limits our exposure and enables us to recover a
portion of any future amounts paid. As a result of our insurance policy
coverage, we believe the estimated fair value of these indemnification
obligations is minimal. We have no liabilities recorded for these obligations as
of September 30, 2004.

     We enter into standard indemnification agreements in our ordinary course of
business. Pursuant to these agreements, we indemnify, hold harmless, and agree
to reimburse the indemnified parties for losses suffered or incurred by the
indemnified parties, generally our business partners or customers, in connection
with any U.S. patent, copyright or other intellectual property infringement
claim by any third party with respect to our products. The term of these
indemnification agreements is generally perpetual. The maximum potential amount
of future payments we could be required to make under these indemnification
agreements is unlimited. We have no liabilities recorded for these agreements as
of September 30, 2004.


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

     Certain statements included in this report, including without limitation,
statements in the Management's Discussion and Analysis of Financial Condition
and Results of Operations, which are not historical facts, are "forward-looking
statements" within the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as amended.
These forward-looking statements represent the Company's current expectations
regarding future events. The Company cautions that such statements are qualified
by important factors that could cause actual results to differ materially from
expected results which may be contained in the forward-looking statements. All
forward-looking statements involve risks and uncertainties, including, but not
limited to, the following: foreign currency fluctuations, regulations and other
economic and political factors which affect the Company's ability to market its
products internationally, new product introductions by the Company's
competitors, increased price competition, dependence upon significant customers,
availability and cost of components for the Company's products, marketplace
acceptance for the Company's new products, FDA and other governmental regulatory
and enforcement actions, and changes to federal research and development grant
programs presently utilized by the Company.

                                       11
<PAGE>

Results of Operations
---------------------

     For the three months ended September 30, 2004, the Company reported net
income of approximately $417,000, or $0.04 per diluted common share compared to
a loss of $239,000 or ($0.02) per diluted common share reported for the same
period of 2003. Overall results for the three months ended September 30, 2004
were favorably impacted by increased sales, improved gross profit as a
percentage of sales, and reductions in operating expenses as a percentage of
sales compared to the three months ended September 30, 2003. Prior year results
were also negatively affected by a $250,000 provision for excess and obsolete
inventory.

     Net income for the first nine months of 2004 was $960,000 or $0.09 per
diluted common share compared to net income of $545,000 or $0.05 per diluted
share for the nine months ended September 30, 2003. Net income for the first
nine months of 2003 included $500,000, or $0.05 per diluted share, of
non-taxable proceeds from a life insurance policy paid upon the death of one of
the Company's key employees. Overall results for the nine months ended September
30, 2004 have been positively affected by increased sales volume, improved gross
profit as a percentage of sales, reductions in operating expenses as a
percentage of sales, and lower interest expense. Net income for the first nine
months of 2004 was also favorably affected by $80,000 of income tax benefits
pertaining to state research and development tax credits that lowered the
effective tax rate for the first quarter of 2004. Prior year results were also
negatively impacted by a $250,000 provision for excess and obsolete inventory.

     The Company recorded revenue of $5,005,000 for the third quarter ended
September 30, 2004, an increase of $1,375,000, or 38%, over sales of $3,630,000
for the third quarter of 2003. The growth in sales was led primarily by
increases in blood pressure product sales of 72% and neonatal product sales of
39%. Increases in blood pressure sales were driven by sales to domestic
customers, primarily the Department of Veterans Affairs ("VA") under the
Company's multi-year contract, sales to the veterinary market, and sales to
Original Equipment Manufacturers ("OEM"). Sales to the veterinary market were
driven by the launch of the Company's new Model 750 cardio-vascular monitor
under a private label distribution arrangement as well as continued strong sales
of the Model 740 vital signs monitor. Partially offsetting these increases were
reductions in apnea product sales of 27%. Despite the lower than expected sales
of apnea products in the third quarter of 2004, year-to-date apnea sales remain
flat from the prior year and the Company expects a stronger fourth quarter for
apnea sales.

     Revenues for the first nine months of 2004 were $14,373,000, an increase of
$2,440,000, or 20%, over revenues of $11,932,000 recorded for the first nine
months of 2003. Increases in overall sales were led by increased blood pressure
product sales of 36% and neonatal sales of 11%. Blood pressure sales were driven
by shipments to the VA, sales of the new Model 750 to the veterinary market, and
OEM sales. Partially offsetting these increases were reductions in service
related sales of 32%, or $204,000, primarily from the discontinuance of service
support on older apnea products.

     The cost of products sold as a percentage of net sales was 51.2% for the
three-month period ended September 30, 2004, compared to 63.4% for the same
period of 2003. Cost of products sold as a percentage of net sales for the first
nine months of 2004 was 53.0% compared to 58.4% for the first nine months of
2003. The reduction in cost of sales for both periods was driven by
manufacturing efficiencies and lower purchased component costs. Cost of products
sold for the three months ended September 30, 2003 reflected a $250,000
inventory provision resulting from slower than expected demand for the Company's
older vital signs monitors and higher than expected demand for the new Model 740
monitor. The Company is continuing to work aggressively to lower its cost of
products sold during 2004 through manufacturing efficiencies, company-wide
quality and process improvement initiatives, and capital equipment expenditures.

     Selling, general and administrative expenses ("S,G&A") increased $166,000,
or 12%, to $1,581,000 for the three months ended September 30, 2004, compared to
$1,415,000 for the three months ended September 30, 2003. Increased salaries and
related fringe benefits of $229,000 (including increased sales commissions of
$65,000 on higher sales volume and employee bonus accruals of $70,000),
increased travel and entertainment expenses of $44,000, and increased freight
costs of $13,000 were primarily responsible for the increased S,G&A expenses for
this period. Partially offsetting these increases were reductions in sales and
marketing promotional costs of $88,000,

                                       12
<PAGE>

outside professional services of $27,000, and bad debt provision of $19,000.
S,G&A expenses were $4,607,000 for the first nine months of 2004 compared to
$4,146,000 for the first nine months of 2003 representing an increase of
$461,000 or 11%. Increases in salaries and related fringe benefits of $573,000
(including $71,000 of commissions and $70,000 of employee bonus accruals),
freight costs of $38,000, and travel and entertainment expenses of $34,000 were
partially offset by reduced legal expenses of $84,000 and advertising and
promotional costs of $108,000.

     Research and Development ("R&D") expenses decreased $21,000 or 10% to
$209,000 for the three months ended September 30, 2004 compared to $230,000 for
the three months ended September 30, 2003. Increases in amounts reimbursed from
the National Institutes of Health (NIH) under established grant programs
partially offset by increases in engineering project materials and supplies were
primarily responsible for the decrease in R&D expenses for the period. R&D
expenses were $730,000 for the first nine months of 2004 compared to $654,000
for the first nine months of the prior year representing an increase of $76,000
or 12%. Increases in salaries and related benefits, outside professional
services, and engineering materials, and reductions in reimbursements from the
NIH were primarily responsible for the increase in R&D spending.

     Interest expense was approximately $13,000 for the three months ended
September 30, 2004 compared to $25,000 for the three months ended September 30,
2003 and $63,000 for the nine months ended September 30, 2004 compared to
$112,000 for the nine months ended September 30, 2003. Reductions in interest
expense for both periods reflect lower borrowing levels and improved interest
rates.

     The provision for income taxes of $388,000 for the nine-month period ended
September 30, 2004 represents an expected effective rate of approximately 35%
for 2004 offset by an $80,000 income tax benefit resulting primarily from a
refund pertaining to state research and development tax credits. The combined
estimated federal and state effective tax rate is lower than the statutory rate
as a result of anticipated R&D tax credits. The income tax provision of $2,500
for the first nine months of 2003 reflected an effective tax rate of
approximately 4.7% due to the exclusion of $500,000 of non-taxable insurance
proceeds, qualifying foreign trade income benefits from expected research and
development tax credits and operating losses incurred in the third quarter of
2003.


Financial Condition, Liquidity and Capital Resources
----------------------------------------------------

     At September 30, 2004, the Company's cash and cash equivalents totaled
approximately $1,426,000 compared to $881,000 at December 31, 2003 and the
Company's working capital totaled $5,575,000 on September 30, 2004 compared to
$5,158,000 on December 31, 2003. The Company's current ratio increased slightly
to 3.5 to 1 from 3.4 to 1 at December 31, 2003.

     Cash provided by operations for the nine month period ended September 30,
2004 was $2,101,000, compared to $1,879,000 for the comparable period of 2003.
The improvement in cash from operations was led by increased net income,
reductions in accounts receivable, and increases in income taxes payable and
other accrued expenses, partially offset by an increase in inventory. Increases
in inventory resulted primarily from the Company's expanded product offerings,
component parts requirements for the new Model 750 product launch which has
incurred certain delays, and the Company's efforts to improve customer order
fulfillment. Cash from operations for the first nine months of 2003 was
favorably impacted by $500,000 of proceeds received from a life insurance policy
following the death of a key employee.

     Cash used in investing activities was $471,000 for the first nine months of
2004 compared to $120,000 for the first nine months of 2003. The increase
resulted from several significant capital equipment purchases including a new
enterprise resource planning ("ERP") system expected to be operational during
the first quarter of 2005 and new manufacturing packaging equipment needed to
enhance productivity and quality. Further expenditures approximating $150,000
will be required to complete the ERP initiative.

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<PAGE>

     Cash used in financing activities during the nine month period ended
September 30, 2004 was $1,085,000, compared to $938,000 for the first nine
months of the prior year. During the first nine months of 2004, the Company
repaid $902,000 of outstanding bank debt obligations including unscheduled
principal payments of $582,000 against its term loan. The unscheduled payments
were made as a cost-savings measure thus eliminating the term loan. During the
first nine months of 2003, the Company eliminated the outstanding balance on its
line-of-credit obligation in the amount of $600,000 and repaid $346,000 of other
bank debt obligations.

     During August 2004, the Company renewed its $3,000,000 line-of-credit with
its bank lender. The line is payable on demand and matures in September 2005.
Borrowings under the line-of-credit bear interest at the bank's base rate (4.75%
at September 30, 2004) which may change from time to time. At September 30,
2004, there were no amounts outstanding under the line-of-credit facility. Under
the terms of the agreement, the Company is permitted to borrow against accounts
receivable and inventory according to pre-established criteria. The bank has a
first security interest in substantially all assets of the Company.

     The Company believes that its source of funds consisting of cash and cash
equivalents, projected cash flow from operating activities for 2004, and funds
available from the line-of-credit facility will be sufficient to meet its
current and expected requirements over at least the next twelve months. Although
there can be no assurance that the Company's line-of-credit facility will be
renewed, management believes that, if needed, it would be able to find
alternative sources of funds on commercially acceptable terms.


Critical Accounting Judgments and Estimates
-------------------------------------------

     The Company's discussion and analysis of financial condition and results of
operations are based upon the condensed financial statements, which have been
prepared in accordance with accounting principles generally accepted in the
United States of America. The preparation of these financial statements requires
the Company to make estimates and judgments that affect the reported amounts of
assets, liabilities, revenue and expenses, and disclosure of contingent assets
and liabilities. The Company's estimates include those related to revenue
recognition, the valuation of inventory, and valuation of deferred tax assets
and liabilities, useful lives of intangible assets, warranty obligations and
accruals. The Company bases its estimates on historical experience and on
various other assumptions that management believes to be reasonable under the
circumstances. Actual results may differ from these estimates under different
assumptions or conditions. For a complete description of accounting policies,
see Note 2 to our financial statements included in the Company's Form 10-KSB for
the year ended December 31, 2003.


ITEM 3 - CONTROLS AND PROCEDURES
--------------------------------

     As of September 30, 2004, an evaluation of the effectiveness of the design
and operation of the Company's disclosure controls and procedures was conducted
under the supervision and with the participation of the Chief Executive Officer
and Chief Financial Officer. Based on this evaluation, the Chief Executive
Officer and Chief Financial Officer have concluded that the Company's disclosure
controls and procedures were effective. These disclosure controls and procedures
are designed to ensure that information required to be disclosed by the Company
in this report is recorded, processed, summarized and reported in a timely
manner, including that such information is accumulated and communicated to
management, including the Chief Executive Officer and Chief Financial Officer,
as appropriate to allow timely decisions regarding required disclosure.

     There have been no changes in the Company's internal control over financial
reporting during the quarter ended September 30, 2004 that have materially
affected, or are reasonably likely to materially affect the Company's internal
control over financial reporting.

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<PAGE>

PART II - OTHER INFORMATION
---------------------------


ITEM 6 EXHIBITS
---------------

     10.1    Commercial Line of Credit Note and Loan Agreement dated August 10,
             2004
     10.2    Security Agreement dated August 10, 2004
     11      See Notes to Financial  Statements  Note 4, regarding computation
             of earnings per share.
     31.1    Certification pursuant to Rule 13a-14(a) of Louis P. Scheps,
             President and Chief Executive Officer
     31.2    Certification pursuant to Rule 13a-14(a) of Jeffery A. Baird, Chief
             Financial Officer
     32.1    Certification of Periodic Financial Report of Louis P. Scheps,
             President and Chief Executive Officer and Jeffery A. Baird, Chief
             Financial Officer






















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<PAGE>

                                   SIGNATURES


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


CAS MEDICAL SYSTEMS, INC.
(Registrant)



/s/ Louis P. Scheps                                Date: November 11, 2004
---------------------------
Louis P. Scheps
President and Chief Executive Officer


/s/ Jeffery A. Baird                               Date: November 11, 2004
---------------------------
Jeffery A. Baird
Chief Financial Officer














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