U.S. Securities and Exchange Commission Washington, D. C. 20549

                          FORM 10-KSB

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

     For the calendar year ended December 31, 2002

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

     For the transition period from _____________ to ____________



                       Commission File No. 0-27419


                        COMPUTER AUTOMATION SYSTEMS, INC.
                    ---------------------------------
              (Name of Small Business Issuer in its Charter)


               NEVADA                                       75-2749166
               ------                                       ----------
   (State or Other Jurisdiction of                 (I.R.S. Employer I.D. No.)
    incorporation or organization)

                    1825 East Plano Parkway, Suite #200
                             Plano, TX 75074
                             ---------------
                 (Address of Principal Executive Offices)

                Issuer's Telephone Number:  (214) 734-2116

                                  N/A
                                  ---
        (Former Name or Former Address, if changed since last Report)

Securities Registered under Section 12(b) of the Exchange Act:   None
Name of Each Exchange on Which Registered:                       None
Securities Registered under Section 12(g) of the Exchange Act:   $0.001 par
value common stock

     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 Company was required to file such reports), and (2) has
been subject to such filing requirements for the past 90 days.

     (1)   Yes  X    No            (2)   Yes  X    No
               ---      ---                  ---      ---

     Check if there is no disclosure of delinquent files in response to Item 405
of Regulation S-B is not contained in this form, and no disclosure will be
contained, to the best of Company's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form
10-KSB or any amendment to this Form 10-KSB.  [X]

State Issuer's revenues for its most recent fiscal year: December 31, 2002 -
$36,113.

     State the aggregate market value of the voting stock held by non-affiliates
computed by reference to the price at which the stock was sold, or the average
bid and asked prices of such stock, as of a specified date within the past 60
days.

     May 1, 2003 - $499,180.  There are approximately 9,983,619 shares
of common voting stock of the Company held by non-affiliates. There is no
"established market" for the Company's securities; management has arbitrarily
valued these shares at the average bid price of the Company's common stock
during the quarterly period ended December 31, 2002.

                (ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS
                        DURING THE PAST FIVE YEARS)

                              Not Applicable.

                     (APPLICABLE ONLY TO CORPORATE ISSUERS)

     State the number of shares outstanding of each of the Issuer's classes of
common equity, as of the latest practicable date:

                           May 1, 2003

                             9,983,619


                   DOCUMENTS INCORPORATED BY REFERENCE

          A description of "Documents Incorporated by Reference" is contained in
Part III, Item 13.

Transitional Small Business Issuer Format   Yes     No _X__
                                                --

                              PART I

Item 1.  Description of Business.
         ------------------------

Business Development.
---------------------

          CASi Texas was incorporated under the laws of the State of Texas on
February 13, 1998, for the purpose of designing and manufacturing custom rack
mount and industrial computer applications for the telecommunications and other
high technology industries. "Rack mount" literally means installation or
mounting in a rack or metal frame of standard dimension numerous pieces of
diverse equipment which are interconnected to make a system perform any variety
of functions. The Company succeeded to these business operations, which are
described in detail under the heading "Business" of this Item.

          Copies of the initial Articles of Incorporation of the Company filed
in the State of Utah; the Articles of Incorporation of the Nevada subsidiary
into which the Company merged to change its domicile to Nevada; the Articles of
Merger respecting the change of domicile; the Articles of Amendment to change
the name of the Company to "Computer Automated Systems, Inc."; the Bylaws of the
Company; and the CASi Texas Plan were attached as exhibits to the Company's
Registration Statement on Form 10-SB, filed with the Securities and Exchange
Commission on September 22, 1999, and are incorporated herein by reference. See
Part III, Item 13 of this Report.

Business.
---------

     General
     -------

                Computer Automation Systems, Inc. ("the Company" or "CASi") is a
holding company incorporated in the State of Nevada. As used herein, the term
"CASi" or the "Company" refers to both the parent company and its only wholly
owned subsidiary Computer Automation Systems, Inc. - Texas.

                CASi designed and manufactured custom rack mount and industrial
computer applications primarily for the telecommunications industry during 2001.
The Company discontinued all of its manufacturing operations during 2002 and
began seeking candidates to acquire the holding company.


Distribution Methods of the Products or Services.
-------------------------------------------------

          Presently, the Company is not seeking new customers and management is
concentrating its efforts on seeking candidates for a possible merger or sale of
the company's assets.

Principal Products or Services and their Markets.
-------------------------------------------------

                For a discussion of the Company's principal products and
service, see the heading "General" of Part I, Item 1 of the Report.


Status of any Publicly Announced New Product or Service.
--------------------------------------------------------

 New Products

 ------------
         There are no new services or products offered by CASi's during 2002 and
the company has no plans to renew its manufacturing processes or offer any new
products in the future.

Dependence on One or a Few Major Customers.
-------------------------------------------
         The Company's largest single account in 2001 was Alcatel, a subsidiary
of a diversified French telecommunications manufacturer, Alcatel, S.A. Alcatel
has represented approximately 80% of CASi's 2001 revenues. CASi did not have any
sales to Alcatel during 2002.


Governmental Approval of Principal Products or Services.
--------------------------------------------------------
          None presently; however, see the heading "Risk Factors" of the heading
"Business," Part I, Item 1, specifically, the risk factor "Government
Regulation and Legal Uncertainties."  See also the heading " New Products" of
the heading "Status of any Publicly Announced New Product or Service."


Effects of Existing or Probable Governmental Regulations.
---------------------------------------------------------
          The integrated disclosure system for small business issuers adopted by
the Securities and Exchange Commission in Release No. 34-30968 and effective as
of August 13, 1992, substantially modified the information and financial
requirements of a "Small Business Issuer," defined to be an issuer that has
revenues of less than $25 million; is a U.S. or Canadian issuer; is not an
investment company; and if a majority-owned subsidiary, the parent is also a
small business issuer; provided, however, an entity is not a small business
issuer if it has a public float (the aggregate market value of the issuer's
outstanding securities held by non-affiliates) of $25 million or more.

          The Securities and Exchange Commission, state securities commissions
and the North American Securities Administrators Association, Inc. ("NASAA")
have expressed an interest in adopting policies that will streamline the
registration process and make it easier for a small business issuer to have
access to the public capital markets.

          Also, see the heading "Risk Factors" of the heading "Business," Part
I, Item 1, specifically, the risk factor "Government Regulation and Legal
Uncertainties."

Cost and Effect of Compliance with Environmental Laws.
------------------------------------------------------
          None; not applicable.

Research and Development Expenses.
----------------------------------
          The Company expended $43,894 in expenditures on research and
development in the calendar years ended December 31, 2001. The majority of these
funds were expended for the Kiosk business and the ACE-10 product lines. Both of
these product lines have been discontinued.

Number of Employees.
--------------------
         The Company cancelled its leasing agreement with Employee Resource
Administration "ERA" in 2002 resulting in no employees leased to CASi. However,
Michael E. Cherry, President and CEO continued employment at the company during
2002 in order to wind down the business affairs of the Company. The Company did
not pay any salary to Mr. Cherry for these services.

Risk Factors.
-------------
          In any business venture, there are substantial risks specific to the
particular enterprise which cannot be ascertained in total until the business is
underway. However, at a minimum, the Company's present and proposed business
operations will be highly speculative and will be subject to the same types of
risks inherent in any new or unproven venture, and will include those types of
risk factors outlined below.

Limited Assets and Source of Revenue.
-------------------------------------

          The Company's revenues are insufficient to fund operating expenses or
to expand its business operations. See the heading "Plan of Operation" of the
caption "Management's Discussions and Analysis or Plan of Operation," Part II,
Item 6 of this Report.

          Limited Funds Available for Operating Expenses.
          -----------------------------------------------
          The Company currently has no operating capital or cash
resources. The Company's ability raise debt or equity funding from
non-affiliated sources may be severely limited by reason of its limited
historical operations, current and prior year net operating losses, limited
assets, and the limited public market for its common stock. See the heading
"Plan of Operation" of the caption "Management's Discussion and Analysis or Plan
of Operation," Part II, Item 6 of this Report, regarding The Company's current
and intended operations; and the caption "Market for Common Equity and Related
Stockholder Matters," Part II, Item 5, regarding the limited market for the
Company's common stock.

                Stock Market Volatility.
          ------------------------
          Any market price for shares of common stock of the Company is likely
to be very volatile, and numerous factors beyond the control of the Company may
have a significant adverse effect. In addition, the stock markets generally have
experienced, and continue to experience, extreme price and volume fluctuations
which have affected the market price of many small capital companies and which
have often been unrelated to the operating performance of these companies. These
broad market fluctuations, as well as general economic and political conditions,
may adversely affect the market price of the Company's common stock in any
market that may develop. See the caption


"Market for Common Equity and Related Stockholder Matters," Part II, Item 5 of
this Report.

          Sales of "restricted securities" under Rule 144 may also have an
adverse effect on any market that may develop in the Company's common stock, due
to the possibility that the supply of these shares will significantly exceed the
demand for such shares in the market. See the heading "Recent Sales of
Unregistered Securities," Part II, Item 5, for information regarding the number
of shares which may be available for sale under Rule 144 by present stockholders
of the Company.


          Low Barriers to Entry.
          ----------------------
                N/A - no new business or continuing operations to consider.

          Rapid Technology Change.
          ------------------------
                N/A due to no manufacturing or production operations.

          Potential Liability to Clients.
          -------------------------------
          N/A since no customers are currently being sought by management.

          Future Capital Needs; Uncertainty of Additional Financing.
          ----------------------------------------------------------

          The Company currently does not have the available cash resources and
credit facilities sufficient to meet its presently anticipated working capital
and capital expenditure requirements for this year. However, the Company's
future liquidity and capital requirements will depend upon its ability to obtain
outside investments or complete a merger with a qualified candidate. There can
be no assurance that such additional funding, if acquired, will be available on
terms acceptable to the Company, or at all. Furthermore, any additional equity
financing may be dilutive to stockholders, and debt financing, if acquired, may
involve restrictive covenants, which may limit the Company's operating
flexibility with respect to certain business matters. Strategic arrangements, if
necessary to raise additional funds, may require the Company to relinquish its
rights to certain of its products or selected business opportunities.

          Government Regulation and Legal Uncertainties.
          ----------------------------------------------

          The Company is not currently subject to direct governmental
regulation, other than the securities laws and the regulations thereunder
applicable to all publicly owned companies, and laws and regulations applicable
to businesses generally, and there are currently few laws or regulations
directly applicable to access to or commerce on the Internet. However, due to
the increasing popularity and use of the Internet, it is likely that a number of
laws and regulations may be adopted at the local, state, national and
international levels with respect to the Internet covering issues such as user
privacy, freedom of expression, pricing of products and services, taxation,
advertising, intellectual property rights, information security or the
convergence of traditional communication services with Internet communications.
The adoption of any such laws or regulations may decrease growth of the
Internet, which could in turn decrease the demand for the Company's products or
services or increase the cost of doing business, either of which may make it
more difficult for the Company to operate at a profit.

          Further, the applicability to the Internet of existing laws governing
issues such as property ownership, copyrights and other intellectual property
issues, taxation, libel and personal property is uncertain. The vast majority of
such laws were adopted prior to the advent of the Internet and related
technologies and, as a result, do not contemplate or address the unique issues
of the Internet and related technologies. Changes to such laws intended to
address these issues, including some recently proposed changes, could create
uncertainty in the marketplace which could reduce demand for the Company's
products or services or increase the cost of doing business as a result of
litigation expenses or increased service delivery costs.

Item 2.  Description of Property.
         ------------------------
         The Company leases 2,000 square feet of office and light industrial
space at 1825 East Plano Parkway, Suite #200, Plano, TX 75074, on a month to
month basis, at a monthly rent of $1,505. Total rent for these facilities during
the calendar year ended December 31, 2002, was $18,060; total rent in the
calendar year ended December 31, 2001, was $18,060. These facilities are leased
from Control Manufacturing, the owners of which are stockholders of the Company;
however, management believes the lease terms for these facilities are fair and
reasonable, and are at rates comparable to similar facilities in the areas where
the Company conducts its business operations. Ms. McCollum and Ms. Cobb are the
"affiliated" stockholders who own Control Manufacturing; see Part III, Item 11,
for information concerning their stock ownership in The Company.

Item 3.  Legal Proceedings.
         ------------------
         The Company is a party to several lawsuits involving its trade
creditors. These creditors are seeking payment for raw materials used in CASi's
products previously manufactured. CASi was able to return a majority of these
materials to these vendors for credit during 2002; however, some balances remain
unpaid. Management has offered stock in exchange for these debts in order to
complete a potential merger as explained in footnote 12 of the financial
statements.

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

         No matter was submitted to a vote of the Company's security holders
during the calendar year ended December 31, 2002.

                                  PART II

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

Market Information.
-------------------

 The Company's common stock is traded on the NASDAQ bulletin board under the
symbol "CASX". No assurances can be given that any market for the Company's
common stock will develop or be maintained. For any market that develops for the
Company's common stock, the sale of "restricted securities" (common stock)
pursuant to Rule 144 of the Securities and Exchange Commission by members of
management or any other person to whom any "restricted securities" may be issued
in the future may have a substantial adverse impact on any public market for the
Company's common stock. A minimum holding period of one year is required for
resales under Rule 144, along with compliance with other pertinent provisions of
the Rule, including publicly available information concerning the Company (this
requirement will be satisfied by the continued timely filing by the Company of
all reports required to be filed by it with the Securities and Exchange
Commission; limitations on the volume of "restricted securities" which can be
sold in any 90 day period; the requirement of unsolicited broker's transactions;
and the filing of a Notice of Sale of Form 144). For information regarding
"restricted securities" issued by the Company during the past three years and
the commencement date of the holding period of these securities, see the caption
"Recent Sales of Unregistered Securities," Part II, Item 5 of this Report.


          The following quotations were provided by the National Quotation
Bureau, LLC. They represent inter-dealer prices and do not represent actual
transactions; these quotations do not reflect dealer markups, markdowns or
commissions.

                             STOCK QUOTATIONS*

                                               CLOSING BID

Quarter ended:                          High                Low
--------------                          ----                ---
January 4, 2001
through
March 31, 2001                         $.75                 $.38

April 1, 2001
through
June 30, 2001                          $.25                  $.16

July 1, 2001
through
September 30, 2001                    $.19                   $.07

October 1, 2001
through
December 31, 2001                     $.25                  $.12

January 1, 2002
Through
March 31, 2002                         $.23                  $.06

April 1, 2002
Through
June 30, 2002                          $.08                  $.05

July 1, 2002
Through
December 31, 2002                       $.08                 $.05


Holders.
--------

         The number of record holders of the Company's securities as of the date
of this Report is approximately 143.


Dividends.
----------

         The Company has not declared any cash dividends with respect to its
common stock, and does not intend to declare dividends in the foreseeable
future. The future dividend policy of the Company cannot be ascertained with any
certainty, and if and until the Company completes any acquisition,
reorganization or merger, no such policy will be formulated. There are no
material restrictions limiting, or that are likely to limit, the Company's
ability to pay dividends on its securities.


Common Stock Warrants and Options
----------------------------------------
                On June 5, 2000, the Company entered into a nonqualified stock
option agreement with certain employees, directors, and independent contractors.
The plan allows the Board to award up to 500,000 stock options. During 2000, the
Board awarded 275,000 stock options. These options vested immediately and expire
on June 5, 2010. This plan allows these individuals to purchase Company stock at
$.875 per share. At the time of this filing, no options had been exercised.

Item 6.  Management's Discussion and Analysis or Plan of Operation.
         ----------------------------------------------------------

Plan of Operation.
------------------

          The Company has ceased all operations during 2002 and focused on
settling its trade payables by offering stock for debt in hopes of strengthening
its balance sheet in order to complete a merger with a viable candidate. If CASi
is unable to complete a merger or acquire additional outside debt or equity
funding, the Company's results of operations will be significantly impacted and
it will be unable to produce sufficient operating revenue to continue as a going
concern.

          The Company has no major purchases planned or any production of any
products for the next 12 months.


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

                The Company had revenues of $36,113 during the calendar year
ended December 31, 2002, as compared with revenues of $789,944 during the
calendar year ended December 31, 2001. This decrease was primarily due to CASi's
major customer's reduction in demand for CASi's MPS product line. The
elimination of this product line had a significant impact on CASi's earnings.
This decrease in sales coupled with increased manufacturing costs and inventory
valuation reserves, resulted in lower gross profits in 2002.

                Sales from Alcatel were 80% of total sales for the calendar year
ended December 31, 2001. There were no sales to Alcatel in 2002. In the 2002
calendar year, The Company's gross profit, before deduction of general and
administrative expenses of $279,972, was $31,928; gross profit in the preceding
calendar year was $161,732, before deduction of general and administrative
expenses of $536,141. Principal general and administrative expenses included
payroll expenses ($ 36,907 and $214,635, respectively); contracted services
($62,765 and $172,675, respectively); and bad debts ($46,444 and $8,691,
respectively).

                The Company recorded an impairment adjustment on its fixed
assets relating to its Kiosk equipment. Management was also successful in
returning some of the raw materials used to manufacture this equipment for
credits to the respective vendors. The total write-off from these transactions
was $226,350.

          The Company also incurred research and development expenses of $43,894
during the year ended December 31, 2001. The majority of these funds were spent
for discontinued product lines.

                 The Company had a net operating loss for the year ended
December 31, 2002 and 2001.


Liquidity and Capital Resources.
--------------------------------

                 The Company did not generate any cash flow during 2002 and
experienced a decrease of ($272,576) in 2001. As of December 31, 2002, the
Company had no cash assets.

                During 2002, The Company used cash generated from collection of
accounts receivable and collection of an income tax receivable to pay amounts
owed to trade creditors.

          Management does not believe that SFAS No's 131 and 133 regarding
segment reporting and derivatives, respectively, will have any impact on the
Company's financial condition and operations.




                         PART II - FINANCIAL STATEMENTS
                COMPUTER AUTOMATION SYSTEMS, INC. AND SUBSIDIARY


                          INDEX TO FINANCIAL STATEMENTS



                                                                           Page

Report of Independent Certified Public Accountants............................3

Financial Statements

   Consolidated Balance Sheets at December 31, 2002 ..........................4

   Consolidated Statements of Operations for the years ended
    December 31, 2002 and 2001................................................5

   Consolidated Statement of Shareholders' Equity for the years
   ended December 31, 2002 and 2001...........................................6

   Consolidated Statements of Cash Flows for the years ended
   December 31, 2002 and 2001.................................................7

   Notes to Consolidated Financial Statements.................................8




               REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS



To the Board of Directors and Shareholders of
Computer Automation Systems, Inc.
Plano, Texas

We have audited the accompanying consolidated balance sheets of Computer
Automation Systems, Inc., as of December 31, 2002, and the related consolidated
statements of operations, shareholders' deficit, and cash flows for the year
then ended. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.

We conducted our audit in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the consolidated financial position of Computer
Automation Systems, Inc. as of December 31, 2002, and the consolidated results
of their operations and cash flows for the year then ended, in conformity with
accounting principles generally accepted in the United States.

The accompanying consolidated financial statements have been prepared assuming
the Company will continue as a going concern. As shown in the accompanying
consolidated financial statements, the Company has incurred losses for the last
two years. This factor, among others as discussed in Note 3 to the consolidated
financial statements, raise substantial doubt about the Company's ability to
continue as a going concern. Management's plans in regard to these matters are
also described in Note 3. The consolidated financial statements do not include
any adjustments that might result from the outcome of this uncertainty.




MALONE and BAILEY, PLLC
www.malone-bailey.com
Houston, Texas


May 19,  2003



                COMPUTER AUTOMATION SYSTEMS, INC. AND SUBSIDIARY
                           CONSOLIDATED BALANCE SHEETS
                                December 31, 2002

                                     ASSETS
<TABLE>
                                                                                                   2002

<S>                                                                                            <C>
Total assets                                                                                              -
                                                                                               ============



                      LIABILITIES AND SHAREHOLDERS' DEFICIT

CURRENT LIABILITIES
    Cash in bank - overdraft                                                                   $      1,065
    Accounts payable                                                                                179,747
    Accounts payable - related party                                                                 12,040
                                                                                               ------------

              Total current liabilities                                                             192,852

    Contingencies                                                                                         -

Shareholders' deficit:
    Preferred stock - 5,000,000 shares authorized; $.001 par
      value; no shares issued or outstanding                                                              -
    Common stock - 15,000,000 shares authorized; $.001 par
      value; 9,983,619 and 8,393,334 shares issued and outstanding
      at December 31, 2002 and 2001, respectively                                                     9,984
    Additional paid-in capital                                                                      569,550
    Accumulated deficit                                                                            (772,386)
                                                                                               -------------

Total shareholders' deficit                                                                        (192,852)
                                                                                               -------------

Total liabilities and shareholders' deficit                                                    $          -
                                                                                               ============


</TABLE>

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


                COMPUTER AUTOMATION SYSTEMS, INC. AND SUBSIDIARY
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                     Years ended December 31, 2002 and 2001


<TABLE>

                                                                           2002                      2001
                                                                       -------------             ------------

<S>                                                                    <C>                       <C>
Revenues                                                               $      36,113             $    789,944

Cost of revenues                                                               4,185                  628,212
                                                                       -------------             ------------

         Gross profit                                                         31,928                  161,732

General and administrative expenses                                          279,972                  536,141

Impairment valuation allowance                                               260,372                        -

Research and development expense                                                   -                   42,999
                                                                       -------------             ------------

Operating loss                                                              (508,416)                (417,408)

Other expenses
   Interest                                                                   14,323                   11,439
   Other                                                                      14,009                      980
                                                                       -------------             ------------
                                                                              28,332                   12,419

Net loss before income taxes                                                (536,748)                (429,827)

Income tax benefit                                                                 -                 (108,378)

         Net loss                                                      $    (536,748)            $   (321,449)
                                                                       =============             =============

Loss per common share - basic and diluted                              $        (.06)            $       (.04)
                                                                       =============             =============

Weighted average shares outstanding - basic and diluted                    8,647,785                8,393,334
                                                                       =============             ============

</TABLE>


The accompanying notes are an integral part of this
consolidated financial statement.


                COMPUTER AUTOMATION SYSTEMS, INC. AND SUBSIDIARY
                 CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY
                     Years ended December 31, 2002 and 2001

<TABLE>


                                                                     Additional       Retained
                                             Common Stock              Paid-in         Earnings
                                      --------------------------
                                         Shares         Amount         Capital        (Deficit)         Total
                                      ------------     ---------     -----------    -------------    -----------
<S>                                   <C>              <C>           <C>            <C>              <C>
Balances at December 31, 2000            8,393,334     $    8,394     $  340,073     $     85,811    $  434,278

   Net loss                                      -             -               -         (321,449)     (321,449)
                                      ------------     ---------      ----------     -------------   -----------

Balances at December 31, 2001            8,393,334         8,394         340,073         (235,638)       112,829

   Stock for Trade Creditors               164,411           165          70,402                          70,567
   Stock for Convertible Debt              250,000           250         119,750                         120,000
   Common Stock Issued                   1,005,874         1,175          39,325                          40,500

   Net loss                                      -             -               -         (536,748)      (536,748)
                                      ------------     ---------      ----------     -------------   ------------

Balances at December 31, 2002            9,983,619     $   9,984      $569,550       $   (772,386)   $  (192,852)
                                      ============     =========      ==========     =============   ============

</TABLE>


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


                COMPUTER AUTOMATION SYSTEMS, INC. AND SUBSIDIARY
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                     Years ended December 31, 2002 and 2001

<TABLE>
                                                                               2002                     2001
                                                                           ------------             -----------
<S>                                                                        <C>                      <C>
Cash flows from operating activities
    Net loss                                                               $   (536,748)            $  (321,449)
    Adjustments to reconcile net income (loss) to net cash
      provided by (used in) operating activities:
        Depreciation and amortization                                            38,371                  56,695
        Loss on abandonment of capital equipment                                 87,796                       -
        Bad debt expense                                                         46,444                  63,097
        Impairment of assets and inventory write-downs                            297,533                  89,362
Changes in operating assets and liabilities:
          Accounts receivable                                                    83,189                (126,936)
          Inventory                                                               7,808                 (30,364)
          Employee receivables                                                   32,014                  (2,573)
          Note receivable                                                         5,384                       -
          Other assets                                                            5,858                   4,867
          Accounts payable and bank overdraft                                  (175,676)                298,556
          Accrued liabilities                                                   (18,306)                  3,718
          Income tax receivable                                                  88,789                   3,467
                                                                           ------------             -----------
                Net cash provided by (used in) operating activities             (37,544)                 38,440
                                                                           -------------            -----------

Cash flows from investing activities
    Capital expenditures                                                              -                (300,950)
                                                                           ------------             ------------
                Net cash used in investing activities                                 -                (300,950)
                                                                           ------------             -----------

Cash flows from financing activities
    Issuance of common stock                                                     40,500                       -
    Payments on capital lease                                                    (2,956)                 (2,745)
                                                                           -------------            ------------
             Net cash provided by (used in) financing activities                 37,544                  (2,745)

Net (decrease) in cash and cash equivalents                                           -                (265,255)

Cash and cash equivalents, beginning of year                                          -                 265,255
                                                                           ------------             -----------

Cash and cash equivalents, end of year                                     $          -             $         -
                                                                           ============             ===========

Supplemental disclosures of cash flow information:
    Cash paid for interest                                                 $      6,474             $     1,482
                                                                           ============             ===========
    Cash paid for income taxes                                             $          -             $         -
                                                                           ============             ===========

Schedule of non-cash investing and financing transactions
    Stock issued for trade creditors                                       $     70,567             $         -
                                                                           ============             ===========
    Stock issued for debt                                                  $    120,000             $         -
                                                                           ============             ===========
</TABLE>





                COMPUTER AUTOMATION SYSTEMS, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 2002 and 2001



NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Organization

Computer Automation Systems, Inc. (CASi") was incorporated in the State of
Nevada. Its wholly owned subsidiary CASI-Texas is a Texas corporation
incorporated on February 13, 1999 that designs and manufactures custom rack
mount and industrial computer applications for the telecom and other high tech
industries. CASi lost its largest customer and is in the process of designing a
new product line (See Note 3).

The consolidated financial statements of CASI and its subsidiary (CASI-Texas)
include the accounts of the Company and its subsidiary. All significant
intercompany transactions have been eliminated.

Cash and Cash Equivalents

For purposes of the statements of cash flows, the CASi considers all highly
liquid investments purchased with an original maturity date of three months or
less to be cash equivalents.


Property and Equipment

Property and equipment are stated at cost. Depreciation is provided using the
straight-line and accelerated methods over the useful lives of the related
assets. Expenditures for maintenance and repairs are charged to expense as
incurred. Betterments and renewals are capitalized.

Income Taxes

CASI utilizes the asset and liability method in accounting for income taxes.
CASi recognizes deferred tax assets or liabilities computed based on the
difference between the financial statements and income tax basis of assets and
liabilities using the enacted marginal tax rate. Income tax expense or benefit
is the tax payable or refundable for the period plus or minus the change during
the period in deferred tax assets and liabilities.

Revenue Recognition

Revenue is recognized when earned. For products which the CASi designs and
engineers or manufactures, revenue is recognized when products are shipped.
Revenue is recognized for services such as custom design, configuration, and
programming, as provided to customers.

Loss Per Common Share

Basic loss per share is computed by dividing net loss by the weighted average
number of shares outstanding for the year. Diluted earnings per share is
computed by dividing net loss by the weighted average number of common shares
plus dilutive common share equivalents outstanding during the period using the
treasury stock method. Common stock equivalents were not included in the
computation for the year ended December 31, 2001 because their inclusion is
anti-dilutive. There were no outstanding common stock equivalents during the
year ended December 31, 2002.

Use of Estimates in Preparation of Financial Statements

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

Fair Value of Financial Instruments

The fair values of the CASi's financial instruments, consisting primarily of
cash and cash equivalents, accounts receivable and accounts payable, and
convertible debt approximate their carrying values because of their short term
nature or based on the CASi's incremental borrowing rate.

Stock-based Compensation

CASi accounts for stock-based compensation using the intrinsic value method
prescribed in Accounting Principles Board Opinion No. 25 (APB 25), Accounting
for Stock Issued to Employees, and related interpretations and applies Statement
of Financial Accounting Standards No. 123 (SFAS 123), Accounting for Stock-Based
Compensation, on a disclosure basis only.


NOTE 2 - GOING CONCERN

The accompanying financial statements have been prepared in conformity with
accounting principles generally accepted in the United States, which contemplate
continuation of CASi as a going concern. CASi has incurred net losses of
$502,726 and $321,449 in 2002 and 2001 respectively. In addition, Alcatel, CAS
's largest customer which made up 80% of the CASi's revenue in 2001, this
customer cancelled this product line at the end of 2001 which had a significant
negative impact on the CASi's revenues and cash flows.

The consolidated financial statements do not include any adjustments to reflect
the possible effects on the recoverability and classification of assets or
classification of liabilities which may result from the inability of CASi to
continue as a going concern.

NOTE 3 - PROPERTY AND EQUIPMENT

All property and equipment was considered impaired at December 31, 2002 and has
been adjusted to reflect its actual value. Total impairment adjustment was
$260,372 during 2002.

Depreciation expense was $38,371 and $56,698 for the years ended December 31,
2002 and 2001, respectively.


NOTE 4 - CONVERTIBLE DEBT

During 2000, Casi secured $100,000 of financing as part of a $150,000
convertible note agreement. Interest accrues on the outstanding principal
balance of the note at the rate of 10% per annum and is payable monthly. The
unpaid principal together with any unpaid accrued interest is due on September
27, 2003. The holder of the note elected to convert this debt to stock during
2002. The principal balance of $100,000 and accrued interest of $20,000 has been
converted to 250,000 shares of common stock.


NOTE 5 - RESEARCH AND DEVELOPMENT COSTS

CASi classifies the costs of planning, designing and establishing the
technological feasibility of a computer hardware product as research and
development costs and charges those costs to expense when incurred. After
technological feasibility has been established, costs of producing a marketable
product are capitalized and amortized over the estimated life of the product (3
years). Cost of maintenance and customer support is charged to expense as
incurred. CASi incurred research and development expenditures of $42,999 in
2001, relating to the research, development and testing of new product lines.

NOTE 6 - INCOME TAXES

Temporary differences that give rise to the deferred tax assets or liabilities
at December 31, 2002 and 2001 are as follows:

     Deferred tax assets
       Net operating loss carryforward                                 216,000
                                                                      --------
       Deferred tax asset                                              216,000
       Valuation allowance                                            (216,000)
                                                                      --------
     Net deferred tax asset                                           $      -
                                                                      ========

The provision for income taxes for the years ended December 31, 2002 and 2001
consists of the following:

                                                2002                  2001
                                             -----------           ----------
     Federal
       Current                               $         -           $ (108,378)
       Deferred                                        -                    -
                                             -----------           ----------
                                             $         -           $ (108,378)
                                             ===========           ===========

A reconciliation of income tax expense (benefit) using the statutory federal
income tax rate of 34% to the actual income tax expense (benefit) for the years
ended December 31, 2002 and 2001 is as follows:
<TABLE>
                                                                 2002                        2001
                                                             -----------                 ----------
<S>  <C>                                                     <C>                         <C>
     Federal tax expense (benefit) at statutory rate         $  (170,927)                $ (120,037)
     Change in valuation allowance                               170,927
     Other                                                                                   11,659
                                                             -----------                 ----------
                                                             $         -                 $ (108,378)
                                                             ===========                 ===========
</TABLE>
CASi has total net operating losses at December 31, 2002 of approximately
$635,000.

NOTE 7 - RELATED-PARTY TRANSACTIONS

CASi has a Cooperation Agreement ("Agreement") with an entity controlled by a
director and shareholder of CASi. The Agreement provides for sharing
complimentary resources in the engineering, manufacturing, and support of
industrial computers. Substantially all product production is provided for under
this Agreement. Pricing is negotiated with each order as submitted. The related
party payable in connection with services received by CASi as of December 31,
2002 and 2001 was $12,040 and $55,657, respectively. Total expenses related to
production paid to this related party were $0 and $239,519 for the years ended
December 31, 2002 and 2001, respectively. CASi also leases its facilities from
this entity on a month-to-month basis at $1,505 per month. Total rent expense
for the year ended December 31, 2002 and 2001 was $18,060 for each year.

During 2002 and 2001, CASi advanced funds to the CASi's president. The amounts
due were $0 and $32,014 at December 31, 2002 and 2001, respectively. These
amounts are included in employee receivables in the accompanying balance sheet.
During the year, CASi forgave this amount due from the president in
consideration of him not receiving any salary for services during 2002. The
balance reclassified to expense in 2002 was $16,589.

In January 2002, Control Manufacturing, a related party, advanced CASi $50,000
for operating capital. The funds were repaid with accounts receivable
collections in February 2002. The total amount repaid was $55,000.

NOTE 8 - STOCK OPTIONS

On June 5, 2000, the Board unanimously approved a stock option plan for
employees, Board members and key contractors. The plan allows the Board to award
up to 500,000 stock options. The Board awarded 275,000 stock options all with an
exercise price of $.88 per share during the second quarter of 2000. These
options are exercisable immediately and have a 10-year life. The fair value of
these options granted in 2000 were estimated at the date of grant using the
Black-Scholes option pricing model with the following assumptions used; expected
volatility 0%, risk free rate of 6%, no dividend yield and expected life of 2
years. A volatility of 0% was used due to the low volume of trading of the
Company's stock since the reverse acquisition. The weighted average grant date
fair value of options granted during 2000 was $.88 per share. No options were
granted in 2002 and 2001 and no options have been exercised through December 31,
2002.

Had compensation costs for stock based compensation been determined consistent
with the fair value method of SFAS 123, the CASi's net loss and net loss per
common share for the year ended December 31, 2002 and 2001 would have been as
follows:
<TABLE>
                                                                2002                      2001
                                                                ----                      ----
<S>    <C>                                              <C>                         <C>
       Net loss, as reported                            $     (502,726)             $   (321,449)
                                                         ==============              ============
       Pro forma net loss                               $     (502,726)             $   (321,449)
                                                         ==============             ============

       Net loss per common share as reported            $         (.05)             $       (.04)
                                                         ==============              ============
       Pro forma net loss per common share              $         (.05)             $       (.04)
                                                         ==============              ============
</TABLE>

NOTE 9 - LEASES

In 1999 CASi entered into an operating lease with a related party for its
facilities. The lease agreement provides for rent of $1,505 to be paid on a
month-to-month basis. Total rent expense for 2002 and 2001 for this facility was
$18,060 per year. This lease was cancelled at the end of 2002.

Total rent expense for equipment incurred for 2002 and 2001 was $2,956 and
$32,014, respectively.


NOTE 10 - SIGNIFICANT CONCENTRATION OF BUSINESS RISK

Approximately 80% of revenues in 2001 were from a single customer. Accounts
receivable related to this customer were approximately $127,740 at December 31,
2001. In the event of non-performance, the maximum exposure to CASi is the
recorded amount shown on the balance sheet.

NOTE 11 - SUBSEQUENT EVENTS

On April 29, 2003, CASi signed a "Letter of Intent" to exchange CASi shares for
shares in Acorn Medical, Inc. The agreement states that the existing
shareholders of CASi will receive 1,250,000 or 12.5% of the post merger entity,
which equates to a 10:1 reverse split. In order to this merger to be successful,
CASi is required to reduce its payables below $100,000 and will attempt to
accomplish this by offering stock for amounts owed to trade creditors. In the
event CASi is not successful in this attempt, the merger will not be completed
and CASi will cease operating as a going concern.

NOTE 12 - LITIGATION

The Company is a party to several lawsuits involving its trade creditors. These
creditors are seeking payment for raw materials used in CASi's products
previously manufactured. CASi was able to return a majority of these materials
to these vendors for credit during 2002; however, some balances remain unpaid.
Management has offered stock in exchange for these debts in order to complete a
potential merger as explained in footnote 12 of the financial statements.


                                 PART III

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

Identification of Directors and Executive Officers
--------------------------------------------------

         The following table sets forth the names of all current directors and
executive officers of the Company. These persons will serve until the next
annual meeting of the stockholders or until their successors are elected or
appointed and qualified, or their prior resignation or termination.


                                  Date of         Date of
                    Positions    Election or     Termination
Name                  Held       Designation   or Resignation
----                  ----       -----------   --------------


Michael E. Cherry     President     7/28/98           *
                      Director      7/28/98           *
                      CEO          10/22/99           *

Connie Cherry         Secretary    10/22/99           *
                      Director     10/22/99           *

Chris Poinsatte       Director     10/22/99           *

Sylvia McCollum       Director     10/22/99           *

Sandra Cobb           Director      4/7/00            *


      * These persons presently serve in the capacities indicated.


Business Experience.
--------------------

         Michael E. Cherry, Chief Executive Officer, President and Director. Mr.
Cherry is 44 years of age. During the previous five years, Mr. Cherry was Vice
President of Cytec Corporation where he was responsible for introducing Cytec
Corporation into the industrial computer marketplace. He was also responsible
for sales and marketing, administration and operations. He was the President and
a Director of CASi Texas from February, 1998, prior to its acquisition by the
Company pursuant to the CASi Texas Plan.

         Connie Cherry, Secretary and Director. Ms. Cherry, age 46, received a
B.S. Degree in Health and Physical Education from Penn State. After her
graduation, she worked for approximately five years as a surgical periodontal
assistant in Dallas, Texas. She then worked as an insurance salesperson from
MONY - Mutual of New York for three years. From 1981 to 1986, Ms. Cherry was
sales manager for Cosmopolitan Lady Health Clubs in Dallas, Texas. She spent the
next three years working in sales for Multi Market Media, which pioneered the
"1-800 Dentist" national dental referral program. From 1989 through 1992, Ms.
Cherry worked for Professional TV Productions, where she wrote, produced and
sold TV commercials for clients such as attorneys, chiropractors, veterinarians
and jewelers. From 1992 to 1995, she wrote, produced and sold TV commercials for
TM Century Productions. Since then, she has been employed as Advertising Sales
and Sales Manager for Power Media Group, dba "Texas Technology Magazine."

         Sylvia McCollum, Director.  Ms. McCollum is 60 years of age.  She has
been the President of Control Manufacturing Co., Inc., of Plano, Texas, since
1977.  Control Manufacturing is an electronics subcontractor that assembles
and delivers product for the Company.  Prior to her involvement with Control
Manufacturing, Ms. McCollum was Director of Materials for International
Computer Products, Inc., a company specializing in peripherals for the
computer industry.

                Sandra Cobb, Director.  Ms. Cobb is 56 years of age.  She has
been the Vice-President of Control Manufacturing Co., Inc., of Plano, Texas,
since 1977.  Control Manufacturing is an electronics subcontractor that
assembles and delivers product for the Company.  Prior to her involvement with
Control Manufacturing, Ms. Cobb was Director of Materials for International
Computer Products, Inc., a company specializing in peripherals for the computer
industry.

Significant Employees.
----------------------

        The Company has no significant employees who are not executive officers.

Family Relationships.
---------------------

         Michael Cherry and Connie Cherry are husband and wife.  Other
than this relationship, there are no family relationships among the directors or
executive officers of the Company.

Involvement in Certain Legal Proceedings.
-----------------------------------------

         During the past five years, no present or former director, executive
officer or person nominated to become a director or an executive officer of The
Company:

            (1) was a general partner or executive officer of any business
against which any bankruptcy petition was filed, either at the time of the
bankruptcy or two years prior to that time;

            (2) was convicted in a criminal proceeding or named subject to a
pending criminal proceeding (excluding traffic violations and other minor
offenses);

            (3) was subject to any order, judgment or decree, not subsequently
reversed, suspended or vacated, of any court of competent jurisdiction,
permanently or temporarily enjoining, barring, suspending or otherwise limiting
his involvement in any type of business, securities or banking activities; or

            (4) was found by a court of competent jurisdiction (in a civil
action), the Securities and Exchange Commission or the Commodity Futures
Trading Commission to have violated a federal or state securities or commodities
law, and the judgment has not been reversed, suspended or vacated.

Compliance with Section 16(a) of the Exchange Act.
--------------------------------------------------

          Each of the Company's directors and executive officers filed a Form 3
Initial Statement of Beneficial Ownership of Securities with the Securities
and Exchange Commission on or about May 19, 1998. To the best knowledge of
management, all reports required to be filed by members of management under
Section 16(a) of the 1934 Act have been filed.

Item 10. Executive Compensation.
         -----------------------

Cash Compensation.
------------------

          The following table sets forth the aggregate compensation paid by the
Company for services rendered during the periods indicated:






                        SUMMARY COMPENSATION TABLE

                           Long Term Compensation

                    Annual Compensation   Awards  Payouts

<TABLE>
(a)             (b)   (c)   (d)   (e)   (f)   (g)   (h)    (i)         (j)

                                              Secur-
                                              ities        All         % of
Name and   Year or               Other  Rest- Under- LTIP  Other       Total
Principal  Period   Salary Bonus Annual rictedlying  Pay- Comp-        Options
Position   Ended      ($)   ($)  Compen-Stock Optionsouts ensat'n Granted
-------------------------------------------------------------------------
<S>                        <C>        <C>    <C>    <C>      <C>        <C>     <C>    <C>
Michael E.
Cherry,               12/31/02         $0      0      0        0          0       0        0           0
CEO, Pres.            12/31/01    $96,154      0      0        0          0       0        0           0
Director

Connie                12/31/02          0      0      0        0          0       0        0           0
Cherry,               12/31/01          0      0      0        0          0       0        0           0
Secretary/Director

Sylvia                12/31/02          0      0      0        0          0       0        0           0
McCollum,             12/31/01          0      0      0        0          0       0        0           0
Director

Sandra                12/31/02          0      0      0        0          0       0        0           0
Cobb,                 12/31/01          0      0      0        0          0       0        0           0
Director

Chris                 12/31/02          0      0      0       0           0       0        0           0
Poinsatte,            12/31/01          0      0      0       0           0       0        0           0
Former Director


</TABLE>

          (1) On March 6, 2000, the Company's Board of Directors resolved to
create an audit committee, on which Mr. Poinsatte will serve in consideration of
the payment of 1000 "unregistered" and "restricted" shares of the Company's
common stock for each meeting attended. See the heading "Compensation of
Directors," below.

          (2) On June 5, 2000, the Company's Board of Directors resolved to
enter into a nonqualified stock option plan with certain key employees,
directors, and independent contractors. See the heading "Common Stock Warrants
and Options" under Item 5 - "Market for Common Equity and Related Stockholder
Matter."


          Except as set forth above, no cash compensation, deferred compensation
or long-term incentive plan awards were issued or granted to The Company's
management during the calendar years ended December 31, 2002 and 2001.

Compensation of Directors.
--------------------------

          On March 6, 2000, the Company's Board of Directors resolved to create
an audit committee, with Mr. Poinsatte to be the first member of the committee
and with at least one other outside member to be appointed. The Board further
resolved to issue 1000 "unregistered" and "restricted" shares of the Company's
common stock to each director for each audit committee meeting attended.

          Other than the foregoing, there are no standard arrangements pursuant
to which the Company's directors are compensated for any services provided as
director and no additional amounts are payable to the Company's directors for
committee participation or special assignments.

Employment Contracts and Termination of Employment and Change-in-Control
Arrangements.
-------------

         There are no employment contracts, compensatory plans or arrangements,
including payments to be received from the Company, with respect to any director
or executive officer of the Company which would in any way result in payments to
any such person because of his or her resignation, retirement or other
termination of employment with the Company, any change in control of the
Company, or a change in the person's responsibilities following a change in
control of the Company.

Bonuses and Deferred Compensation
---------------------------------

          None.

Compensation Pursuant to Plans
------------------------------

          None.

Pension Table
-------------

          None; not applicable.

Other Compensation
------------------

          None.

Termination of Employment and Change of Control Arrangements
------------------------------------------------------------

          None.


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

Security Ownership of Certain Beneficial Owners.
------------------------------------------------

         The following table sets forth the share holdings of those persons
who own more than five percent of the Company's common stock, including stock
options, outstanding as of the date of this Report, assuming 9,983,619 shares
are outstanding:

<TABLE>






         Name and Address                Type of             Number of Shares           Subtotal         Percentage
                                        Ownership           Beneficially Owned                            Of Class
------------------------------------ ----------------- ----------------------------- ---------------- ------------------
------------------------------------ ----------------- ----------------------------- ---------------- ------------------
                <S>                        <C>                     <C>                     <C>               <C>
Michael E. Cherry
1825 E. Plano Parkway                                                                      2,556,525        25.6
Suite 200
Plano, Texas 75074                       Personal                2,556,525 (1)

Sandra Cobb
1825 E. Plano Parkway                                                                        912,000         9.3
Suite 200
Plano, Texas 75074                       Personal                  912,000

Sylvia McCollum
1825 E. Plano Parkway                                                                        912,000         9.3
Suite 200
Plano, Texas 75074                       Personal                  912,000

Cede and Co
PO Box 222
Bowling Green Station
New York, NY  10274                      Personal               2,453,787                  2,453,787        24.6
               TOTAL                                                                       6,834,312        68.5

</TABLE>
          (1) A total of 60,000 of these shares are held in the names of Mr.
              Cherry's minor children.


Security Ownership of Management.
---------------------------------

          The following table sets forth the share holdings of the Company's
directors and executive officers as of the date of this Report, assuming
9,983,619 shares and options are outstanding:
<TABLE>
                 Name and Address                       Type of            Number of Shares            Subtotal         Percentage
                                                       Ownership          Beneficially Owned                             Of Class
--------------------------------------------------- ---------------- ------------------------------ ---------------- --------------
--------------------------------------------------- ---------------- ------------------------------ ---------------- --------------
                       <S>                                <C>                     <C>                     <C>               <C>
Michael E. Cherry
1825 E. Plano Parkway
Suite 200                                                                                                 2,556,525
Plano, Texas 75074                                     Personal      2,077,500 (1)(2)                                    25.6

Connie Cherry
815 Autumn Ridge Drive
McKinney, Texas 75070

Chris Poinsatte (former CFO)
3924 Peter Pan
Dallas, TX 75229

Sylvia McCollum
1825 E. Plano Parkway
Suite 200                                                                                                   912,000         9.3
Plano, Texas 75074                                     Personal      912,000

Sandra Cobb
1825 E. Plano Parkway
Suite 200                                                                                                   912,000         9.3
Plano, Texas 75074                                     Personal      912,000

                      TOTAL                                                                               4,380,525        43.8

</TABLE>
     (1) A total of 60,000 of these shares are held in the names of Mr. Cherry's
         minor children.

     (2) Michael E. Cherry and Connie Cherry are husband and wife. As a result,
         all shares beneficially owned by Mr. Cherry may also be
              deemed to be beneficially owned by Ms. Cherry.

Changes in Control.
-------------------
          The Company has entered into a "Letter of Intent" to merge the
existing operations into Acorn Medical, Inc. If completed, the shareholders of
CASi will exchange their shares for shares in Acorn Medical, Inc. resulting in
CASi existing shareholders owning 12.5% of Acorn Medical, Inc.


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

          There have been no material transactions, series of similar
transactions, currently proposed transactions, or series of similar
transactions, to which the Company and any director, executive officer, five
percent stockholder or associate of any of these persons, except the CASi Texas
Plan (see Part I, Item 1 of this Report) and the lease of the Company's
principal executive offices (see Part I, Item 2).

Parents of the Issuer.
----------------------

          The Company has no parents, except to the extent that directors and
executive officers may be deemed to be parents by virtue of collective ownership
of a majority of issued and outstanding shares.

Item 13. Exhibits and Reports on Form 8-K.
         ---------------------------------
Reports on Form 8-K.
--------------------

NONE

Exhibits*

          (i)

          Registration Statement on Form 10-SB, as amended, previously filed
with the Securities and Exchange Commission**.


       Initial Articles of Incorporation filed in the State of Utah.**

       Initial Articles of Incorporation filed in the State of Nevada.**

       Articles of Merger to change the Company's domicile filed in the State of
       Utah and Nevada and effecting a one for 20 reverse split of the
       outstanding securities of The Company.**

       Certificate of Amendment changing the name of the Company to "Computer
       Automation Systems, Inc." in the State of Nevada.**

       By-Laws**

       Agreement and Plan of Reorganization with CASi Texas, with exhibits.**

       Purchase Agreement with Alcatel Network Systems, Inc., with
       attachments**

       Calculation of Weighted Average Shares**

       Subsidiaries**

       Financial Data Schedule.**


          (ii)

Exhibit
Number               Description
------               -----------

 27       Financial Data Schedule


          *    Summaries of all exhibits contained within this Report are
               modified in their entirety by reference to these Exhibits.

          **   These documents and related exhibits have been previously filed
               with the Securities and Exchange
 In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed by the undersigned, hereunto duly authorized.


COMPUTER AUTOMATION SYSTEMS, INC.


Date:
          --------------------------


Signature:
          --------------------------
          Michael E. Cherry, President







                              FORM OF CERFITICATION
                       PURSUANT TO RULE 13a-14 AND 15d-14
              UNDER THE SECURITIES EXCHAGE ACT OF 1934, AS AMENDED

CERTIFICATION

I, Michael Cherry, certify that:

1.   I have reviewed this quarterly report on Form 10-K of Computer Automation
     Systems, Inc.;
2.   Based on my knowledge, this annual report does not contain any untrue
     statement of material fact or omit to state a material fact necessary to
     make the statements made, in light of the circumstances under which such
     statements were made, not misleading with respect to the period covered by
     this annual report;
3.   Based on my knowledge, the financial statements, and other financial
     information included in this annual report, fairly present in all material
     respects the financial condition, results of operations and cash flows of
     the registrant as of, and for, the periods presented in this annual report;
4.   The registrant's other certifying officer and I are responsible for
     establishing and maintaining disclosure controls and procedures (as defined
     in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:
        (a) designed such disclosure controls and procedures to ensure that
          material information relating to the registrant, including its
          consolidated subsidiaries, is made known to us by others within those
          entities, particularly during the period in which this annual report
          is being prepared;
        (b) evaluated the effectiveness of the registrant's disclosure controls
          and procedures as of a date within 90 days of the filing date of this
          annual report (the "Evaluation Date"); and
(c)       presented in this quarterly report our conclusions about the
          effectiveness of the disclosure controls and procedures based on our
          evaluation as of the evaluation date.
(d)       The registrant's other certifying officer and I have disclosed, based
          on our most recent evaluation, to the registrant's auditors and the
          audit committee of the registrant's board of directors (or persons
          performing the equivalent functions):
        (a) all significant deficiencies in the design or operation of internal
          controls which could adversely affect the registrant's ability to
          record, process, summarize, and report financial data and have
          identified for the registrant's auditors any material weaknesses in
          internal controls; and
        (b) any fraud, whether or not material, that involves management or
          other employees who have a significant role in the registrant's
          internal controls.
6.   The registrant's other certifying officer and I have indicated in this
     annual report whether or not there were significant changes in internal
     controls or in other factors that could significantly affect internal
     controls subsequent to the date of our most recent evaluation, including
     any corrective actions with regard to significant deficiencies and material
     weaknesses.


Date:
      -----------------------------------------------
        Name:  Michael E. Cherry
        Title: President and Chief Executive Officer







                            CERTIFICATION PURSUANT TO
                             18 U.S.C. SECTION 1350
                             AS ADOPTED PURSUANT TO
                  SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Computer Automation Systems, Inc. on
Form 10-QSB for the period ended December 31, 2002 as filed with the Securities
and Exchange Commission on the date hereof (the "Report"), each of the
undersigned, in the capacities and on the dates indicated below, hereby
certifies pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906
of the Sarbanes-Oxley Act of 2002, that to the best of his knowledge:

1.   The Report fully complies with the requirements of Section 13(a) or 15(d)
     of the Securities Exchange Act of 1934; and

2.   The information contained in the Report fairly presents, in all material
     respects, the financial condition and results of operation of the Company.



Date:                                    By
     -----------                            -------------------------
                                            Michael E. Cherry, Chief
                                            Executive Officer and Director



Date:                                   By
     ------------                           ------------------------
                                            Chris Poinsatte, Director


Date:                                    By
     ------------                           ------------------------
                                            Sandra Cobb, Director


Date:                                   By
     ------------                           ------------------------
                                            Sylvia McCollum, Director


Date:                                   By
     ------------                           ------------------------
                                            Connie Cherry, Director