<PAGE>

                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-QSB

                |X| QUARTERLY REPORT UNDER SECTION 13 OR 15(D) OF
                       THE SECURITIES EXCHANGE ACT OF 1934

                FOR THE QUARTERLY PERIOD ENDED DECEMBER 31, 2006
                                       or
        |_| TRANSITION REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES
                              EXCHANGE ACT OF 1934

                         COMMISSION FILE NUMBER 0-27757

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

                DELAWARE                                    33-0529299
     (State or other jurisdiction of                     (I.R.S. Employer
      incorporation or organization)                   Identification Number)

  5950 La Place Court, Suite 155, Carlsbad, CA                  92008
    (Address of principal executive offices)                  (Zip code)

                                  760-804-1449
                           (Issuer's telephone number)

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 issuer was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes [X] No [_]

Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act). Yes [_] No [X]

           Number of shares of issuer's common stock outstanding as of
                          January 31, 2007: 26,370,145

Transitional Small Business Disclosure Format (check one). Yes [_] No [X]

Documents incorporated by reference: None.

<PAGE>
<TABLE>
<CAPTION>

PART I - FINANCIAL INFORMATION

ITEM 1. INTERIM CONSOLIDATED FINANCIAL STATEMENTS

                                      CASE FINANCIAL, INC. AND SUBSIDIARIES
                                      CONDENSED CONSOLIDATED BALANCE SHEETS
---------------------------------------------------------------------------------------------------------------

                                 ASSETS
                                                                                AS OF               AS OF
                                                                             DECEMBER 31,        SEPTEMBER 30,
                                                                                 2006                2006
                                                                          -----------------   -----------------
<S>                                                                        <C>                 <C>
CURRENT ASSETS
Cash & cash equivalents                                                    $       122,069     $       101,299
Prepayments and deposits                                                             6,669               6,711
Investment - Bahamas                                                                40,000              40,000
Assets from discontinued operations                                              1,837,508           1,880,258
                                                                          -----------------   -----------------
TOTAL CURRENT ASSETS                                                             2,006,246           2,028,268

NET PROPERTY & EQUIPMENT                                                             1,607               2,142

                                                                          -----------------   -----------------
      TOTAL ASSETS                                                         $     2,007,853     $     2,030,411
                                                                          =================   =================

            LIABILITIES & STOCKHOLDERS' EQUITY (DEFICIT)

CURRENT LIABILITIES
Accounts payable and accrued expenses                                      $       823,022     $       794,172
Loans payable - related parties                                                    183,800             198,800
Loans payable                                                                      225,000             270,000
Liabilities from discontinued operations                                         2,025,558           2,008,448
                                                                          -----------------   -----------------
TOTAL CURRENT LIABILITIES                                                        3,257,380           3,271,419
                                                                          -----------------   -----------------

      TOTAL LIABILITIES                                                          3,257,380           3,271,419

STOCKHOLDERS' EQUITY (DEFICIT)
Common stock, (par value $.001 per share, 100,000,000 shares
   authorized: 27,370,145 and 25,406,812 shares issued and outstanding
    as of December 31, and September 30, 2006)                                      27,370              25,407
Common stock to be issued                                                                -             294,500
Paid-in capital                                                                  9,844,931           9,552,394
Treasury Stock                                                                    (240,000)           (240,000)
Accumulated deficit                                                            (10,881,828)        (10,873,309)
                                                                          -----------------   -----------------
TOTAL STOCKHOLDERS' EQUITY (DEFICIT)                                            (1,249,527)         (1,241,008)

                                                                          -----------------   -----------------
      TOTAL LIABILITIES &
           STOCKHOLDERS' EQUITY (DEFICIT)                                  $     2,007,853     $     2,030,411
                                                                          =================   =================


                               SEE NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

                                                       2
<PAGE>

                                      CASE FINANCIAL, INC. AND SUBSIDIARIES
                                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
---------------------------------------------------------------------------------------------------------------

                                                                                 THREE MONTHS    THREE MONTHS
                                                                                     ENDED           ENDED
                                                                                 DECEMBER 31,    DECEMBER 31,
                                                                                     2006            2005
                                                                                --------------  --------------

REVENUES
Service fees, related parties                                                   $           -   $           -
                                                                                --------------  --------------
NET REVENUE                                                                                 -               -

OPERATING EXPENSES
Depreciation                                                                              536           1,520
General and administrative
                                                                                      114,876         219,631
                                                                                --------------  --------------
TOTAL OPERATING EXPENSES                                                              115,412         221,151

INCOME (LOSS) FROM OPERATIONS                                                        (115,412)       (221,151)

OTHER INCOME
Interest income                                                                             -             154
Interest expense                                                                       (5,775)       (104,036)
Non-cash finance expenses                                                                   -         (50,584)
Miscellaneous income                                                                    1,538               -
                                                                                --------------  --------------
TOTAL OTHER INCOME                                                                     (4,237)       (154,466)

NET INCOME (LOSS) BEFORE DISCONTINUED OPERATIONS AND EXTRAORDINARY ITEMS             (119,649)       (375,617)

GAIN (LOSS) FROM DISCONTINUED OPERATIONS                                              111,131         (18,851)
                                                                                --------------  --------------

NET INCOME (LOSS)                                                               $      (8,518)  $    (394,468)
                                                                                ==============  ==============

NET INCOME (LOSS) PER COMMON SHARE - BASIC AND DILUTED:
>From continuing operations                                                      $       (0.00)  $       (0.02)
                                                                                ==============  ==============

>From discontinued operations                                                    $       (0.00)  $       (0.02)
                                                                                ==============  ==============

Net Income (Loss)                                                               $       (0.00)  $       (0.02)
                                                                                ==============  ==============

WEIGHTED AVERAGE NUMBER OF
   COMMON SHARES - BASIC AND DILUTED                                               27,370,145      24,567,485


                               SEE NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

                                                       3

<PAGE>

                                      CASE FINANCIAL, INC. AND SUBSIDIARIES
                                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
---------------------------------------------------------------------------------------------------------------

                                                                                 THREE MONTHS    THREE MONTHS
                                                                                     ENDED           ENDED
                                                                                 DECEMBER 31,    DECEMBER 31,
                                                                                     2006            2005
                                                                                --------------  --------------

CASH FLOWS FROM OPERATING ACTIVITIES

Net income (loss)                                                               $       (8,518) $     (394,468)
Gain (Loss) from discontinued operations                                               111,131          18,851
                                                                                --------------  --------------
Loss from continuing operations                                                       (119,649)       (375,617)
Adjustments to reconcile net loss to net cash
provided by (used in) operating activities:
Loss on forgiveness of debt                                                             42,750               -
Depreciation                                                                               536           1,520
Amortization of debt premium                                                                 -          66,128
Amortization of warrants issued with debt                                                    -          47,690
Amortization of beneficial conversion feature of convertible debentures                      -           2,391
Common Stock and options for compensation                                                               45,000
Changes in operating assets and liabilities:
(Increase) decrease in prepayments and other assets                                         42            (375)
(Increase) decrease in accounts payable and accrued expenses                            28,850         189,762
                                                                                --------------  --------------
     NET CASH USED IN CONTINUING OPERATIONS                                            (47,471)        (23,501)
     NET CASH PROVIDED BY DISCONTINUED OPERATIONS                                     (111,131)        (28,773)
                                                                                --------------  --------------
     NET CASH USED BY OPERATING ACTIVITIES                                              63,660         (52,274)

CASH FLOWS FROM INVESTING ACTIVITIES

Increase in restricted cash                                                                  -            (427)
                                                                                --------------  --------------
     NET CASH USED IN CONTINUING OPERATIONS                                                  -            (427)
     NET CASH PROVIDED BY DISCONTINUED OPERATIONS                                            -           6,375
                                                                                --------------  --------------
     NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES                                     -           5,948

CASH FLOWS FROM FINANCING ACTIVITIES

Payments to related party                                                              (15,000)              -
Repayments of borrowings                                                               (45,000)              -
Proceeds from related party borrowings
                                                                                             -          41,300
                                                                                --------------  --------------
     NET CASH USED IN CONTINUING OPERATIONS                                            (60,000)         41,300
     NET CASH PROVIDED BY DISCONTINUED OPERATIONS                                       17,110               -
                                                                                --------------  --------------
     NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES                               (42,890)         41,300

     NET INCREASE (DECREASE) IN CASH & CASH EQUIVALENTS                                 20,770          (5,026)
     CASH & CASH EQUIVALENTS AT BEGINNING OF PERIOD                                    101,299          14,367
                                                                                --------------  --------------
     CASH & CASH EQUIVALENTS AT END OF PERIOD                                   $      122,069  $        9,341
                                                                                ==============  ==============

SUPPLEMENTAL DISCLOSURES OF CASH FLOW
INFORMATION:
Cash paid during the three month period for Interest                            $            -  $            -
                                                                                ==============  ==============

Income taxes paid                                                               $            -  $            -
                                                                                ==============  ==============

                               SEE NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

                                                       4
</TABLE>

<PAGE>

                      CASE FINANCIAL, INC AND SUBSIDIARIES
                           NOTES TO INTERIM CONDENSED
                   CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 2006
                                   (UNAUDITED)


NOTE 1 - CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The accompanying December 31, 2006 condensed consolidated financial statements
have been prepared by the Company without audit. In the opinion of management,
all adjustments (which include only normal recurring adjustments) necessary to
present fairly the financial position, results of operations and cash flows at
December 31, 2006 and for all periods presented have been made. Certain
information and footnote disclosures normally included in financial statements
prepared in accordance with accounting principles generally accepted in the
United States of America have been condensed or omitted. It is suggested that
these condensed consolidated financial statements be read in conjunction with
the consolidated financial statements and notes thereto included in the
Company's September 30, 2006 audited consolidated financial statements. The
results of operations for periods ended December 31, 2006 are not necessarily
indicative of the operating results for the full years.

NOTE 2 - GOING CONCERN

The Company's condensed consolidated financial statements are prepared using
generally accepted accounting principles applicable to a going concern, which
contemplates the realization of assets and liquidation of liabilities in the
normal course of business. The accompanying condensed consolidated financial
statements do not include any adjustments relating to the recoverability and
classification of liabilities that might result from the outcome of this
uncertainty. It is management intention to seek additional operating funds
through operations, and debt or equity offerings. Management has yet to decide
what type of offering the Company will use or how much capital the Company will
raise. There is no guarantee that the Company will be able to raise any capital
through any type of offerings.

NOTE 3 - SIGNIFICANT EVENTS

DISCONTINUED OPERATIONS

The Company has discontinued further investment in its Litigation Finance
Business other than the collection or other disposition of its existing loan and
investment portfolio and accordingly has reclassified on its Consolidated
Balance Sheet all assets and liabilities associated with the Litigation Finance
Business as Assets and Liabilities from Discontinued Operations. All revenues
and expenses associated with the Litigation Finance Business have been
reclassified and the net amount reported on its Condensed Consolidated Statement
of Operations as Loss from Discontinued Operations. All revenues and expenses
associated with the Litigation Finance Business have been reclassified and the
net amount reported on its Condensed Consolidated Statement of Operations as
Loss from Discontinued Operations.

                                       5
<PAGE>

On March 25, 2005 a derivative lawsuit was filed by a major stockholder and
secured lender of the Company. The lawsuit was filed in the Court of Chancery of
the State of Delaware against former officers and directors of the Company,
specifically Eric Alden, a former CEO and CFO and Chairman of the Board, Harvey
Bibicoff, a former interim CEO and CFO and director, Lorne Pollock, former Vice
President of Underwriting, Secretary and director and Gordon Gregory, a former
director alleging that these officers and directors had damaged the Company by
(a) engaging in self dealing transactions in breach of their fiduciary duty of
loyalty; (b) mismanaging the Company in violation of their oversight duties and
duty of care; (c) wasting corporate assets; and (d) making fraudulent
misrepresentations which induced the corporate entity to issue shares to these
individuals. The Company's Board of Directors has elected to consent to the
filing of this complaint. The Company was named as a nominal defendant in this
complaint. Management believes that the outcome of this case will not have a
material impact on the financial condition of the Company. Mr. Gregory, Mr.
Pollock and Mr. Bibicoff have been released from this action based on settlement
agreements discussed in the Company's Form 10KSB filed on January 11, 2007 with
the Securities and Exchange Commission. Mr. Alden remains a defendant in this
action.

On April 25, 2005, Mr. Alden filed a breach of contract lawsuit against the
Company in the Superior Court of the State of California, Case Number BC 332373.
This lawsuit had been stayed by the court pending the outcome of the derivative
action and was dismissed on January 29, 2007.

On April 19, 2006 Mr. Alden filed a wrongful termination lawsuit against the
Company in the Superior Court of the State of California, Case Number BC 350929.
This lawsuit had been stayed by the court pending the outcome of the derivative
action and was dismissed on January 29, 2007. Mr. Alden has been directed by the
court not to file any additional lawsuits against the Company until the
derivative action has been resolved.

On June 2, 2006, a lawsuit was filed against the Company by a relative of Eric
Alden, a former CEO and director of the Company, in the Superior Court of the
State of California, Case Number BC 347120. The plaintiff is demanding payment
on a promissory note in the amount of $100,000 as well as repayment of three
advances made to attorneys by the Company on the plaintiff's behalf. The Company
does not believe that the outcome of this case will have a material effect on
the financial condition of the Company.

On June 23, 2006, a lawsuit was filed against the Company by a relative of Eric
Alden, a former CEO and director of the Company, in the Superior Court of the
State of California, Case Number BC 347120. The plaintiff is demanding repayment
of two advances made to attorneys by the Company on the plaintiff's behalf. The
Company does not believe that the outcome of this case will have a material
effect on the financial condition of the Company.

On July 12, 2006, a lawsuit was filed against the Company by Woodland Finance
Inc., a California Corporation, in the Superior Court of the State of
California, Case Number BC 355323. The plaintiff, as assignee of Eric Alden a
former C.E.O and director of the Company and Frederick Barak, is demanding
payment on two promissory notes in the amount of $45,000.00 and $75,000.00. The
Company continues to defend this suit and believes the ultimate outcome of it
will not have a material impact on the Company's financial condition.


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

The discussion contained herein is for the three and nine months ended December
31, 2006 and 2005. The following discussion should be read in conjunction with
the Company's condensed consolidated financial statements and the notes to the
condensed consolidated financial statements included elsewhere in this Quarterly
Report on Form 10-QSB for the quarterly period ended December 31, 2006.

                                       6
<PAGE>

FORWARD LOOKING STATEMENTS

The following discussion contains forward-looking statements within the meaning
of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended, including statements that include
words such as "anticipates", "expects", "intends", "plans", "believes", "may",
"will" or similar expressions that are intended to identify forward-looking
statements. In addition, any statements that refer to expectations, projections
or other characterizations of future events or circumstances, including any
underlying assumptions, are forward-looking statements. Such statements include,
but are not limited to, statements regarding our intent, belief or current
expectations regarding our strategies, plans and objectives, our product release
schedules, our ability to design, develop, manufacture and market products, our
intentions with respect to strategic acquisitions, the ability of our products
to achieve or maintain commercial acceptance and our ability to obtain financing
for our obligations. Such statements are not guarantees of future performance
and are subject to risks, uncertainties and assumptions that are difficult to
predict. Therefore, the Company's actual results could differ materially and
adversely from those expressed in any forward-looking statements as a result of
various factors. Factors that could cause or contribute to the differences are
discussed in "Factors That May Affect Future Results" in the Company's Form
10KSB filed on January 11, 2007with the Securities and Exchange Commission.
Except as required by applicable law or regulation, the Company undertakes no
obligation to revise or update any forward-looking statements contained in this
Quarterly Report on Form 10-QSB for the quarterly period ended December 31,
2006. The information contained in this Quarterly Report on Form 10-QSB for the
quarterly period ended December 31, 2006 is not a complete description of the
Company's business or the risks associated with an investment in the Company's
common stock. Each reader should carefully review and consider the various
disclosures made by the Company in this Quarterly Report on Form 10-QSB for the
quarterly period ended December 31, 2006 and in the Company's other filings with
the Securities and Exchange Commission.

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. 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 "Litigation Finance Business").

We have experienced substantial operating losses in our Litigation Finance
Business since completing the reverse acquisition with Asia Web and, as a
result, have depleted our working capital available for new advances under our
loan programs. By unanimous consent of the Board of Directors dated September
30, 2005, our Board of Directors approved a resolution declaring that we would
discontinue further investment in our Litigation Finance Business other than the
collection or other disposition of our existing loan and investment portfolio.
We have reclassified on our Consolidated Balance Sheet all assets and
liabilities associated with the Litigation Finance Business as Assets and
Liabilities from Discontinued Operations. All revenues and expenses associated
with the Litigation Finance Business have been reclassified and the net amount
reported on its Consolidated Statement of Operations as Loss from Discontinued
Operations.

We intend to continue our efforts to collect our existing portfolio of loans
receivable and investments in contracts, settle our outstanding obligations
resolve current litigation and minimize operating costs. We believe that our
available current cash resources and anticipated collections will be adequate to
fund our current limited level of operations through its fiscal year ended
September 30, 2007. However, to the extent our estimates and assumptions are
inaccurate and/or we are unable to successfully collect the amounts due on its
portfolio and settle outstanding obligations at reduced amounts, we may not have
sufficient cash resources to fund our ongoing obligations. In such event, we may
be required to seek other funding and/or consider a formal or informal
restructuring or reorganization. In the event we are successful in recovering
cash from these resources in excess of our operating needs, we may utilize this
cash to acquire new business opportunities.

                                       7
<PAGE>

OUR CRITICAL ACCOUNTING POLICIES

The discussion and analysis of the Company's financial condition and results of
operations is based upon the Company's consolidated financial statements, which
have been prepared in accordance with accounting principles generally accepted
in the United States of America. The preparation of these financial statements
requires the Company to make estimates and judgments that affect the reported
amounts of assets, liabilities, revenues and expenses, and related disclosure of
contingent assets and liabilities. On an ongoing basis, the Company evaluates
its estimates, including those related to bad debts, intangible assets, income
taxes, and contingencies and litigation, among others. The Company bases its
estimates on historical experience and on various other assumptions that it
believes to be reasonable under the circumstances, the results of which form the
basis for making judgments about the carrying values of assets and liabilities
that are not readily apparent from other sources. Actual results may differ from
these estimates under different assumptions or conditions. The Company believes
that the following critical accounting policies affect its more significant
judgments and estimates used in the preparation of its consolidated financial
statements: discontinued operations, use of estimates and impairment of
long-lived assets. These accounting policies are discussed in "ITEM 6
-MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION" contained in the
Company's Annual Report on Form 10-KSB for the fiscal year ended September 30,
2006, as well as in the notes to the September 30, 2006 consolidated financial
statements. There have not been any significant changes to these accounting
policies since they were previously reported at September 30, 2006.

GENERAL AND ADMINISTRATIVE EXPENSES

General and administrative expenses consist of costs not directly associated
with our Litigation Finance Business. For the three months ended December 31,
2006, administrative expenses decreased by $104,755 to $114,876.

INTEREST EXPENSES

Interest expense was $5,775 for the three months ended December 31, 2006
compared with $104,036 for the three months ended December 31, 2005, a decrease
of $98,261.

OPERATING ACTIVITIES

Our balance sheet at December 31, 2006 reflects cash of $122,069 compared to
cash of $101,300 at September 30, 2006, an increase of $20,769. Net cash used in
operating activities was $63,660 for the three months ended December 31, 2006
compared to $52,274 for the three months ended December 31, 2005. The increase
in cash used in continuing operations is the result of our decreases in accounts
payable and accrued expenses primarily as a result of forgiveness of debt.

INVESTMENT ACTIVITIES

Net cash provided by investing activities for the three months ended December
31, 2006 was zero compared to net cash provided by investing activities of
$5,948 for the three months ended December 31, 2005 a decrease of $5,948. This
decrease is the result of our inability to collect on the remaining cases in our
portfolio of cases in the discontinued Litigation Finance Business.

FINANCING ACTIVITIES

Net cash provided by financing activities was ($42,890) for the three months
ended December 31, 2006 as compared to net cash used by finance activities of
$41,300 for the three months ended December 31, 2005. This decrease is the
result of repayments of borrowings consisted of officer loans and are classified
as current operations. Net cash used in financing activities from discontinued
operations was zero for the three months ended December 31, 2005.

                                       8
<PAGE>

PRINCIPAL COMMITMENTS

We conduct our operations utilizing leased facilities under a non-cancelable
operating lease agreement expiring on April 30, 2007. Future minimum lease
commitments, excluding property taxes and insurance, are $13,816 through the end
of the lease term.

OFF-BALANCE SHEET ARRANGEMENTS

At December 31, 2006, we did not have any transactions, obligations or
relationships that could be considered off-balance sheet arrangements.

ITEM 3. CONTROLS AND PROCEDURES

EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES
Disclosure controls and procedures are designed to ensure that information
required to be disclosed in the reports filed or submitted by the Company under
the Securities Exchange Act of 1934 is recorded, processed, summarized and
reported, within the time periods specified in the rules and forms of the
Securities and Exchange Commission. Disclosure controls and procedures include,
without limitation, controls and procedures designed to ensure that information
required to be disclosed in the reports filed under the Securities Exchange Act
of 1934 is accumulated and communicated to the Company's management, including
its principal executive and financial officers, as appropriate, to allow timely
decisions regarding required disclosure. The Company carried out an evaluation,
under the supervision and with the participation of its management, including
its principal executive officer and principal financial officer, of the
effectiveness of the design and operation of the Company's disclosure controls
and procedures as of the end of the period covered by this report. Based upon
and as of the date of that evaluation, the Company's principal executive officer
and financial officers concluded that the Company's disclosure controls and
procedures are effective to ensure that information required to be disclosed in
the reports the Company files and submits under the Exchange Act of 1934 is
recorded, processed, summarized and reported within the time periods specified
in the Securities and Exchange Commission's rules and forms.

CHANGES IN INTERNAL CONTROLS
There were no changes in the Company's internal controls or in other factors
that could have significantly affected those controls subsequent to the date of
the Company's most recent evaluation.

PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

On March 25, 2005 a derivative lawsuit was filed by a major stockholder and
secured lender of the Company. The lawsuit was filed in the Court of Chancery of
the State of Delaware against former officers and directors of the Company,
specifically Eric Alden, a former CEO and CFO and Chairman of the Board, Harvey
Bibicoff, a former interim CEO and CFO and director, Lorne Pollock, former Vice
President of Underwriting, Secretary and director and Gordon Gregory, a former
director alleging that these officers and directors had damaged the Company by
(a) engaging in self dealing transactions in breach of their fiduciary duty of
loyalty; (b) mismanaging the Company in violation of their oversight duties and
duty of care; (c) wasting corporate assets; and (d) making fraudulent
misrepresentations which induced the corporate entity to issue shares to these
individuals. The Company's Board of Directors has elected to consent to the
filing of this complaint. The Company was named as a nominal defendant in this
complaint. Management believes that the outcome of this case will not have a
material impact on the financial condition of the Company. Mr. Gregory, Mr.
Pollock and Mr. Bibicoff have been released from this action based on settlement
agreements discussed in the Company's Form 10KSB filed on January 11, 2007 with
the Securities and Exchange Commission. Mr. Alden remains a defendant in this
action.

                                       9
<PAGE>

On April 25, 2005, Mr. Alden filed a breach of contract lawsuit against the
Company in the Superior Court of the State of California, Case Number BC 332373.
This lawsuit had been stayed by the court pending the outcome of the derivative
action and was dismissed on January 29, 2007.

On April 19, 2006 Mr. Alden filed a wrongful termination lawsuit against the
Company in the Superior Court of the State of California, Case Number BC 350929.
This lawsuit had been stayed by the court pending the outcome of the derivative
action and was dismissed on January 29, 2007. Mr. Alden has been directed by the
court not to file any additional lawsuits against the Company until the
derivative action has been resolved.

On June 2, 2006, a lawsuit was filed against the Company by a relative of Eric
Alden, a former CEO and director of the Company, in the Superior Court of the
State of California, Case Number BC 347120. The plaintiff is demanding payment
on a promissory note in the amount of $100,000 as well as repayment of three
advances made to attorneys by the Company on the plaintiff's behalf. The Company
does not believe that the outcome of this case will have a material effect on
the financial condition of the Company.

On June 23, 2006, a lawsuit was filed against the Company by a relative of Eric
Alden, a former CEO and director of the Company, in the Superior Court of the
State of California, Case Number BC 347120. The plaintiff is demanding repayment
of two advances made to attorneys by the Company on the plaintiff's behalf. The
Company does not believe that the outcome of this case will have a material
effect on the financial condition of the Company.

On July 12, 2006, a lawsuit was filed against the Company by Woodland Finance
Inc., a California Corporation, in the Superior Court of the State of
California, Case Number BC 355323. The plaintiff, as assignee of Eric Alden a
former C.E.O and director of the Company and Frederick Barak, is demanding
payment on two promissory notes in the amount of $45,000.00 and $75,000.00. The
Company continues to defend this suit and believes the ultimate outcome of it
will not have a material impact on the Company's financial condition.

ITEM 2. UNREGISTERED SALE OF EQUITY SECURITIES

On February 28, 2005, the Company purchased a 65.63% interest, valued at
$287,000, in the remaining case portfolio of Case Financial Funding, Inc through
the issuance of a convertible debenture in the amount of $287,000. In September
2006, pursuant to the terms of the debenture, the debenture was converted to
1,913,333 shares of the Company's common stock representing a conversion price
of $0.15 per share. On December 19, 2006, the Company issued these shares along
with an additional 50,000 shares of its common stock in payment of accrued
interest still due on this debenture in the amount of $8,370.81 ($0.167 per
share).

ITEM 3. DEFAULTS IN SENIOR SECURITIES

As of December 31, 2006, the Company is in default on the following notes:

        1.  Notes payable, uncollateralized, interest payable           $150,000
            monthly at 12.0% per annum, due January 1, 2007. The
            Company is in default on this note.
        2.  Note payable unsecured payable May 23, 2004 plus            $100,000
            interest at 8% per annum. The Company is in default
            on this note due to nonpayment of interest.
        3.  Note payable, uncollateralized, interest payable             $50,000
            monthly at 12.0% per annum, due January 1, 2007. The
            Company is in default on this note due to nonpayment
            of interest.
        4.  Promissory demand notes, unsecured, interest payable        $120,000
            monthly at 12.0% per annum. The Company is in default
            on these notes due to nonpayment of interest.


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<PAGE>

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

None.

ITEM 5. OTHER INFORMATION

None.

ITEM 6. EXHIBITS

The following documents are filed as part of this report:

      Exhibit No.

      31.1        Certification of Chief Executive Officer Pursuant to Section
                  302 of the Sarbanes Oxley Act of 2002.
      31.2        Certification of Chief Financial Officer Pursuant to Section
                  302 of the Sarbanes Oxley Act of 2002
      32          Certification Pursuant to Section 906 of the Sarbanes Oxley
                  Act of 2002


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<PAGE>

                                   SIGNATURES

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

                                        CASE FINANCIAL, INC.

Dated: February 14, 2007                /s/ Michael Schaffer
                                        ----------------------------------------
                                        By: Michael Schaffer
                                        Its: Chief Executive Officer
                                        (Principal Executive Officer)


Dated: February 14, 2007                /s/ Lawrence Schaffer
                                        ----------------------------------------
                                        By: Lawrence Schaffer
                                        Its: Chief Financial Officer
                                        (Principal Financial Officer and
                                        Principal Accounting Officer)


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