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, 2005
                                       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, 2006:
25,269,236

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

Documents incorporated by reference: None.


<PAGE>

                               CASE FINANCIAL INC.
                                TABLE OF CONTENTS
                               FORM 10-QSB REPORT
                                DECEMBER 31, 2005

PART I - FINANCIAL INFORMATION                                              PAGE
                                                                            ----
ITEM 1.  INTERIM CONSOLIDATED FINANCIAL STATEMENTS
 Condensed Consolidated Balance Sheet as of December 31, 2005 (Unaudited)      1
 Condensed Consolidated Statements of Income (Loss) for the Three
  Month Periods  Ended December 31, 2005 and December 31, 2004 (Unaudited)     2
 Condensed Consolidated Statements of Cash Flows for the Three
  Month Periods Ended December 31, 2005 and December 31, 2004 (Unaudited)      3
 Notes to Interim Condensed Consolidated Financial Statements for the Three
  Month Periods Ended December 31, 2005 and 2004 (Unaudited)                   4

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

ITEM 3.  CONTROLS AND PROCEDURES                                              18

PART II - OTHER INFORMATION
Item 1.  Legal Proceedings                                                    19
Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds          20
Item 3.  Defaults upon Senior Securities                                      21
Item 4.  Submission of Matters to Vote of Security Holders                    22
Item 5.  Other Information                                                    22
Item 6.  Exhibits                                                             22
Signatures                                                                    22


<PAGE>

PART I - FINANCIAL INFORMATION
ITEM 1.  INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

                      CASE FINANCIAL INC. AND SUBSIDIARIES
                      CONDENSED CONSOLIDATED BALANCE SHEET

                                                                   DECEMBER 31,
                                                                       2005
                                                                   ------------
ASSETS
Cash & cash equivalents                                            $      9,340
Cash - restricted                                                        25,427
Prepayments and deposits                                                  6,596
Equipment, at cost, net of accumulated depreciation of
    $17,404 at December 31, 2005                                          2,835
Assets from discontinued operations                                   1,999,471
                                                                   ------------
                TOTAL ASSETS                                       $  2,043,669
                                                                   ============

LIABILITIES AND STOCKHOLDERS'  (DEFICIENCY)
Accounts payable and accrued expenses                              $    344,969
Accrued interest                                                        798,718
Convertible debentures payable                                          275,837
Loans payable - related parties                                       3,501,300
Loans payable                                                           270,000
Liabilities from discontinued operations                              2,045,895
                                                                   ------------
                                                                      7,236,720

STOCKHOLDERS' (DEFICIENCY)
Common stock, par value $0.001 per share,
  100,000,000 shares authorized, 25,219,236 shares issued
   And outstanding at December 31, 2005                                  25,219
Paid-in-capital                                                       9,206,558
Accumulated deficit                                                 (14,424,828)
                                                                   ------------
                                                                     (5,193,051)
                TOTAL LIABILITIES AND                              ------------
                     STOCKHOLDERS' (DEFICIENCY)                    $  2,043,669
                                                                   ============

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


                                       1
<PAGE>


                          CASE FINANCIAL, INC. AND SUBSIDIARIES
                    CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS)
               FOR THE THREE MONTH PERIODS ENDED DECEMBER 31, 2005 AND 2004
                                       (UNAUDITED)

<TABLE>
<CAPTION>
                                                                 2005            2004
                                                             ------------    ------------
<S>                                                          <C>             <C>
REVENUE                                                      $         --    $         --

OPERATING EXPENSES
      General and administrative                                  221,151         184,337
                                                             ------------    ------------
         TOTAL OPERATING EXPENSES                                 221,151         184,337
                                                             ------------    ------------
      LOSS FROM OPERATIONS                                       (221,151)       (184,337)

OTHER INCOME (EXPENSE)
      Interest income                                                 154             290
      Interest expense                                           (104,036)       (107,702)
      Non-cash finance expenses                                   (50,584)        (54,119)
                                                             ------------    ------------
         TOTAL OTHER INCOME (EXPENSE)                            (154,466)       (161,531)
                                                             ------------    ------------
NET LOSS FROM CONTINUING OPERATIONS                              (375,617)       (345,868)

LOSS FROM DISCONTINUED OPERATIONS                                 (18,851)        (33,442)
                                                             ------------    ------------
         NET LOSS                                            $   (394,468)   $   (379,310)
                                                             ============    ============
Net loss per common share -- basic and diluted:
      From continuing operations                             $      (0.02)   $      (0.02)
                                                             ============    ============
      From discontinued operations                           $      (0.00)   $      (0.00)
                                                             ============    ============
      Net Loss                                               $      (0.02)   $      (0.02)
                                                             ============    ============
      Weighted average number of common shares - basic and
      diluted                                                  24,567,485      17,019,236
                                                             ============    ============
</TABLE>

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


                                            2
<PAGE>

<TABLE>
<CAPTION>
                                CASE FINANCIAL INC. AND SUBSIDIARIES
                           CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                    FOR THE THREE MONTHS PERIODS ENDED DECEMBER 31, 2005 AND 2004
                                             (UNAUDITED)
                                                                                 2005         2004
                                                                              ---------    ---------
<S>                                                                           <C>          <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss                                                                      $(394,468)   $(379,310)

Loss from discontinued operations                                                18,851       33,442
                                                                              ---------    ---------
Loss from continuing operations                                                (375,617)    (345,868)
Adjustments to reconcile net loss to net cash used in operating activities:

      Depreciation                                                                1,520        6,266
      Amortization of debt premium                                               66,128       18,957
      Amortization of warrants issued with debt                                  47,690       27,432
      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                      (375)         347
          Increase (decrease) in accounts payable and other liabilities         189,762       40,949
                                                                              ---------    ---------
             Net cash used in continuing operations                             (23,501)    (251,917)

             Net cash provided by (used in) discontinued operations             (28,773)      45,781
                                                                              ---------    ---------
             Net cash used by operating activities                              (52,275)    (206,137)
                                                                              ---------    ---------
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      590,840
                                                                              ---------    ---------
             Net cash provided by investing activities                            5,948      590,840
                                                                              ---------    ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
     Proceeds from related party borrowings                                      41,300           --
                                                                              ---------    ---------
             Net cash provided by continuing operations                          41,300           --
             Net cash provided by (used in) discontinued operations                  --     (302,947)
                                                                              ---------    ---------
             Net cash provided by (used in)  financing activities                41,300     (302,947)
                                                                              ---------    ---------
NET (DECREASE) INCREASE IN CASH & CASH EQUIVALENTS                               (5,027)      81,756

CASH CASH EQUIVALENTS - BEGINNING OF PERIOD                                      14,367       33,383
                                                                              ---------    ---------
CASH CASH EQUIVALENTS - END OF PERIOD                                         $   9,340    $ 115,139
                                                                              =========    =========
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
  Cash paid during the nine month period for:
     Interest                                                                 $      --    $     981
                                                                              =========    =========
     Income taxes                                                             $      --    $      25
                                                                              =========    =========
</TABLE>

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


                                                 3
<PAGE>

                      CASE FINANCIAL, INC. AND SUBSIDIARIES
                               NOTES TO CONDENSED
                        CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 2005
                                   (UNAUDITED)

1.    BACKGROUND AND BUSINESS 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. Case
      Financial,  Inc.  and its  subsidiaries,  Case  Financial,  LLC,  and Case
      Capital  Corporation,  (collectively  "Case"  or the  "Company")  provided
      recourse and non-recourse  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  in the form of loans and  investments  in
      contracts (the "Litigation Finance Business").

      The Company has experienced  substantial operating losses since completing
      its  reverse  acquisition  with Asia Web and,  as a result,  depleted  its
      working capital  available for new advances under its loan programs.  At a
      Board of Directors  meeting held October 7, 2004, five directors  resigned
      from the Board and an officer of the Company relinquished his positions as
      Chief Executive Officer and Chief Financial Officer of the Company. At the
      same meeting,  the Board of Directors appointed four directors to fill the
      seats  created  by  submission  of   resignations   effective  as  of  the
      adjournment  of the meeting and new Chairman of the Board of Directors was
      appointed in the meeting.

      By unanimous  consent of the Board of Directors  dated September 30, 2005,
      the Board of Directors  approved a resolution  declaring the Company shall
      discontinue  further  investment in its Litigation  Finance Business other
      than  the  collection  or  other  disposition  of its  existing  loan  and
      investment  portfolio.  The Board further discussed that it shall continue
      to actively seek new business opportunities for the Company.

      The Company has incurred  recurring  operating losses since its inception.
      As of  December  31,  2005,  the  Company  had an  accumulated  deficit of
      $14,424,828,  a stockholders' deficiency of $5,193,051, and a net loss and
      negative cash flows from  operating  activities for the three months ended
      December  31,  2005  of  $394,468  and  $52,275,   respectively,  and  has
      insufficient capital to fund all of its obligations.  The Company has been
      unable to abide by the payment terms on all of its recourse  loans payable
      and a demand for  payment  has been made by one note  holder for  $640,000
      though the Company is  disputing  the validity of these  obligations.  The
      Company discontinued its Litigation Finance Business at September 30, 2005
      and,  as  a  result,  the  Company  has  no  revenue-generating   business
      operations  currently or in the foreseeable future. These conditions raise
      substantial  doubt  about the  Company's  ability to  continue  as a going
      concern.  The  financial  statements  do not  include any  adjustments  to
      reflect   the   possible   future   effect  of  the   recoverability   and
      classification of assets or the amounts and classifications of liabilities
      that may result from the outcome of this uncertainty.

      The  Company's  management  intends to  continue  efforts  to collect  the
      Company's  existing  portfolio  of loans  receivable  and  investments  in
      contracts  as well as settle the  Company's  outstanding  obligations  and
      minimize  operating costs. The Company believes that its available current
      cash resources and  anticipated  collections  will be adequate to fund its
      current  limited  level  of  operations  through  its  fiscal  year  ended
      September 30, 2006.  However,  to the extent the  Company's  estimates and
      assumptions  are inaccurate  and/or the Company is unable to  successfully
      collect  the  amounts  due  on  its  portfolio   and  settle   outstanding
      obligations at reduced  amounts,  the Company may not have sufficient cash
      resources to fund its ongoing obligations.  In such event, the Company may
      be required  to seek other  funding  and/or  consider a formal or informal
      restructuring or reorganization.


                                       4
<PAGE>

      The Company's management may also consider various strategic  alternatives
      in the future,  including the  acquisition of new business  opportunities,
      which may be from related or unrelated parties.  However,  there can be no
      assurances  that such efforts will  ultimately be successful.  The Company
      may finance any  acquisitions  through a combination of debt and/or equity
      securities.

2.    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

      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.

      In  accordance  with  SFAS No.  144,  "Accounting  for the  Impairment  or
      Disposal  of  Long-Lived  Assets",  the  Company  has  determined  that it
      complied  with the  provisions  of SFAS No. 144 at December  31, 2005 with
      respect to the  classification of the operations of the Litigation Finance
      Business  as  a  discontinued  operation.  Accordingly,  the  Company  has
      accounted for its Litigation Finance Business as a discontinued  operation
      at December 31, 2005,  and has  reclassified  its  consolidated  financial
      statements as of December 31, 2004 to reflect such  accounting  treatment,
      and the assets and  liabilities  of the Litigation  Finance  Business have
      been classified accordingly.

      Interim Financial Information

      The interim  consolidated  financial statements of Case Financial Inc. and
      Subsidiaries  (the "Company") are condensed and do not include some of the
      information necessary to obtain a complete  understanding of the financial
      data.  Management  believes  that  all  adjustments  necessary  for a fair
      presentation  of results have been included in the unaudited  consolidated
      financial statements for the interim periods presented.  Operating results
      for the  three  months  ended  December  31,  2005,  are  not  necessarily
      indicative  of the  results  that  may be  expected  for  the  year  ended
      September 30, 2006.  Accordingly,  your  attention is directed to footnote
      disclosures  found in the September 30, 2005 Annual Report on Form 10KSB/A
      for the year ended  September 30, 2005, and  particularly to Note 2, which
      includes a summary of significant accounting policies.

      Principles of Consolidation

      All  inter-company  balances  and  transactions  have been  eliminated  in
      consolidation.   Corporate  administrative  costs  are  not  allocated  to
      subsidiaries.

      Impairment of Long-Lived Assets

      Long-lived  assets  consist  primarily  of  property  and  equipment.  The
      recoverability  of  long-lived  assets  is  evaluated  by an  analysis  of
      operating results and consideration of other significant events or changes
      in the business environment.  If impairment exists, the carrying amount of
      the  long-lived  assets is reduced to its estimated  fair value,  less any
      costs  associated  with the final  settlement.  As of December  31,  2005,
      management  believes  there was no impairment of the Company's  long-lived
      assets.

      Cash-Restricted

      The Company has  $25,427 in cash in a  certificate  of deposit as security
      for the Company's California state lender's license.


                                       5
<PAGE>

      Segment Reporting

      Statement  of  Financial   Accounting  Standards  No.  131  ("SFAS  131"),
      "Disclosure  About  Segments of an  Enterprise  and  Related  Information"
      requires use of the "management approach" model for segment reporting. The
      management  approach  model  is based  on the way a  company's  management
      organizes  segments within the company for making operating  decisions and
      assessing  performance.  Reportable  segments  are based on  products  and
      services,  geography, legal structure,  management structure, or any other
      manner in which management  disaggregates a company.  Currently,  SFAS 131
      has no effect on the Company's  financial  statements as substantially all
      of the Company's operations have been conducted in one industry segment.

      Reclassifications:

      Certain items in prior financial statements are reclassified to conform to
      the current presentation.

      Property and Equipment

      Property and equipment are stated at cost. Major renewals and improvements
      are charged to the asset  accounts  while  replacements,  maintenance  and
      repairs,  which do not  improve  or  extend  the  lives of the  respective
      assets,  are  expensed.  At the time property and equipment are retired or
      otherwise  disposed  of, the asset and  related  accumulated  depreciation
      accounts  are  relieved of the  applicable  amounts.  Gains or losses from
      retirements or sales are credited or charged to income.

      Depreciation is computed using accelerated  methods based on the estimated
      useful lives of the assets, generally as follows:

                 Computer software                     3 years
                 Office furniture and fixtures       5-7 years
                 Equipment                             5 years

      Impact of New Accounting Standards

      In June 2005, the FASB issued SFAS No. 154,  "Accounting Changes and Error
      Corrections,  a  replacement  of APB No. 20 and FAS No.  3." SFAS No.  154
      provides  guidance  on the  accounting  for and  reporting  of  accounting
      changes  and error  corrections.  It  establishes,  unless  impracticable,
      retrospective application as the required method for reporting a change in
      accounting  principle in the absence of explicit  transition  requirements
      specific  to the newly  adopted  accounting  principle.  SFAS No. 154 also
      provides guidance for determining whether  retrospective  application of a
      change in accounting principle is impracticable and for reporting a change
      when  retrospective  application  is  impracticable.  The correction of an
      error in  previously  issued  financial  statements  is not an  accounting
      change. However, the reporting of an error correction involves adjustments
      to  previously  issued  financial  statements  similar to those  generally
      applicable to reporting an accounting change  retrospectively.  Therefore,
      the reporting of a correction of an error by restating  previously  issued
      financial  statements  is also  addressed by SFAS No. 154. SFAS No. 154 is
      required to be adopted in fiscal years  beginning after December 15, 2005.
      The Company does not believe adoption of SFAS No. 154 will have a material
      impact on its financial position, results of operations or cash flows.

      Computation of Earnings per Share

      Basic net income  (loss) per common  share is  computed  by  dividing  net
      income (loss)  attributable to common stockholders by the weighted average
      number of shares of common stock outstanding during the period. Net income
      (loss) per  common  share  attributable  to common  stockholders  assuming
      dilution is computed by dividing net income by the weighted average number
      of shares of common stock outstanding plus the number of additional common
      shares that would have been  outstanding if all dilutive  potential common
      shares had been issued.  Potential  common shares related to stock options
      and stock warrants are excluded from the computation  when their effect is
      antidilutive.


                                       6
<PAGE>

3.    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.  Included  in this  reclassification  is a 65.63%  interest in
      secured notes issued by Case Financial  Funding,  Inc, a subsidiary of Old
      Case  ("CFF"),  acquired in February 2005 and valued at $287,000 as of the
      date  acquired,  that  provide the holder  with a secured  interest in the
      proceeds of the outstanding cases of CFF as more fully described in Note 7
      - Convertible  Debentures.  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. Furthermore the Company has reclassified its
      consolidated  financial statements as of December 31, 2004 to reflect such
      accounting  treatment.   A  summary  of  the  assets  and  liabilities  so
      classified is as follows:

                                                                   DECEMBER 31,
                                                                       2005
                                                                   ------------
      DISCONTINUED ASSETS
        OPERATING
         Service fees receivable net of impairment
         allowance of $122,520                                     $         86
      INVESTING
         Investments in contracts, net of allowance for
         contract losses of $470,411                                  1,899,385
         Loans receivable, net of allowance for bad
         debts of $99,851                                               100,000
                                                                   ------------
                                                                      1,999,385
                                                                   ------------
                                                                      1,999,471
                                                                   ============
      DISCONTINUED LIABILITIES
        OPERATING
          Accounts payable                                         $    282,665
      FINANCING
          Non recourse loans payable - related parties (1)            1,484,681
          Non recourse loans payable  (2)                               278,549
                                                                   ------------
                                                                   $  2,045,895
                                                                   ============
      -----------
      (1)   Notes to major stockholders,  officers and directors  collateralized
            by specifically  identified  investments in contracts,  payable upon
            settlement of the related  investments  in contracts plus either 75%
            or 50% of the fee income earned thereon. Repayment of these notes is
            contingent upon recovery of the specifically  identified investments
            in contracts.

      (2)   Notes  collateralized  by  specifically  identified  investments  in
            contracts,  payable upon  settlement of the related  investments  in
            contracts  plus either 75% or 50% of the fee income earned  thereon.
            Repayment  of  these  notes  is  contingent  upon  recovery  of  the
            specifically identified investments in contracts.


                                       7
<PAGE>

      Net revenues and expenses from discontinued operations are as follows:

                                                      THREE MONTH PERIOD ENDED
                                                     DECEMBER 31,  DECEMBER 31,
                                                     ------------  ------------
                                                         2005          2004
                                                     ------------  ------------
      Revenues                                       $      1,125  $     35,994
      Operating expenses                                   19,976        69,436
                                                     ------------  ------------
      Loss from discontinued operations              $    (18,851) $    (33,442)
                                                     ============  ============

4.    EQUIPMENT

      Equipment consisted of the following at December 31, 2005:

      Computer Software                              $      3,240
      Office furniture and fixtures                         3,077
      Office Equipment                                     13,922
                                                     ------------
                                                           20,239
      Less: Accumulated depreciation                       15,884
                                                     ------------
                                                     $      2,835
                                                     ============

5.    LOANS PAYABLE, RELATED PARTIES

      The related party debt consists of the following:
                                                                   December 31,
                                                                       2005
                                                                   ------------

        Note  payable  to major  stockholder,  uncollateralized,
        interest   payable  monthly  at  12.0%  per  annum,  due
        December 12, 2006 (1)                                      $  2,000,000

        Secured note payable,  major  shareholder,  secured by a
        lien on all  assets  of the  Company,  interest  payable
        monthly at 12.0% per annum,  due  September  8, 2004 (2)        500,000

        Note  payable,  unsecured,  payable  May 23,  2004  plus
        interest at 8% per annum. (3)                                   600,000

        Notes  payable,   uncollateralized,   interest   payable
        monthly  at 12.0% per  annum,  due  January  1, 2007 (4)        150,000

        Promissory  demand notes,  unsecured , interest  payable
        monthly at 12.0% per annum (5)                                  210,000

        Revolving demand loans-Officers (6)                              41,300
                                                                   ------------
                                                                      3,501,300
                                                                   ============

      ----------
      (1)   This loan also 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  value  of the
            warrants,  determined  utilizing  the Black  Scholes  option-pricing


                                       8
<PAGE>

            model,  was recorded as a debt discount and amortized  over the life
            loan.  CCWIPP  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.  The value of
            the reduction in the exercise  price of the warrants was  determined
            to be $150,500 utilizing the Black Scholes  option-pricing model and
            is being amortized as additional interest expense over the remaining
            life of the loan.  The  Company  is in  default on this loan and has
            been unable to resume interest  subsequent to the expiration of this
            deferral in July 2004 and, as of December 31, 2005 accrued  interest
            totaled  $460,274.  As a result  of the loan  being in  default  and
            therefore  immediately due and payable, the Company has written off,
            as of December 31, 2005,  $22,275 in deferred  interest costs to non
            cash finance expenses and $51,563 of prepaid finders fees to general
            and  administrative  expenses  related  to the  warrants  issued  in
            conjunction with this loan.

      (2)   In March 2004,  the Company  entered  into a $500,000  secured  loan
            agreement  with the CCWIPP.  This loan was 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 had  completed  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  issued
            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  issued  has been
            amortized  over the life of the loan  resulting in a charge for year
            ended  September 30, 2004 of $450,000 to non-cash  finance  expense.
            The Company is in default on this loan and, as of December  31, 2005
            accrued interest totaled $108,833.

      (3)   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 former director and former interim CEO
            and CFO of the Company.  On March 30, 2004, Mr. Bibicoff 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, he 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 one
            of the  Company's  former  CEO's.  As of June 7, 2004,  the  Company
            entered  into an  agreement  and mutual  release with the 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.  The new  management,  which  assumed  control  as of
            October 7, 2004 is investigating  the adequacy of the  consideration
            and the legal validity of the release. 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 $100,000 note was
            due May 2004. The Company is investigating  this matter. The Company
            is in default on both of these  notes due to non payment of interest
            (and  principal,  in the  case  of the  $600,000  note)  and,  as of
            December 31, 2005,  total accrued  interest on the $600,000  totaled
            $100,000. The note holder of the $600,000 has filed suit against the
            Company for non payment (See Note 9; Contingencies)


                                       9
<PAGE>

      (4)   Effective  January 1, 2003, an accredited  investor,  which is now a
            related  party  through its  affiliation  with CCWIPP,  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.  The Company is in default on this note and, as of
            December 31, 2005, accrued interest totaled $36,000.  As a result of
            the loan being in default and therefore immediately due and payable,
            the Company has written  off,  as of December  31,  2005,  $3,630 in
            deferred  interest costs to non cash finance expenses related to the
            warrants issued in conjunction with this loan.

      (5)   The Company had  outstanding  as of  December  31, 2005  $210,000 in
            unsecured  promissory  demand notes,  all to former  directors.  The
            holders  of these  demand  notes  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. The Company is in
            default on all of these notes due to non payment of interest and, as
            of December 31, 2005,  accrued interest  totaled  $47,462.  The note
            holder of the  $40,000  of these  notes has filed suit  against  the
            Company for non payment (See Note 9; Contingencies)

      (6)   During the three months ended December 31, 2005, the Company entered
            into  revolving  demand  loan  agreements  with its Chief  Executive
            Officer and Chief Financial Officer.  Pursuant to the terms of these
            agreements, the Company may borrow, at the discretion of the lender,
            up to $50,000 from each officer  payable on demand with  interest at
            8.0%.  As of  December  31,  2005,  $18,800 was  outstanding  to the
            Company's Chief Executive Officer and $22,500 was outstanding to the
            Company's  Chief  Financial  Officer.  Accrued  interest  payable at
            December 31, 2005 totaled $355.


                                       10
<PAGE>

6.    LOANS PAYABLE, UNRELATED PARTIES

      The unrelated party debt consists of the following:

                                                                   December 31,
                                                                       2005
                                                                   ------------
        Note  payable   unsecured  payable  May  23,  2004  plus
        interest at 8% per annum. (1)                              $    100,000

        Notes  payable,   uncollateralized,   interest   payable
        monthly  at 12.0% per  annum,  due  January  1, 2007 (2)         50,000

        Promissory  demand notes,  unsecured , interest  payable
        monthly at 12.0% per annum (3)                                  120,000
                                                                   ------------
                                                                   $    270,000
                                                                   ============

      ----------
      (1)   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  and former  interim CEO and
            CFO of the Company. 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 the  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  $100,000  note was due May 2004.
            The Company is investigating  this matter. The Company is in default
            on this note due to non payment of interest  and, as of December 31,
            2005, accrued interest totaled $10,667.

      (2)   The principal amount of this promissory note was $50,000.  Effective
            January 1, 2003, the noteholder  converted  their  investment in the
            Company by exchanging a four year,  9.85% per annum  promissory note
            for a four  year,  12% per  annum  promissory  note.  As part of the
            conversion,  the Company  cancelled  four year  warrants to purchase
            25,000  shares of common  stock at $0.60 per share,  and issued four
            year  warrants to purchase:  (i) 50,000 shares of common stock at an
            exercise price of $0.50 and (ii) 25,000 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.  The Company is in
            default  on this note due to non  payment  of  interest  and,  as of
            December 31, 2005,  accrued interest totaled $9,000.  As a result of
            the loan being in default and therefore immediately due and payable,
            the Company has written  off,  as of December  31,  2005,  $1,210 in
            deferred  interest costs to non cash finance expenses related to the
            warrants issued in conjunction with this loan.

      (3)   The Company had  outstanding  as of  December  31, 2005  $120,000 in
            unsecured  promissory  demand notes to the former CEO and a relative
            of the former  CEO which bear  interest  at 12%.  The  Company is in
            default on these  notes due to non  payment of  interest  and, as of
            December 31, 2005, accrued interest totaled $28,599.


                                       11
<PAGE>

7.    CONVERTIBLE DEBENTURES

      On February 28, 2005, the Company  purchased a 65.63%  interest  valued at
      $287,000  as of the date  acquired  based  upon  the pro rata  collectible
      principal in the remaining case portfolio of Case Financial Funding,  Inc,
      a subsidiary of Old Case ("CFF"), by acquiring 65.63% of the secured notes
      issued  by CFF that  provide  the  holder  with  secured  interest  in the
      proceeds  of the  outstanding  cases  of CFF.  This  investment  has  been
      reclassified as a discontinued  asset. As consideration for this purchase,
      the Company  issued a convertible  debenture in the amount  $287,000.  The
      principal  amount of the  debenture  is due and  payable in full two years
      from the date of issue unless  converted  into common stock of the Company
      at a conversion price of $0.15 per share, a total of 1,913,333 shares. The
      Company has the right at anytime, after one year, to require conversion of
      the  debenture  into shares of common  stock at $0.15 per share,  provided
      that:  the stock at anytime  trades at $0.30 or higher  for a  consecutive
      period of 30 trading days. Interest is payable  semi-annually at a rate of
      5% per annum.  The Company  recorded  the  beneficial  conversion  feature
      associated  with the  convertible  debentures  in the  amount  of  $19,133
      representing the difference  between the $0.15 per share exercise price of
      the  conversion  feature  and the  $0.16  per  share  market  value of the
      Company's  common  stock  on  the  date  of  the  debenture.  The  $19,133
      beneficial  conversion is being amortized as additional  interest over the
      two year term of the  convertible  debenture.  On October  19,  2005,  the
      Company  issued  200,000  shares of its common stock in payment of accrued
      interest  on the  outstanding  convertible  debentures  in the  amount  of
      $14,350 ($0.072 per share).

8.    COMMITMENTS

      The Company conducts its operations  utilizing  leased  facilities under a
      non-cancelable  operating  lease  agreement  expiring on October 31, 2006.
      Future minimum lease commitments,  excluding property taxes and insurance,
      are as follows:

                         Period ending September 30,

                         2006                        $     17,776
                         2007                               1,980
                                                     ------------
                         Total                       $     19,756
                                                     ============

9.    CONTINGENCIES

      On November 9, 2005,  the Company  and L&M  Specialties,  Inc.,  a company
      controlled by the Chairman of the Board and Chief Executive Officer of the
      Company,  filed suit in the U.S.  District  Court,  Southern  District  of
      Florida,  located in Miami,  Florida,  against Canadian Commercial Workers
      Industry  Pension Plan, known as CCWIPP, a large debenture and shareholder
      of the Company,  South Ocean  Development  Company,  Ltd. (a subsidiary of
      CCWIPP),  Allen & Company and certain  individuals for breach of fiduciary
      duties,   fraudulent  inducement,   breach  of  contract  and  declaratory
      judgment.  The suit seeks damages  against the  defendants  arising out of
      their conduct with respect to certain  agreements to purchase a waterfront
      hotel property,  overlooking a golf course and marina,  including a gaming
      license, located on the island of New Providence,  Bahamas and to purchase
      $2.5 million of outstanding Case Financial debentures held by CCWIPP.

      The South Ocean Development Company, Ltd signed a letter of intent to sell
      the  property on March 26,  2005,  with L&M  Specialties  Inc.  CCWIPP had
      required  that an entity other than the Company  enter into the  agreement
      until such time that the property  could be conveyed to the Company.  Both
      the Company and L&M Specialties agreed to this arrangement.

      The suit alleges,  among other things,  that the  defendants  violated the
      exclusivity provisions of the agreement for purchasing the property in the
      Bahamas,  attempted  to lure  away  investment  groups  introduced  to the
      property by plaintiffs,  and fraudulently induced plaintiffs into agreeing
      to purchase the  debentures in return for an extension of the deadlines in
      the agreement to purchase the property, which defendants did not intend to
      perform.  The suit alleges that  defendants  obtained the agreements  from
      plaintiffs  in order to deflect and mitigate an ongoing  investigation  of
      CCWIPP by the  Financial  Services  Commission  of  Ontario,  Canada.  The
      Company,  through its officers and directors, has made several attempts to
      resolve the breach to no avail,  resulting  in the filing of this  action.
      Such  litigation  could be  protracted,  costly and with no assurance that
      plaintiffs will be successful.


                                       12
<PAGE>

      On August 8, 2005, a lawsuit was filed against the Company by a former CEO
      and director in the Superior Court of the State of California, Case Number
      BC 337914,  demanding  payment of two  promissory  notes in the amounts of
      $600,000 and $40,000 and  purporting  other  amounts due and owning by the
      Company  for past wages and other fees due  related to cases for which the
      former CEO and director  participated in the funding.  It is the Company's
      position  that the notes were the result of improper,  invalid and illegal
      transfers of debts from other  entities to Case  Financial  that were done
      without Board Approval in violation of Delaware and  California  Corporate
      Law and in breach of the former CEO and  director  fiduciary  duties.  The
      Company  does not  believe  the  outcome of this case will have a material
      effect on the  financial  condition  of the  Company as stated in that the
      promissory  notes  and  the  accrued  interest  thereon  are  recorded  as
      liabilities of the Company and other claims purported to be due and owning
      by the  Company  for past  wages and other  fees due  related to cases for
      which the former CEO and director  participated in the funding are without
      merit.

      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.  On October 5, 2005, Mr. Gregory,  Mr.  Pollock,  and the Company
      executed a Settlement and Release Agreement regarding this action pursuant
      to which;  a) Mr.  Gregory  will return to the  Company  for  cancellation
      750,000  shares of common stock owned or  controlled by him and return and
      cancel two  promissory  notes of the  Company  totaling  $100,000;  b) Mr.
      Pollock  will  return to the Company for  cancellation  100,000  shares of
      common stock owned or  controlled  by him and repay in cash to the Company
      $15,160;  c) Mr.  Pollock and Mr.  Gregory  will be released  from further
      action by the  majority  stockholder  and the Company  with respect to the
      claims made in the derivative lawsuit, and; d) Mr. Pollock and Mr. Gregory
      agree to waive any and all  further  claims  against  the  Company and the
      major stockholder.  The foregoing  agreement is subject to approval by the
      Court of Chancery in the State of  Delaware.  Mr.  Alden and Mr.  Bibicoff
      remain as defendants in this action.  Further, Mr. Alden filed a breach of
      contract  action which has been stayed by the court pending outcome of the
      derivative action suit.

      The Company was served  with a complaint  in February  2004 filed with the
      Los Angeles  Superior Court,  Northwest  District,  Case Number LC 067786,
      naming the Company and a former  director of the Company Harvey  Bibicoff,
      as  co-defendants  in a case  against  Old  CFI  claiming  a  breach  of a
      promissory  note by Old  Case  and  asserting  fraud  seeking  damages  of
      $140,000 plus attorneys fees and punitive  damages.  The Company continues
      to defend this suit and  believes  the  ultimate  outcome  will not have a
      material  impact on the  Company's  financial  condition.  The Company has
      accrued $140,000 as of December 31, 2005 for this potential claim.

      The  Company is in  default on all of its  recourse  debt  obligations  as
      described  in Notes 5 and 6 and,  although  no formal  demands for payment
      have been made by any of the lenders other than claims on the $600,000 and
      $40,000 noted as described above,,  there is no assurance that such demand
      will  not be made in the  future  and  that  the  Company  will be able to
      resolve such demands.


                                       13
<PAGE>

      In addition to the  foregoing,  the Company has initiated  several  action
      against  attorneys who where the  beneficiary of the companies  litigation
      financing  programs and who  breached  their  agreements  with the Company
      relative to such  financing.  The Company has fully  reserved  the amounts
      outstanding  for these advances which have since been classified as assets
      from discontinued operations.

10.   STOCKHOLDERS DEFICIENCY

      On October 19, 2005, the Company issued 200,000 shares of its common stock
      in payment of accrued interest on the outstanding  convertible  debentures
      in the amount of $14,350 ($0.072 per share).

      On October 20, 2005,  the Company  entered into a one year  agreement  for
      services with Kaliber  Management  Corporation  ("Kaliber")  to assist the
      Company in seeking additional capital pursuant to which the Company issued
      to Kaliber 300,000 shares of its common stock and agreed to pay a finders'
      fees for corporate  financings with entities  introduced to the Company by
      Kaliber in the amount of 5% on the first $1.0 million in financing,  4% on
      amounts between $1.0 million and $2.0 million,  3% on amounts between $2.0
      million and $3.0  million,  2% on amounts  between  $3.0  million and $4.0
      million,  and 1% on amounts  over $4.0  million . The market  value of the
      stock on the date  granted  was $0.08 per share for a total of $24,000 was
      charged to financial consulting fees.

      On October 25, 2005, the Company issued 150,000 shares of its common stock
      to each of the Company's four  directors,  a total of 600,000  shares,  as
      compensation  for services  for the year ended  September  30,  2005.  The
      market  value of the stock on the date  granted  was $0.10 per share for a
      total of  $60,000  which was  charged  to  director's  compensation  as of
      September 30, 2005.

      On November 23, 2005,  the Company  entered into a one year  agreement for
      services with James Caplan,  dba Market  Maker's  ("Market  Maker's"),  to
      assist the  Company in investor  relations,  pursuant to which the Company
      agreed to pay $1,000 per month and issued to Market Maker's 100,000 shares
      of its common stock upon signing and further agreed to issue an additional
      100,000 shares of its common stock after a ninety day  evaluation  period.
      The market  value of the stock on the date granted was $0.21 per share for
      a total of $21,000 was charged to financial consulting fees.

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

The discussion  contained herein is for the three months ended December 31, 2005
and  2004.  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, 2005.  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/A filed on January 23, 2006 with 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


                                       14
<PAGE>

Quarterly  Report on Form 10-QSB for the  quarterly  period  ended  December 31,
2005. The information  contained in this Quarterly Report on Form 10-QSB for the
quarterly  period ended  December 31, 2005 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, 2005 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.   Furthermore,  we  have  reclassified  our  consolidated  financial
statements as of September 30, 2004 to reflect such accounting treatment.

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, 2006.  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.

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


                                       15
<PAGE>

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/A for the fiscal year ended September 30,
2005, as well as in the notes to the September 30, 2005  consolidated  financial
statements.  There have not been any  significant  changes  to these  accounting
policies since they were previously reported at September 30, 2005.

RESULTS OF OPERATIONS

Discontinued Operations

All revenue and expenses applicable to our Litigation Finance Business have been
reported as Loss from  Discontinued  Operations in Statement of Operations.  The
components of Loss from Discontinued Operations for the years ended December 31,
2005 and December 31, 2004 consist of the following

      Net revenues and expenses from discontinued operations are as follows:

                                                     DECEMBER 31,  DECEMBER 31,
                                                         2005          2004
                                                     ------------  ------------
      Revenues                                       $      1,125  $     35,994
      Operating expenses                                   19,976        69,436
                                                     ------------  ------------
      Loss from discontinued operations              $    (18,851) $    (33,442)
                                                     ============  ============

In the aggregate,  our Loss from Discontinued Operations decreased by $14,591 or
44%,  to  $18,851.  Revenues  from the  Litigation  Finance  Business  decreased
$34,869,  or 97%, in the three  months  ended  December  31, 2005 over the three
months  ended  December  31,  2004 as a result  of  having  limited  success  in
collecting  the  balances  owed  from  the  oldest  and most  problematic  cases
remaining on our portfolio from investments in prior years.  Operation  expenses
in the Litigation  Finance Business  declined  $49,460,  or 71%, to $19,976 as a
result  of  termination  of the  personnel  related  to the  Litigation  Finance
Business  during  the  year  ended  September  30,  2005 and  downsizing  of our
operations.

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,
2005,  administrative  expenses  increased  $36,814,  or 20%, to  $221,151.  The
increase is the result of  reductions in rent expense of  approximately  $5,000,
the  elimination  of our  director  and  officer  liability  insurance  premiums
resulting in a saving of $20,000 and  reductions in corporate  legal expenses of
$78,000  offset by the write-off of $51,563 in deferred  costs  associated  with
warrants  issued as finders  for a $2.0  million  loan for which we have been in
default and have therefore  deemed the loan  immediately due and payable as well
as increases in directors fees of $24,000,  consulting  fees paid primarily with
the issuance of our common stock of $45,000, general and administrative salaries
of $18,000 and $3,000 in financial consulting and accounting expenses.

Interest Expense

Interest  expense was  $104,036  for the three  months  ended  December 31, 2005
compared with $107,702 for the three months ended  December 31, 2004, a decrease
of $3,666,  or 3%, primarily as a result of a lower interest rate on $287,000 in
convertible  debentures  we issued on  February  28, 2005 than the debt that was
outstanding during the three months ended December 31, 2004.


                                       16
<PAGE>

Non-Cash Finance Expense

Non-cash  finance  expenses were $50,584 for the three months ended December 31,
2005, as compared with $54,119  during the three months ended December 31, 2004,
a decrease of $3,535.

Non-cash finance expenses represent amortized costs of common stock, options and
warrants granted in conjunction with financing  transactions.  In as much as the
underlying notes associated with these deferred interest,  specifically the $2.0
million and $150,000 notes payable to a related party (a major  stockholder) and
the $50,000  note  payable to an  unrelated  party are in default and  therefore
deemed immediately due and payable,  we have written off the balance of deferred
interest totaling $27,115.

LIQUIDITY AND CAPITAL RESOURCES

In their report  dated  December 19, 2005 on the  financial  statements  for the
fiscal  year ended  September  30,  2005;  our  independent  auditors  expressed
substantial  doubt about our ability to  continue  as a going  concern.  We have
discontinued our principal  business,  the Litigation Finance Business.  We have
incurred  net losses of $  $1,586,202  and  $2,578,438  during  the years  ended
September 30, 2005 and 2004,  respectively.  There was an accumulated deficit of
$14,030,360 as of September 30, 2005 and total liabilities exceeded total assets
by  $4,871,616  as of  September  30, 2005.  As of December 31, 2005,  we had an
accumulated  deficit of $14,424,828,  a stockholders'  deficiency of $5,193,051,
and a net loss and negative cash flows from  operating  activities for the three
months  ended  December  31, 2005 of $394,468  and  $52,275,  respectively.  Our
current  cash  is  not  sufficient  to  sustain  our  operations  unless  we are
successful  at  collecting  amounts due and owing on our existing  investment in
contracts and loan  receivable  portfolios  and/or raising  additional  capital.
These  conditions  raise  substantial  doubt  about our ability to continue as a
going concern and our financial  statements do not include any adjustments  that
might result from the outcome of this uncertainty.

Operating Activities

Our balance sheet at December 31, 2005 reflects cash of $9,340  compared to cash
of  $14,367 at  September  30,  2005,  a  decrease  of $5,027.  Net cash used in
operating  activities  was $52,275 for the three months ended  December 31, 2005
compared to $206,137 for the three months ended December 31, 2004, a decrease in
cash used in  operating  activities  of  $153,862.  Net cash  used in  operating
activities  from  continuing  operations  was $23,501 for the three months ended
December 31, 2005 as compared to $251,917  for the three  months ended  December
31,  2004,  a  decrease  $228,416.  The  decrease  in cash  used  in  continuing
operations  is the result of our  increases  in  accounts  payable  and  accrued
expenses primarily as a result of our non payment of interest.  Net cash used in
operating  activities  for  discontinued  operations  was  $28,773 for the three
months  ended  December  31, 2005 as compared to $45,781 of cash  provided  from
operating  activities  of  discontinued  operations  for the three  months ended
December 31, 2004,  primarily the result of decreased  collection of fees on our
investments in contracts and loans receivable balances.

Investment Activities

Net cash provided by investing  activities  for the three months ended  December
31, 2005 was $5,948  compared to net cash  provided by investing  activities  of
$590,840 for the three  months  ended  December 31, 2004 a decrease of $584,856.
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 $41,300 for the three months ended
December  31, 2005 as compared to net cash used by finance  activities  of $302,
947 for the three  months ended  December 31, 2004 an increase of $344,247.  Net
cash provided by financing  activities s for the three months ended December 31,
2005  consisted of officer loans and are classified as current  operations.  Net
cash used in financing activities from discontinued  operations was $302,947 for
the three months  ended  December  31, 2004 as a result of  repayments  of third
party non recourse  loans from funding of cases that were settled and  collected
during the period.


                                       17
<PAGE>

We are in default on all of our  recourse  debt  obligations  and,  although  no
formal  demands  for  payment  have been made by any of the  lenders  other than
claims on a $600,000 and $40,000 note from a former officer and director who has
commenced a legal  proceeding  for  collection,  there is no assurance that such
demands  will not be made in the future and that we will be able to resolve such
demands.

PRINCIPAL COMMITMENTS

We conduct our operations  utilizing  leased  facilities  under a non-cancelable
operating  lease  agreement  expiring on October 31, 2006.  Future minimum lease
commitments, excluding property taxes and insurance, are as follows:

                        Period ending September 30,

                        2006                         $     17,776
                        2007                                1,980
                                                     ------------
                        Total                        $     19,756
                                                     ============

OFF-BALANCE SHEET ARRANGEMENTS

At  December  31  2005,  we  did  not  have  any  transactions,  obligations  or
relationships that could be considered off-balance sheet arrangements.

ITEM 3.  CONTROLS AND PROCEDURES.

(a)   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.


                                       18
<PAGE>

(b)   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 November 9, 2005, the Company and L&M Specialties, Inc., a company controlled
by the Chairman of the Board and Chief Executive  Officer of the Company,  filed
suit in the U.S. District Court, Southern District of Florida, located in Miami,
Florida,  against  Canadian  Commercial  Workers Industry Pension Plan, known as
CCWIPP,  a  large  debenture  and  shareholder  of  the  Company,   South  Ocean
Development Company, Ltd. (a subsidiary of CCWIPP),  Allen & Company and certain
individuals for breach of fiduciary  duties,  fraudulent  inducement,  breach of
contract and declaratory judgment. The suit seeks damages against the defendants
arising out of their  conduct with respect to certain  agreements  to purchase a
waterfront  hotel  property,  overlooking a golf course and marina,  including a
gaming license, located on the island of New Providence, Bahamas.

The South Ocean Development  Company,  Ltd signed a letter of intent to sell the
property on March 26, 2005, with L&M  Specialties  Inc. CCWIPP had required that
an entity other than the Company enter into the  agreement  until such time that
the  property  could  be  conveyed  to the  Company.  Both the  Company  and L&M
Specialties agreed to this arrangement.

The  suit  alleges,  among  other  things,  that  the  defendants  violated  the
exclusivity  provisions  of the  agreement  for  purchasing  the property in the
Bahamas,  attempted to lure away investment groups introduced to the property by
plaintiffs,  and fraudulently  induced  plaintiffs into agreeing to purchase the
debentures  in return for an  extension  of the  deadlines  in the  agreement to
purchase the  property,  which  defendants  did not intend to perform.  The suit
alleges that  defendants  obtained the  agreements  from  plaintiffs in order to
deflect  and  mitigate  an  ongoing  investigation  of CCWIPP  by the  Financial
Services  Commission of Ontario,  Canada. The Company,  through its officers and
directors,  has made  several  attempts  to  resolve  the  breach  to no  avail,
resulting in the filing of this action.  Such  litigation  could be  protracted,
costly and with no assurance that  plaintiffs  will be successful.  On August 8,
2005,  a lawsuit was filed  against the Company by a former CEO and  director in
the Superior Court of the State of California,  Case Number BC 337914, demanding
payment of two  promissory  notes in the  amounts of  $600,000  and  $40,000 and
purporting  other amounts due and owning by the Company for past wages and other
fees due related to cases for which the former CEO and director  participated in
the  funding.  It is the  Company's  position  that the notes were the result of
improper,  invalid and illegal  transfers  of debts from other  entities to Case
Financial  that were done  without  Board  Approval in violation of Delaware and
California  Corporate Law and in breach of the former CEO and director fiduciary
duties.  The  Company  does not  believe  the  outcome  of this case will have a
material effect on the financial  condition of the Company as stated in that the
promissory notes and the accrued interest thereon are recorded as liabilities of
the Company and other  claims  purported to be due and owning by the Company for
past  wages and other  fees due  related  to cases for which the  former CEO and
director participated in the funding are without merit.

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


                                       19
<PAGE>

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.  On October 5, 2005,
Mr.  Gregory,  Mr.  Pollock,  and the Company  executed a Settlement and Release
Agreement regarding this action pursuant to which; a) Mr. Gregory will return to
the Company for cancellation  750,000 shares of common stock owned or controlled
by him and  return  and  cancel two  promissory  notes of the  Company  totaling
$100,000;  b) Mr.  Pollock will return to the Company for  cancellation  100,000
shares  of  common  stock  owned or  controlled  by him and repay in cash to the
Company  $15,160;  c) Mr.  Pollock and Mr. Gregory will be released from further
action by the  majority  stockholder  and the Company with respect to the claims
made in the  derivative  lawsuit,  and; d) Mr.  Pollock and Mr. Gregory agree to
waive any and all further claims against the Company and the major  stockholder.
The  foregoing  agreement is subject to approval by the Court of Chancery in the
State of  Delaware.  Mr. Alden and Mr.  Bibicoff  remain as  defendants  in this
action.  Further,  Mr.  Alden filed a breach of contract  action  which has been
stayed by the court pending outcome of the derivative action suit.

The  Company was served  with a  complaint  in February  2004 filed with the Los
Angeles Superior Court,  Northwest District,  Case Number LC 067786,  naming the
Company and a former director of the Company Harvey  Bibicoff,  as co-defendants
in a case against Old CFI claiming a breach of a promissory note by Old Case and
asserting  fraud seeking  damages of $140,000 plus  attorneys  fees and punitive
damages.  The Company  continues  to defend this suit and  believes the ultimate
outcome will not have a material  impact on the Company's  financial  condition.
The  Company has accrued  $140,000  as of December  31, 2005 for this  potential
claim.

The Company is in default on all of its recourse debt  obligations  as described
in Notes 5 and 6 and,  although no formal  demands for payment have been made by
any of the  lenders  other than  claims on the  $600,000  and  $40,000  noted as
described above,, there is no assurance that such demand will not be made in the
future and that the Company will be able to resolve such demands.

In addition to the foregoing,  the Company has initiated several actions against
attorneys  who  were  the  beneficiary  of the  company's  litigation  financing
programs and who breached  their  agreements  with the Company  relative to such
financing.  The Company has fully  reserved  the amounts  outstanding  for these
advances  which  have  since  been   classified  as  assets  from   discontinued
operations.

ITEM 2.  UNREGISTERED SALE OF EQUITY SECURITIES.

On October 19, 2005,  the Company  issued  200,000 shares of its common stock in
payment of accrued  interest on the  outstanding  convertible  debentures in the
amount of $14,350 ($0.072 per share).

On October 20, 2005, the Company  entered into a one year agreement for services
with Kaliber Management Corporation ("Kaliber") to assist the Company in seeking
additional  capital  pursuant  to which the  Company  issued to Kaliber  300,000
shares of its  common  stock and  agreed to pay a  finders'  fees for  corporate
financings  with entities  introduced to the Company by Kaliber in the amount of
5% on the first $1.0 million in  financing,  4% on amounts  between $1.0 million
and $2.0 million,  3% on amounts  between $2.0 million and $3.0  million,  2% on
amounts  between  $3.0  million and $4.0  million,  and 1% on amounts  over $4.0
million . The market  value of the stock on the date granted was $0.08 per share
for a total of $24,000 was charged to financial consulting fees.

On October 25, 2005,  the Company  issued  150,000 shares of its common stock to
each of the Company's four directors, a total of 600,000 shares, as compensation
for services  for the year ended  September  30,  2005.  The market value of the
stock on the date  granted was $0.10 per share for a total of $60,000  which was
charged to director's compensation as of September 30, 2005.


                                       20
<PAGE>

On November 23, 2005, the Company entered into a one year agreement for services
with James Caplan, dba Market Maker's ("Market Maker's"),  to assist the Company
in investor  relations,  pursuant to which the Company  agreed to pay $1,000 per
month and  issued to Market  Maker's  100,000  shares of its  common  stock upon
signing and further  agreed to issue an additional  100,000 shares of its common
stock after a ninety day evaluation period. The market value of the stock on the
date granted was $0.21 per share for a total of $21,000 was charged to financial
consulting fees.

ITEM 3.  DEFAULTS IN SENIOR SECURITIES.

As of December 31, 2005, the Company is in default on the following notes:

  1.    Note  payable  to major  stockholder,  uncollateralized,
        interest   payable  monthly  at  12.0%  per  annum,  due
        December  12,  2006.  The  Company is in default on this
        loan and,  as of  December  31,  2005  accrued  interest
        totaled $460,274.                                          $  2,000,000

  2.    Secured note payable,  major  shareholder,  secured by a
        lien on all  assets  of the  Company,  interest  payable
        monthly at 12.0% per annum,  due September 8, 2004.  The
        Company is in default on this loan and,  as of  December
        31, 2005 accrued interest totaled $108,833.                $    500,000

  3.    Note  payable,  unsecured,  payable  May 23,  2004  plus
        interest  at 8% per annum.  The Company is in default on
        this loan and, as of December 31, 2005 accrued  interest
        totaled $100,000. The note holder has filed suit against
        the Company for non payment.                               $    600,000

  4.    Notes  payable,   uncollateralized,   interest   payable
        monthly at 12.0% per annum,  due January 1,  2007,.  The
        Company is in default on this note and,  as of  December
        31, 2005, accrued interest totaled $36,000.                $    150,000

  5.    Promissory  demand notes,  unsecured , interest  payable
        monthly at 12.0% per annum. The Company is in default on
        all of these notes due to non  payment of interest  and,
        as  of  December  31,  2005,  accrued  interest  totaled
        $47,462.  The note  holder  of a $40,000  note  included
        herein  has  filed  suit  against  the  Company  for non
        payment.                                                   $    210,000

  6.    Note  payable   unsecured  payable  May  23,  2004  plus
        interest  at 8% per annum.  The Company is in default on
        this note due to non  payment  of  interest  and,  as of
        December 31, 2005,  accrued  interest  totaled  $10,667.   $    100,000

  7.    Note payable, uncollateralized, interest payable monthly
        at 12.0% per annum,  due January 1, 2007. The Company is
        in default on this note due to non  payment of  interest
        and, as of December 31, 2005,  accrued  interest totaled
        $9,000.                                                    $     50,000

  8.    Promissory  demand notes,  unsecured , interest  payable
        monthly at 12.0% per annum. The Company is in default on
        these notes due to non  payment of  interest  and, as of
        December 31, 2005,  accrued interest totaled $28,599.      $    120,000


                                       21
<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


                                   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: March 4, 2006                    /s/ Michael Schaffer
                                        ---------------------------------------
                                   By:  Michael Schaffer
                                   Its: Chief Executive Officer (Principal
                                        Executive Officer)


Dated: March 4, 2006                    /s/ Lawrence Schaffer
                                        ---------------------------------------
                                   By:  Lawrence Schaffer
                                   Its: Chief Financial Officer (Principal
                                        Financial Officer and Principal
                                        Accounting Officer)


                                       22