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

                                   FORM 10-QSB

                                   (MARK ONE)

           [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

                  FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2004

                                       OR

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

           FOR THE TRANSITION PERIOD FROM ____________ TO ____________

                         COMMISSION FILE NUMBER 0-27757

                              CASE FINANCIAL, INC.
             (Exact Name of registrant as specified in its charter)

         DELAWARE                                              33-0529299
(State or other jurisdiction                                (I.R.S. Employer
of incorporation or organization)                           Identification No.)


       15060 VENTURA BOULEVARD, SUITE 240, SHERMAN OAKS, CALIFORNIA 91403
                    (Address of principal executive offices)

                                 (818) 728-9440 (Registrant's  telephone number,
              including area code)

         SECURITIES REGISTERED UNDER SECTION 12(G) OF THE EXCHANGE ACT:

                         COMMON STOCK, $0.001 PAR VALUE
                                (Title of class)

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

 AS OF AUGUST 1, 2004 THERE WERE 17,019,236 SHARES OF COMMON STOCK OUTSTANDING.


Transitional Small Business Disclosure format (check one): Yes [ ]  No [X]


<PAGE>



                                TABLE OF CONTENTS

                                                                            Page

                         PART I - FINANCIAL INFORMATION


Item 1.        FINANCIAL STATEMENTS                                           3

Item 2.        MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION     14

Item 3.        CONTROLS AND PROCEDURES                                       26


                           PART II - OTHER INFORMATION


Item 1.        LEGAL PROCEEDINGS                                             28

Item 5.        OTHER INFORMATION                                             28

Item 6.        EXHIBITS, REPORTS ON FORM 8-K                                 29

SIGNATURES                                                                   30



<PAGE>

ITEM 1.         FINANCIAL STATEMENTS


                       CASE FINANCIAL, INC. AND SUBSIDIARIES
                            CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
                                                                         June 30, 2004   September 30, 2003
                                                                          (Unaudited)
                                                                         --------------  ------------------
<S>                                                                      <C>               <C>
ASSETS
    Cash                                                                 $      182,886    $      192,651
    Investments in contracts - net of allowance for contract losses of
      $258,289 at September 30, 2003 and $278,126 at June 30, 2004            2,052,900         2,265,112
    Loans receivable                                                            978,000           788,000
    Prepayments and other assets                                                252,382           317,571
    Receivables related parties, and other assets, net of impairment             71,674           126,393
      allowance of $131,431 at September 30, 2003 and $122,520 at
      March 31, 2004
    Equipment, at cost, net of accumulated depreciation of $137,868
      at September 30, 2003  and $173,832 at June 30, 2004                       22,950            58,914

    Notes receivable from affiliate,net of impairment allowance of               23,067            23,209
      $810,000 at September 30,2003 and June 30, 2004
                                                                         --------------    --------------
    TOTAL ASSETS                                                         $    3,583,859    $    3,771,850
                                                                         ==============    ==============

LIABILITIES AND STOCKHOLDERS' DEFICIENCY

    Accounts payable and accrued expenses                                $      566,599    $      474,434
    Loans payable - related parties                                           5,508,628         1,293,438
    Loans payable                                                               555,000         3,966,080
                                                                         --------------    --------------
    TOTAL LIABILITIES                                                         6,630,227         5,733,952

STOCKHOLDERS' DEFICIENCY
    Common stock, par value $0.001 per share,100,000,000 shares                  17,019            15,561
     authorized, 15,561,108 shares issued and outstanding at
    September 30, 2003 and 17,019,230 issued and outstanding at
    June 30, 2004
    Paid-in-capital                                                           8,314,786         7,888,057
    Accumulated deficit                                                     (11,378,173)       (9,865,720)
                                                                         --------------    --------------
    TOTAL STOCKHOLDERS' DEFICIENCY                                           (3,046,368)       (1,962,102)
                                                                         --------------    --------------
    TOTAL LIABILITIES AND
         STOCKHOLDERS' DEFICIENCY                                        $    3,583,859    $    3,771,850
                                                                         ==============    ==============
</TABLE>


          See accompanying notes to consolidated financial statements.

                                       3

<PAGE>

                      CASE FINANCIAL, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (unaudited)

<TABLE>
<CAPTION>
                                                        Three Months      Three Months      Nine Months       Nine Months
                                                       ended June 30,    ended June 30,    ended June 30,    ended June 30,
                                                            2004              2003              2004              2003
                                                       --------------    --------------    --------------    --------------
<S>                                                    <C>               <C>               <C>               <C>
REVENUE
    Contract fees                                      $      191,535    $       86,166    $      499,369    $      320,569
    Service fees, related parties                              20,017             6,587            43,541            51,812
                                                       --------------    --------------    --------------    --------------

          TOTAL REVENUE                                       211,552            92,753           542,910           372,381
                                                       --------------    --------------    --------------    --------------

OPERATING EXPENSES
    Provision for losses on investments in contracts          104,087            66,951            85,913           174,267
    Provision for impairment of notes and other                    --                --            (8,911)               --
      receivables from affiliate
    General and administrative                                358,972           499,308         1,119,144         1,476,417
    Sales and marketing                                        46,932           136,636           188,270           417,060
                                                       --------------    --------------    --------------    --------------
       TOTAL OPERATING EXPENSES                               509,991           702,895         1,384,416         2,067,744
                                                       --------------    --------------    --------------    --------------
    LOSS FROM OPERATIONS                                     (298,439)         (610,142)         (841,506)       (1,695,363)

OTHER INCOME (EXPENSE)
    Interest income                                               318             1,196               489             8,425
    Interest expense                                         (104,358)          (80,404)         (283,579)         (191,479)
    Non-cash finance expenses                                (296,804)          (25,474)         (390,169)          (71,628)
    Legal settlement - net of costs                                --           149,004                --           149,004
    Miscellaneous Income                                           --                --             2,313                --
                                                       --------------    --------------    --------------    --------------

       TOTAL OTHER INCOME (EXPENSE)                          (400,844)           44,322          (670,946)         (105,678)
                                                       --------------    --------------    --------------    --------------
    NET LOSS                                           $     (699,283)   $     (565,820)   $   (1,512,452)   $   (1,801,041)
                                                       ==============    ==============    ==============    ==============

    Net loss per common share - basic and diluted      $        (0.04)   $        (0.04)   $        (0.09)   $        (0.11)
                                                       ==============    ==============    ==============    ==============
    Weighted average number of common shares -
      basic and diluted                                    16,464,485        16,019,230        16,464,485        16,019,230
                                                       ==============    ==============    ==============    ==============
</TABLE>

          See accompanying notes to consolidated financial statements.

                                       4

<PAGE>

                CASE FINANCIAL, INC. AND SUBSIDIARIES
                CONSOLIDATED STATEMENTS OF CASH FLOWS
                             (Unaudited)

<TABLE>
<CAPTION>
                                                                        Nine Months ended   Nine Months ended
                                                                          June 30, 2004       June 30, 2003
                                                                        -----------------   -----------------
<S>                                                                       <C>               <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss                                                                  $   (1,512,452)   $   (1,801,041)
Adjustments to reconcile net loss to net cash used in
  operating activities:
      Depreciation                                                                35,964            35,665
      Amortization of debt expense                                               121,244                --
      Provision for losses on investments in contracts                            85,913           174,267
      Impairment of notes receivable from affiliate                               (8,911)               --
      Common stock and options for compensation                                  115,566            86,707
      Warrants issued with debt                                                   18,228            15,882
      Common stock issued with debt                                              294,394                --
   Changes in operating assets and liabilities                                        --                --
          (Increase) decrease in prepayments and other assets                      7,575          (158,302)
          Increase (decrease) in accounts payable and other liabilities           92,165            75,183
                                                                          --------------    --------------
          Net cash used in operating activities                                 (750,314)       (1,571,639)
                                                                          --------------    --------------

CASH FLOWS FROM INVESTING ACTIVITIES:
        Purchase of short-term investments                                            --        (1,025,000)
        Redemptions of short-term investments                                         --         1,025,000
     Investment in contracts  -- advances                                       (526,157)       (2,447,222)
     Investment in contracts  -- collections                                     652,455         1,345,184
     Loans receivable - advances                                                (677,500)               --
     Loans receivable - collections                                              487,500                --
     Principal repayments on notes receivable from affiliate                         141             1,272
     Purchase of equipment                                                            --           (17,358)
                                                                          --------------    --------------
          Net cash used in investing activities                                  (63,561)       (1,118,124)
                                                                          --------------    --------------

CASH FLOWS FROM FINANCING ACTIVITIES:
    Proceeds from borrowings                                                     476,360         2,950,980
    Repayments of borrowings                                                    (305,837)          (90,980)
    Proceeds from related party borrowings                                     1,121,673           713,500
    Repayments of related party borrowings                                      (488,086)         (728,500)
                                                                          --------------    --------------
         Net cash provided by financing activities                               804,110         2,845,000
                                                                          --------------    --------------
NET (DECREASE) INCREASE IN CASH                                                   (9,765)          155,237

CASH - BEGINNING OF PERIOD                                                       192,651           159,209
                                                                          --------------    --------------

CASH - END OF PERIOD                                                      $      182,886    $      314,446
                                                                          ==============    ==============


SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
  Cash paid during the nine month period for:
     Interest                                                             $      129,611    $      165,030
     Income taxes                                                         $        5,820    $        7,380

SUPPLEMENTAL SCHEDULE OF NON-CASH FINANCING
AND INVESTING ACTIVITIES:
Warrants issued with debt in December 2002 and January 2003               $       95,775    $       96,099
  and repriced in March 2004
</TABLE>

      As of February 23, 2004, the Company appointed a new Chairman of the Board
of Directors who is also an officer,  director and/or has a controlling interest
in several of the entities  that had loans  outstanding  with the Company.  As a
result,  the Company has  reclassified  $3,896,603  from Loans  Payable to Loans
Payable-Related  Parties and advances and repayments under these loans have been
reflected as related  party  transactions  for the three and nine month  periods
ended June 30,  2004.  As of June 7, 2004,  the  Company  has also  reclassified
various obligations due and owing to their former CEO and parties related to him
totaling $315,000 from Loans  Payable-Related  Parties to Loans Payable, for net
reclassification  from  Loans  Payable  to  Loans  Payable-Related   Parties  of
$3,581,603.


          See accompanying notes to consolidated financial statements.

                                       5

<PAGE>

NOTE 1:     SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

            Nature of activities:

            Case  Financial,  Inc.  was  incorporated  in 1998 and  completed  a
            reverse  acquisition  with Asia Web Holdings,  Inc.  ("Asia Web"), a
            publicly traded company  incorporated  in the State of Delaware,  on
            May 24, 2002. As part of the transaction,  Asia Web changed its name
            to Case  Financial,  Inc. and continued the business of the Company.
            Case Financial, Inc. and its subsidiaries,  Case Financial, LLC, and
            Case Capital  Corporation,  (collectively  "Case" or the  "Company")
            provide   pre-settlement  and  post-settlement   litigation  funding
            services to  attorneys  (and,  previously,  plaintiffs)  involved in
            personal  injury  and  other   contingency   litigation,   conducted
            primarily within the California courts.

            The Company's  funding services have included  advances to attorneys
            and previously, plaintiffs, which are non-recourse, meaning that the
            investment principal, success fees and interest are repaid only when
            the  case is  settled  or  favorably  adjudicated  in  court.  These
            investments are  collateralized  solely by the potential proceeds of
            underlying   litigation.   The  Company  records  such  advances  as
            investments   in  contracts.   The  Company   performs  an  internal
            underwriting  as to the merits of each case proposed to be financed,
            the likelihood of its success,  and its estimated  settlement value.
            The Company's  investment  decisions and the pricing of its fees are
            based on this risk analysis and its estimate of settlement timing.

            In April 2003, Case Capital Corporation became a licensed California
            finance lender and began  marketing two primary loan  programs.  The
            first   program   involves   making   interest-bearing    short-term
            collateralized loans (Recourse Bridge Loan Program) to attorneys for
            cases which have settled but are awaiting disbursement of settlement
            proceeds.  The Company  charges loan fees in  connection  with these
            loans.  In addition,  interest is charged on these loans if they are
            not repaid by a  specified  date.  These  term  loans are  typically
            recourse and  collateralized  by the proceeds of the case as well as
            the assets of the borrowers,  typically law firms and attorneys, and
            personal  guarantees  from the  attorneys.  The Company  performs an
            internal  underwriting as to the adequacy of the  collateral.  These
            loans are recorded by the Company as Loans Receivable.

            Also during  2003,  Case Capital  Corporation  began  entering  into
            credit  agreements with attorneys  (L.E.G.s(TM)  Program).  Advances
            under  this  loan  program  are   non-recourse,   meaning  that  the
            principal,  success  fees and interest are repaid only when the case
            is settled  successfully  or  favorably  adjudicated  in court.  The
            Company  records  advances under this loan program as investments in
            contracts   to   reflect   their   higher   risk  and   non-recourse
            characteristics.  The  Company  performs  an  internal  underwriting
            analysis of each  attorney  and  determines  the  maximum  amount of
            investments  in  contracts  each  attorney  may enter  into with the
            Company.

            Operations  are  conducted  from leased  premises  in Sherman  Oaks,
            California.

            Basis of presentation:

            The accompanying  financial  statements include the accounts of Case
            Financial Inc. and its  subsidiaries,  Case Financial,  LLC and Case
            Capital   Corporation.   All  significant   intercompany   accounts,
            transactions and profits have been eliminated upon consolidation and
            combination.


                                       6
<PAGE>


            Revenue recognition:

            Contract fee income from investments in contracts is recognized once
            collection is assured, usually upon receipt of cash, after a case is
            settled or favorably  adjudicated.  Selling commissions are expensed
            as  incurred.  An  investment  in a  contract  is  deemed  fully  or
            partially  uncollectible when the case is dismissed,  abandoned,  or
            settled for an amount less than the Company's investment.

            The  Company  also  participates  in  and  services  investments  in
            contracts  with  third  party  investors.   At  times,  the  Company
            participates in these investments.  In the case of these third party
            investments,   the  Company  receives  a  success  fee  equal  to  a
            percentage of the income generated upon successful resolution of the
            underlying  case,  at which time  revenue is  recorded.  These third
            party  investments are  collateralized  by  specifically  identified
            investments in contracts and are repayable to the investor only upon
            successful  resolution and collection on the underlying  case, along
            with the  fees  earned,  less the  agreed  upon  success  fee to the
            Company.  Third party  investors bear financial risk with respect to
            the  underlying  investment  in a  contract  in  relation  to  their
            proportionate  interest in the principal advanced for such contract.
            Contract  fees are  presented  net of  amounts  paid to third  party
            participants.

            The  Company  has   established  an  allowance  for  investments  in
            contracts that may become uncollectible.  The allowance for contract
            investment  losses is maintained at a level which,  in  management's
            judgment,  is adequate to absorb  losses in the contract  investment
            portfolio.  The  amount  of the  allowance  is  based on  trends  on
            historical loss experience.

            Loan  fees and  interest,  net of  direct  costs,  charged  on loans
            receivable with terms in excess of ninety (90) days are deferred and
            amortized  over the life of the  related  loan  using the  effective
            interest  method.  Loan  fees on  short  term  loans  are  generally
            recognized  over the term of the loan.  Interest  on these  loans is
            accrued as earned.

            The Company earns service fees from a contract entered into with two
            entities including the prior Case Financial, Inc. and its affiliate,
            Case Financial Funding, Inc ("Prior CFI"). The Company manages Prior
            CFI's  portfolios  of  investments  for a fee  equal to 15% of gross
            amounts collected on its behalf.

            Stock-based compensation:

            The Company  accounts for stock-based  compensation  arrangements in
            accordance  with the  provisions  of SFAS No. 123,  "Accounting  for
            Stock-Based  Compensation"  which  establishes  a  fair  value-based
            method of accounting for stock-based  compensation plans. Under SFAS
            No. 123, compensation cost is recognized based on the difference, if
            any, on the date of grant  between  the fair value of the  Company's
            common  stock and the amount  the  grantee  must pay to acquire  the
            stock.  The Company uses the  Black-Scholes  option pricing model to
            determine the fair value of each stock option granted.

            Loss per common share:

            Basic and diluted  loss per common share is computed by dividing the
            net loss by the weighted average number of common shares outstanding
            for each of the periods presented. The weighted average number of


                                       7
<PAGE>

            common shares  outstanding  for computing the basic and diluted loss
            per common share was  16,464,485 for the three and nine months ended
            June 30,  2004.  For the three and nine months  ended June 30, 2003,
            the  weighted  average  number  of  common  shares  outstanding  for
            computing   the  basic  and  diluted   loss  per  common  share  was
            16,019,236. The weighted average number of common shares outstanding
            does not  include  6,560,833  and  7,660,000  options  and  warrants
            outstanding  at June  30,  2004 and  June  30,  2003,  respectively,
            because they are antidilutive.

            As a result of an  investigation  of the  number  of  common  shares
            outstanding  conducted in conjunction  with the Company's  change in
            transfer  agent,  the  Company  has  determined  that  there  are an
            additional  458,122  shares  outstanding  then had  been  previously
            reported.  These  shares  have  been  recorded  during  the  current
            quarter.

            Customer Concentrations

            As of June  30,  2004  and June  30,  2003,  one law  firm  customer
            represented   approximately  35%  and  34%,  respectively,   of  the
            portfolio of investments in contracts and loans  receivable,  net of
            third party participations. For the nine months ended June 30, 2004,
            another law firm represented  approximately 36% of the total revenue
            for the period.  For the nine months  ended June 30,  2003,  two law
            firms represented  approximately 20% and 14%,  respectively,  of the
            total revenue for the period.

NOTE 2:     INVESTMENTS IN CONTRACTS

            Amounts advanced relating to the Company's  investments in contracts
            range from 3.5% to 15% of the estimated settlement value.

            At September 30, 2003 and June 30, 2004,  investments  in contracts,
            net  of  allowance  for  contract   losses,   were   $2,265,112  and
            $2,052,900, respectively.

            The Company records fee income once  collection is assured,  usually
            upon  receipt of cash,  after the case is  settled  or  successfully
            adjudicated. Based on historical data, at June 30, 2004, the Company
            estimates that unrecorded fee income on all outstanding  investments
            in contracts approximates $1.0 million. However, no assurance can be
            given that these amounts will eventually be realized.  This estimate
            is based on  historical  performance  and  includes a provision  for
            settlements at amounts less than contracted fees.

            A summary of the activity in investments in contracts (excluding the
            allowance  for contract  losses) for the three and nine months ended
            June 30, 2004 is as follows:

                               Three Months Ended       Nine Months Ended
                                 June 30, 2004            June 30, 2004
                               -------------------     --------------------
Beginning balance                       2,465,032               $2,523,401
Advances                                   99,241                  526,157
Collections                             (210,162)                (652,455)
Write-offs                               (23,085)                 (66,077)
                               -------------------     --------------------
Ending balance                         $2,331,026               $2,331,026
                               ===================     ====================


                                       8
<PAGE>

NOTE 3:     LOANS RECEIVABLE

            In April 2003, Case Capital Corporation became a licensed California
            finance  lender  and in August  2003 began  making  interest-bearing
            collateralized  recourse  term loans under its Recourse  Bridge Loan
            Program. The Company charges loan fees in connection with these term
            loans. In addition,  interest is charged on these loans if the loans
            are not repaid by a specified  date,  which is generally  before the
            maturity date.

            A summary of the activity in loans receivable for the three and nine
            months ended June 30, 2004 is as follows:

                            Three Months Ended      Nine Months Ended
                               June 30, 2004          June 30, 2004
                            -------------------    ---------------------
Beginning balance                     $858,000                 $788,000
New loans                              173,000                  677,500
Collections                           (53,000)                (487,500)
                            -------------------    ---------------------
Ending balance                        $978,000                 $978,000
                            ===================    =====================

            Included  in loans  receivable  as of June 30,  2004 is  $728,000 in
            loans to a single law firm for a group of similar cases, $658,000 of
            which have been funded through third party investments.  These funds
            were advanced over a seven-month  period while the cases were in the
            process of settling.  The Company has received notification that the
            settlements  are now  substantially  complete  on  these  cases  and
            anticipates  that this loan  should be  repaid  within  the  current
            fiscal year.

NOTE 4:     DEBT

            On February  23, 2004,  the Company  appointed a new Chairman of the
            Board of  Directors  who is also an officer,  director  and/or has a
            controlling  interest  in  several  of the  entities  that had loans
            outstanding with the Company. As a result, as of March 31, 2004, the
            Company   reclassified   $3,896,603  from  Loans  Payable  to  Loans
            Payable-Related  Parties.  Further,  as of June 7, 2004, the Company
            entered  into an  agreement  and mutual  release with its former CEO
            which  included  provisions  for this former  officer,  director and
            shareholder to divest of the majority of his shares of the Company's
            common  stock.  Accordingly,  the Company has  reclassified  various
            obligations due and owing this former CEO and parties related to him
            totaling  $315,000  from  Loans  Payable-Related  Parties  to  Loans
            Payable,  for net  reclassification  from  Loans  Payable  to  Loans
            Payable-Related Parties of $3,581,603.  As of June 30, 2004, related
            party debt totaling $5,508,628 consists of the following:


            a.    In December 2002, the Company  entered into a $2,000,000  note
                  payable agreement.  The note is  uncollateralized,  has a four
                  year term  with  principal  due at the end of the term,  bears
                  interest at 12 % per annum  payable  monthly,  and  originally
                  included  warrants to purchase  2,000,000 shares of the common
                  stock of the  Company  at $0.50  per  share  and  warrants  to
                  purchase  1,000,000  shares of the common stock of the Company
                  at $0.80 per share that expire in four  years.  The Company is
                  obligated  to  register  the common  shares  underlying  these
                  warrants for resale however such registration has not yet been
                  completed.  On March 30, 2004, in conjunction with changes the
                  Company implemented with respect to its senior management and


                                       9
<PAGE>

                  its Board of Directors,  the lender of the  $2,000,000,  now a
                  related  party  through  its  affiliation  with the  Company's
                  Chairman  of the  Board,  agreed  to a  deferral  on  interest
                  payments  and a  suspension  of  any  collection  actions  for
                  defaults  previously  asserted under this note,  including the
                  failure  to  register  the  common  shares   underlying  these
                  warrants  for resale,  for a period of six months,  commencing
                  with the date of the  interest  payment  that had been due for
                  February 2004. In consideration of this deferral,  the Company
                  agreed  to  reduce  the  exercise  price  on the  warrants  to
                  purchase  1,000,000  shares of the common stock of the Company
                  at $0.80 to a revised  exercise price of $0.50 per share.  All
                  other terms of the warrants remain unchanged.  The increase in
                  the fair value of the  foregoing  warrants  as a result of the
                  reduction in the exercise  price as well as the initial  value
                  are being  amortized  over the remaining  life of the warrants
                  and charged to non-cash finance expense.


            b.    In March 2004,  the Company  entered  into a $500,000  secured
                  loan  agreement  with  the same  lender  as  described  in the
                  foregoing  paragraph.  This loan is due and  payable in a lump
                  sum, inclusive of interest at the rate of 12% per annum, on or
                  before the sooner of the date the Company completes additional
                  equity  financings  aggregating  in excess of $3.0  million or
                  September 8, 2004. The loan is secured by a lien on all assets
                  of the Company. As additional consideration for this loan, the
                  Company is to issue  1,000,000  shares of its common  stock to
                  the lender. The market value as of the date of the loan of the
                  common stock so issued is being  amortized  over the remaining
                  life of the loan  resulting in a charge for the three and nine
                  months  ended  June  30,  2004  of  $252,778   and   $294,395,
                  respectively, to non-cash finance expense.


            c.    Effective  January 1, 2003, an accredited  investor,  which is
                  now a related party through its affiliation with the Company's
                  Chairman of the Board,  converted an investment in the Company
                  by exchanging a four year, 9.85% per annum promissory note for
                  a four  year,  12% per  annum  promissory  note  issued by the
                  Company.  The  principal  amount  of the  promissory  note was
                  $150,000.  As part of the  conversion,  the Company  cancelled
                  four year  warrants to purchase  75,000 shares of common stock
                  at $0.60 per share, and issued four year warrants to purchase:
                  (i) 150,000  shares of common  stock at an  exercise  price of
                  $0.50 and (ii)  75,000  shares of common  stock at an exercise
                  price of $0.80. The Company also agreed to register the common
                  stock  underlying the warrants for resale.  On March 30, 2004,
                  in  conjunction  with  changes  the Company  implemented  with
                  respect to its senior  management  and its Board of Directors,
                  the lender  agreed to a deferral  on interest  payments  under
                  this note and a suspension of any collection actions for prior
                  defaults under this note, commencing with the payment that had
                  been  due for  January  2004 for a period  of six  months.  In
                  consideration  of this deferral,  the Company agreed to reduce
                  the exercise  price on warrants to purchase  75,000  shares of
                  the common stock of the Company at $0.80 to a revised exercise
                  price of $0.50  per  share.  All other  terms of the  warrants
                  remain  unchanged.  The  increase  in the  fair  value  of the
                  foregoing  warrants  as a  result  of  the  reduction  in  the
                  exercise  price  as  well  as  the  initial  value  are  being
                  amortized  over the remaining life of the warrants and charged
                  to non-cash finance expense.


            d.    In May  2002  in  conjunction  with  the  acquisition  of Case
                  Financial  LLC,  the Company  assumed  $700,000  in  unsecured
                  promissory  notes,  bearing interest at 8%, which, at the time
                  assumed were payable to two  related-party  stockholders.  The
                  first note, for $600,000,  which was due in May 2004, was to a
                  director of the Company. On March 30, 2004, the holder of the


                                       10
<PAGE>

                  $600,000 promissory agreed to a six month deferral on interest
                  payments  commencing  with the interest  payment that had been
                  due for March 2004 and a deferral of the principal  payment to
                  September  30,  2004.  In  addition,  the  holder  agreed to a
                  suspension of any  collection  actions for any prior  defaults
                  under  this note.  The second  note,  for  $100,000,  was to a
                  relative of the Company's  former CEO. As of June 7, 2004, the
                  Company  entered into an agreement and mutual release with its
                  former CEO which included  provisions for this former officer,
                  director  and  shareholder  to divest of the  majority  of his
                  shares  of the  Company's  common  stock.  As a result  of the
                  foregoing, the Company has reclassified the $100,000 unsecured
                  promissory  note  due  May  2005  from  Loans  Payable-Related
                  Parties to Loans  Payable.  The  noteholder  has  informed the
                  Company  that  this  note  is due May  2004.  The  Company  is
                  investigating this matter.

            e.    As of June 30, 2004, the Company had  outstanding  $140,000 in
                  unsecured  promissory  demand  notes  to  stockholders  deemed
                  related  parties which bear interest at 12%. In addition,  the
                  holders of these  demand  notes also  agreed to a deferral  on
                  interest  payments and the principal  payment  commencing with
                  the  interest  payment  due  March  2004 for a  period  of six
                  months.  In addition,  these holders agreed to a suspension of
                  any collection actions for defaults  previously asserted under
                  this note.

            f.    As of June 30, 2004, the Company's  contingent  obligations to
                  related  third  party  investors  who  provided   funding  for
                  investments  in contracts and loans  receivable was $1,450,628
                  and $668,000 respectively. These related third party investors
                  include  directors,  relatives of directors  and companies who
                  are considered  related parties through their affiliation with
                  the Company's  Chairman of the Board.  As of June 7, 2004, the
                  Company  entered into an agreement and mutual release with its
                  former CEO which included  provisions for this former officer,
                  director  and  shareholder  to divest of the  majority  of his
                  shares  of the  Company's  common  stock.  As a result  of the
                  foregoing,  the Company has reclassified $95,000 of such loans
                  from Loans  Payable-Related  Parties to Loans Payable.  During
                  the nine months ended June 30, 2004, the Company  received new
                  loans from related  third party  investors of $384,894 and the
                  Company  made  principal  repayments  to related  third  party
                  investors for closed cases of $344,672. Third party investment
                  participations are  collateralized by specifically  identified
                  investments   in  contracts  and  are   repayable   only  upon
                  successful  resolution and collection of the underlying  case,
                  along with 50%-75% of the fees received. Contract fees related
                  to such  investments  are presented net of amounts paid to the
                  third party participants.

            During the nine months  ended June 30, 2004,  the Company  increased
            its net contingent obligation to unrelated third party investors who
            provided  funding for investments in contracts and loans  receivable
            by  $75,000  to   $285,000,   after  taking  into  account  the  net
            reclassifications  of  $1,651,603  in  contingent  obligations  from
            unrelated  Loans Payable to Loans  Payable-Related  Parties.  Of the
            $285,000  outstanding  as of June  30,  2004,  $125,000  was for the
            Company's Recourse Bridge Loan Program.  Other than loans made under
            the Recourse  Bridge Loan Program  which are recourse  loans,  these
            third  party   investments   are   collateralized   by  specifically
            identified  investments  in  contracts  and  are  repayable  to  the
            investor  only upon  successful  resolution  and  collection  on the
            underlying case along with 50%-75% of the fees received.



                                       11
<PAGE>

NOTE 5:     CONTINGENCIES

            The Company was a nominal  defendant in a  shareholders'  derivative
            action filed in the Superior  Court of the State of  California  for
            the County of San Diego. The plaintiffs, as shareholders of Asia Web
            before the reverse acquisition, have sued the individual defendants,
            former  officers  including  Michael  Schaffer,  alleging  that they
            converted to personal use certain  corporate  assets and are seeking
            to have the individual  defendants return the assets to the Company.
            The Company was a "nominal" defendant and no relief was being sought
            against the Company in this action.

            In June,  2004,  the court entered an order  dismissing  the lawsuit
            without  prejudice.  The  dismissal  followed a  determination  by a
            special litigation  committee  comprised of disinterested  directors
            that the pursuit of the  litigation was not in the best interests of
            the corporation.

            As a result of the lawsuit,  a dispute arose between the Company and
            a former officer,  Michael Schaffer,  with respect to Mr. Schaffer's
            claim for  indemnification  for legal  fees  incurred  in  defending
            himself  in the  lawsuit.  The  Company  entered  into a  settlement
            agreement  with Mr.  Schaffer on June 25,  2003  whereby the Company
            agreed to: (i) grant 18 month  options to Mr.  Schaffer  to purchase
            250,000 shares of common stock at an exercise price of $0.30 only if
            the market price for the  Company's  common stock  exceeds $0.65 for
            two consecutive trading days during the term of the option, and (ii)
            pay $70,000 in monthly payments of $10,000  commencing October 2003.
            The expense  related to this  settlement was recorded by the Company
            in June  2003.  The  Company  asserted  a breach to this  settlement
            agreement and ceased making  payments  there under in November 2003.
            The Company renegotiated this agreement in April 2004 which modified
            the  payment  terms such that the  remaining  balance due of $60,000
            shall be deferred  until the Company was  successful in obtaining an
            additional $5.0 million dollars in equity  financing,  at which time
            the  balance  shall be paid in six monthly  installments  of $10,000
            each.  In addition,  the exercise  price for the options to purchase
            250,000 shares of common stock was increased from $0.30 to $0.50 and
            is  exercisable  only if the market price for the  Company's  common
            stock  exceeds  $0.85 per share and must be  exercised if the market
            price for the Company's common stock exceeds $1.10 per share.

            The Company was served with a complaint in May 2004 filed in the Los
            Angeles Superior Court,  Central  District,  from an unrelated third
            party  asserting  securities  fraud,  fraud,  breach of contract and
            unfair business practices against the Company and seeking damages of
            $65,000.  The  plaintiff  claims that she had loaned the Company the
            sum of  $40,000  pursuant  to a verbal  agreement  and was  promised
            repayment within 45 days plus a 25% profit.  The funds were utilized
            by the  Company  for a  non-recourse  advance  which the Company was
            unable to recover and the  principal  amount of this  obligation  is
            included in loans payable-unrelated parties on the Company's balance
            sheet.  The  Company  has made  offers to  settle  this  matter  and
            believes the ultimate outcome will not have a material impact on the
            Company's financial condition.

            In addition to the  foregoing,  the Company has  received  notice of
            several other potential  claims none of which the Company  considers
            material.



                                       12
<PAGE>

NOTE 6:     GOING CONCERN

            The accompanying  financial statements  contemplate  continuation of
            the Company as a going concern.  The Company  incurred net losses of
            $3,127,190  and  $1,512,452  during the year and nine  months  ended
            September  30, 2003 and June 30,  2004,  respectively.  There was an
            accumulated  deficit  of  $11,378,173  as of June  30,  2004,  total
            liabilities exceeded total assets by $3,046,368 as of June 30, 2004,
            and the  Company has been  experiencing  cash flow  problems.  Those
            conditions raise  substantial  doubt about the Company's  ability to
            continue as a going concern. The financial statements do not include
            any  adjustments   that  might  result  from  the  outcome  of  this
            uncertainty.  In their report dated January 9, 2004 on the financial
            statements  for the  fiscal  year  ended  September  30,  2003,  the
            Company's independent auditors expressed substantial doubt about the
            Company's ability to continue as a going concern.

            Management  continues to reduce overhead and increase revenues.  The
            Company has reduced its overhead in operations,  sales and marketing
            to reflect the current funding ability of the Company.  The overhead
            reduction was achieved by reducing  personnel,  and  completing  the
            development of the  L.E.G.s(TM)  and Recourse  Bridge Loan programs.
            Completing these  developments has reduced the Company's  consulting
            expenses for accountants and attorneys.  Management has also shifted
            available  funding to the  Recourse  Bridge Loan Program in order to
            reduce the length of the funding cycle and realize  profits  faster.
            On February 26, 2004, the Company announced that it had made changes
            to its Board of Directors and senior  management  intended to better
            position the Company for growth and future financings. These changes
            included  appointment  of a new  Chairman of the Board,  who is also
            associated with the Company's  principal lender, and three other new
            appointments  to the  Board  of  Directors.  On June 21,  2004,  the
            Company  announced  the  appointment  of Edwin S. Baldwin as CEO who
            will also serve as CFO on an interim basis. The new CEO is a 20 year
            veteran of the banking and finance  industry and served as Executive
            Vice  President of a company which  specialized  in specialty  legal
            financing.  In  addition,  the  Company  has  also:  1)  secured  an
            additional  $500,000 in financing from one of its existing  lenders;
            2) obtained six month deferrals on interest  payments and waivers of
            default  from  five  of  its  related  party   lenders   aggregating
            $2,890,000  in loans to the  Company  and a total  interest  payment
            deferral of $149,000;  and 3)  renegotiated  a settlement  agreement
            that was in  default.  The  Company  intends to seek to  negotiate a
            further extension of these interest deferrals from its related party
            lenders in the event the Company has not been  successful in certain
            fund  raising  activities  before the due date of these  obligations
            and/or the resumption of interest payments.

            The Company is actively  engaged in efforts to raise additional debt
            and equity financing and in restructuring its loan programs to focus
            more on  recourse  lending to law firms.  Management  believes  that
            actions presently being taken or to be taken to revise the Company's
            operating and financial requirements provide the opportunity for the
            Company to continue  as a going  concern.  However,  there can be no
            assurance that any of the Company's  actions will be successful.  If
            the  Company  is not  successful  in these  efforts,  it may have to
            further curtail its operations and may impede the Company's  ability
            to continue as a going concern.


                                       13
<PAGE>

ITEM 2.           MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

      The following discussion and analysis of the Company's financial condition
and  results of  operations  should be read in  conjunction  with the  Company's
financial statements and the related notes thereto appearing elsewhere herein.

FORWARD LOOKING STATEMENTS

      The following "Management's Discussion and Analysis of Financial Condition
and Plan of Operation"  includes  "forward  looking  statements." All statements
other  than  statements  of  historical  fact  made  in  this  Form  10-QSB  are
forward-looking.  In  particular,  any  statements  made  in  this  Form  10-QSB
regarding  industry  prospects or our future  results of operations or financial
position are forward-looking statements.  Forward-looking statements reflect our
current   expectations  and  are  inherently   uncertain.   The  forward-looking
statements contained herein are subject to a variety of risks and uncertainties,
including  those  discussed  later  under the heading  "Factors  That May Affect
Future Results" and elsewhere in this Quarterly Report on Form 10-QSB that could
cause actual  results to differ  materially  from those  anticipated  by us. Our
actual results may differ significantly from our expectations.

OVERVIEW

      Case  Financial,  Inc. was  incorporated  in 1998 and  completed a reverse
acquisition with Asia Web Holdings, Inc. ("Asia Web"), a publicly traded company
incorporated  in the  State  of  Delaware,  on May  24,  2002.  As  part  of the
transaction, Asia Web changed its name to Case Financial, Inc. and continued the
business of the Company.  The previous  entities,  Case Financial,  Inc and Case
Financial  Funding,  Inc., are referred to herein as "Prior CFI". Case Financial
Inc. and its  subsidiaries,  Case Financial,  LLC and Case Capital  Corporation,
(collectively   "Case"   or   the   "Company")   provide    pre-settlement   and
post-settlement  litigation  funding  services to  attorneys  (and,  previously,
plaintiffs)  involved  in  personal  injury  and other  contingency  litigation,
conducted primarily within the California courts.

      The Company's  funding  services  have included  advances to attorneys and
previously,  plaintiffs,  which are  non-recourse,  meaning that the  investment
principal, success fees and interest are repaid only when the case is settled or
favorably  adjudicated in court. These investments are collateralized  solely by
the  potential  proceeds of  underlying  litigation.  The Company  records  such
advances  as  investments  in  contracts.   The  Company  performs  an  internal
underwriting  as to the  merits  of  each  case  proposed  to be  financed,  the
likelihood of its success,  and its estimated  settlement  value.  The Company's
investment decisions and the pricing of its fees are based on this risk analysis
and its estimate of settlement timing.

      Attorneys  use the  funds  borrowed  primarily  to pay  litigation  costs,
including expert witness fees, accident  reconstruction  costs, filing fees, and
other costs  ordinarily  incurred in prosecuting  personal  injury cases.  These
expenditures  are necessary to maximize  settlement or trial award values.  This
funding  helps to "level the  playing  field" in the legal  process  against the
insurance carriers by providing  plaintiff attorneys with the working capital to
fund the cost of contingency  litigation,  which prevents  plaintiffs from being
forced to  prematurely  settle  potentially  valuable  claims  at a  substantial
discount.

      In April 2003, Case Capital Corporation, one of the subsidiaries, became a
licensed  California  finance  lender  and  began  marketing  two  primary  loan
programs.  The  first  program  involves  making   interest-bearing   short-term
collateralized loans ("Recourse Bridge Loan Program") to attorneys for cases


                                       14
<PAGE>

which have settled but are awaiting  disbursement  of settlement  proceeds.  The
Company charges loan fees in connection with these loans. In addition,  interest
is charged on these loans if they are not repaid by a specified date. These term
loans are typically  recourse and  collateralized by the proceeds of the case as
well as the assets of the  borrowers,  typically  law firms and  attorneys,  and
personal  guarantees  from the  attorneys.  The  Company  performs  an  internal
underwriting as to the adequacy of the  collateral.  These loans are recorded by
the Company as Loans Receivable.

      Also during 2003,  Case Capital  Corporation  began  entering  into credit
agreements  with attorneys  ("L.E.G.s(TM)  Program").  Advances under these loan
programs are non-recourse, meaning that the principal, success fees and interest
are repaid only when the case is settled  successfully or favorably  adjudicated
in court.  The Company records advances under these loan programs as investments
in contracts to reflect their higher risk and non-recourse characteristics.

      The Company  performs an internal  underwriting  analysis of each attorney
and  determines the maximum amount of investments in contracts each attorney may
enter into with the Company. Funding decisions are made on the basis of a formal
underwriting  and risk  analysis  performed  internally as to the merits of each
case proposed to be financed,  the likelihood of its success,  and its estimated
settlement  value;  and  not on  the  credit  worthiness  of  the  plaintiff  or
plaintiff's  attorney.  The decision to invest, as well as the price charged, is
determined  by this risk  analysis.  Success  fees are a function of i) the risk
price, ii) the amount of funding  provided,  and iii) in the case of advances or
loans, the period of time the advance or loan remains  outstanding.  Investments
and fees are  collateralized  by the proceeds of the respective legal settlement
evidenced  by a security  interest on the case filed with the attorney of record
on the  claim,  entitling  the  Company  to a  priority  interest  on any monies
received by the plaintiff or plaintiff's counsel.

      Since the  inception of Prior CFI in December  1998 through June 30, 2004,
over 2,000  advances and loans,  representing  an aggregate of $11.1  million in
principal amount of investments in contracts and loans,  have been funded. As of
June 30, 2004, approximately 84% of those cases have been resolved, resulting in
the return of $9.28 million cash (representing 84% of total principal  advanced)
and an annualized return on investment of 71%, including principal losses of 14%
on those resolved cases to date. The Company does  anticipate  higher  principal
losses  on its  remaining  cases and past  results  are no  guarantee  of future
results. Nevertheless,  these metrics provide useful aggregate information about
the  size  and  past  performance  of the  Company's  investments  in  contracts
portfolio.  As the Company gains more experience in the marketplace,  management
has focused on improving its risk analysis,  collection  techniques,  investment
timing and pricing  models.  Over time,  risk policies have evolved to include a
set of financial metrics and portfolio management techniques to help shorten the
average investment period,  maximize  collection values and minimize the risk of
loss.

Revenue Generation, Recognition, and Reserve for Contract Losses

      The majority of the Company's  advances,  loans and guarantees  other than
those loans under the Recourse Bridge Loan Program are risk-based investments in
contracts  subject to the uncertainty of future events in the prosecution of the
underlying  litigation.  The Company  charges  success fees which are recognized
only at the conclusion of the case,  and only if such  litigation is successful.
Pricing  is  based  upon  the   underwriting  and  analysis  of  the  risk,  and
additionally,  in the case of advances and loans, on the time value of money. In
unsuccessful cases, losses are realized on the investment principal. The Company
has  established  an allowance  for  investments  in  contracts  that may become
uncollectible.  It is  maintained  at a level  which,  based  upon  management's
judgment,  is sufficient to cover future losses.  The amount of the allowance is
based  on  trends  in  historical  loss  experience,   and  exceeds  the  amount
experienced on resolved cases.



                                       15
<PAGE>

      Contract  Fees - There  are  two  categories  of  Contract  Fees:  i) fees
generated  from the  resolution  of  successful  cases and through the  Recourse
Bridge Loan Program funded entirely by the Company,  and ii) fees generated from
the resolution of successful  cases and through the Recourse Bridge Loan Program
arranged and serviced by the Company,  but funded by third parties,  referred to
herein as "Third Party Investments."

      Third  Party  Investments  are  utilized  in order to  provide  funding to
clients in situations  when available  internal  capital is insufficient to fund
the transactions,  or when the size of the transaction is larger than is prudent
to undertake  directly.  The Company  receives a success fee for  servicing  the
investment,  generally equal to 25% to 50% of the income,  if any, received upon
successful resolution of the underlying case. The third party investors bear the
entire financial risk with respect to the underlying investment in the contract.
In addition,  if the Company also participates in the funding,  it shares in the
remaining  fees and principal  with the third party  investors  according to the
pro-rata share of the total capital invested.

      Service Fees - Service Fees  consist of revenues  generated in  connection
with the management of the investments in contracts portfolio of Prior CFI under
a Service Agreement entered into in May 2002 as part of the reverse acquisition.
Prior CFI has retained the  underlying  investments  in these  portfolios so the
fees are for servicing the investment  portfolios during their liquidation.  The
service  fees earned are equal to 15% of the gross amount  collected  (principal
plus contract fee income) on behalf of Prior CFI.

Critical Accounting Policies

      Revenue recognition:

      Contract  fee income from  investments  in contracts  is  recognized  once
collection is assured, usually upon receipt of cash after a case is successfully
settled or favorably adjudicated.  Selling commissions are incurred and expensed
when the contract  investments are funded. An investment in a contract is deemed
fully  or  partially  uncollectible  when the case is  dismissed,  abandoned  or
settled for an amount less than the amount invested.

      In addition to contract fees from  investments  in contracts,  the Company
also  services  investments  in contracts on behalf of third party  investors in
exchange  for a success  fee equal to 25% to 50% of the  income  generated  upon
successful  resolution of the underlying case. These third party investments are
collateralized  by  specifically  identified  investments  in contracts  and are
repayable to the investor only upon successful  resolution and collection of the
underlying  case,  along  with fees  equal to 50% to 75% of the  amount  earned.
Contract fees are presented net of amounts paid to third party participants.

      Fees and interest,  net of direct costs, charged on the Company's recourse
loan  programs with terms in excess of ninety (90) days are recorded as contract
fee income and  deferred and  amortized  over the life of the related loan using
the  effective  interest  method.  Loan fees on  recourse  short  term loans are
generally recognized over the term of the loan. Interest on these recourse loans
is accrued as earned.

      The Company has established an allowance for investments in contracts that
may become  uncollectible.  The  allowance  for  contract  investment  losses is
maintained at a level, which in the judgment of management is adequate to absorb
principal  losses  in the  contract  investment  portfolios.  The  amount of the
allowance  is based on trends in  historical  loss  experience,  and exceeds the
amount experienced on resolved cases.



                                       16
<PAGE>

      Use of estimates:

      The  preparation  of financial  statements in conformity  with  accounting
principles  generally  accepted  in the United  States of America  requires  the
making of certain  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  amounts could differ from those
estimates.

      A  significant  estimate is the  allowance  for losses on  investments  in
contracts. Because of the inherent uncertainties in estimating the allowance for
losses on investments in contracts,  it is likely that the Company's estimate of
the  allowance  for  losses  on  investments   in  contracts  will  change,   as
circumstances become better known.

      The  Company  closely  monitors  the  progress  of each  case in  order to
reevaluate its estimate of uncollectible investments in contracts.

      Long-lived assets:

      The Company reviews for the impairment of long-lived assets, including the
notes receivable from Prior CFI, and certain identifiable intangibles,  whenever
events or changes in  circumstances  indicate  that the  carrying  amount of any
asset may not be  recoverable.  An impairment  loss would be recognized when the
estimated  undiscounted future cash flows expected to result from the use of the
asset  and its  eventual  disposition  is less  than  the  carrying  amount.  If
impairment  is  indicated,  the amount of the loss to be recorded is based on an
estimate of the difference between the carrying amount and the fair value of the
asset.  Fair value is based upon  discounted  estimated  cash flows  expected to
result  from  the  use of the  asset  and its  eventual  disposition  and  other
valuation  methods.  When a note  receivable  becomes  impaired,  interest is no
longer accrued and is recognized when received in cash.

      Trends and Uncertainties:

      The business of providing non-recourse  pre-settlement  litigation funding
in  personal  injury  and  other  contingency  litigation  as well as  providing
post-settlement bridge financing is a developing market. The Company has focused
on educating  attorneys  within the State of California as to the ethical use of
these  alternative  forms of  financing.  The industry has shifted from an early
emphasis on providing  funding  primarily  to  plaintiffs  to funding  plaintiff
attorneys and law firms. The total burden of the cost of contingency  litigation
continues  to increase,  and law firms are  beginning  to  understand  the value
proposition  in  non-recourse  pre-settlement  funding that helps them share the
economic  risk while  freeing up their  business and  personal  assets for other
purposes.

      The Company  presently focuses on the personal injury market in California
which  is a large  market,  and has a  legal,  statutory  and  economic  climate
favorable to its  business.  The principal  uncertainties  the Company faces are
access to adequate  capital to build our portfolio of  investments  in contracts
and loans  receivable,  market  acceptance of our L.E.G.s(TM) and Recourse Bride
Loan  programs,  the ability to develop and market other  recourse loan programs
and the regulatory requirements as a licensed California finance lender.

      RESULTS OF OPERATIONS

Results of Operations for the three and nine months ended June 30, 2004 compared
with the three and nine months ended June 30, 2003.



                                       17
<PAGE>

      Revenues:

      Revenues  consist  primarily of fees earned on  investments  in contracts,
which are recognized once  collection is assured,  usually upon receipt when the
case is  settled  or  favorably  adjudicated  and  interest  and  fees on  loans
receivable.  Consequently,  contract  fee  revenue is a function of the size and
maturity of the  investment  portfolio.  In addition,  subsequent to the reverse
acquisition,  the Company manages the investments in contract  portfolios of two
entities  including  the prior Case  Financial,  Inc.  and its  affiliate,  Case
Financial Funding, Inc ("Prior CFI"). The Company manages Prior CFI's portfolios
of investments for a fee equal to 15% of gross amounts collected on its behalf.

      Total Revenue

      Total  revenues  consisting of contract  fees and service fees  aggregated
$211,552 for the three months ended June 30, 2004  compared with $92,753 for the
three  months  ended June 30,  2003,  an increase  of $118,799 or 128.1%.  Total
revenues  aggregated  $542,910 for the nine months ended June 30, 2004  compared
with total  revenues of $372,381  for the nine months  ended June 30,  2003,  an
increase of $170,529 or 45.8%.

      Contract Fees

      Contract  fee revenues  were  $191,535 for the three months ended June 30,
2004  compared  with $ $86,166  for the three  months  ended June 30,  2003,  an
increase  of $105,369  or 122.3%.  For the nine  months  ended June 30, 2004 and
2003, contract fee revenues were $499,369 and $320,569 respectively, an increase
of $178,800 or 55.8%.

      The  increase in contract fee revenues for the three and nine months ended
June 30, 2004 is  attributable  to the  Company's  realization  of revenues from
cases  that were  initiated  after May 24,  2002 with  capital  provided  by the
reverse acquisition as opposed to the three and nine months ended June 30, 2003,
during  which  period the Company had limited  time to realize  revenue from new
cases  initiated  subsequent to the reverse  acquisition.  At June 30, 2004, the
Company  estimates  that  unrecorded  fee income on  outstanding  investments in
contracts (i.e. open cases not yet resolved)  approximated  $1.0 million,  which
the Company expects will resolve within the next 12-15 months.  This estimate is
based on  historical  performance  and  includes  a  provision  for  losses  and
settlements at amounts less than contracted fees;  however,  no assurance can be
given that these amounts will eventually be realized.

      Service Fees

      Service fee revenues were $20,017 for the three months ended June 30, 2004
compared  with $6,587 for the three months  ended June 30, 2003,  an increase of
$13,430 or 203.8%. For the nine months ended June 30, 2004 and 2003, service fee
revenues were $43,541 and $51,812 respectively, a decrease of $8,271 or 16.0%.

      Service fees are based upon  collections  from the portfolios of Prior CFI
under management by the Company and are anticipated to decline as this portfolio
matures. The increase for three months ended June 30, 2004 compared to the three
months ended June 30, 2003 was  attributable  primarily to the settlement of one
case.



                                       18
<PAGE>

      Operating Costs and Expenses:

      Operating   costs  and  expenses   consist  of  provision  for  losses  on
investments   in  contracts,   provision  for  impairment  of  notes  and  other
receivables,  general  and  administrative  expenses,  and sales  and  marketing
expenses.

      Provision for Losses on Investments in Contracts

      Fee income is recognized once collection is assured,  usually upon receipt
when a case is settled or favorably adjudicated.  An investment in a contract is
deemed  fully or partially  uncollectible  when the case is dismissed or settled
for an amount less than the Company's investment. The Company has established an
allowance for  investments  in contracts  for contracts  where the Company is at
risk and that may become  uncollectible.  The allowance for contract  investment
losses is maintained at a level, which in management's  judgment, is adequate to
absorb losses in the contract investment portfolio.  The amount of the allowance
is based on a loss  rate  which  exceeds  the  amount  actually  experienced  on
resolved cases.

      The provision for losses on  investments in contracts was $104,087 for the
three  months  ended June 30,  2004 as opposed to $66,951  for the three  months
ended June 30, 2003,  an increase of $37,136.  This increase was the result of a
reassessment  during  the three  months  ended  June 30,  2004 of the  Company's
forecasted  collections  from  investments in contracts  which have not complied
with the  terms of their  agreements.  The  result of this  reassessment  was an
increase to the Reserve for Losses of  approximately  $100,000  during the three
months ended June 30, 2004.

      For the nine months ended June 30, 2004 and 2003, the provision for losses
decreased  by $88,354  from  $174,267 to $85,913.  The  Company  only  records a
provision for losses on investments in contracts funded by Company funds thereby
excluding investments in contracts funded by third party investors.  The balance
of investments in contracts  (without regard to the reserve for contract losses)
decreased  $91,795 to  $2,331,026  at June 30, 2004 from  $2,422,821 at June 30,
2003  principally as a result of the Company's focus on the Recourse Bridge Loan
Program for new financings. The Company's aggregate third party participation in
investments in contracts  increased $515,628 to $1,585,628 at June 30, 2004 from
$1,070,000 at June 30, 2003.  Because the third parties bear pro rata  financial
risk in the  contracts  in which they  invest,  the  portion of  investments  in
contracts for which the Company records a provision for losses on investments in
contracts  decreased  $607,423 to $745,398 at June 30, 2004 from  $1,352,821  at
June 30, 2003.

      Provision for Impairment of Notes and Other Receivables

      The provision for impairment of notes and other  receivables  was a credit
of $8,911 for the nine months ended June 30, 2004.  This occurred as a result of
the Company's reversal of a receivable from Prior CFI previously written off and
subsequently collected.

      General and Administrative

      General and administrative  costs and expenses were $358,972 for the three
months ended June 30, 2004 as compared  with $499,308 for the three months ended
June 30, 2003.  Accordingly,  general and  administrative  expenses decreased by
$140,336 or 28.1% for the three months ended June 30, 2004 as compared  with the
three months  ended June 30,  2003.  For the nine months ended June 30, 2004 and
2003,  general  and   administrative   costs  were  $1,119,144  and  $1,476,417,
respectively, a decrease of $357,273 or 24.2%.



                                       19
<PAGE>

      The decrease in general and administrative costs and expenses for the nine
months ended June 30, 2004 as compared  with the nine months ended June 30, 2003
is primarily  attributable to significant  reductions in legal costs of $217,000
as a result of the Company's  completing  development of the Company's core loan
programs.   Further,  the  Company  has  taken  significant  steps  to  decrease
administrative  overhead costs through personnel and management cost reductions.
In addition,  in conjunction with the Company's new L.E.G.s(TM) program, a ten %
fee  is  collected  from  certain  clients  at  the  inception  of a new  client
enrollment  which is  recorded  by the  Company  as an  offset  to  general  and
administrative  underwriting  costs.  These offsets totaled $29,350 for the nine
months ended June 30, 2004.

      Sales and Marketing

      Sales and marketing  expenses were $46,931 for the three months ended June
30,  2004 as  compared  with  $136,636  for the  three  months  June  30,  2003.
Accordingly,  sales and marketing  expenses  decreased  $89,705 or 65.7% for the
three  months  ended June 30, 2004 as compared  with the three months ended June
30, 2003. For the nine months ended June 30, 2004 and 2003,  sales and marketing
expenses  were $188,270 and  $417,060,  respectively,  a decrease of $228,790 or
54.9%. The decrease is primarily from a reduction in sales personnel,  marketing
consultants,  advertising  and  promotional  costs as the Company  continues its
efforts to reduce operating losses and cash expenditures.

      Other Income (Expense):

      Interest Expense

      Interest expense was $104,358 for the three months ended June 30, 2004, as
compared with $80,404 during the three months ended June 30, 2003.  Accordingly,
interest expense  increased  $23,954 for the three months ended June 30, 2004 as
compared  with the three months  ended June 30, 2003.  For the nine months ended
June  30,  2004  and  2003,   interest   expense  was  $283,579  and   $191,479,
respectively, an increase of $92,100.


      The increase in interest  expense for the three and nine months ended June
30, 2004  compared  with the three and nine months  ended June 30, 2003  results
primarily  from the interest  expense  attributable  to the  $2,000,000 12% note
payable  agreement  entered into by the Company in December  2002 with a related
party  through its  affiliation  with the Company's  Chairman of the Board,  the
additional borrowings from various related parties used for the expansion of the
Company's  Recourse  Bridge  Loan  Program,  as  well  as the  interest  expense
attributable to the $500,000  secured term loan from a related party through its
affiliation with the Company's Chairman of the Board in March 2004.


      Non-Cash Finance Expense

      Non-cash  finance  expenses  were $296,804 for the three months ended June
30, 2004, as compared with $25,474  during the three months ended June 30, 2003.
Accordingly,  non-cash finance expenses  increased $271,330 for the three months
ended June 30, 2004 as compared  with the three months ended June 30, 2003.  For
the nine months ended June 30, 2004 and 2003,  non-cash  finance  expenses  were
$390,169 and $71,628, respectively, an increase of $318,541.

      Non-cash  finance  expenses  represents  amortized  costs of common stock,
options and warrants  granted in conjunction  with financing  transactions.  The
principal  reason for the increase in non-cash finance charges for the three and
nine months ended June 30, 2004 is the amortization of costs associated with


                                       20
<PAGE>

granting of 1.0  million  shares of the  Company's  common  stock as  additional
consideration  for the $500,000  secured term loan from a related party in March
2004 as well as the additional  costs  associated  with the repricing of the 1.0
million  warrants from $0.80 to $0.50 each as additional  consideration  for the
six month interest moratorium granted by the holder of a $2,000,000 note payable
who is also a related party.

      Contingencies

      The Company was a nominal  defendant in a shareholders'  derivative action
filed in the  Superior  Court of the State of  California  for the County of San
Diego.  The  plaintiffs,   as  shareholders  of  Asia  Web  before  the  reverse
acquisition,  have sued the individual  defendants,  former  officers  including
Michael Schaffer, alleging that they converted to personal use certain corporate
assets and are seeking to have the  individual  defendants  return the assets to
the  Company.  The  Company was a  "nominal"  defendant  and no relief was being
sought against the Company in this action.


      In June,  2004, the court entered an order  dismissing the lawsuit without
prejudice.  The  dismissal  followed  a  determination  by a special  litigation
committee  comprised  of  disinterested   directors  that  the  pursuit  of  the
litigation was not in the best interests of the corporation.


      As a result of the  lawsuit,  a dispute  arose  between  the Company and a
former  officer,  Michael  Schaffer,  with respect to Mr.  Schaffer's  claim for
indemnification for legal fees incurred in defending himself in the lawsuit. The
Company  entered into a settlement  agreement with Mr. Schaffer on June 25, 2003
whereby the  Company  agreed to: (i) grant 18 month  options to Mr.  Schaffer to
purchase  250,000  shares of common stock at an exercise  price of $0.30 only if
the  market  price  for  the  Company's  common  stock  exceeds  $0.65  for  two
consecutive  trading days during the term of the option, and (ii) pay $70,000 in
monthly payments of $10,000 commencing October 2003. The expense related to this
settlement  was  recorded  by the Company in June 2003.  The Company  asserted a
breach to this  settlement  agreement and ceased making  payments there under in
November  2003.  The Company  renegotiated  this  agreement  in April 2004 which
modified the payment terms such that the remaining  balance due of $60,000 shall
be deferred  until the Company was  successful in obtaining an  additional  $5.0
million dollars in equity financing,  at which time the balance shall be paid in
six monthly  installments  of $10,000 each. In addition,  the exercise price for
the options to purchase  250,000 shares of common stock was increased from $0.30
to $0.50 and is  exercisable  only if the market price for the Company's  common
stock  exceeds $0.85 per share and must be exercised if the market price for the
Company's common stock exceeds $1.10 per share.


      The  Company  was  served  with a  complaint  in May 2004 filed in the Los
Angeles  Superior  Court,  Central  District,  from  an  unrelated  third  party
asserting  securities  fraud,  fraud,  breach of  contract  and unfair  business
practices  against the Company and  seeking  damages of $65,000.  The  plaintiff
claims that she had loaned the  Company the sum of $40,000  pursuant to a verbal
agreement and was promised repayment within 45 days plus a 25% profit. The funds
were  utilized by the Company for a  non-recourse  advance which the Company was
unable to recover and the  principal  amount of this  obligation  is included in
loans payable-unrelated  parties on the Company's balance sheet. The Company has
made offers to settle this matter and  believes  the  ultimate  outcome will not
have a material impact on the Company's financial condition.

      In addition to the foregoing,  the Company has received  notice of several
other potential claims none of which the Company considers material.



                                       21
<PAGE>

      Liquidity and Capital Resources:

      In their report dated January 9, 2004 on the financial  statements for the
fiscal  year ended  September  30,  2003,  the  Company's  independent  auditors
expressed  substantial  doubt about the Company's ability to continue as a going
concern.  Management  continues to reduce  overhead and increase  revenues.  The
Company has reduced its overhead in  operations,  sales and marketing to reflect
the current funding ability of the Company.  The overhead reduction was achieved
by reducing  personnel,  and completing the  development of the  L.E.G.s(TM) and
Recourse Bridge Loan programs.  Completing  these  developments  has reduced the
Company's consulting expenses for accountants and attorneys. Management has also
shifted available funding to the Recourse Bridge Loan Program in order to reduce
the length of the funding  cycle and realize  profits  faster.  On February  26,
2004,  the Company  announced that it had made changes to its Board of Directors
and senior  management  intended to better  position  the Company for growth and
future financings.  These changes included  appointment of a new Chairman of the
Board,  who is also associated with the Company's  principal  lender,  and three
other new  appointments  to the Board of  Directors.  Since these  changes  were
effected,  the Company has: 1) secured an additional  $500,000 in financing from
one of its  existing  lenders;  2)  obtained  six month  deferrals  on  interest
payments  and  waivers  of  default  from  five  of its  related  party  lenders
aggregating  $2,890,000  in loans to the  Company and a total  interest  payment
deferral of $149,000;  and 3)  renegotiated  a settlement  agreement that was in
default.  At  present,  these  interest  deferrals  are  scheduled  to expire in
September  2004. The Company  intends to seek to negotiate an extension of these
deferrals in the event the Company has not been  successful  in its fund raising
activities  before the due date of these  obligations  and/or the  resumption of
interest payments.  On June 21, 2004, the Company announced the appointment of a
new CEO who will also serve as CFO on an interim basis. The new CEO is a 20 year
veteran  of the  banking  and  finance  industry  and served as  Executive  Vice
President of a company  which  specialized  in specialty  legal  financing.  The
Company is  actively  engaged in  efforts  to raise  additional  debt and equity
financing  and in  restructuring  its loan programs to be focus more on recourse
lending to law firms.  Management believes that actions presently being taken or
to be taken to revise the Company's operating and financial requirements provide
the opportunity for the Company to continue as a going concern.  However,  there
can be no assurance that any of the Company's actions will be successful. If the
Company is not successful in these efforts,  it may have to further  curtail its
operations and may impede the Company's ability to continue as a going concern.

      The Company's balance sheet at June 30, 2004 reflects cash of $182,886,  a
decrease  of $9,765 for the nine  months  then  ended.  As of June 30,  2003 the
Company's balance sheet reflected cash and investments of $314,446,  an increase
of  $155,237  for the  nine  months  then  ended.  Net  cash  used in  operating
activities  was  $750,314 for the nine months ended June 30, 2004 as compared to
$1,571,639 for the nine months ended June 30, 2003. The decrease in cash used in
operating  activities  of $821,325  for the nine  months  ended June 30, 2004 as
compared to the same period for the prior year is primarily  attributable to the
Company's reduction in net loss of $288,589, the value of common stock issued in
conjunction  with the $500,000  secured  term loan of $294,394,  the increase in
non-cash  expenses  for  amortization  of  debt  expenses  of  $121,244  and the
reduction in the increase in prepayments  and other assets of $165,878 offset by
the reduction in provisions for losses on investments in contracts of $88,354.

      The Company made contract advances for the nine months ended June 30, 2004
of $526,157,  a decrease of $1,921,065  from advances of $2,447,222 made for the
nine months ended June 30, 2003. The Company's collections on resolved cases for
the nine months ended June 30, 2004 were $652,455,  compared with $1,345,184 for
the nine months  ended  December  31,  2003,  a decrease of  $692,729.  Advances
declined as a result of the Company's  limited cash resources during the current
fiscal  year as well as the  Company's  emphasis  on its  Recourse  Bridge  Loan
Program. Collections have decreased primarily due to the fact that the Company's
advances under the new L.E.G.s(TM) program which commenced in the quarter ended


                                       22
<PAGE>

June 30, 2003 increased  significantly  in the quarters ending June 30, 2003 and
September  2003 and for which the Company  estimates  a 12-15  month  collection
cycle. The Company anticipates increased collections under its current portfolio
during the next 180 days.

      During the nine months ended June 30, 2004, the Company advanced  $677,500
under its Recourse Bridge Loan Program and received collections during this same
period of $487,500 from this program. There was no comparable program during the
nine months ended June 30, 2003.

      During the nine months ended June 30, 2004, the Company borrowed  $173,139
from three related  parties and $145,000 from an unrelated  party in the form of
demand notes after taking into account the reclassifications  discussed.  During
the same period,  the Company repaid $25,000 of the unrelated  party  borrowings
from within the period and $159,251 of the related party  borrowings from within
the period.

      In March 2004, the Company  borrowed  $500,000  pursuant to a secured loan
agreement  with a related  party.  This loan is due and  payable  in a lump sum,
inclusive  of interest at the rate of 12% per annum,  on or before the sooner of
the date the Company  completes  additional  equity  financings  aggregating  in
excess of $3.0 million or  September  8, 2004.  The loan is secured by a lien on
all assets of the  Company.  As  additional  consideration  for this  loan,  the
Company is to issue 1,000,000 shares of its common stock to the lender. The fair
value of the common  stock so issued is being  charged to  interest  expense pro
rata over the term of the loan.

         During the nine months ended June 30, 2004,  the Company  increased its
contingent obligations under third party investments by $170,222 as follows:

<TABLE>
<CAPTION>
                                                                 Unrelated
                                             Related Party        Parties             Total

<S>                                         <C>               <C>               <C>
Balance at October 1, 2003                  $      470,000    $    1,763,406    $    2,233,406

New third party advances                           326,500           453,394           779,894
Repayments                                        (329,475)         (280,197)         (609,672)
Net reclassifications as of June 30, 2004
                                                 1,651,603        (1,651,603)               --
                                            --------------    --------------    --------------

Balance at June 30, 2004                    $    2,118,628    $      285,000    $    2,403,628
                                            ==============    ==============    ==============
</TABLE>


      The Company does not have any material capital expenditure  commitments as
of June 30, 2004.

FACTORS THAT MAY AFFECT FUTURE RESULTS

OUR INDEPENDENT AUDITORS HAVE EXPRESSED DOUBT ABOUT OUR ABILITY TO CONTINUE AS A
GOING CONCERN, WHICH MAY HINDER OUR ABILITY TO OBTAIN FUTURE FINANCING.

      In their report  dated  January 9, 2004 for the year ended  September  30,
2003,  our  independent  auditors  have  expressed  doubt  about our  ability to
continue as a going  concern.  Our  ability to continue as a going  concern is a
result of  recurring  losses  from  operations,  a  stockholders'  deficit,  and
requirement  for a significant  amount of capital  financing to proceed with our
business  plan.  Our ability to  continue  as a going  concern is subject to our
ability to generate a profit and/or obtain necessary funding from outside


                                       23
<PAGE>

sources, including obtaining additional funding from the sale of our securities,
increasing   sales  or  obtaining  loans  where  possible.   The  going  concern
uncertainty  in the auditor's  report  increases the  difficulty in meeting such
goals and there can be no assurances that such methods will prove successful.

THE COMPANY'S CASH FLOW IS DEPENDANT ON A LENGTHY  COLLECTION  CYCLE AND FACTORS
BEYOND ITS CONTROL THAT MAY REQUIRE THE COMPANY TO OBTAIN INTERIM FINANCING.

      The  Company  must wait for a long  period of time to  collect  money from
judgment recoveries after it advances money. Based on the Company's  experience,
claims  take an average of 15 months to  resolve.  The  Company  has been making
efforts to reduce that time and  believes  that it has been  successful  in such
efforts.  However,  once the Company advances the money, the collection cycle is
out of the Company's control.  Accordingly,  the Company must use other funds to
pay for its overhead  expenses.  Should  recoveries take longer than the Company
planned,  the Company may have to seek interim  financing to meet its  expenses.
There can be no assurance  that,  in such an event,  the Company could find such
financing or that, if it could, the financing would be available on satisfactory
terms.

THE  COMPANY'S   INVESTMENT   PORTFOLIO  AND  REVENUES  HAVE  A  HIGH  LEVEL  OF
CONCENTRATION IN SEVERAL KEY CLIENTS.

      The  Company's  current  portfolio of  investment  in contracts  and loans
receivable has a high level of concentration in a relatively small number of law
firms. Should one or more of these firms discontinue  operations,  the resulting
loss of principal and revenues could have material  adverse  consequences to the
Company's current resources.

THE  COMPANY'S  RESULTS MAY BE VOLATILE  DUE TO THE  UNCERTAINTY  OF  LITIGATION
OUTCOMES.

      The  Company's  business  is  dependent  on  litigation  outcomes  and the
judgments  rendered in connection  with such outcomes and settlements of claims.
Settlements  are in turn dependent upon  perceived  probabilities  of litigation
outcomes and the attending  judgments.  However,  litigation  entails greater or
lesser degrees of uncertainty.  Such uncertainties include uncertainty as to the
assessment of the  credibility of witnesses,  the trier of fact's  perception of
counsel,  the assessment of fault,  the legal nature of the claim and the amount
of damages. Although the Company seeks to weigh such uncertainties when it makes
the  underwriting  decision,  there can be no assurance  that the outcome of any
given litigated claim will be as predicted whether or not the probabilities were
correctly  assessed.  The vagaries of litigation may result in judgments against
the  Company's  interests,  settlements  for lower  amounts than  predicted,  or
failures to reach  settlements.  Although  the Company  maintains  reserves  for
contract losses which management believes are adequate, such outcomes would have
a  negative  impact  on  the  Company's  business,   prospects  and  results  of
operations.

THE COMPANY HAS LIMITED OPERATING HISTORY AND LACK OF PROFITABILITY.

      The Company  was formed in 1998 and,  due to working  capital  limitations
since its  inception,  has been  limited in its ability to scale its  investment
portfolio.  In  addition,  the Company has  incurred  operating  losses in every
quarter since inception.  The Company is subject to the risks and  uncertainties
usually encountered by early-stage companies. These risks include risks that the
Company  cannot  attract,  train or  integrate  into the  business  organization
qualified  personnel,  risks that  fluctuations  in  operating  results  will be
significant as the Company develops and tests business practices, and risks that
the Company will fail to properly  manage growth and  expansion,  if and when it
occurs.



                                       24
<PAGE>

THE COMPANY'S  INABILITY TO COLLECT UPON JUDGMENT,  ON A TIMELY BASIS OR AT ALL,
WILL HAVE A NEGATIVE IMPACT ON ITS BUSINESS.

      The Company may not be able to collect upon the judgment recovery when and
if it is paid  to the  plaintiff,  or the  Company  may  not be able to  collect
without bringing a legal action against the former  plaintiff.  In either event,
the failure to collect or the necessity of legal action to collect,  can have an
adverse impact on the Company's business, prospects and results of operations.

THE COMPANY'S ABILITY TO EXPAND IS LIMITED BY JURISDICTIONAL LIMITATIONS.

      Not  all  states  allow  advances  to  attorneys  and   plaintiffs.   Some
jurisdictions  do not allow  maintaining,  supporting,  promoting  or  assisting
another person, with money or otherwise, to prosecute a lawsuit. The practice is
referred to as  "maintenance."  Similarly,  the bargain between a stranger and a
party  to a  lawsuit  by  which  the  stranger  pursues  the  party's  claim  in
consideration  of  receiving  part  of any  judgment  proceeds  may be a form of
"maintenance"  and may not be permitted  in some  jurisdictions.  The  Company's
ability to grow and expand the  Company's  business  may be limited to  specific
jurisdictions.  The Company's  inability to expand beyond such jurisdictions may
negatively impact its business, prospects and results of operations.

COURTS MAY DEEM THE COMPANY'S  ADVANCES TO BE LOANS  RESULTING IN LIMITATIONS ON
HOW THE COMPANY DOES BUSINESS.

      The Company  does not loan money to  plaintiffs.  The  recovery  agreement
between the Company and the individual or law firm receiving the advance clearly
states  that the  advance is not a loan,  and that it is not to be repaid if the
lawsuit is lost.  Accordingly,  the Company  believes  that it is not subject to
various laws and regulations that constrain lending activities.  However,  there
can be no  assurance  that a court  in any  jurisdiction  in which  the  Company
pursues its business would not examine the Company's  activities and come to the
conclusion that the Company was in fact lending money to plaintiffs.  One result
of such a  conclusion  by a  court  would  be that  the  rate of  return  on the
Company's  advances  may exceed  the rates of return  permitted  by law.  Such a
conclusion would make the Company's agreements with plaintiffs voidable, subject
the  Company to fines or other  sanctions  or  otherwise  negatively  impact the
Company's business, prospects or results of operations.

THE COMPANY HAS LIMITED UNDERWRITING EXPERIENCE AND INFORMATION ON WHICH TO BASE
ITS OPERATIONS FACTORS THAT MAY MAKE IT MORE DIFFICULT TO EVALUATE THE COMPANY'S
BUSINESS AND RESULTS.

      The  Company  has only  six  years of  precedents  upon  which to base its
operations.  The  Company  also has only four years of  experience  underwriting
risks.  While the  Company  believes  that the time spent in the past four years
refining its  underwriting  procedures  allows it to evaluate the plaintiffs and
cases to whom it advances money,  there is no extensive  history in underwriting
upon  which the  Company or  investors  may rely.  Although  the  Company  makes
comparisons  to other claims and is compiling a database to assist the Company's
underwriting  procedures,  the Company does not have an extensive  database upon
which it can make the Company's underwriting  decisions.  Underwriting decisions
made on incomplete or inaccurately  assessed information may lead to lower rates
of claims recovery and may have an adverse impact on the Company's  business and
results of the Company's operations.



                                       25
<PAGE>

IN ORDER TO SUCCEED THE COMPANY MUST EDUCATE CUSTOMERS ABOUT ITS SERVICES.

      Through the Company's  sales efforts the Company must educate its consumer
base with regard to its business. Unlike other financial services, the Company's
services are not well known in the general  population.  Therefore,  the Company
cannot give any  assurances  that it will be successful  in educating  potential
consumers  about its  services  and  especially  educating  consumers  about its
services  in a manner  that will be  attractive  to  consumers.  A failure to so
educate  consumers  may hamper the  Company's  sales efforts and have an adverse
impact on the Company's business, prospects and results of operations.

TORT REFORM IN THE FORM OF LEGISLATED RESTRICTIONS ON PLAINTIFF'S ABILITY TO SUE
WOULD NEGATIVELY AFFECT THE COMPANY'S BUSINESS.

      In addition to the uncertainties  inherent in litigation,  tort reform may
negatively  impact  the  Company's  business.  The  legislatures  in  any of the
jurisdictions  where the Company  operates may pass legislation that restricts a
plaintiff's  ability to sue. Such restrictions may be in the form of altering or
eliminating claims that may be heard in court or changing statutes of limitation
or the  periods  of time  plaintiffs  have  to  make a  claim.  These  or  other
restrictions on the right to sue may limit the market for the Company's services
and  negatively  impact  the  Company's  business,   prospects  and  results  of
operations.  Legislatures  could also limit the amounts  that could be recovered
for specific claims. Such limitations,  if enacted,  could negatively impact the
Company's business, prospects and results of operations.

THE COMPANY'S NEED FOR  INFORMATION  ABOUT A CASE MAY HAVE A NEGATIVE  IMPACT ON
ITS OUTCOME.

      The Company's need for  information  about a case may result in an adverse
outcome  of the  case.  In  general,  communications  between  a client  and the
client's attorney are privileged.  However,  the Company requires information to
assess the case.  While in the course of obtaining the  information  the Company
requires,  the  Company  strives  to keep  such  communications  privileged  and
confidential,  a court may determine that such  communications  with the Company
are not privileged.  If the privileged  information  given to the Company may be
discovered by the  defendant  such  information  may be used against the client.
Either  situation,  the inability to obtain  privileged  information the Company
needs to assess the case, or making privileged  information  discoverable to the
defendants,  increases the  likelihood of outcomes which would be adverse to the
Company's business, prospects and results of operations.

THE  COMPANY'S  BUSINESS  MAY BE COPIED BY  COMPETITORS  AS THERE ARE FEW IF ANY
BARRIERS TO COMPETITION.

      Other than an expertise in assessing  underwriting risks and the Company's
database, the Company's business is not dependent upon proprietary  information.
Accordingly,  there are no substantial  barriers to potential  competitors.  The
Company  may not be able to  compete  successfully  against  current  or  future
competitors. In addition, competition may drive down the return on the Company's
advances. Given the risks inherent in the Company's business, a reduction in the
rate of the Company's return may impact the viability of the Company's  business
model.  There  is  no  assurance  that  the  Company  may  be  able  to  compete
successfully  against others who offer similar services or that such competition
may not reduce the rate of return the Company receives for its advances.

THE COMPANY'S BUSINESS IS DEPENDENT ON KEY PERSONNEL.

      The Company's future  performance  depends on the service of key personnel
and the Company's ability to attract, train, and retain additional underwriting,
technical,  marketing,  customer support, and management personnel.  The loss of


                                       26
<PAGE>

one or more key employees could negatively  impact the Company.  There can be no
assurance  that the  Company  will retain key  employees,  or attract and retain
other needed personnel.

EXERCISE OF OPTIONS AND WARRANTS  WILL DILUTE  EXISTING  STOCKHOLDERS  AND COULD
DECREASE THE MARKET PRICE OF THE COMPANY'S COMMON STOCK.

      As of June 30,  2004 the  Company  had issued and  outstanding  17,019,236
shares of common stock,  outstanding  options to purchase  3,060,833  additional
shares of common stock, and warrants to purchase 3,500,000  additional shares of
common stock.  The  existence of such options and warrants may adversely  affect
the market  price of the  Company's  common  stock and the terms under which the
Company obtains additional equity capital.

COMPANY COMMON STOCK IS LISTED ON THE  OVER-THE-COUNTER  (OTC)  BULLETIN  BOARD,
WHICH MAY MAKE IT MORE DIFFICULT FOR  STOCKHOLDERS  TO SELL THEIR SHARES AND MAY
CAUSE THE MARKET PRICE OF COMPANY COMMON STOCK TO DECREASE.

      Because the  Company's  common stock is listed on the OTC Bulletin  Board,
the liquidity of the common stock is impaired,  not only in the number of shares
that are bought and sold, but also through delays in the timing of transactions,
and limited  coverage by security  analysts  and the news media,  if any, of the
Company.  As a result,  prices for shares of the  Company's  common stock may be
lower than might otherwise  prevail if the Company's  common stock was traded on
NASDAQ or a national securities exchange, like the American Stock Exchange.

THE COMPANY'S STOCK PRICE MAY BE VOLATILE AND AN INVESTMENT IN SUCH COMMON STOCK
COULD SUFFER A DECLINE IN VALUE.

      The market price of the Company's common stock may fluctuate significantly
in  response  to a number of  factors,  some of which are beyond  the  Company's
control. These factors include:

o     government   regulatory   action  affecting  the  Company's   services  or
      competitors' services;
o     actual or anticipated fluctuations in operating results;
o     the loss of key management or other personnel;
o     the loss of major customers; o the outcome of any future litigation;
o     broad market fluctuations; and
o     economic conditions in the United States or abroad.

THE COMPANY'S  CHARTER  DOCUMENTS AND DELAWARE LAW MAY HAVE THE EFFECT OF MAKING
IT MORE EXPENSIVE OR MORE DIFFICULT FOR A THIRD PARTY TO ACQUIRE,  OR TO ACQUIRE
CONTROL, OF THE COMPANY.

      The  Company's  certificate  of  incorporation  makes it possible  for the
Company's  Board of  Directors  to issue  preferred  stock with  voting or other
rights that could  impede the  success of any  attempt to change  control of the
Company.  Delaware  Law  prohibits a publicly  held  Delaware  corporation  from
engaging in certain business  combinations with certain persons, who acquire the
Company's  securities  with the intent of  engaging  in a business  combination,


                                       27
<PAGE>

unless the  proposed  transaction  is  approved  in a  prescribed  manner.  This
provision  has the  effect of  discouraging  transactions  not  approved  by the
Company's  Board of  Directors as required by the statute  which may  discourage
third parties from  attempting  to acquire or to acquire  control of the Company
even if the attempt  would  result in a premium over market price for the shares
of common stock held by the Company's stockholders.

ITEM 3.           CONTROLS AND PROCEDURES

      Management,  including the principal  executive  officer,  who is also the
principal financial officer, conducted an evaluation of the Company's disclosure
controls  and  procedures,   as  such  term  is  defined  under  Rule  13a-15(e)
promulgated under the Securities Exchange Act of 1934, as amended, as of the end
of the period covered by this report.  Based on such  evaluation,  the Company's
principal  executive  officer,  who is also the  principal  accounting  officer,
concluded that the Company's disclosure controls and procedures are adequate and
effective.

      During the quarterly period covered by this report,  there were no changes
in the Company's  internal control over financial  reporting that has materially
affected,  or is reasonably likely to materially  affect the Company's  internal
control over financial reporting.

PART II - OTHER INFORMATION

ITEM 1.           LEGAL PROCEEDINGS

            The Company was a nominal  defendant in a  shareholders'  derivative
action filed in the Superior  Court of the State of California for the County of
San Diego.  The  plaintiffs,  as  shareholders  of Asia Web  before the  reverse
acquisition,  have sued the individual  defendants,  former  officers  including
Michael Schaffer, alleging that they converted to personal use certain corporate
assets and are seeking to have the  individual  defendants  return the assets to
the  Company.  The  Company was a  "nominal"  defendant  and no relief was being
sought against the Company in this action.


      In June 2004, the court entered an order  dismissing  the lawsuit  without
prejudice.  The  dismissal  followed  a  determination  by a special  litigation
committee  comprised  of  disinterested   directors  that  the  pursuit  of  the
litigation was not in the best interests of the corporation


            As a result of the lawsuit,  a dispute arose between the Company and
a former officer,  Michael  Schaffer,  with respect to Mr.  Schaffer's claim for
indemnification for legal fees incurred in defending himself in the lawsuit. The
Company  entered into a settlement  agreement with Mr. Schaffer on June 25, 2003
whereby the  Company  agreed to: (i) grant 18 month  options to Mr.  Schaffer to
purchase  250,000  shares of common stock at an exercise  price of $0.30 only if
the  market  price  for  the  Company's  common  stock  exceeds  $0.65  for  two
consecutive  trading days during the term of the option, and (ii) pay $70,000 in
monthly payments of $10,000 commencing October 2003. The expense related to this
settlement  was  recorded  by the Company in June 2003.  The Company  asserted a
breach to this  settlement  agreement and ceased making  payments there under in
November  2003.  The Company  renegotiated  this  agreement  in April 2004 which
modified the payment terms such that the remaining  balance due of $60,000 shall
be deferred  until the Company was  successful in obtaining an  additional  $5.0
million dollars in equity financing,  at which time the balance shall be paid in
six monthly  installments  of $10,000 each. In addition,  the exercise price for
the options to purchase  250,000 shares of common stock was increased from $0.30
to $0.50 and is  exercisable  only if the market price for the Company's  common
stock  exceeds $0.85 per share and must be exercised if the market price for the
Company's common stock exceeds $1.10 per share.



                                       28
<PAGE>

            The Company was served with a complaint in May 2004 filed in the Los
Angeles  Superior  Court,  Central  District,  from  an  unrelated  third  party
asserting  securities  fraud,  fraud,  breach of  contract  and unfair  business
practices  against the Company and  seeking  damages of $65,000.  The  plaintiff
claims that she had loaned the  Company the sum of $40,000  pursuant to a verbal
agreement and was promised repayment within 45 days plus a 25% profit. The funds
were  utilized by the Company for a  non-recourse  advance which the Company was
unable to recover and the  principal  amount of this  obligation  is included in
loans payable-unrelated  parties on the Company's balance sheet. The Company has
made offers to settle this matter and  believes  the  ultimate  outcome will not
have a material impact on the Company's financial condition.

            In addition to the  foregoing,  the Company has  received  notice of
several other potential claims none of which the Company considers material.

ITEM 5.     OTHER INFORMATION

            On July  21,  2004,  Edwin S.  Baldwin  was  named  to the  Board of
Directors and appointed CEO/CFO,  replacing interim CEO/CFO Harvey Bibicoff, who
remains on the Board and who was named to the Executive Committee.  In addition,
the Board  accepted the  resignations  of Directors  Eric A. Alden and Thomas G.
Brown.

ITEM 6.     EXHIBITS AND REPORTS ON FORM 8-K

         None

(a) EXHIBITS

      31    CEO  and  CFO   Certification   Pursuant   To  Section  302  Of  The
            Sarbanes-Oxley Act Of 2002..
      32    CEO  and  CFO   Certification   Pursuant   To  Section  906  Of  The
            Sarbanes-Oxley Act Of 2002.

(b) REPORTS ON FORM 8-K

      None.


                                       29
<PAGE>

                                   SIGNATURES

      In accordance  with the  requirements  of the  Securities  Exchange Act of
1934,  the  registrant  has caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.

CASE FINANCIAL, INC.

By:      /s/
         -----------------------------------
         Edwin S Baldwin
         Chief Executive Officer
         (Principal Executive Officer)
Date: August 16, 2004

By:      /s/
         -----------------------------------
         Edwin S Baldwin
         Chief Financial Officer
         (Principal Accounting Officer)
Date: August 16, 2004


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