<PAGE>
                    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, 2001

[ ]  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: (972) 578-3128

                                       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 [ ]



<PAGE>

     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, 2001 -
$789,944.

     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.

     March 23, 2002 - $503,600.  There are approximately 2,295,667 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, 2001.

                   (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:

                                 March 28, 2002

                                    8,393,334


                       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.



<PAGE>

          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 designs and manufactures custom rack mount and industrial computer
applications primarily for the telecommunications industry. The Company offers
in-house engineering to provide innovative, customized hardware and software
applications to meet non-standard customer specifications and requirements. In
addition, CASi provides computer system integration assemblies and test services
of electronic products to OEM's and nationwide electronics distributors.

         CASi obtains requests for products from customers and completes custom
designs to these specifications. CASi outsources the engineering and
manufacturing of these products to various vendors including Control
Manufacturing, Inc. "CMI", a related party. The principals of CMI, Sylvia
McCollum and Sandra Cobb, are also major stockholders of the Company and were
former stockholders of CASi of Texas. Both individuals are board members of
CASi; however, CASi believes the cost of services performed by CMI is equal to
or less than could be obtained from other sources. Reference to this arrangement
can also be found in the audited financial statements of the Company for the
years ended December 31, 2001 and 2000, specifically, in Notes 8 and 10.
Information regarding the share holdings of Ms. McCollum and Ms. Cobb can be
found in Part III, Item 9 of this Report.

CASi has entered into a Letter of Intent with Global Access Alliance (GAA), a
Bessemer, Alabama kiosk company, to acquire the assets and existing contract for
the deployment of their public access multimedia kiosk. The existing contract is
with Phillips 66 for the deployment of up to 3500 kiosks into Circle K
Convenience Stores throughout the USA. CASi will be issuing 600,000 of 144 stock
to GAA founders for the assets and Phillip's Contract.



<PAGE>

CASi has also entered into a Letter of Intent with AZ Communications
International Inc., a Payson, Arizona kiosk company, to discuss a possible
merger of AZ Communications into CASi. AZ Communication has developed a Business
Center Kiosk and has international joint venture agreements for deployment of
kiosks. Management believes that a merger with AZ Communications would provide
CASi with additional resources to be successful in competing in the Kiosk
industry. Details of the plan of merger have not been agreed upon at the time of
this filing.

CASi has entered into a Letter of Intent with Stop Look and Listen, a San
Antonio, Texas Kiosk Company to discuss a possible merger of Stop Look and
Listen into CASi. Stop Look and Listen has developed a kiosk that provides brand
marketing, couponing and promotion opportunities either within the Convenience
Store or mounted on the gas pump. Stop Look and Listen provides opportunities
for CASi to deploy units within Shell, Mobil and Diamond Shamrock Convenience
Stores. Management believes that a merger with Stop Look and Listen will provide
CASi with opportunities to deploy Kiosk units in Shell, Mobil, and Diamond
Shamrock Convenience Stores. Details of the plan of merger have not been agreed
upon at the time of this filing.

CASi has entered into a strategic partnership with Digital Matters, a Calgary
Canada Software Company. Digital Matters is the original software developer for
the GAA kiosk that is being deployed to the Circle K Convenience Stores. This
partnership provides CASi with ongoing support and the development of new
applications for the Kiosk machines that CASi deploys.

The consolidation of the three companies provides a CASi a multi-function
promotion program to the retailer. The application from each company complements
each other, thus providing CASi with a much broader product offering. These
offerings provide a complete program that can be offered to retailers to
increase sales and income.

The consolidations provide CASi with experienced professionals and proven
products within the Kiosk marketplace. The development monies for R&D have been
spent and the concepts proven with a favorable ROI to the company.

CASi has developed a business plan and is seeking a bridge note from Investment
Bankers and Angel Investors for the operation. The business plan has been
favorably accepted in the investment community. But as yet, no funds have been
raised.

CASi will manufacture, install and maintain the public access multimedia
interactive Kiosks. CASi is promoting a global standard for the public access
Kiosk industry. CASi will establish a Kiosk solution that will: reduce overall
project cost through standardized, "open architecture" design in both hardware
and software to encourage third party development of new media products and
services, is flexible enough to promote branding, provide a common user-friendly
environment, does not require Kiosk deplorers to be Kiosk experts, and ROI
(return on investment) is driven to provide maximum income while reducing
overall cost of operation.

CASi has also developed a cost effective, energy efficient solution for
indoor/outdoor digital video display signage. CASi's product line of digital
sign systems is designed for computer based, real-time delivery of outdoor video
signage that will deliver beautiful color images day or night in any weather.
Plug and play, outdoor network ready computer modules have been designed for
existing sign replacement components. The digital display technology and content
management for the Kiosk is the same technology that is being used for the
digital signage.



<PAGE>

Distribution Methods of the Products or Services.

         Presently, the Company contacts potential customers directly, attends
trade shows, and utilizes customer and vendor referrals to enhance product
awareness.

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

         CASi's key services include: computer system design, system
integration, product development, printed circuit (PC) board design, prototype
and material procurement, high production assembly of electronic assemblies,
custom products for specific industries, product testing, and environmental
testing. CASi's goal is to provide OEM's with solutions that help them bring
quality products to the market faster and more cost efficiently.

         CASi's products are marketed to an industry with volatile demand and
rapid technological changes along with complex manufacturing processes. CASi's
ability to complete and operate in this market is dependent upon its reaction
time to market changes and its ability to develop and manufacture new and
improved products and obtain appropriate financing to fund this activity.
Accordingly, CASi is committed to enhancing its product lines by adapting a
wider range of applications that can utilize CASi's products. CASi is also
committed to controlling its manufacturing costs in order to increase its
profitability.

         CASi offers three products in the interactive multimedia public access
Kiosk. These products are: the COMMUNICATOR, a multimedia Kiosk with pay for
use, internet applications and digital advertising for local, regional, and
national advertisers; the SEED, special event electronic displays; and the
OFFICE ON THE GO, your office or business center away from home. Our Kiosk
product offerings are targeted for retailers such as convenience stores
(C-store), grocery, pharmacy, and shopping malls. CASi's Kiosks can be
customized for each retailer. CASi has designed its business strategy to receive
multiple revenue streams as technology is deployed and services contracted for,
including product sales revenue, financing fees, design fees, consulting and
development fees, maintenance and monitoring fees, content management fees, and
transaction fees. We sell advertising with couponing and promotion opportunities
to sponsors and plan to share revenue with retailers. CASi also offers a
communication Kiosk that is designed as a Business Center ideal for hotels,
time-share properties, airports, convention centers, or similar high volume
locations.

         CASi offers indoor and outdoor digital sign systems. Our digital sign
components are designed to be plug and play replacement modules for existing
digital or static signs. CASi offers a 2 screen panel, which is targeted for
fast food digital menu board applications and a 4 screen panel that is targeted
for video wall applications.



<PAGE>

Competition.

        The Company expects competition to persist, intensify and increase in
the future. Present competition includes almost every firm which designs
and manufactures custom computer applications. Rapid technology changes
including system integrations and e-commerce will increase competition in future
periods.

         Almost all of the Company's current and potential competitors have
longer operating histories, larger installed customer bases, longer
relationships with clients and significantly greater financial, technical,
marketing and public relation resources than the Company and could decide at any
time to increase their resource commitments to the Company's target market.
Competition from these competitors could make the Company unable to generate or
maintain enough clients to make a profit.

         In addition, the Company's ability to generate clients will depend
significantly on the quality of its products and services and its reputation
among its clients and potential clients, compared with the quality of services
provided by, and the reputations of, the Company's competitors. To the extent
the Company loses clients to its competitors because of dissatisfaction with the
Company's services or its reputation is adversely affected for any other reason,
it may be unable to produce sufficient operating revenue to stay in business.

Sources and Availability of Raw Materials.

         There is ample supply of all products, components and related materials
necessary for the conduct of the Company's present and proposed business
operations, and no shortfalls of supplies are anticipated which would have any
adverse effect on the present or intended business operations of the Company.
Most products and components are purchased directly from Sun Microsystems or
Intel or their distributors.

Dependence on One or a Few Major Customers.

         The Company's largest single account in 2001 and 2000 was Alcatel, a
subsidiary of a diversified French telecommunications manufacturer, Alcatel,
S.A. Alcatel has represented approximately 80% and 95% of CASi's 2001 and 2000
revenues, respectively.

         CASi provided a database management system for Alcatel which interfaced
with a network switch controller to change switch functions, alter switch
activities, and report on the functioning and environment of the switch system.
CASi's sales of these products were phased out during 2001 and the Company does
not expect any future revenues from this customer. If the Company is not
successful in marketing its new product lines and creating a demand for its
Kiosk systems, the loss of this customer will prevent the Company from
generating enough revenues to remain in business.

         To mitigate the effect of this dependence on Alcatel, the Company has
developed products that can be used in growing national and international
markets. Our product offerings are not limited to one application, customer, or
retailer. CASi has targeted 119,000+ C-stores on a national basis. We are
pursuing the same type of customers in Canada and Mexico. CASi has obtained
operating licenses and joint ventures with 27 international companies for
deployment of our product offerings on a world wide basis.



<PAGE>

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 $42,999 and $317,552 in expenditures on research
and development in the calendar years ended December 31, 2001 and 2000
respectively. The majority of these funds were expended for the Kiosk business
and the ACE-10 product lines. The ACE-10 product line has been discontinued, the
original equipment manufacturer for the computer engine stopped production and
the Company does not expect to recoup any of its investment in this product.

Number of Employees.

         The Company has entered into a leasing agreement with Employee Resource
Administration "ERA", whereby ERA leases its personnel to CASi as requested.
Currently, CASi leases three individuals on a full time basis from ERA. The
Company plans to continue to lease its employees in the future.



<PAGE>

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 may be insufficient to fund expansion of its
business operations and future operating expenditures. The Company can provide
no assurance that its business prospects will produce material revenues adequate
for the Company to continue its present or proposed operations; or that its
current and intended business operations will be profitable. 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 limited operating capital or cash resources.
Substantial funding for expansion and marketing of its Kiosk machines is
required in order for the Company to meet its operating and working capital
needs. 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.



<PAGE>

         Low Barriers to Entry.

         There are relatively low barriers to entry into the Company's business.
Because firms such as the Company rely on the skill of their personnel and the
quality of their client service, they have no patented technology that would
preclude or inhibit competitors from entering their markets. The Company is
likely to face additional competition from new entrants into the market in the
future. There can be no assurance that existing or future competitors will not
develop or offer services that provide significant performance, price, creative
or other advantages over those offered by the Company, which could attract
existing and potential customers away from the Company and may make it unable to
operate profitably.

         Rapid Technology Change.

         The market for computer products and services is characterized by rapid
technological change, changes in user and client requirements and preferences,
frequent new product and service introductions embodying new processes and
technologies and evolving industry standards and practices that could render the
Company's intended service practices and methodologies obsolete. Failure to keep
pace with these changes could result in the loss of customers or the inability
to attract and retain customers, either of which developments could make the
Company unable to operate at a profit.

         Potential Liability to Clients.

         Many of the Company's intended operations involve the development,
implementation and maintenance of applications that are critical to the
operations of their clients' businesses. Our failure or inability to meet a
client's expectations in the performance of our products or services could
injure the Company's business reputation or result in a claim for substantial
damages, regardless of its responsibility for such failure. In addition, the
Company possesses technologies and content that may include confidential or
proprietary client information. Although the Company will implement policies to
prevent such client information from being disclosed to unauthorized parties or
used inappropriately, any such unauthorized disclosure or use could result in a
claim for substantial damages.

         The Company will attempt to limit contractually its damages arising
from negligent acts, errors, mistakes or omissions in rendering professional
services; however, there can be no assurance that any contractual protections
will be enforceable in all instances or would otherwise protect the Company from
liability for damages. The successful assertion of one or more large claims
against the Company that are uninsured, exceed available insurance coverage, if
any, or result in changes to any insurance policies the Company may obtain,
including premium increases or the imposition of a large deductible or
co-insurance requirements, could result in significant costs to the Company and
may make it unable to operate profitably.

         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 numerous factors,
including the success of its product and service offerings and competing
technological and market developments. The Company will be required to raise



<PAGE>

additional funds through public or private financing, strategic relationships or
other arrangements, particularly as its acquisition strategy matures. There can
be no assurance that such additional funding, if needed, 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 available, 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.

         During 2000, CASi acquired $150,000 of financing to complete the
research and development of the ACE-10 products, of which $100,000 was advanced
as of December 31, 2000. Since this product has been phased out, the remaining
$50,000 of financing is unavailable to the Company.

         If other adequate funds are not available on acceptable terms, the
Company may be unable to develop or enhance its services and products, take
advantage of future opportunities or respond to competitive pressures.
Furthermore, if additional financing is not obtained, the Company will not be
able to continue as a going concern.

         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.



<PAGE>

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, 2001, was $18,060; total rent in the
calendar year ended December 31, 2000, 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 not a party to any pending legal proceeding and, to the
knowledge of management, no federal, state or local governmental agency is
presently contemplating any proceeding against the Company. No director,
executive officer or affiliate of the Company or owner of record or beneficially
of more than five percent of the Company's common stock is a party adverse to
the Company or has a material interest adverse to the Company in any proceeding.



<PAGE>

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, 2001.

                                     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 assurance 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.



<PAGE>

                                STOCK QUOTATIONS*

<Table>
<Caption>
                                          CLOSING BID

Quarter ended:                           High      Low
--------------                          ------   -------
<S>                                     <C>      <C>
January 4, 2000
through
March 31, 2000                          $ 1.00   $  1.00

April 1, 2000
through
June 30, 2000                           $ 1.00   $   .75

July 1, 2000
through
September 30, 2000                      $  .75   $  2.75

October 1, 2000
through
December 31, 2000                       $ 1.25   $  .687

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
</Table>

Holders.

         The number of record holders of the Company's securities as of the date
of this Report is approximately 117.

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

         The Company had granted 750,000 stock warrants to certain individuals
to purchase shares of common stock of CASi at $1.00 per share, these warrants
expired on March 31, 2001 and were not extended past this date.

         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.



<PAGE>

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

Plan of Operation.

         The Company will continue to support the demands of its major customer,
Alcatel; however, in order to offset anticipated decline in revenues from this
customer, the Company is focusing its attention on developing and selling its
new products. If CASi is unable to obtain additional customers and generate
significant revenues from sales of its new products, the Company's results of
operations will be significantly impacted and it may be unable to produce
sufficient operating revenue to continue as a going concern.

         CASi expects gross profit margin to improve in 2002 if its new Kiosk
product lines are successful, see the heading "General" of Part I, Item I of
this report. CASi expects operating expenses to remain constant in 2002 except
for expected decreases in legal & auditing, outside services, and contracted
services.

         The Company wrote-off $109,508 of bad debts during the year ended
December 31, 2000. During 2001, the Company recovered $63,097 of these bad debts
and does not anticipate any other recoveries in 2002. As a result, the Company
had tightened its credit policies and implemented new policies prohibiting the
reoccurrence of this situation in future periods.

         CASi expects revenues to decline substantially until the demand for its
new product line is established in the marketplace.

         The Company has no major purchases planned for the next 12 months and
does not expect to increase its personnel unless sales levels increase
significantly during the next year. Cash provided from operations is expected to
be sufficient to meet future operating expenses.

         Further, manufacturing costs of components are borne by the Company's
subcontractors until products are delivered to CASi for testing and delivery to
customers; as a result, any increased sales volume does not result in a
corresponding increase in working capital needs.

Results of Operations.

         The Company had revenues of $789,944 during the calendar year ended
December 31, 2001, as compared with revenues of $2,872,790 during the calendar
year ended December 31, 2000. This decrease was primarily due to CASi's major
customer's reduction in demand for CASi's MPS product line. The decline in
demand for this product 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 2001. In order to offset
this trend in future years, CASi has expanded its product line and is
aggressively marketing these products to improve its operating results in 2002.



<PAGE>

         Sales from Alcatel were 80% and 95% of total sales for the calendar
years ended December 31, 2001 and 2000, respectively. The balance of these
revenues were generated from sales to a variety of small customers and from the
repair of existing Naked Mini Computers. In the 2001 calendar year, The
Company's gross profit, before deduction of general and administrative expenses
of $547,580, was $161,732; gross profit in the preceding calendar year was
$884,964, before deduction of general and administrative expenses of $864,031.
Principal general and administrative expenses included payroll expenses
($214,635 and $262,103, respectively); contracted services ($172,675 and
$277,873, respectively); and bad debts ($-0- and $109,508, respectively).

         The Company also incurred research and development expenses of $42,999
and $317,552 during the years ended December 31, 2001 and 2000 respectively. The
majority of these funds were spent for the NEBS-402 and ACE-10 product lines.

         The Company had a net operating loss for the year ended December 31,
2001 and 2000. Federal income tax expense includes the recording of a federal
tax refund of $120,037 and $92,256 for 2001 and 2000 respectively, due to these
losses.

Liquidity and Capital Resources.

         The Company's cash flow decreased ($265,255) in 2001 as compared with
an increase of $86,934 in 2000. As of December 31, 2001, the Company had no cash
assets, compared with $265,255 at December 31, 2000.

         During 2001, The Company generated cash of $63,097 from collecting bad
debts previously written-off; but, used $301,350 of cash for capital
expenditures for its Kiosk equipment. The Company generated cash flow from an
increase in accounts payable during 2001 of $291,055. This increase in payables
will require additional cash to be generated from operations or from other
financing sources in 2002 in order for the Company to acquire raw materials to
manufacture its product lines.

         Working capital decreased $205,841 during 2001 as compared with 2000.
This decrease was primarily due to increased accounts receivable and accounts
payable, a reduction in cash generated from sales during 2001, and inventory
write-downs.

         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.



<PAGE>

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


                          INDEX TO FINANCIAL STATEMENTS



<Table>
<Caption>
                                                                                                             Page
<S>                                                                                                          <C>
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS............................................................F-1

FINANCIAL STATEMENTS

   Consolidated Balance Sheets at December 31, 2001 and 2000..................................................F-3

   Consolidated Statements of Operations for the years ended
    December 31, 2001 and 2000................................................................................F-4

   Consolidated Statement of Shareholders' Equity for the years
   ended December 31, 2001 and 2000...........................................................................F-5

   Consolidated Statements of Cash Flows for the years ended
   December 31, 2001 and 2000.................................................................................F-6

   Notes to Consolidated Financial Statements.................................................................F-7
</Table>



<PAGE>

               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, 2001, and the related consolidated
statements of operations, shareholders' equity, 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 audit provides 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, 2001, 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 incurred a net loss of $321,449
for the year ended December 31, 2001. Additionally, during 2001, the Company
lost a significant portion of their orders from a customer that accounted for
80% of the Company's revenues in 2001 due to the phasing out of a major product
that was being purchased from the Company. These factors, 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 & BAILEY, PLLC
www.malone-bailey.com
Houston, Texas


April 11, 2002



                                      F-1
<PAGE>

               REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS



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

We have audited the accompanying consolidated balance sheet of Computer
Automation Systems, Inc., (formerly Intercontinental Strategic Minerals, Inc.)
and Subsidiary, as of December 31, 2000, and the related consolidated statements
of operations, shareholders' equity, 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 audit.

We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audits 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 audit provides 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. and Subsidiary as of December 31, 2000, and the
consolidated results of their operations and cash flows for the year then ended,
in conformity with generally accepted accounting principles.

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 incurred a net loss of $222,441
for the year ended December 31, 2000. Additionally, during early 2001, the
Company lost a significant portion of their orders from a customer that
accounted for 95% of the Company's revenues in 2000 due to the phasing out of a
major product that was being purchased from the Company. These factors, 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.




                                       KING GRIFFIN & ADAMSON P.C.


Dallas, Texas
March 2, 2001



                                      F-2
<PAGE>

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

<Table>
<Caption>
                                                 ASSETS
                                                                                 2001          2000
                                                                              ----------    ----------
<S>                                                                           <C>           <C>
CURRENT ASSETS
    Cash and cash equivalents                                                 $       --    $  265,255
    Accounts receivable (net of allowance for doubtful
      accounts of $20,494 and $11,803 at December 31, 2001
      and 2000, respectively)                                                    129,633        66,193
    Note receivable, current portion                                               5,384         5,535
    Officer receivable                                                            32,014        29,441
    Income tax receivable                                                         88,789        92,256
    Inventory                                                                     44,969       103,968
                                                                              ----------    ----------
              Total current assets                                               300,789       562,648

Property and equipment and capitalized software costs, net                       386,539       141,884

Note receivable, less current portion                                                 --         4,465

Other assets                                                                       5,858         6,109
                                                                              ----------    ----------

              Total assets                                                    $  693,186    $  715,106
                                                                              ==========    ==========

                                  LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES
    Cash in bank - overdraft                                                  $    7,501    $       --
    Capital lease obligation, current portion                                      2,534         2,534
    Accounts payable                                                             383,786        75,861
    Accounts payable - related party                                              55,657        72,527
    Accrued liabilities                                                           15,457        11,739
    Warranty reserve                                                              15,000        15,000
                                                                              ----------    ----------
              Total current liabilities                                          479,935       177,661

Capital lease obligation, less current portion                                       422         3,167
Convertible debt                                                                 100,000       100,000
                                                                              ----------    ----------
                                                                                 580,357       280,828
Shareholders' equity
    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; 8,393,334 shares issued and outstanding
      at December 31, 2001 and 2000, respectively                                  8,394         8,394
    Additional paid-in capital                                                   340,073       340,073
    Retained earnings (deficit)                                                 (235,638)       85,811
                                                                              ----------    ----------

Total shareholders' equity                                                       112,829       434,278
                                                                              ----------    ----------
Total liabilities and shareholders' equity                                    $  693,186    $  715,106
                                                                              ==========    ==========
</Table>



          See summary of accounting policies and notes to consolidated
                              financial statements.



                                      F-3
<PAGE>

                COMPUTER AUTOMATION SYSTEMS, INC. AND SUBSIDIARY
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                        For the years ended December 31,


<Table>
<Caption>
                                                              2001            2000
                                                          ------------    ------------
<S>                                                       <C>             <C>
Revenues                                                  $    789,944    $  2,872,790

Cost of revenues                                               628,212       1,987,826
                                                          ------------    ------------

         Gross profit                                          161,732         884,964

General and administrative expenses                            536,141         864,031

Research and development expense                                42,999         317,552
                                                          ------------    ------------

Operating loss                                                (417,408)       (296,619)

Other expenses
   Interest                                                     11,439           4,422
   Other                                                           980           4,753
                                                          ------------    ------------
                                                                12,419           9,175

Net loss before income taxes                                  (429,827)       (305,794)

Income tax benefit
   Current                                                    (108,378)        (92,256)
   Deferred                                                         --           8,903
                                                          ------------    ------------
                                                              (108,378)        (83,353)
                                                          ------------    ------------

         Net loss                                         $   (321,449)   $   (222,441)
                                                          ============    ============

Loss per common share - basic and diluted                 $       (.04)   $       (.03)
                                                          ============    ============

Weighted average shares outstanding - basic and diluted      8,393,334       8,390,770
                                                          ============    ============
</Table>



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



                                      F-4
<PAGE>

                COMPUTER AUTOMATION SYSTEMS, INC. AND SUBSIDIARY
                 CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY
                 For the years ended December 31, 2001 and 2000


<Table>
<Caption>
                                     Common Stock         Additional    Retained
                                -----------------------    Paid-in      Earnings
                                  Shares       Amount      Capital      (Deficit)      Total
                                ----------   ----------   ----------   ----------    ----------
<S>                             <C>          <C>          <C>          <C>           <C>
Balances at December 31, 1999    8,369,334   $    8,370   $  313,097   $  308,252    $  629,719

   Common stock for services        24,000           24       26,976           --        27,000

   Net loss for the year                --           --           --     (222,441)     (222,441)
                                ----------   ----------   ----------   ----------    ----------

Balances at December 31, 2000    8,393,334        8,394      340,073       85,811       434,278

   Net loss for the year                --           --           --     (321,449)     (321,449)
                                ----------   ----------   ----------   ----------    ----------

Balances at December 31, 2001    8,393,334   $    8,394   $  340,073   $ (235,638)   $  112,829
                                ==========   ==========   ==========   ==========    ==========
</Table>



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



                                      F-5
<PAGE>

                COMPUTER AUTOMATION SYSTEMS, INC. AND SUBSIDIARY
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                        For the years ended December 31,


<Table>
<Caption>
                                                                         2001          2000
                                                                      ----------    ----------
<S>                                                                   <C>           <C>
Cash flows from operating activities
    Net loss                                                          $ (321,449)   $ (222,441)
    Adjustments to reconcile net income (loss) to net cash
      provided by (used in) operating activities:
        Depreciation and amortization                                     56,695        44,192
        Deferred tax provision                                                --         8,903
        Bad debt expense (recovered)                                     (54,406)      109,508
        Inventory write-down                                              89,362            --
        Stock issued for services                                             --        27,000
        Loss on sale of equipment                                             --         6,740
        Changes in operating assets and liabilities:
          Accounts receivable                                             (9,033)      732,995
          Inventory                                                      (30,364)       33,219
          Employee receivables                                            (2,573)      (11,948)
          Other assets                                                     4,867         2,000
          Accounts payable and bank overdraft                            298,556      (289,317)
          Accrued liabilities                                              3,718           417
          Income taxes payable                                                --      (232,871)
          Income tax receivable                                            3,467       (92,256)
                                                                      ----------    ----------
                Net cash provided by operating activities                 38,840       116,141
                                                                      ----------    ----------

Cash flows from investing activities
    Capital expenditures                                                (301,350)     (127,307)
                                                                      ----------    ----------
                Net cash used in investing activities                   (301,350)     (127,307)
                                                                      ----------    ----------

Cash flows from financing activities
    Payments on capital lease                                             (2,745)       (1,900)
    Proceeds from issuance of convertible debt                                --       100,000
                                                                      ----------    ----------
                Net cash provided by (used in) financing activities       (2,745)       98,100
                                                                      ----------    ----------

Net increase (decrease) in cash and cash equivalents                    (265,255)       86,934

Cash and cash equivalents, beginning of year                             265,255       178,321
                                                                      ----------    ----------

Cash and cash equivalents, end of year                                $       --    $  265,255
                                                                      ==========    ==========

Supplemental disclosures of cash flow information:
    Cash paid for interest                                            $    1,482    $    2,228
                                                                      ==========    ==========
    Cash paid for income taxes                                        $       --    $  224,273
                                                                      ==========    ==========

Schedule of non-cash investing and financing transactions
    Receipt of note receivable for sale of equipment                  $       --    $   10,000
                                                                      ==========    ==========
    Capital lease obligation incurred for use of equipment            $       --    $    7,601
                                                                      ==========    ==========
</Table>



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



                                      F-6
<PAGE>

                COMPUTER AUTOMATION SYSTEMS, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 2001 and 2000


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.

Inventory

Inventory consists of component parts and finished goods valued at the lower of
cost or market (net realizable value) using the first-in, first-out method.

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.

Warranty Reserve

CASi provides a reserve for warranty expense for estimated costs to be incurred
on items sold.



                                      F-7
<PAGE>

                COMPUTER AUTOMATION SYSTEMS, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 2001 and 2000


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, 2000.

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 - INVENTORY

Principal components of inventory at December 31, 2001 and 2000 are as follows:

<Table>
<Caption>
                     2001         2000
                  ----------   ----------
<S>               <C>          <C>
Component parts   $   19,891   $  103,968
Finished goods        25,078           --
                  ----------   ----------
Total inventory   $   44,969   $  103,968
                  ==========   ==========
</Table>



                                      F-8
<PAGE>

                COMPUTER AUTOMATION SYSTEMS, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 2001 and 2000


NOTE 3 - 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
$321,449 and $222,441 in 2001 and 2000 respectively. In addition, Alcatel, CAS
's largest customer which made up 80% and 95% of the CASi's revenue in 2001 and
2000 respectively, has notified CASi that it has decided to phase out the use of
a major product it currently purchases from CASi. This had a significant
negative impact on the CASi's revenues and cash flows.

CASi has taken steps in response to this development to increase its customer
base and focus on the marketing of its new product lines, which if successful
could generate significant revenues in future years. Management believes that
these actions will provide sufficient liquidity to enable CASi to meet its
obligations and continue in business. However, there is no assurance that such
actions will be successful.

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 4 - PROPERTY AND EQUIPMENT AND CAPITALIZED SOFTWARE COSTS

Property and equipment and capitalized software costs at December 31, 2001 and
2000 are summarized as follows:


<Table>
<Caption>
                                                                Depreciable
                                       2001          2000       Life (years)
                                    ----------    ----------    ------------
<S>                                 <C>           <C>           <C>
Testing & manufacturing equipment   $   76,441    $   76,441      5 to 7
Office equipment                        48,725        48,725      5 to 7
Kiosk equipment                        301,350            --      5 to 7
Software development costs              65,813        65,813        3
                                    ----------    ----------
                                       492,329       190,979
Less accumulated depreciation and
  amortization                        (105,790)      (49,095)
                                    ----------    ----------
                                    $  386,539    $  141,884
                                    ==========    ==========
</Table>

Depreciation expense was $56,698 and $44,192 for the years ended December 31,
2001 and 2000, respectively.



                                      F-9
<PAGE>

                COMPUTER AUTOMATION SYSTEMS, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 2001 and 2000


NOTE 5 - CONVERTIBLE DEBT

During 2000, Casi secured $100,000 of financing as part of a $150,000
convertible note agreement. CASi is using the funding for research and
development of its ACE-10 products. The ACE-10 product line was discontinued in
2001 since the component parts were no longer supported from the original
equipment manufacturer. Based on this, CASi, and the holder of the note, agreed
to cancel any future advances and limit the total debt to the outstanding
principal of $100,000. 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 has the option of converting all unpaid principal
and accrued interest into shares of CASi common stock at $1.25 per share.


NOTE 6 - 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 and
$317,552 for 2001 and 2000 respectively, relating to the research, development
and testing of new product lines.

NOTE 7 - INCOME TAXES

Temporary differences that give rise to the deferred tax assets or liabilities
at December 31, 2001 and 2000 are as follows:

<Table>
<S>                                 <C>
Deferred tax assets
  Accounts receivable               $  6,968
  Warranty reserve                     5,100
  Net operating loss carryforward     20,817
                                    --------
Deferred tax asset                    32,885
  Valuation allowance                (32,885)
                                    --------
Net deferred tax asset              $     --
                                    ========
</Table>

The provision for income taxes for the years ended December 31, 2001 and 2000
consists of the following:

<Table>
<Caption>
                2001          2000
             ----------    ----------
<S>          <C>           <C>
Federal
  Current    $ (108,378)   $  (92,256)
  Deferred           --         8,903
             ----------    ----------
             $ (108,378)   $  (83,353)
             ==========    ==========
</Table>



                                      F-10
<PAGE>

                COMPUTER AUTOMATION SYSTEMS, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 2001 and 2000


NOTE 7 - INCOME TAXES - CONT'D

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, 2001 and 2000 is as follows:

<Table>
<Caption>
                                                     2001          2000
                                                  ----------    ----------
<S>                                               <C>           <C>
Federal tax expense (benefit) at statutory rate   $ (120,037)   $ (103,970)
Change in valuation allowance                             --        21,226
Other                                                 11,659          (609)
                                                  ----------    ----------
                                                  $ (108,378)   $  (83,353)
                                                  ==========    ==========
</Table>

CASi has total net operating losses at December 31, 2001 of approximately
$400,000. CASi carried back approximately $270,000 of these losses to recover
$88,789 available taxes previously paid.

NOTE 8 - 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,
2001 and 2000 was $55,657 and $72,527, respectively. Total expenses related to
production paid to this related party were $239,519 and $1,356,839 for the years
ended December 31, 2001 and 2000, 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, 2001 and 2000 was $18,060 for each year.

During 2001 and 2000, CASi advanced funds to the CASi's president. The amounts
due were $32,014 and $19,550 at December 31, 2001 and 2000, respectively. These
amounts are included in employee receivables in the accompanying balance sheet.

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 9 - 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 2001 and no options have been exercised through December 31, 2001.



                                      F-11
<PAGE>

                COMPUTER AUTOMATION SYSTEMS, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 2001 and 2000


NOTE 9 - STOCK OPTIONS - CONT'D

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, 2001 and 2000 would have been as
follows:

<Table>
<Caption>
                                            2001            2000
                                        ------------    ------------
<S>                                     <C>             <C>
Net loss, as reported                   $   (321,449)   $   (222,441)
                                        ============    ============
Pro forma net loss                      $   (321,449)   $   (271,074)
                                        ============    ============

Net loss per common share as reported   $       (.04)   $       (.03)
                                        ============    ============
Pro forma net loss per common share     $       (.04)   $       (.03)
                                        ============    ============
</Table>


NOTE 10 - 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 2001 and 2000 for this facility was
$18,060 per year.

Additionally, CASi leases certain equipment under non-cancelable operating
leases. The future minimum rental commitments under the leases are $9,231 for
the year ended 2002.

Total rent expense for equipment incurred for 2001 and 2000 was $32,014 and
$35,696, respectively.


NOTE 11 - SIGNIFICANT CONCENTRATION OF BUSINESS RISK

Approximately 80% and 95% of revenues in 2001 and 2000, respectively, was from a
single customer. Accounts receivable related to this customer were approximately
$127,740 and $64,295 at December 31, 2001 and 2000, respectively. In the event
of non-performance, the maximum exposure to CASi is the recorded amount shown on
the balance sheet.

NOTE 12 - SUBSEQUENT EVENTS

During the first quarter of 2002, CASi has actively engaged in negotiations with
Global Access Alliance, Inc. "GAA", in order to complete the delivery,
installation, and servicing of CASi's new product lines and its Kiosk equipment.

In January 2002, CASi signed a letter of intent to complete the merger with GAA
and pursuant to the plan of merger, CASi will acquire GAA's rights in a contract
with Phillips 66 to install and maintain Kiosk machines in Circle K stores. In
exchange for this contract, CASi will acquire 100% of the issued and outstanding
stock of GAA by issuing 600,000 of Class A Common Shares, subject to 144
restrictions, to the shareholders of GAA. As of April 11, 2002 this transaction
was not closed.



                                      F-12
<PAGE>

                COMPUTER AUTOMATION SYSTEMS, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 2001 and 2000


                                 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.

<Table>
<Caption>
                                                       Date of                Date of
                                 Positions           Election or            Termination
Name                               Held              Designation           or Resignation
----                             ---------           -----------           --------------
<S>                              <C>                 <C>                   <C>
Michael E. Cherry                President            7/28/98                    *
                                 Director             7/28/98                    *
                                 CEO                 10/22/99

William T. Criswell              Chairman            10/22/99                    *
                                 of the
                                 Board

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

Chris Poinsatte                  CFO                 10/22/99              3/23/01
                                 Director            10/22/99                    *

Sylvia McCollum                  Director            10/22/99                    *

Sandra Cobb                      Director              4/7/00                    *
</Table>

      * 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.



<PAGE>

         William T. Criswell, Chairman of the Board. Mr. Criswell, age 79, is a
graduate of the University of Miami. Starting in Brazil in 1946, he was manager
of Northern Brazil for the Winthrop Company. He later worked for IBM and AM
Corporations in Brazil and Venezuela. In 1953, Mr. Criswell entered the
insurance field as founder of the first health insurance program in Latin
America. He entered the development business in 1960 and for the next 18 years
developed and constructed numerous projects in Central America. In 1978, Mr.
Criswell came to Dallas to form the Criswell Development Company with his son.
He retired from the Criswell Development Company and did not return to the
development business until 1992. At that time, he formed Dorchester
International, Inc., a company devoted to pursuing resort developments in Mexico
and the Caribbean. Mr. Criswell is currently Director of Development and Senior
Vice President of Golfcraft Corporation, where he is primarily responsible for
identifying municipality development opportunities and supervision of golf
center developments. Mr. Criswell also serves on the Dallas Area Rapid Transit
Board of Directors.

         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 &
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.



<PAGE>

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.



<PAGE>

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

<Table>
<Caption>
                               Annual Compensation                 Awards          Payouts

(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    ricted    lying    Pay-    Comp-    Options
Position                Ended       ($)      ($)    Compen-   Stock    Options   outs   ensat'n   Granted
------------------     --------   -------   -----   -------   ------   -------   ----   -------   -------
<S>                    <C>        <C>       <C>     <C>       <C>      <C>       <C>    <C>       <C>
Michael E.
Cherry,                12/31/00   $97,462       0         0        0    12,000      0         0       4.3
CEO, Pres              12/31/01   $96,154       0         0        0         0      0         0         0
Director

William T.             12/31/00   $36,000       0         0        0    52,000      0         0      18.9
Criswell               12/31/01   $36,000       0         0        0         0      0         0         0
Chairman

Connie                 12/31/00         0       0         0        0    12,000      0         0       4.3
Cherry,                12/31/01         0       0         0        0         0      0         0         0
Secretary/Director

Sylvia                 12/31/00         0       0         0        0    12,000      0         0       4.3
McCollum,              12/31/01         0       0         0        0         0      0         0         0
Director

Sandra                 12/31/00         0       0         0        0    12,000      0         0       4.3
Cobb,                  12/31/01         0       0         0        0         0      0         0         0
Director

Frank                  12/31/00         0       0         0   24,000     1,000      0         0        .3
Neukomm,               12/31/01         0       0         0        0         0      0         0         0
Former Director

Chris                  12/31/00         0       0     7,725        0    13,000      0         0       4.7
Poinsatte,             12/31/01         0       0         0        0         0      0         0         0
Former Director
</Table>



<PAGE>

         (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, 2001 and 2000.

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.



<PAGE>

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 8,668,334 shares
are outstanding:

<Table>
<Caption>
                                         Type of             Number of Shares                            Percentage
  Name and Address                      Ownership           Beneficially Owned             Subtotal       Of Class
  ----------------                      ---------           ------------------             --------      ----------
<S>                                     <C>                 <C>                            <C>           <C>
Michael E. Cherry
1825 E. Plano Parkway                    Personal              2,077,500(1)
Suite 200                                                                                  2,089,500        24.1
Plano, Texas 75074                       Options                  12,000

Sandra Cobb
1825 E. Plano Parkway                    Personal                912,000
Suite 200                                                                                    924,000        10.6
Plano, Texas 75074                       Options                  12,000

Sylvia McCollum
1825 E. Plano Parkway                    Personal                912,000
Suite 200                                                                                    924,000        10.6
Plano, Texas 75074                       Options                  12,000

Brett Kacura
1825 E. Plano Parkway
Suite 200                                Personal              2,077,500                   2,077,500        24.0
Plano, TX  75074
               TOTAL                                                                       6,015,000        69.4
</Table>



<PAGE>

       (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
8,668,334 shares and options are outstanding:

<Table>
<Caption>
                                                       Type of        Number of Shares                          Percentage
      Name and Address                                Ownership      Beneficially Owned           Subtotal       Of Class
      ----------------                                ---------      ------------------           --------      ----------
<S>                                                   <C>            <C>                          <C>           <C>
Michael E. Cherry
1825 E. Plano Parkway                                  Personal      2,077,500(1)(2)(3)
Suite 200                                                                                         2,089,500        24.1
Plano, Texas 75074                                      Options         12,000

William T. Criswell
2756 Fairwood Avenue                                    Options         52,000(3)                    52,000          .6
Carrollton, Texas 75006

Connie Cherry
815 Autumn Ridge Drive                                  Options         12,000(2)(3)                 12,000          .1
McKinney, Texas 75070

Chris Poinsatte (former CFO)
3924 Peter Pan                                          Options         13,000(3)                    13,000          .1
Dallas, TX 75229

Sylvia McCollum
1825 E. Plano Parkway                                  Personal        912,000(3)
Suite 200                                                                                           924,000        10.6
Plano, Texas 75074                                      Options         12,000

Frank Neukomm (former director)
6601 Kirby Drive                                       Personal         24,000(3)
Suite 600                                                                                            24,000          .3
Houston, Texas 77005                                    Options

Sandra Cobb
1825 E. Plano Parkway                                  Personal        912,000(3)
Suite 200                                                                                           924,000        10.6
Plano, Texas 75074                                      Options         12,000

                      TOTAL                                                                       4,038,500        46.6
</Table>



<PAGE>

        (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.

        (3)   During 2000, the Board entered into a nonqualified stock option
              plan and awarded certain key employees, directors, and independent
              contractors options totaling 275,000. The number of shares
              reflected in the table in Item 11 above includes these options.
              See additional information under the heading "Common Stock
              Warrants and Options" under Item 3.

Changes in Control.

         There are no present arrangements or pledges of the Company's
securities which may result in a change in control of the Company.

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.

                  Current Report on Form 8-K, dated February 28, 2000,
         previously filed with the Securities and Exchange Commission.

         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.**



<PAGE>

                  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**

                  *    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 Commission and are
                       incorporated herein by reference.



<PAGE>

                                   SIGNATURES

         Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, The Company has caused this Report to be signed on its
behalf by the undersigned, thereunto duly authorized.

                                         COMPUTER AUTOMATION SYSTEMS, INC.


Date: 4/16/02                            By /s/ MICHAEL E. CHERRY
     ---------                             -------------------------------
                                           Michael E. Cherry, Chief
                                           Executive Officer and Director

          Pursuant to the requirements of the Securities Exchange Act of 1934,
as amended, this Report has been signed below by the following persons on behalf
of The Company and in the capacities and on the dates indicated:


Date: 4/16/02                            By /s/ MICHAEL E. CHERRY
     ---------                             -------------------------------
                                           Michael E. Cherry, Chief
                                           Executive Officer and Director


Date: 4/16/02                            By /s/ WILLIAM T. CRISWELL
     ---------                             -------------------------------
                                           William T. Criswell, Director


Date: 4/16/02                            By /s/ CHRIS POINSATTE
     ---------                             -------------------------------
                                           Chris Poinsatte, Director


Date: 4/16/02                            By /s/ SANDRA COBB
     ---------                             -------------------------------
                                           Sandra Cobb, Director


Date: 4/16/02                            By /s/ SYLVIA MCCOLLUM
     ---------                             -------------------------------
                                           Sylvia McCollum, Director


Date: 4/16/02                            By /s/ CONNIE CHERRY
     ---------                             -------------------------------
                                           Connie Cherry, Director