CASDIM INTERNATIONAL SYSTEMS INC
424B1, 1996-10-16
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                                                       Rule 424(b)(1) Prospectus

PROSPECTUS         [Logo of Company appears centered above name]

                       CASDIM INTERNATIONAL SYSTEMS INC.

                        5,450,000 Shares of Common Stock

     This  Prospectus  relates to the resale by certain  shareholders  of Casdim
International  Systems, Inc. (the "Company") of up to 5,450,000 shares of common
stock (the "Shares"),  of which  4,000,000  Shares were issued by the Company in
connection with its May 1996 private placement. The Company will not receive any
proceeds from the sale of any of these 4,000,000 Shares.  An additional  300,000
shares  are being sold by  Cedarwood  Trading &  Investment  Ltd.,  a  principal
stockholder.  The remaining  1,150,000  Shares are issuable  upon  conversion of
warrants (the "Warrants") issued to certain financial consultants to the Company
in May 1996.  No assurance  can be given as to if and when the Warrants  will be
exercised. The holders of the Shares are sometimes referred to in the Prospectus
as the  "Selling  Shareholders."  The Shares may be offered from time to time by
the  Selling  Shareholders  in  the   over-the-counter   market,  in  negotiated
transactions or otherwise, at market prices prevailing at the time of sale or at
negotiated prices.

     For most of the  period  since the  completion  of its public  offering  on
September 27, 1989, the public  trading  market for the Company's  common stock,
par value $.0001 per share (the "Common Stock") has not been active.  The Common
Stock is presently  quoted on the Nasdaq  Bulletin  Board.  Because  there is no
established  trading  market,  and only a limited  number of market  makers have
sporadically offered to purchase and sell shares of Common Stock, during most of
the period  since 1989  reliable  quotations  for the Common Stock have not been
available.  On October 11, 1996 the  closing  bid price for the Common  Stock as
reported on the Nasdaq  Bulletin Board was 4 3/8.  Application has been made for
the  Company's  Common  Stock to be listed on the Nasdaq  Small Cap Market.  See
"Price Range of Common Stock."
 
PROSPECTIVE  INVESTORS  SHOULD  CAREFULLY  CONSIDER  THE RISKS  ASSOCIATED WITH
INVESTMENT  IN THE SHARES,  WHICH RISKS ARE  DESCRIBED  UNDER THE CAPTION "RISK
FACTORS" ON PAGE 6 .

THESE  SECURITIES  HAVE NOT BEEN APPROVED OR  DISAPPROVED  BY THE SECURITIES AND
EXCHANGE  COMMISSION OR ANY STATE  SECURITIES  COMMISSION NOR HAS THE SECURITIES
AND  EXCHANGE  COMMISSION  OR ANY STATE  SECURITIES  COMMISSION  PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.

                                    --------


                The date of this Prospectus is October 11, 1996.


<PAGE>


The  Company  will  furnish its  shareholders  with  annual  reports  containing
financial  statements  certified by independent  public  accountants and publish
quarterly reports containing unaudited financial data.



This Prospectus  shall not constitute an offer to sell or the solicitation of an
offer to buy nor shall there be any sale of these securities in any jurisdiction
in  which  such  offer,   solicitation  or  sale  would  be  unlawful  prior  to
registration   or   qualification   under  the  securities   laws  of  any  such
jurisdiction.  Neither  the  delivery  of  this  Prospectus  nor any  sale  made
hereunder shall under any  circumstances  create any implication  that there has
been no change in the affairs of the Company since the date hereof.


                                       -2-

<PAGE>


                               PROSPECTUS SUMMARY

         The following summary is qualified in its entirety by the more detailed
information and financial  statements and notes thereto  appearing  elsewhere in
this Prospectus.

                                   The Company

         Casdim International  Systems, Inc. and its subsidiaries  (collectively
referred  to herein as the  "Company")  design and develop  interactive  kiosks,
customized  databases  and perform  network  integration.  The Company  designs,
develops and markets  multimedia  kiosks to companies in various market sectors,
including medical, health insurance, banking, human resources, lodging and trade
fairs.  Currently,  the Company provides kiosks to several large  enterprises in
Israel,  including  medical  kiosks  for  Kupat  Holim  Leumit,  one of the four
existing HMOs in Israel,  Madanis  Insurance  Company Ltd.,  Mercantile Bank and
shopping malls. 

         The Company is a Colorado  holding  company  incorporated on January 5,
1988 under the name of S.W.  Financial  Corporation for the purpose of acquiring
an interest in one or more business  opportunities  in the field of  multimedia,
information and communication  technology.  In keeping with the stated corporate
purpose,   the  then  management  of  the  Company  evaluated  several  business
opportunities and, during the fiscal year ended December 31, 1995, finalized the
Company's first corporate acquisition.  The acquisition was effected by means of
an agreement for the exchange of stock and plan of reorganization dated November
21,  1995,  (the  "Exchange  Agreement"),  by  and  among  the  Company,  Casdim
Interactive  Systems USA, Inc.  ("Casdim  USA"), a Nevada  corporation,  and Mr.
Yehuda Shimshon. Mr. Shimshon acted on behalf of himself and Cedarwood Trading &
Investment  Ltd.  ("Cedarwood"),  the then  sole  shareholders  of  Casdim  USA.
Pursuant to the terms of the Exchange  Agreement,  the Company  acquired all the
issued and outstanding  shares of Casdim USA in exchange for 425,000,000  shares
of the Company.  The Exchange Agreement,  which became effective on December 11,
1995, was approved at a special meeting of the  shareholders of the Company held
on October 24, 1995 at which the  shareholders  also approved:  (i) renaming the
Company  Casdim  International  Systems,  Inc.;  (ii)  the 50:1  stock  split of
76,700,000 shares,  the then outstanding  number of shares of the Company,  into
1,534,000  shares;  and (iii) the  appointment of Mr.  Shimshon as President and
Chairman of the Board.

         The  Company  maintains  its  principal  executive  offices  at 90 Park
Avenue, New York, New York 10016, and its telephone number is 212-984-1090.


                                       -3-

<PAGE>

                                                   The Offering


Common Stock offered...............5,450,000 shares (1)

Common Stock to be outstanding
   after the Offering..............14,784,000 shares (2)

Use of proceeds....................The Company will not receive any
                                   proceeds from the sale of the Shares by the
                                   Selling Shareholders.  The net proceeds to
                                   be received by the Company from the
                                   exercise of the Warrants, assuming the
                                   exercise of all such Warrants, are
                                   estimated to be approximately $1,075,000.
                                   Such proceeds will be used for working
                                   capital.

Nasdaq Bulletin Board Symbol.......CDMI

Risk Factors.......................Prospective investors should carefully
                                   consider the matters set forth herein under
                                   the captions "RISK FACTORS."

- --------------------

(1)   Assumes the sale of 1,150,000 Shares to be issued upon exercise of the 
      Warrants.

(2)   Does not include  500,000  shares of Common  Stock  reserved  for issuance
      pursuant to the Company's 1996 Stock Option Plan, 700,000 shares of Common
      Stock  issuable  upon exercise of an option  granted to Sunrise  Financial
      Group,  Inc. and 100,000  shares of Common Stock issuable upon exercise of
      an option granted to WEDA  Corporation  N.V. See  "Description  of Capital
      Stock" and "Management - Stock Options."

(3)   Application  has been made for the Company's  Common Stock to be listed on
      the Nasdaq  Small Cap Market.  No  assurance  can be given that the Common
      Stock will be accepted for listing.  The possible  inclusion of the Common
      Stock on the Nasdaq system does not provide any  assurance  that an active
      and  liquid  trading  market  will  develop  or be  maintained.  See "Risk
      Factors--Absence of Active Public Market."


                                       -4-

<PAGE>

                             Summary Financial Data


Income Statement Data:
<TABLE>
<CAPTION>

                                                        Year Ended December 31,             Six Months Ended June 30,
                                                        -----------------------             -------------------------
                                                       1995               1994             1996                 1995
                                                       ----               ----             ----                 ----
<S>                                                 <C>                 <C>               <C>               <C>         
Sales........................................       $  2,011,110        $  188,351        $   262,034       $   348,704
Cost of sales................................            468,353            51,739             56,082           166,665
                                                       ---------        ----------           --------          ---------
Gross profit.................................          1,542,757           136,612            206,006           182,039
                                                       ---------         ---------           --------         ---------
Selling, general and administrative
    expenses.................................            237,016           199,411            591,443           216,089
                                                       ---------         ---------          ---------         ---------
Income (Loss) from operations................          1,542,757           (62,799)          (385,437)          (34,770)
Other Income (Expenses):
    Interest income..........................                --                --               9,211                --
   Interest expense..........................            (75,272)          (54,361)           (34,807)          (40,504)
   Investment activity loss..................            (93,142)              --                 --                 --
   Gain (loss) foreign translation...........             (6,203)              214            (32,252)          (11,858)
                                                      ----------        ----------          ---------         ----------
Income (Loss) from Operations Before
   Taxes.....................................          1,131,124          (116,946)          (443,285)          (87,132)
Income Tax (Expenses) Benefit................           (440,309)           34,334                --             26,011
                                                      ----------         ---------        -----------         ---------
Net Income (Loss)............................       $    690,815     $     (82,612)        $ (443,285)      $   (61,121)
Net Earnings (Loss) per Share................       $        .36     $       ( .07)        $     (.04)      $      (.05)
                                                  ==============     =============        ===========     =============
Weighted Average Number of Shares
   Outstanding...............................          1,899,000         1,134,000         12,384,969         1,134,000
                                                      ==========         =========         ==========         =========
</TABLE>





Balance Sheet Data:
                                                    June 30,
                                                      1996
                                                      ----
Working capital................................    $2,587,600
Total assets...................................     4,783,521
Total debt        .............................        35,947
Shareholders' equity...........................     3,139,758




                                       -5-

<PAGE>



                                                   RISK FACTORS

In addition to the other  information in this Prospectus,  the following factors
should be  considered  carefully in  evaluating  an  investment in the shares of
Common Stock offered by this Prospectus.

Business, Market and Shareholder Risks

         Limited  Operating  History.  Although the Company was  incorporated in
1988, it did not have any material  ongoing  operations until it acquired Casdim
USA on December 11, 1995.  The Company is currently  increasing  its presence in
the United States and intends to substantially broaden its global activities. No
assurance  can be given that the  Company  will be able to  operate  profitably,
especially  as it expands  its  operations.  See  "Management's  Discussion  and
Analysis."

         Potential Fluctuations in Operating Results; Seasonality. The Company's
operating results are likely to vary  significantly in the future,  depending on
factors such as the size and timing of significant orders and their fulfillment,
demand for the Company's products, changes in pricing policies by the Company or
its  competitors,  changes  in the level of  operating  expenses,  product  life
cycles,  personnel changes,  changes in the Company's strategy,  seasonal trends
and general domestic and international economic and political conditions,  among
others.  The  timing of  expansion  in the  United  States and the rate at which
orders are  obtained  will also cause  material  fluctuations  in the  Company's
operating  results.  The  Company's  results  may also be  affected  by currency
exchange rate  fluctuations  and economic  conditions in the geographic areas in
which the Company operates. Due to the foregoing factors, revenues and operating
results are  difficult to forecast.  Although  the Company  experienced  revenue
growth in 1995,  such  growth  should  not be  considered  indicative  of future
revenue growth, if any, or of future operating results. 

          The Company's expense levels are based,  in  significant  part, on the
Company's  expectations as to future revenues and are therefore relatively fixed
in the  short-term.  If revenue  levels fall below  expectations,  net income is
likely to be  disproportionately  adversely  affected because a  proportionately
smaller amount of the Company's  expenses  varies with its revenues.  During the
first six months of 1996 the Company's  operations were  negatively  impacted as
revenues declined and operating expenses increased. No assurance can be given as
to when the  Company  will be able to return  to  profitability.  The  operating
results of the Company will likely  fluctuate on a quarterly  basis.  Due to all
the foregoing  factors,  in some future quarter the Company's  operating results
may be below the  expectations  of  investors.  In such event,  the price of the
Company's  Ordinary Shares would likely be materially  adversely  affected.  See
"Selected Financial Data" and "Management's Discussion and Analysis."  

         Absence  of Active  Public  Market.  For most of the  period  since the
completion  of its public  offering on  September  27,  1989,  an active  public
trading market has not developed for the Company's  Common Stock.  Because there
is no established trading market, and only a limited

                                       -6-

<PAGE>



number of market makers have sporadically offered to purchase and sell shares of
the Company's Common Stock,  during significant  portions of the listed periods,
reliable  quotations for the Common Stock have not been  available.  Application
has been made for the  Company's  Common  Stock to be listed on the Nasdaq Small
Cap Market,  although no  assurance  can be given that the Common  Stock will be
accepted for listing..  The possible inclusion of the Common Stock on the Nasdaq
system does not provide any assurance  that an active and liquid  trading market
will develop or be maintained. See "Price Range of Common Stock."  

         Need to Manage a  Changing  Business.  The  Company is  experiencing  a
period of significant  growth in the number of its  employees,  the scope of its
operating and financial  systems and geographic  areas of its  operations.  This
growth  has  resulted  in new  and  increased  responsibilities  for  management
personnel  and has placed a significant  strain upon the  Company's  management,
operating systems and financial resources.  To accommodate such growth,  compete
effectively  and manage  potential  future growth,  the Company must continue to
implement and improve its  information  systems,  procedures  and controls,  and
expand,  train,  motivate and manage its work force.  These demands will require
the addition of new  management  personnel.  The Company's  future  success will
depend  to a  significant  extent  on the  ability  of its  current  and  future
management personnel to operate effectively,  both independently and as a group.
There can be no  assurance  that the  Company's  personnel,  operating  systems,
procedures  and  controls  will be  adequate  to support  the  Company's  future
operations.  Any failure to  implement  and improve the  Company's  operational,
financial  and  management  systems  or to  expand,  train,  motivate  or manage
employees  could  have a  material  adverse  effect on the  Company's  business,
operating results and financial  condition.  See "--Dependence on Key Personnel"
and "Business--Employees"and "Management."
  
         Risks Associated with Expanding Distribution.  To date, the Company has
sold and attempted to lease its kiosks  through its in-house  sales forces.  The
Company's  ability  to achieve  significant  revenue  growth in the future  will
depend in large part on its success in recruiting and training sufficient direct
sales personnel.  Although the Company intends to expand its direct sales force,
the Company may experience  difficulty in recruiting  qualified sales personnel.
There can be no assurance that the Company will be able to  successfully  expand
its sales force or that such  expansion  will result in an increase in revenues.
Any  failure by the Company to expand its direct  sales  force would  materially
adversely  affect  the  Company's  business,  operating  results  and  financial
condition.  See  "--Dependence  on  Key  Personnel,"   "Business--Strategy"  and
"--Sales and Marketing."

         Competition.  The market for interactive kiosks,  customized  databases
and network  integration is intensely  competitive and  characterized by rapidly
changing   technology,   evolving  industry  standards,   frequent  new  product
introductions  and rapidly  changing  customer  requirements.  The Company faces
competition from numerous companies, some of which are more established and have
greater  financial and other resources than the Company.  The Company's  current
direct  competitors,  include among others,  Golden  Screens in Israel,  Factura
Composites,  Inc., Quick ATM, 1-Media,  Aimtech,  EDR Systems,  Virtual Shopping
Inc. Rikon, and HSI in the United States.


                                       -7-

<PAGE>



         The Company's competitors may be able to respond more quickly to new or
emerging  technologies  and changes in customer  requirements  or devote greater
resources to the  development,  promotion  and sale of their  products  than the
Company. The Company expects to face additional competition as other established
and emerging  companies enter the interactive kiosk  development  market and new
products and technologies are introduced.  Increased competition could result in
fewer customer  orders,  reduced gross margins and loss of market share,  any of
which  could  materially  adversely  affect the  Company's  business,  operating
results and financial condition. In addition,  current and potential competitors
may make strategic  acquisitions or establish  cooperative  relationships  among
themselves  or with  third  parties,  thereby  increasing  the  ability of their
products  to  address  the  needs  of  the  Company's   prospective   customers.
Accordingly,  it is possible that new competitors or alliances among current and
new  competitors  may emerge and rapidly gain  significant  market  share.  Such
competition  could  materially  adversely  affect the Company's  ability to sell
additional  licenses and maintenance and support  renewals on terms favorable to
the Company.  Furthermore,  competitive  pressures  could require the Company to
reduce the price of its licenses and related  services,  which could  materially
adversely  affect  the  Company's  business,  operating  results  and  financial
condition.  There can be no  assurance  that the Company will be able to compete
successfully  against current and future  competitors,  and the failure to do so
would have a material  adverse  effect upon the  Company's  business,  operating
results and financial condition. See "Business -- Competition."

         Rapid Technological Change. The market in which the Company competes is
characterized  by rapid  technological  change.  The  introduction  of  products
embodying new  technologies  and the emergence of new industry  standards  could
exert price pressures on the Company's  products.  The Company's  future success
will depend upon its ability to address the increasingly  sophisticated needs of
its customers by supporting existing and emerging hardware,  software,  database
and  networking  platforms and by developing  and  introducing  new and enhanced
products on a timely basis that keep pace with such  technological  developments
and  emerging  industry  standards  and customer  requirements.  There can be no
assurance  that the Company will be successful  in developing  and marketing new
products,  that it will not experience  difficulties that could delay or prevent
the successful  development,  introduction and sale of such enhancements or that
such  enhancements  will adequately meet the requirements of the marketplace and
achieve  any  significant  degree  of  market  acceptance,   thereby  materially
affecting the Company's business, operating results and financial condition. See
"Management's  Discussion  and Analysis" and "Business -- Product  Development."

         Proprietary Rights and Risks of Infringement.  The Company is dependent
upon its proprietary network technology and relies primarily on a combination of
confidentiality procedures and contractual provisions to protect its proprietary
rights.  The Company also  believes that factors such as the  technological  and
creative skills of its personnel,  new product  developments,  frequent  product
enhancements, and reliable product maintenance are essential to establishing and
maintaining a technology  leadership position.  The Company seeks to protect its
software,  documentation  and other written  materials  under trade secret laws,
which afford only limited protection. There can be no assurance that others will
not develop technologies that are similar or

                                       -8-

<PAGE>



superior to the Company's  technology.  Despite the Company's efforts to protect
its proprietary rights,  unauthorized parties may attempt to copy aspects of the
Company's  products or to obtain and use information that the Company regards as
proprietary.  There can be no assurance  that the Company's  means of protecting
its  proprietary  rights in the United States or abroad will be adequate or that
competition will not independently develop similar technology.

         The Company is not aware that it is infringing any  proprietary  rights
of third parties.  There can be no assurance,  however,  that third parties will
not claim infringement by the Company of their intellectual  property rights. In
the event of a successful claim of product  infringement against the Company and
failure  or  inability  of the  Company  to  license  the  infringed  or similar
technology,  the Company's  business,  operating results and financial condition
would be materially adversely affected. 

         The  Company  relies and  intends to rely in the  future  upon  certain
software  that it  licenses  from  third  parties,  including  software  that is
integrated with the Company's  internally  developed  software.  There can be no
assurance that these third-party software licenses will continue to be available
to the Company on commercially  reasonable  terms.  The loss of, or inability to
maintain,  any such  software  licenses  could  result  in  shipment  delays  or
reductions until equivalent  software could be developed,  identified,  licensed
and integrated which would materially  adversely affect the Company's  business,
operating results and financial condition. See "Business--Intellectual  Property
Rights and Software Protection." 

         Risk of Software Defects.  Network  multimedia  products are internally
complex  and  frequently  contain  errors  or  defects,  especially  when  first
introduced  or when new  versions or  enhancements  are  released.  Although the
Company has not experienced  material  adverse  effects  resulting from any such
defects or errors to date,  there can be no assurance  that,  despite testing by
the Company and by current and potential customers,  defects and errors will not
be found in current versions, new versions or enhancements after commencement of
commercial  shipments,  resulting  in loss  of  revenues  or  delays  in  market
acceptance,  which  could  have a material  adverse  effect  upon the  Company's
business,  operating  results and financial  condition.  See  "Business--Product
Development."

         Dependence  on  Key  Personnel.  The  Company's  success  depends  to a
significant  degree upon the  continuing  contributions  of its key  management,
sales, marketing,  customer support and product development personnel.  The loss
of key management or technical personnel could adversely affect the Company. The
Company  believes  that its future  success  will  depend in large part upon its
ability to attract and retain highly-skilled managerial, sales, customer support
and product  development  personnel.  The Company has at times  experienced  and
continues  to  experience   difficulty  in   recruiting   qualified   personnel.
Competition  for qualified  software  development,  sales and other personnel is
intense,  and there can be no assurance  that the Company will be  successful in
attracting and retaining such personnel. Competitors and others have in the past
and may in the future  attempt to recruit the  Company's  employees.  Failure to
attract and retain key  personnel  could have a material  adverse  effect on the
Company's business, operating results and

                                       -9-

<PAGE>



financial condition.  See "Business -- Research and Development," "-- Employees"
and "Management."

         Risks   Associated  with   International   Operations.   The  Company's
subsidiary,  Casdim Israel,  is based in Israel and  historically its operations
were carried out  exclusively  in Israel.  Although the Company is expanding its
operations in the United States and is committing  significant  management  time
and financial  resources to developing direct and indirect  international  sales
and support channels, there can be no assurance that the Company will be able to
establish  international market demand for its products.  To the extent that the
Company is unable to do so in a timely manner, the Company's business, operating
results and financial  condition  would be materially  adversely  affected.  See
"Business."

         International  Operations.  International  operations  are  subject  to
inherent risks,  including the impact of possible  recessionary  environments in
multiple  foreign  markets,  costs of localizing  products for foreign  markets,
longer  receivables  collection  periods  and  greater  difficulty  in  accounts
receivable   collection,   unexpected   changes  in   regulatory   requirements,
difficulties  and costs of staffing and  managing  foreign  operations,  reduced
protection  for  intellectual  property  rights in some  countries,  potentially
adverse tax consequences and political and economic instability. There can be no
assurance  that the  Company  will be able to  sustain or obtain  revenues  from
international  operations or that the foregoing factors will not have a material
adverse effect on the Company's future revenues and, consequently, its business,
operating results and financial condition.

         The Company's revenues in Israel are generally denominated in the local
currency. The Company does not currently engage in any hedging activities. There
can be no assurance that  fluctuations in currency  exchange rates in the future
will  not  have a  material  adverse  impact  on  the  Company's  revenues  from
international  sales and thus the  Company's  business,  operating  results  and
financial   condition.   See   "Management's   Discussion   and   Analysis"  and
"Business--Customers and Markets" and "--Sales and Marketing and Distribution."

         Future Capital Needs. The Company anticipates that its existing capital
resources  will be adequate to satisfy its capital  requirements,  including its
expansion plans,  for at least the next 12 months.  The Company's future capital
requirements will depend on many factors,  including  continued  progress in its
expansion  plans  and its  ability  to  successfully  develop  new and  enhanced
products.  To the extent its existing capital resources are insufficient to fund
the Company's operating and financial requirements, it may be necessary to raise
additional  funds  through  public or  private  financings.  Any  equity or debt
financings,   if  available  at  all,  may  cause   dilution  to  the  Company's
then-existing shareholders. See "Management's Discussion and Analysis--Liquidity
and Capital Resources." 

         Concentration of Ownership. Mr. Yehuda Shimshon and Cedarwood Trading &
Investments  Ltd.  ("Cedarwood"),   a  company  in  which  Mr.  Shimshon  has  a
controlling  interest,  beneficially  own  approximately  60.5% of the Company's
outstanding  Ordinary  Shares.  As a result,  Mr.  Shimshon  is able to exercise
control over most matters requiring stockholder approval, including the election

                                      -10-

<PAGE>



of  directors  and  approval  of  significant  corporate   transactions.   Such
concentration  of  ownership  may have the effect of  delaying or  preventing  a
change in control of the Company. See "Principal Shareholders."

         Shares  Eligible for Future Sale.  Upon  consummation of this Offering,
the  Company  will  have   14,784,000   shares  of  Common  Stock   outstanding,
substantially   all  of  which  are  freely   tradable  by  persons  other  than
"affiliates"  of the Company,  as such term is defined under the Securities Act.
The  Company's  principal  stockholders,   Yehuda  Shimshon  and  Cedarwood  who
beneficially  own in the  aggregate  8,250,000  shares  of  Common  Stock of the
Company,  have agreed not to offer, sell,  contract to sell or otherwise dispose
of any shares or any securities  convertible  into,  exercisable or exchangeable
for shares of Common Stock of the Company  (other than 300,000  shares of Common
Stock which are being offered  hereby),  for a period of three years in the case
of Yehuda  Shimshon,  and two years in the case of Cedarwood,  without the prior
written consent of Sunrise  Financial  Group,  Inc., a financial  consultant and
public  relations  advisor to the Company.  No predictions can be made as to the
effect,  if any,  that market  sales of shares of existing  stockholders  or the
availability for future sale of such shares or shares in this Offering will have
on the  market  price of the  Common  Stock  prevailing  from time to time.  The
prevailing  market  price  of the  Common  Stock  after  the  Offering  could be
adversely  affected by future  sales of  substantial  amounts of Common Stock by
existing stockholders. See "Principal Shareholders," "Shares Eligible for Future
Sale" and "Plan of Distribution." 

         Substantial Number of Shares of Common Stock Reserved for Issuance Upon
Exercise of Outstanding Options and Warrants.  The Company has reserved from its
authorized but unissued Common Stock (i) 1,150,000  shares of Common Stock which
are subject to this  offering  and  issuable  upon  exercise of  warrants;  (ii)
700,000  shares of Common  Stock  issuable  upon  exercise  of options  given to
Sunrise  Financial  Group,  Inc. under a May 1996 consulting  agreement with the
Company;  (iii) 500,000 shares of Common Stock issuable under the Company's 1996
Stock  Option Plan (the "1996  Plan") and (iv)  100,000  shares of Common  Stock
issuable upon exercise of options granted to WEDA Corporation N.V. The 1996 Plan
has been approved by the Company's  directors and shareholders  will be asked to
ratify both Plans at the  Company's  next annual  meeting.  The existence of the
outstanding  options  and  warrants  may  prove  to  be a  hindrance  to  future
financings by the Company.  In addition,  the exercise of any options may dilute
the net  tangible  book  value of the Common  Stock.  See  "Management  -- Stock
Options." 

         No Dividends.  The Company has never paid a dividend nor does it intend
to make any dividend payments for the foreseeable future. See "Dividend Policy."

                                      -11-
<PAGE>
Risks Relating to the Company's Operations in Israel

         Operations in Israel.  Casdim Israel's operations are directly affected
by economic,  political and military  conditions  there.  For  information  with
respect to certain factors concerning the State of Israel,  risks related to its
economic and political  situation and special programs  provided by the State of
Israel  relating  to  research  and  development,   exports  and  taxation,  see
"Management's  Discussion and Analysis",  "Israeli  Taxation" and "Conditions in
Israel."  The  loss of the  various  research  and  development  grants  and tax
benefits  afforded to the Company by the State of Israel would negatively impact
its results of operations in the future. 

         Some of the Company's officers and employees are currently obligated to
perform  annual  reserve  duty in the Israel  Defense  Forces and are subject to
being called for active duty at any time upon the outbreak of hostilities. While
the Company has operated effectively under these requirements, no prediction can
be made as to the effect on the Company of any expansion of such obligation. See
"Business -- Employees." 

         Impact of Inflation and Currency  Fluctuations.  The dollar cost of the
Company's operations in Israel is influenced by the extent to which any increase
in the rate of  inflation  in  Israel is not  offset  (or is offset on a lagging
basis) by a devaluation  of the NIS in relation to the dollar.  During the three
years ended December 31, 1995 the rate of inflation in Israel  exceeded the rate
of devaluation  of the dollar  against the NIS. In 1994,  1995 and the first six
months  of  1996,  the rate of  inflation  in  Israel  was  14.5%,  8.1% and 7%,
respectively,   while  the  rate  of  devaluation   was  1.1%,  3.9%  and  2.2%,
respectively. 

                                      -12-

<PAGE>



                                 USE OF PROCEEDS

         The Company will not receive any  proceeds  from the sale of the Shares
by the Selling Shareholders. The net proceeds to be received by the Company from
the exercise of the Warrants,  assuming the exercise of all such  warrants,  are
estimated to be approximately $1,075,000. The proceeds of the exercises, if any,
will be used for working capital.

                           PRICE RANGE OF COMMON STOCK

         Since completion of its public offering on September 27, 1989, a public
trading  market has not developed for the Company's  common stock,  $0.00001 par
value (the "Common Stock").  Because there is no established trading market, and
only a limited number of market makers have sporadically offered to purchase and
sell shares of the Company's Common Stock,  during  significant  portions of the
listed  periods,  reliable  quotations  for  the  Common  Stock  have  not  been
available.

1994:                                           High            Low
- -----                                           ----            ---
First Quarter............................      No Bid          No Bid
Second Quarter...........................      No Bid          No Bid
Third Quarter............................      No Bid          No Bid
Fourth Quarter...........................      No Bid          No Bid
1995:
First Quarter............................      No Bid          No Bid
Second Quarter...........................      No Bid          No Bid
Third Quarter............................      No Bid          No Bid
Fourth Quarter...........................      No Bid          No Bid
1996:
First Quarter............................      $1 1/8          $ 7/32
Second Quarter...........................       5 3/4             1/2
Third Quarter ...........................       5 1/4           2 3/4
Fourth Quarter (through October 2).......       5 1/2           4 1/16

  The Nasdaq Bulletin Board symbol for the Company's Common Stock is CDMI. As of
September  16,  1996,  there  were  approximately  39  holders of record and 300
beneficial owners of the Company's Common Stock.

                                      -13-

<PAGE>



                                 DIVIDEND POLICY

  The Company has not paid any cash  dividends  on its Common Stock and does not
anticipate paying any cash dividends in the foreseeable future.


                                 CAPITALIZATION

         The following table sets forth the short-term  debt and  capitalization
of the Company at June 30, 1996,  without any  adjustment to reflect the sale of
the Shares by the Company upon exercise of the Warrants:



                                                             June 30,1996
                                                             ------------
Total short-term debt......................................   $   954,895
                                                               ==========
Long-term debt.............................................        35,947
                                                              -----------
 Shareholders' equity:
     Common Stock, $.00001 par value; 500,000,000 
     shares authorized; 13,634,000 shares issued 
     and outstanding; 14,784,000 shares issued and
     outstanding, as adjusted (1)..........................           985
Less treasury stock........................................       (1,425)
Retained earnings..........................................        93,616
TOTAL SHAREHOLDERS' EQUITY.................................     3,139,758
                                                             ------------
TOTAL CAPITALIZATION.......................................  $  4,783,521
                                                             ============

     (1) Does not include  500,000  shares of Common Stock reserved for issuance
         pursuant to the  Company's  1996 Stock Option Plan,  700,000  shares of
         Common Stock  issuable  upon  exercise of an option  granted to Sunrise
         Financial Group,  Inc. under a May 1996 consulting  agreement,  100,000
         shares of Common Stock  issuable  upon  exercise of options  granted to
         WEDA  Corporation  N.V., and 1,150,000  shares of Common Stock issuable
         upon exercise of warrants  issued to certain  financial  consultants to
         the Company.  See  "Description  of Capital Stock --" and "Management -
         Stock Options."



                                      -14-

<PAGE>

                             SELECTED FINANCIAL DATA

     The following  selected financial data for each of the years ended December
31,  1994,  and 1995,  are derived  from the  Company's  consolidated  financial
statements  set forth  elsewhere in this  Prospectus.  The  Company's  financial
statements  were  examined by Hocker,  Lovelett,  Hargens & Yennie,  P.C.  whose
report with respect to such financial statements appears in this Prospectus. The
consolidated  balance  sheet data at December 31, 1994 and 1995, is derived from
audited consolidated  financial statements previously filed with the Commission.
The  consolidated  statement of operations data for the six-month  periods ended
June 30, 1995 and 1996 and the consolidated  balance sheet data at June 30, 1996
are derived from  unaudited  consolidated  financial  statements  which,  in the
opinion  of  the  Company,   reflect  all  adjustments   necessary  for  a  fair
presentation of the Company's  financial  position and results of operations for
such periods.

Income Statement Data:
<TABLE>

                                               Year Ended December 31,         Six Months Ended June 30,
                                               -----------------------         -------------------------
                                                1995            1994            1996             1995
                                                ----            ----            ----             ----
<S>                                       <C>               <C>            <C>             <C>         
Sales..................................   $  2,011,110      $  188,351     $   262,034     $    348,704
Cost of sales..........................        468,353          51,739          56,082          166,665
                                             ---------      ----------        --------        ---------
Gross profit...........................      1,542,757         136,612         206,006          182,039
                                             ---------       ---------        --------        ---------
Selling, general and administrative
    expenses...........................        237,016         199,411         591,443          216,089
                                             ---------       ---------       ---------       ---------
Income (Loss) from operations..........      1,542,757         (62,799)       (385,437)         (34,770)
Other Income (Expenses):
     Interest income...................            --              --            9,211               --
     Interest expense..................        (75,272)        (54,361)        (34,807)         (40,504)
     Investment activity loss..........        (93,142)            --              --               --
     Gain (loss) foreign translation...         (6,203)            214         (32,252)         (11,858)
                                            ----------      ----------        ---------       ----------
Income (Loss) from Operations Before
     Taxes.............................      1,131,124        (116,946)       (443,285)          (87,132)
Income Tax (Expenses) Benefit..........       (440,309)         34,334             --            26,011
                                            ----------       ---------      ----------        ---------
Net Income (Loss)......................     $  690,815     $   (82,612)    $  (443,285)     $   (61,121)
Net Earnings (Loss) per Share..........     $      .36     $      (.07)    $      (.04)     $     (.05 )
                                           ===========     ============      ==========      ===========
Weighted Average Number of Shares
     Outstanding.......................      1,899,000        1,134,000      12,384,969        1,134,000
                                            ==========        =========      ==========        =========
</TABLE>

Balance Sheet Data:

                                           December 31,                June 30,
                                           ------------                --------
                                         1994        1995                1996
                                         ----        ----                ----

Working capital (deficit)............ $(114,322)    $  179,432      $ 2,587,600
Total assets.........................    453,250     1,916,781        4,783,521
Total long-term debt.................      9,566        12,986           35,947
Shareholders' equity (deficiency)....   (58,338)       652,541        3,139,758

    
                                      -15-
<PAGE>
                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Background

         The Company was  incorporated  in Colorado on January 5, 1988 under the
name of S.W.  Financial  Corporation for the purpose of acquiring an interest in
one or more business  opportunities in the field of multimedia,  information and
communication   technology.  In  keeping  with  the  stated  corporate  purpose,
management evaluated several business  opportunities and, during the fiscal year
ended December 31, 1995, finalized the Company's first corporate acquisition.

         The  acquisition  was effected by means of an Exchange  Agreement dated
November 21, 1995 by and among the Company,  Casdim USA and Mr. Yehuda Shimshon.
Mr. Shimshon acted on behalf of himself and Cedarwood, then sole shareholders of
Casdim  USA.  Pursuant  to the  terms of the  Exchange  Agreement,  the  Company
acquired  all the issued and  outstanding  shares of Casdim USA in exchange  for
425,000,000  shares  of  the  Company.  The  Exchange  Agreement,  which  became
effective  on  December  11,  1995,  was  approved  at a special  meeting of the
shareholders  of the Company held on October 24, 1995 at which the  shareholders
also approved: (i) renaming the Company Casdim International Systems, Inc.; (ii)
the 50:1 stock split of 76,700,000 shares, the then outstanding number of shares
of the Company, into 1,534,000 shares; and (iii) the appointment of Mr. Shimshon
as President and Chairman of the Board.

         Casdim USA, the Company's  wholly-owned  subsidiary,  effectively  owns
100% of the  issued  and  outstanding  shares  of Casdim  Israel,  and holds the
exclusive U.S. licensing rights for such company's  products.  Casdim Israel was
established as a private limited company in Israel on November 4, 1993 under the
name of CIS Clinical Information Systems Ltd. Its name was changed officially on
November 13, 1995 to Casdim  Interactive  Systems Ltd. Casdim Israel designs and
develops   interactive  kiosks,   customized   databases  and  performs  network
integration.   Although  Casdim  Israel  was  originally  formed  to  distribute
information  specifically in the clinical  laboratories  medical market,  it has
expanded its  operations  significantly  by also targeting the larger HMO market
segment. 

     In order to  strengthen  its  position in the health  care market  segment,
improve  sales of its medical  kiosks,  and minimize  research  and  development
costs,  the Company entered into an agreement with Casdim Software  Systems Ltd.
("CSS Ltd."), a company owned by Mr. Yehuda Shimshon. The agreement provided for
the payment of $700,000 to CSS Ltd.  for services and products to be supplied to
the Company.  These  products  and  services  included:  (i)  adaptation  of the
Scope(TM)  LIS system  operating in the 140  laboratories  of Kupat Holim Leumit
("Kupat  Holim"),  one of the four  existing  HMOs in  Israel,  to work with the
medical kiosk;  (ii) development and  implementation  of a central data base for
laboratory test results;  (iii)  implementation  of the "Laboratory Test Results
Central  Data Base" to work with the 140  laboratories  and 400 clinics of Kupat
Holim;  and (iv)  communication  software and  adaptation of various  interfaces
between  CSS Ltd.  and Casdim  Israel's  products.  The  agreement  between  the
companies also provided that in the event Kupat Holim or

                                      -16-

<PAGE>



other  companies  purchased  the  above-mentioned  products  from CSS Ltd.,  the
proceeds,  up to the sum of $700,000 would be paid to Casdim Israel.  On October
31, 1995,  Kupat Holim ordered a central data base for  laboratory  test results
from CSS Ltd. for $260,000,  excluding  additional  payments covering extras. In
January 1996,  CSS Ltd. paid Casdim Israel  $125,000 of the $260,000 it received
in 1995. The Company  expects that the remaining  amount due under the agreement
will be received in 1996.

         Revenues  from sales are  recognized  on  delivery  of  merchandise  or
performance of service.  Revenue from long-term  contracts which are carried out
on a fixed-price basis (subject to inflation linkage  agreements) are recognized
by the percentage-of-completion method. The Company applies this method when the
total of the costs of the contract can reasonably be estimated (generally,  when
the  project  is more  than 20%  complete).  Revenues  ascribed  to each  period
represent  costs  incurred  during the period,  with the  addition of  estimated
earnings accrued,  based on the extent of progress towards completion during the
period. The percentage-of-completion is determined for each contract at the rate
which costs incurred to date bear to the total  estimated cost of each contract.
With regard to contracts on which a loss is anticipated, a provision is made for
the entire amount of the  estimated  loss.  Contracts are  considered to be 100%
complete when the customer  accepts the project,  when the project is delivered,
or when the project complies with performance specifications, depending upon the
specific situation.

      Research and development expenses are charged to income as incurred.

         The Company prepares its financial  statements in United States dollars
on a consolidated basis with the financial statements of its Israeli subsidiary,
Casdim  Interactive  Systems,  Ltd., whose financial  statements are prepared in
accordance with accounting principles generally accepted in Israel. As currently
applicable to the Company's consolidated  financial statements,  such accounting
principles are practically identical to U.S. GAAP.

Results of Operations

   Six Months Ended June 30, 1996 Compared with Six Months Ended June 30, 1995

     Product sales  decreased to $262,034  during the six-months  ended June 30,
1996 from $348,704  during the comparable  period in 1995. The decrease in sales
was principally  attributable to the Company's decision to emphasize the leasing
of kiosks  rather  than their  sale.  Management  believes  that this  marketing
channel will provide the Company with a continuing stream of income and improved
results in the future.

     Cost of sales  decreased to $56,028 in the 1996 period from $166,665 in the
1995 six-month  period,  principally as a result of the Company's lower level of
sales. As a result,  the Company's  gross margin for the six-month  period ended
June 30, 1996 was 78.6% compared to 52.2% in the 1995 period.


                                      -17-

<PAGE>



     Selling,  general and  administrative  expenses  increased 272% in the 1996
six-month  period to $591,443 from $216,809 in the 1995 comparable  period,  due
primarily to the Company's  establishment of executive offices in New York City,
increased  compensation,  legal and accounting costs,  increased marketing costs
associated with the Company's  efforts to penetrate the United States market and
a charge of approximately $164,000 arising from the issuance of stock options to
the Company's public relations firm.

     For the six-month  period ended June 30, 1996, the Company had an operating
loss of $385,437 as compared to an operating  loss of $34,770 for the comparable
period in 1995. The increase in the Company's operating loss for the 1996 period
was  due  primarily  to the  increase  in the  Company's  selling,  general  and
administrative expenses and the decline in sales.

     During the six months ended June 30,1996, the Company had other expenses of
$57,848 as  compared  to other  expenses  of $52,362 in the 1995  period.  These
expenses  consist  of  foreign  currency  translation  losses  and net  interest
expense.

     As a result  of the  foregoing,  the  Company  had a loss  before  taxes of
$443,285  for  1996  as  compared  to a loss  before  taxes  of  $87,132  in the
comparable  1995 period.  The  Company's net loss was $443,285 or $.04 per share
for the six months  ended  June 30,  1996 as  compared  to a net loss of $61,121
(after an income tax benefit of  $26,011)  or $.05 per share for the  comparable
period in 1995.

     Years Ended December 31, 1995 and 1994

     Sales. Product sales increased to $2,011,110 in 1995 from $188,351 in 1994,
when the Company's Israeli subsidiary,  Casdim Israel began its operations.  The
increase in sales was  principally  attributable to the initiation of deliveries
of the  Company's  kiosks.  Sales of kiosks are  expected  to  increase in 1996,
reflecting continued penetration of the Israeli market and the anticipated entry
into the U.S.  market later in 1996.  No assurance can be given that the Company
will succeed in its efforts in penetrating the U.S. market.

     Costs of Sales. Cost of sales increased to $468,353 in 1995 from $51,739 in
1994 as a result of the Company's  increased  level of operations.  As a result,
the  Company's  gross profit margin was 76.8% in 1995.  The Company  expects its
gross  margins to vary in the future  depending  on changes in its  product  and
customer mix.

     Selling,  General  and  Administrative   Expenses.   Selling,  general  and
administrative  expenses,  increased  18% in 1995 to  $237,016,  reflecting  the
Company's  increased scope of operations.  The Company anticipates that selling,
general  and  administrative  expenses  will  continue  to increase in 1996 as a
result of the planned  increase in marketing and sales efforts for the Company's
products and the costs associated with it being a public company. 


                                      -18-

<PAGE>

     Gain (Loss) from  Investment  Activity.  In 1995, the Company had a $93,142
loss from its investment activity,  resulting from unsuccessful investments made
in 1995 prior to the acquisition of Casdim USA. In 1995 the Company had interest
expenses  of  $75,272  as  compared  to  $54,361  in 1994 as a result  of Casdim
Israel's increased level of borrowing.  The Company expects interest expenses to
decline in 1996. However, if the Company's operations increase significantly, it
may be  required  to seek  additional  debt  financing,  which  will  result  in
increased interest expense.

     Operating  Income.  As a result of the  foregoing,  the  Company had income
before  taxes of  $1,131,124  in 1995 as compared to a loss of $116,946 in 1994.
The Company  was subject to income  taxes of $440,309 in 1995 as a result of its
earnings.  Casdim Israel's profits were taxed at the regular Israel  corporation
tax rate of 37% in 1995, which rate will decline to 36% in 1996.

     Net  Income.  In 1995,  the  Company had net income of $690,815 or $.36 per
share as compared to a loss of $82,612 or $.07 per share.

Liquidity and Capital Resources

     At June 30, 1996,  the Company had  $2,272,553  in cash and  $2,587,600  in
working  capital as compared to $26,000 in cash and $179,432 in working  capital
at December  31,  1995.  The  Company's  liquidity  improved in the 1996 period,
principally as a result of a private  placement of securities.  In May 1996, the
Company completed a private placement of 4,000,000 shares of its common stock at
a sales price of $0.75 per share. The  approximately  $2,690,000 of net proceeds
from  the  sale of the  shares  will be used for  working  capital  and to repay
existing debt. In August 1996 the Company  received an indication  from a lender
that  approximately  $950,000 of short-term debt of its Israeli subsidiary would
be converted  into  long-term  debt later this year.  If this  conversion  takes
place, the Company's working capital position will further improve.

     One of the factors that will affect the  Company's  working  capital in the
future is the payment cycle on its sales. At present, a $233,992 receivable from
one of the Company's major customers, Kupat Holim, an Israeli health maintenance
organization, is over 90 days old. Although the Company believes this receivable
to be recoverable, it believes that it will take a number of months for it to be
paid in full.



     Management  believes that the Company's cash  requirements for at least the
next  twelve  (12)  months  will  be met  from  existing  cash,  and if  needed,
short-term  borrowing.  The  Company at  present  has no  significant  financial
commitments outstanding.


                                      -19-

<PAGE>



                                    BUSINESS

     The Company designs and develops  interactive kiosks,  customized databases
and performs  network  integration.  Currently,  the Company  provides kiosks to
several large  enterprises in Israel,  including  medical kiosks for Kupat Holim
Leumit, one of the four existing HMOs in Israel, Madanis Insurance Company Ltd.,
Mercantile  Bank and  shopping  malls.  The Company also  designs,  develops and
markets  multimedia  kiosks to companies in various  market  sectors,  including
medical  health,  insurance,  banking,  human  resources  and trade fairs.  

Products

     The  emergence  of  multimedia  has  resulted in the dynamic and  extremely
friendly interaction between the user and the computer. The Company is utilizing
this market trend to transfer useful  information from a company or organization
to its target audience in a persuasive,  attractive,  and efficient manner.  The
Company's main products and services consist of:

    *   the sale and lease of multimedia kiosks;
    *   the development and sale of databases, kiosk and Internet home pages, 
        servers, and communications applications; and
    *   the lease of kiosk space to vendors for advertising, marketing, and 
        promotion of their products.

     Sale and Lease of Multimedia  Kiosks.  The Company's kiosks offer a form of
interactive  computerization  which allows for easy consumer access to products,
services,  and  information.  Consumers  are  able  to  access  promotional  and
educational  information  as well as  purchase  goods and  services.  Each kiosk
consists of a free-standing,  electronic,  informational and transactional booth
combining  a number  of  computer  peripheral  technologies  which  collect  and
dispense  information  and services.  The kiosks are designed to be flexible and
user-friendly  in order to meet the  diverse  needs of  users,  and are  usually
placed  in a  highly  visible  and  active  location  to  provide  services  and
information to a wide audience.  The kiosks include up-to-date  technology in PC
hardware,   multimedia,  LAN,  WAN,  satellite  communication  and  applications
generators  and are  comprised of a  processor,  disk  drives,  keyboard,  video
display, touch screen,  magnetic card reader, a scanner, and printer.  Depending
on the  application,  kiosks  may or may not be  connected  to one or more  host
systems.

     The manufacture and assembly of kiosks entail five distinct steps:

         * Manufacturing of the Kiosk Enclosure. The manufacturing process takes
     approximately one to two months, depending on whether the order consists of
     an existing model or a new design.  Although choice of a suitable enclosure
     design  is  usually  chosen  from one of the  Company's  existing  standard
     models,  new designs may be  manufactured  at the customer's  request.  The
     creation of a new enclosure model takes  approximately  two to three months
     during which a

                                      -20-

<PAGE>


     prototype  is built and  tested and an  operating  plan is  developed.  The
     enclosures  are designed by Zog Ltd.,  an  Israel-based  industrial  design
     company, which also oversees the manufacturing process.

         * Purchase of Hardware  Components.  Most of the  hardware  used in the
     kiosks'  operating  systems is standard and not customized,  which provides
     the Company with  flexibility  when a change of  manufacturer  is needed or
     technical  modifications  are  required.  The hardware  components  include
     computers and  expansion  cards,  a  touchscreen,  magnetic card reader,  a
     printer and  communications  equipment.  Generally,  the Company  selects a
     hardware  supplier after comparing the equipment of three or more suppliers
     for quality,  reliability  and  durability,  as well as adaptability to the
     other  components  in the system,  and the  supplier's  quality of service,
     manufacturer's warranty and selling price.

         * Integration and Adaptation of Software,  Database and Graphics.  This
     process includes a system design stage,  design of the  user-interface  and
     connection of the  application  components into one complete  system.  Such
     components can include a logging  component to register  activities made at
     the kiosk stand,  and a component  for display of  advertising  during idle
     time.

         * Testing.  The retrieval and content of the of information provided by
     the individual system is tested before shipping. Great importance is placed
     on building  mechanisms  that will enable easy updates of content items and
     automatic distribution of such information to the kiosks.

         * Connection of Kiosk Units.  This process  entails the  preparation of
     the required infrastructure for connecting a kiosk to the Company's central
     control  room.  Such  connections  may be  implemented  through  the use of
     standard telephone lines, ISDN lines,  local Ethernet network,  frame relay
     lines,  point  to  point  lines,  or  satellite  network.   The  choice  of
     communication  line  depends  on the number of sites to be  connected,  the
     number of kiosks on the site,  the quantity of  information  to be relayed,
     the frequency of  transactions  and the type of project  (i.e.  credit card
     company,  medical  data  bank,  etc.).  Gilat  -  Satellite  Communications
     provides VSATs and hubs for the kiosks' satellite wide area network.

     The  sales  price  of a kiosk  in  Israel,  including  both  equipment  and
technology,  ranges from $10,000 to $25,000.  Under its principal  contract with
Kupat  Holim,  45% of the total price was  payable  upon  execution  of the sale
agreement,  25% on the  installation  of a beta  site,  and the  balance  of 30%
payable upon  completion  of the  project.  The  agreement  with Kupat Holim was
entered into in 1994 and  provided  for the sale of 60 kiosks and certain  other
peripheral systems for the total price of approximately  $2,135,000.  As of June
30, 1996, 10 kiosks were in operation and the remaining 50 kiosks were scheduled
for  installation  during 1996.  In 1995,  Kupat Holim  accounted for 75% of the
Company's revenues. The Company did not have any material sales in 1994.

     The Company has targeted a base selling price of approximately  $15,000 per
unit in the U.S. as a consequence  of the increased  level of competition in the
U.S. market. In the U.S., prices may range from $13,000 to $150,000 for a highly
sophisticated kiosk. In Israel, the Company entered into

                                      -21-

<PAGE>



sales  agreements  for 60  kiosks  in  1994,  and 40 in  1995,  of  which 20 are
currently  in  operation,  and  expects  to have  approximately  140  kiosks  in
operation in Israel by the end of 1996.  In Israel the Company  intends to place
its leased  kiosks in shopping  malls,  bus stations  and tourist  venues and is
currently  negotiating for their placement in such venues. In North America, the
Company is focusing is marketing efforts in the lodging and banking  industries.
No assurance  can be given that the Company will be  successful in its marketing
efforts.

Sales and Marketing

     The Company has begun to emphasize the leasing of kiosks to new  customers.
The Company  intends to place these  kiosks in  strategic  locations in order to
create a network  of  kiosks  offering  a diverse  network  of  information  and
transaction capabilities.

     Generally, agreements for the lease of single-purpose kiosks have a minimum
term of one year at a minimum rental rate of approximately  $1,000 per month for
each  unit,  in  addition  to the  price  payable  for  the  development  of the
customized  software.  The unit  remains  the  property of the  Company,  unless
purchased,  in which case the payment of the last three months' rent is deducted
from the total price of the kiosk.

     The Company provides  technical support to its customers,  at approximately
15% of the total value of the system  provided.  The Company's  information  and
control  center is located  at it's head  office in Petah  Tikva,  from which it
monitors all kiosks on the network in real time, allowing for tracking of usage,
up and down time,  information  received,  access time and a multitude  of other
functions. This network has been designed to provide flexibility and the Company
believes it provides an advantage over it's competitors' non-networked kiosks.

     Development and Sale of Databases,  Kiosk and Internet Home Pages, Servers,
and  Communications  Applications.   The  charge  for  developing  a  customer's
interactive  program ranges from $20,000 to $200,000.  Depending on the project,
the Company's  experienced  staff is able to respond to every  customer's  needs
concerning data structure by developing,  building,  maintaining, and connecting
customized databases to the Company's kiosk network.

     Lease of Kiosk  Space  to  Multiple  Vendors  for  Advertising,  Marketing,
Promotion, and Transactions.  The Company leases kiosk space in units to various
vendors at a per kiosk cost to each vendor of approximately $3,000 to $6,000 per
year per kiosk. Lease prices are determined by the location of the kiosk.

     The Company has developed a  multi-dimensional  approach to the information
services  market by targeting  the  underutilized  "leisure  time"  market.  The
"leisure time" market refers to time spent between the home and the office, when
a customer  is more  predisposed  to shop or  require  access to  services.  The
Company has approached the market from two different avenues.  First,  targeting
markets which are currently  underutilized  and have not yet been  identified as
market  niches.  Second,  the Company turns the kiosks,  located in public areas
which are heavily frequented, into

                                      -22-

<PAGE>



profit  centers.  In essence,  on a one time sale of capital goods,  the Company
sells a number of products,  services, and applications on an ongoing basis. The
markets  which the Company  targets need not be related,  different  information
channels can co-exist on a single kiosk,  and the consumer can then choose which
channel to use. 

     The Company has installed  test kiosks in two of Israel's  largest and most
successful  shopping malls,  Ayalon,  in Ramat Gan, and Dizengoff  Center in Tel
Aviv. These kiosks provide  information for the shops in the mall and, the touch
screen  provides the mall visitor with key  information  about  special  offers,
sales and promotions.  In addition,  these kiosks detail all the shops and their
locations as well as a directional map. With the aid of an internal printer, the
kiosks  dispense  valuable  coupons to shoppers which may be used in conjunction
with  special  store  promotions.  Each  store is able to  utilize  the kiosk to
effectively  target  consumers  specific to their  business.  The kiosk  enables
fashion,  cosmetics,  gift and appliance  stores to promote their business.  The
Company is negotiating to install these kiosks, known as Intershops, in a number
of major shopping malls in Israel. 

     The Company  believes  it is a leading  provider  of  multimedia  kiosks in
Israel,  and intends to translate its success in the Israeli  market to the U.S.
market using the same marketing  strategy it uses in Israel. To that end, Casdim
Israel  intends to obtain  agreements  with  various  customers  to  consolidate
information,  offering services of numerous clients over one network,  with each
client owning a different information channel. If successful,  the consumer need
not spend time searching in order to locate an appropriate  kiosk, but need only
select the relevant channel on any of the Company's kiosks.

     The Company  believes  the U.S.  kiosk market is beginning to mature but is
far from  saturation.  The  market  research  firm of  Frost  and  Sullivan  has
estimated,  that in 1994, the total U.S.  multimedia kiosk  application  market,
which includes  application  software,  computer hardware,  and kiosks, was $1.1
billion,  and it  forecasted  that the market will grow by 35% annually to reach
$2.7 billion by 1997. The Company intends to benefit from this market expansion,
targeting organizations in the banking,  airline,  tourism,  insurance,  retail,
public transit, health care, and governmental sectors.

      The  Company's  marketing  plan for its  expansion  into  the U.S.  market
includes the  establishment of both in-house and distributor  sales forces.  The
in-house  sales force will  consist of a marketing  manager and one sales person
who will be responsible for marketing  niches.  The distributor sales force will
be active in specific geographic areas on a case by case basis, and will seek to
penetrate  specific markets including  hotels,  convention and trade centers and
the health care  environment.  The Company also intends to seek  assistance from
consultants in establishing a comprehensive marketing program covering the types
of media to be used,  which trade shows to attend,  and the USP (unique  selling
point)  of the  Company.  The  Company  expects  that  much  of the  promotional
activities will be accomplished through demonstrations of its kiosks. This "self
promotion" will compliment the Company's other  activities  within its marketing
campaign.  No assurance  can be given that the Company will be successful in its
plan for entering the U.S. market.


                                      -23-

<PAGE>

      On  September  30, 1996 the Company  entered  into a letter of intent with
Dick Clark International Cable Ventures, Ltd. to establish a 50/50 joint venture
for the  provision  of  informational  services  in Mexico  with  respect to ATM
machines,  Point of Purchase machines,  interactive kiosks and vending machines.
Such  letter of intent is  subject  to due  diligence  investigations  and other
conditions.   No  assurance  can  be  given  that  the  joint  venture  will  be
established,  or if established,  that it will be successful.   

Research and Development

      The Company directs its research and development  ("R&D") efforts into the
integration between various products in the areas of multimedia  platforms,  and
the development of software,  video and audio products,  and animation software,
network  technologies (LAN and WAN), and products involved in the areas of fiber
distributed  data interface (FDDI) and  asynchronous  transfer mode (ATM).  This
approach  results in relatively low cost R&D and allows the Company to develop a
wide range of multimedia  applications  for inclusion in its  interactive  kiosk
operation.

      Simultaneously  with the development of kiosks for ongoing  projects,  the
Company is in the process of developing  sub-systems  for general use in various
other applications, including:

              * HTML  Kiosk:  This type of kiosk is  suitable  for use when vast
      amounts of information must be displayed  simultaneously,  or when the use
      of Hypertext Markup Language is required.

              * Mall Kiosk:  This type of information  kiosk enables shoppers to
      find a certain store within a mall either  alphabetically  or by category.
      The system also provides printed directions to store locations.

              *  Bit Technology: The transfer of existing operating systems to 
      32 bit technology.

              * Updated Central  Control  System:  For controlling the status of
      the kiosks and their  informational  content,  receiving  reports from the
      kiosks,  managing  service calls and  distribution of updates for software
      and day-to-day contents.

              *  Video Conference and Cartographic Information Display System: 
      This will provide consumers with the ability to engage in video 
      conferencing.

              *  Continuous  Advertising:  This  component  which  will  display
      advertisements  on a separate screen will be used solely for this purpose.
      This system will include a mechanism  for  determining  the  frequency and
      availability  of  advertisements  according to the amount of  transmission
      time sold.

      The  Company is also  currently  developing  products  in the  interactive
television and Internet areas.


                                      -24-

<PAGE>



Patents

      In January 1995, the Company  acquired a pending  patent (No.  108935) for
its medical  kiosks from CSS Ltd.,  an  affiliated  company  owned by Mr. Yehuda
Shimshon,  for  $500,000.  This patent is pending  both in Israel and the United
States. The Company does not have any registered trademarks.

Competition

      A number of companies are active in the field of information kiosks in the
U.S. Management believes that Factura Composites,  Inc., is the market leader in
kiosk  manufacturing  in the United States.  Other companies active in the field
include: Quick ATM, 1-Media, Aimtech, EDR Systems, Virtual Shopping Inc., Rikon,
and HSI.  All of these  companies  have  greater  financial  resources  than the
Company.  There  are also a large  number  of  companies  in the  field of touch
screens,  peripherals and applications  software. The Company believes that it's
high  standard of product and  innovative  approach to the market will allow the
Company to compete favorably in the U.S. and Israeli markets.

      The Israeli market is a relatively small one in which the Company believes
it is a leading competitor.  The Company's main competitors in Israel are Golden
Screens and  Interactive  Information  Ltd. Golden Screens has been in operation
for  approximately  five  years  and,  to  the  knowledge  of the  Company,  has
approximately 25 kiosks in operation.  Golden Screens  specializes  primarily in
providing  kiosk for the  public and  government  sectors  and does not  service
private  organizations.  Its  kiosks  offer  fewer  features  and  less  updated
technological and multimedia design than the Company's product.  Golden Screen's
kiosks do not  operate in "real  time," and lag behind the  Company's  kiosks in
multimedia,  computer technology and applications.  Interactive Information Ltd.
has been in operation for approximately one year and, to date, services only the
hotel  industry.  Management  believes such company  currently has two kiosks in
operation.

      The  Company's  competitors  may be able to respond more quickly to new or
emerging  technologies  and changes in customer  requirements  or devote greater
resources to the  development,  promotion  and sale of their  products  than the
Company.  Also,  many  current  and  potential  competitors  have  greater  name
recognition and more extensive  customer bases that could be leveraged,  thereby
gaining  market share to the Company's  detriment.  The Company  expects to face
additional  competition as other  established  and emerging  companies enter the
interactive  kiosk  development  market and new  products and  technologies  are
introduced.  Increased  competition  could  result  in price  reductions,  fewer
customer  orders,  reduced gross margins and loss of market share,  any of which
could materially adversely affect the Company's business,  operating results and
financial  condition.  In addition,  current and potential  competitors may make
strategic  acquisitions or establish cooperative  relationships among themselves
or with third  parties,  thereby  increasing  the  ability of their  products to
address the needs of the Company's  prospective  customers.  Accordingly,  it is
possible that new competitors or alliances among current and new competitors may
emerge and  rapidly  gain  significant  market  share.  Such  competition  could
materially  adversely affect the Company's  ability to sell additional  licenses
and maintenance and support renewals on terms

                                      -25-

<PAGE>


favorable to the Company.  Furthermore,  competitive pressures could require the
Company to reduce the price of its  licenses and related  services,  which could
materially  adversely  affect the  Company's  business,  operating  results  and
financial condition.  There can be no assurance that the Company will be able to
compete successfully against current and future competitors,  and the failure to
do so  would  have a  material  adverse  effect  upon  the  Company's  business,
operating results and financial condition. See "Business -- Competition."

Employees

      At  September  30,  1996,  the  Company and its  subsidiaries  employed 15
persons, 7 in research and development and technical support, 4 in marketing and
sales, and 4 in operations and administration. 

Properties

      The Company's  executive offices are located at 90 Park Avenue,  New York,
New York. The Company is currently occupying 200 square feet at a monthly rental
cost of $3,060,  under a short-term lease which will expire on January 14, 1997.
The Company is seeking larger  permanent space in the metropolitan New York area
and  believes  it will be able to obtain such space on  commercially  acceptable
terms.  

      The  Company's  research  and  development  facility  is  located  in  the
industrial  zone  of  Petah  Tikva,  Israel.  The  premises,  which  consist  of
approximately  7,600 square feet and five parking bays, are shared with CSS Ltd.
The   Company   utilizes   approximately   3,000   square   feet  to  house  its
administrative,  marketing and  technical  departments.  The lease  provides for
monthly  rentals of $6,840  per month of which half of such  amount is linked to
changes in the Israeli  Consumer  Price  Index  ("CPI").  The  Company  pays its
pro-rata  share of the lease costs for the premises.  The lease expires in April
1997 and may be renewed for five additional years.  

Legal Proceedings

      The Company is not a party to any material litigation.

Conditions in Israel

      The following  information is intended to advise prospective  investors of
certain conditions in Israel that could affect the Company.

      Political Conditions

      Since  the  establishment  of the  State of  Israel  in  1948,  a state of
hostility  has  existed,  varying as to degree and  intensity,  among Israel and
various Arab countries, which has led to a number of

                                      -26-

<PAGE>



armed  conflicts  in the past and  continues  to create  security  and  economic
problems for Israel.  A peace  agreement was signed  between Israel and Egypt in
1979, and limited  economic and full political  relations have been  established
between the two  countries.  A peace  treaty  between  Israel and the  Hashemite
Kingdom  of Jordan was  signed in 1994,  ending the state of war along  Israel's
longest  border,  pursuant to which full  political and economic  relations were
formally established.

      Since December  1987,  civil unrest has existed in the  territories  which
came under Israel's  control in 1967. In September  1993,  Israel entered into a
Declaration  of  Principles  with the  Palestine  Liberation  Organization  (the
"PLO"),  which sets forth a basic framework for continued  negotiations  between
Israel and the PLO with  respect to ending the state of  hostility  between such
parties. In April 1994,  negotiations between Israel and the PLO resulted in the
signing of an interim  agreement to grant  Palestinian Arabs limited autonomy in
certain of the Territories administered by Israel; in September 1995, Israel and
the  PLO  signed  an  additional  agreement  regarding  the  transfer  of  civil
administration  to the  Palestinian  Authority in other areas of the Territories
and the  Israeli  Army has  withdrawn  from  certain of such  areas as well.  No
prediction  can be made as to  whether  any  other  written  agreements  will be
entered  into  between  Israel and its  neighboring  countries,  whether a final
resolution  of the  area's  problems  will be  achieved,  the nature of any such
resolution,  or whether the civil unrest in the  administered  territories  will
continue  and to what extent the unrest will have an adverse  impact on Israel's
economic development or on the operations of the Company in the future.

      Most adult male permanent residents of Israel under the age 51 are, unless
exempt,  obligated  to perform  approximately  26 days of military  reserve duty
annually. Additionally, all such residents are subject to being called to active
duty at any time under emergency circumstances.  The male officers and employees
of the Company are generally currently obligated to perform annual reserve duty.
While the  Company  and its  personnel  have  operated  effectively  under these
requirements,  no assessments can be made as to the full impact on the Company's
work force or business if conditions should change and no prediction can be made
as to the  effect  on the  Company  of  any  expansion  or  reduction  of  these
obligations.

      Certain  countries  and  companies  participate  in a boycott  of  Israeli
companies  and others doing  business in Israel or with Israeli  companies.  The
Company,  however,  believes  that the boycott will not have a material  adverse
impact on the Company's business. 

      On November 4, 1995,  Prime Minister  Yitzhak Rabin was  assassinated.  In
June 1996,  following  general  elections a new Israeli  government  was formed,
headed by the newly  elected  Prime  Minister,  Benjamin  Netanyahu of the Likud
Party.  No  prediction  can be  made at this  time as to the  effect  of the new
policies to be adopted by the Netanyahu government on the pending peace process,
foreign  investments  in Israel and in  Israeli  companies,  and other  areas of
importance to the Company and its business. 


                                      -27-

<PAGE>



      Economic Conditions

      In 1995, for the sixth consecutive year, the economy of Israel experienced
significant  expansion.  During calendar years 1990 through 1995, Israel's gross
domestic   product   increased  by  5.0%,  6.2%,  6.7%,  3.4%,  6.5%  and  6.8%,
respectively.  The Israeli government's  monetary policy contributed to relative
price and exchange rate stability during most of these years despite fluctuating
rates of economic growth and a high rate of unemployment.

      Israel's  economy  has been  subject to  numerous  destabilizing  factors,
including a period of rampant inflation in the early- to mid-1980s,  low foreign
exchange  reserves,  fluctuations in world commodity prices,  military conflicts
and civil unrest. For these and associated  reasons,  the Israeli Government has
intervened  in sectors of the Israeli  economy,  employing  among  other  means,
fiscal and monetary policies,  import duties,  foreign currency restrictions and
control of wages,  prices and exchange  rates,  and has  frequently  reversed or
modified its policies in all these areas.  The Company believes that the rate of
inflation in Israel has not had a material effect on its business  activities to
date because (i) most of the Company's  activities  are funded or paid in United
States  dollars  or NIS  indexed  to the  dollar,  and (ii)  Israeli  inflation,
although still  significant,  has been  relatively  stable over the last several
years.  The  inflation  rates for 1994 and 1995 and for the first six  months of
1996 (annualized) were 14.5%,  8.1% and 14.0%,  respectively.  In the event that
inflation  in  Israel  were to  return  to such  high  levels  as  would  have a
significant  negative  impact on  Israel's  economy  as a whole,  the  Company's
results of operations  and  financial  position  could be  materially  adversely
affected.

      The defense  burden,  the absorption of immigrants and the  development of
the economy  have  resulted in high  balance of payments  deficits in Israel for
many  years.  The main  sources of capital to  finance  the  deficits  have been
military and economic aid from the United States  (including  loan  guarantees),
reparations  and  other  remittances  to  Israeli  residents,   sales  of  bonds
(primarily  in the United  States),  intragovernmental,  institutional  and free
market loans and contributions from the international Jewish community. Although
the Company knows of no planned reductions or delays in such sources of capital,
the Israeli economy could suffer serious adverse consequences if such sources of
capital were to be reduced by material amounts.

      Trade Agreements

      Israel is a member of the United Nations, the International Monetary Fund,
the International  Bank for Reconstruction and Development and the International
Finance  Corporation.  Israel is a signatory to the General Agreement on Tariffs
and Trade,  which provides for  reciprocal  lowering of trade barriers among its
members.

      Israel became associated with the European Union by an agreement concluded
in 1975 which confers certain advantages with respect to Israeli exports to most
of the European  countries and obliges  Israel to lower its tariffs with respect
to imports from those countries over a number of years.


                                      -28-

<PAGE>



      In September 1992,  Israel signed a free trade agreement with the European
Free Trade  Association  ("EFTA"),  the members of which are  Austria,  Finland,
Iceland,  Liechtenstein,  Norway, Sweden and Switzerland.  The agreement,  which
became  effective on January 1, 1993,  entitles the exporting  countries of EFTA
trading  with Israel to  conditions  similar to those that the  countries of the
European Union enjoy when trading with the United States.

      In 1985,  Israel  and the  United  States  entered  into an  agreement  to
establish a Free Trade  Area,  which is intended  to  ultimately  eliminate  all
tariff  and  certain  non-tariff  trade  between  the two  countries.  Under the
Agreement,  most products  received  immediate duty free status in 1985,  staged
reductions  are taking place on others and  reductions on tariffs  relative to a
third category may be accelerated  prior to 1995, by which all tariffs are to be
eliminated.

      Israel is the only country that has free-trade  area  agreements  with the
United States, the European Union and the EFTA states. Additionally,  the end of
the Cold War has enabled Israel to establish commercial and trade relations with
a number of other nations,  including China,  Russia, and the nations of Eastern
Europe, with which Israel had not previously had such relations.






                                      -29-

<PAGE>



                                   MANAGEMENT

Executive Officers and Directors

      The Directors and Executive Officers of the Company are:


Name                              Age       Position
Yehuda Shimshon................    43       Chairman of the Board, President &
                                            CEO, and Chief Financial Officer
Ilan Mintz.....................    43       Director
Israel Shimshon................    66       Director

David Tamir....................    52       Director
Gary P. Tober     .............    46       Secretary
Doron Leave....................    42       Vice President of Operations and
                                            Director

      Yehuda  Shimshon,  43,  Chairman of the Board,  President,  CEO, and Chief
Financial  Officer of the Company since December  1995,  began his career in the
Israeli Defense Forces and rose to the rank of Captain.  Upon his discharge from
the  Israel  Defense  Forces  in  1977,  he began a career  as a  consultant  to
organizations  active in international  trade throughout Europe and Africa.  Mr.
Shimshon became active in the field of computer research, developing and writing
programs which led to the  establishment  by him of Casdim Software Systems Ltd.
in 1986,  an Israeli  company  which  develops  clinical  laboratory  management
systems ("CSS Ltd."),  and Casdim  Interactive  Systems Ltd. in 1994, an Israeli
company and  wholly-owned  subsidiary  of the Company which designs and develops
interactive  kiosks and customized  databases and performs  network  integration
("Casdim  Israel").  Mr. Shimshon has been the Chief Executive  Officer of these
companies since their inception.  

      Israel Shimshon,  66, a director of the Company since March 1996, has been
principally  employed as the managing director of Hagadish  Insurance Agency, an
Israeli general insurance  agency,  since 1953. Israel Shimshon is the father of
Yehuda Shimshon.

      Doron Leave, 42, a director of the Company since August 1996, has been the
Company's Vice President of Operations  since July 1996.  From September 1990 to
July 1996, Mr. Leave was

                                      -30-

<PAGE>



employed by  Bank Hapoalim Ltd., most recently as Branch Manager of its Allenby,
Tel Aviv branch.  Mr. Leave holds a degree in Business  Administration  from Tel
Aviv University.

      Ilan Mintz,  33, a director of the Company since  December  1995, has been
principally  employed in various  executive  positions  with CSS Ltd.  Mr. Mintz
began his employment with CSS Ltd., a company wholly owned by Mr.  Shimshon,  in
1990 as manager of the Customer Support and Training  Division.  In June 1993 he
became the  director of the  Marketing  Division  of CSS Ltd.  and has served as
General Manager since January 1995.

      David Tamir,  52, a director of the Company  since May 1996,  is currently
engaged as an  independent  consultant.  In addition,  he is currently the chief
project manager for WEDA  Consultants  N.V., a project  consulting  firm,  which
provides services to other Companies.  From May 1992 to December 1995, Mr. Tamir
was president of Powerspectrum Technology, a majority-owned subsidiary of Geotek
Communications,  Inc.  ("Geotek"),  a  wireless  communications  provider.  From
January  1996 to May 1996 Mr.  Tamir  was  employed  in  Israel  by  Geotek in a
non-executive  position.  From  1990  until  May  1992,  Mr.  Tamir  served as a
representative of the Israeli Armament Development Authority in Washington, D.C.
Mr.  Tamir was  initially  elected to the  Company's  Board of  Directors as the
designee of the investors in the Company's 1996 Private Placement.

      Gary P. Tober,  46, Secretary of the Company since December 1995, has been
a member of the law firm of Lane Powell Spears Lubersky of Seattle for over five
years. Mr. Tober practices in the areas of international business law, taxation,
and international investment law.

      All Directors of the Company hold office until the next Annual  Meeting of
Stockholders  and until  their  successors  have  been  elected  and  qualified.
Officers serve at the pleasure of the Board of Directors. Mr. Israel Shimshon, a
director of the Company,  is the father of Mr.  Yehuda  Shimshon,  the Chairman,
President,  and CEO of the Company.  All of the executive  officers devote their
full time to the operations of the Company.

Executive Compensation

      None of the Company's  executive officers received any compensation during
1995. Yehuda Shimshon's salary for 1996 is expected to be $240,000.  The Company
does not have any retirement  plans for its  executives.  There are currently no
employment agreements between the Company and any of its officers.

                              CERTAIN TRANSACTIONS

      In October 1995,  Casdim Israel entered into an agreement with CSS Ltd., a
company  wholly owned by Yehuda  Shimshon.  Pursuant to this  agreement,  Casdim
Israel paid CSS Ltd. $700,000 for

                                      -31-

<PAGE>



services and products to be supplied by CSS Ltd. to the Company.  These products
and services  included:  (i) adaptation of the Scope(TM) LIS system operating in
the 140  laboratories  of Kupat Holim  Klalit  ("Kupat  Holim") to work with the
medical kiosk;  (ii) development and  implementation  of a central data base for
laboratory test results;  (iii)  implementation  of the "Laboratory Test Results
Central  Data Base" to work with the 140  laboratories  and 400 clinics of Kupat
Holim;  and (iv)  communication  software and  adaptation of various  interfaces
between CSS Ltd. and Casdim Israel's products.  The agreement also provided that
in the  event  Kupat  Holim or other  companies  purchased  the  above-mentioned
products from CSS Ltd., the proceeds,  up to the sum of $700,000 would be repaid
to Casdim Israel.  On October 31, 1995,  Kupat Holim ordered a central data base
for  laboratory  test results from CSS Ltd. for $260,000,  excluding  additional
payments covering certain extras. In January 1996, CSS Ltd. paid $125,000 of the
$260,000 to Casdim  Israel.  The Company  expects that the remaining  amount due
under the agreement will be received later in 1996.

      Also in October 1995,  Casdim Israel loaned CSS Ltd. $300,000 at a rate of
interest  linked to the Israeli CPI,  which loan was repaid in 1996.  In January
1995,  Casdim Israel  purchased a pending  patent from CSS Ltd.  relating to the
medical multi-media kiosks for the sum of $500,000.

      On November 21, 1995 the Company entered into an agreement with Casdim USA
and Mr. Yehuda Shimshon.  Mr. Shimshon acted on behalf of himself and Cedarwood,
the then sole  shareholders of Casdim USA. Pursuant to the terms of the Exchange
Agreement,  the Company acquired all the issued and outstanding shares of Casdim
USA in exchange for 425,000,000 shares of the Company.  The Exchange  Agreement,
which became  effective on December 11, 1995, was approved at a special  meeting
of the  shareholders  of the  Company  held on  October  24,  1995 at which  the
shareholders  also  approved:  (i)  renaming  the Company  Casdim  International
Systems,  Inc.;  (ii)  the  50:1  stock  split of  76,700,000  shares,  the then
outstanding  number of shares of the Company,  into 1,534,000 shares;  (iii) the
relocation of the Company's  headquarters from Colorado to Nevada;  and (iv) the
appointment  of Mr.  Shimshon as  President  and  Chairman  of the Board.  As of
December 31, 1995, the Company had 9,634,000 shares outstanding,  of which 44.1%
was owned by Mr. Shimshon and 44.1% was held by Cedarwood, a company in which he
holds a  controlling  interest.  At the time of the exchange,  Mr.  Shimshon and
Cedarwood were each 50% shareholders of Casdim USA. 

      In July 1996 the Company entered into a one year consulting agreement with
WEDA Consultants  N.V., a project  consulting firm, with which firm Mr. Tamir is
employed  as a  chief  project  manager.  Under  the  terms  of  the  consulting
agreement,  WEDA  receives a monthly  retainer of $10,000  and has been  granted
options to purchase 100,000 shares of common stock,  which vest ratably over two
years, beginning on the first anniversary of the grant. Mr. Tamir was originally
elected  to the Board of  Directors  as the  designee  of the  investors  in the
Company's 1996 Private Placement. 

                                      -32-

<PAGE>



                       PRINCIPAL AND SELLING STOCKHOLDERS

      The following table sets forth certain information regarding the aggregate
and percentage ownership of the Company's Common Stock as of August 14, 1996 and
the percentage ownership as adjusted to reflect the sale of the 5,450,000 shares
of Common  Stock  offered  hereby by the Company  and the  Selling  Stockholders
pursuant  to  this  offering,  by  (i)  each  person  known  by the  Company  to
beneficially own more than five percent of the Company's Common Stock, (ii) each
of the Company's  directors,  (iii) each of the executive  officers and (iv) all
directors and executive officers as a group. 


<TABLE>
<CAPTION>
                                                      Beneficial Ownership                            Beneficial Ownership
                                                         Prior to Offering       Number                 After Offering
                                                    Number of    % of Shares    of Shares         Number of      % of Shares
               Name and Address                      Shares      Outstanding   to be Sold          Shares       Outstanding
               ----------------                    ---------     -----------   ----------          ------       -----------

<S>                                                <C>              <C>         <C>              <C>              <C>  
Yehuda Shimshon(1)............................      8,250,000(2)     60.5%          --           8,250,000(2)     55.8%
Cedarwood Trading & Investment Ltd.(1)........      4,000,000        29.3        300,000         3,700,000        25.0%
Doron Leave(1)................................          --            --            --               --              *
Ilan Mintz(1).................................          --            --            --               --              *
Israel Shimshon(1)............................          --            --            --               --              *
David Tamir(1)................................          --            --            --               --              *
Gary P. Tober(1)..............................          --            --            --               --              *
Derek Caldwell................................         50,000          *           50,000            --              *
Frank P. Brosens..............................        400,000         2.9         400,000            --              *
European Venture Corp.........................        533,333         3.9         533,333            --              *
Lotmar Ltd....................................        533,333         3.9         533,333            --              *
Kempton Investments Ltd.......................        533,333         3.9         533,333            --              *
Karle Ltd.....................................        533,333         3.9         533,333            --              *
Nathan Low....................................        413,334         3.0         413,334            --              *
M.H. Meyerson & Co............................        200,000         1.5         200,000            --              *
Pharos Fund Limited...........................        266,666         2.0         266,666            --              *
RBC Inc.......................................         66,668          *           66,668            --              *
Tinicum Investors.............................        400,000         2.9         400,000            --              *
Andrew Hart...................................         40,000          *           40,000            --              *
Alan Swerdloff................................         13,334          *           13,334            --              *
Dwight Miller.................................         16,666          *           16,666            --              *
Pelican Securities & Investments Ltd..........        100,000 (3)      *          100,000 (3)        --              *
Softbreeze Ltd................................        250,000 (3)     1.8         250,000 (3)        --              *
Montaraz Limited..............................        350,000 (3)     2.6         350,000 (3)        --              *
Onvoy Holdings Ltd............................        400,000 (3)     2.9         400,000 (3)        --              *
Wideglobe Ltd.................................         50,000 (3)      *           50,000 (3)        --              *
 
All Executive Officers and Directors as a
group (4 persons).............................      8,250,000        60.5%          __           8,250,000         55.8%

<FN>
- ------------------------
*     Less than 1%
</FN>

</TABLE>




                                      -33-

<PAGE>



(1)   The address  for Mr.  Yehuda  Shimshon is 90 Park Avenue,  New York,  New
      York  10016.   The  address  for  Cedarwood   Trading  &  Investment  Ltd.
      ("Cedarwood")  is c/o Bank of  Bermuda,  6 Front  Street,  Hamilton HM 11,
      Bermuda.  The address for Messrs. Doron Leave, Ilan Mintz, Israel Shimshon
      and David Tamir is 5 Haofan  Street,  Kiryat-Arie,  P.O.  Box 3599,  Petah
      Tikva, Israel 49130. The address for Mr. Tober is 1420 Fifth Avenue, Suite
      4100, Seattle, Washington 98701-2338.

(2)   Includes  4,000,000  shares held by Cedarwood,  in which entity Mr. Yehuda
      Shimshon has a controlling beneficial interest.  Accordingly, he is deemed
      to be the beneficial owner of such shares.

(3)   Shares issuable upon exercise of currently exercisable Warrants.




                                      -34-

<PAGE>



                         SHARES ELIGIBLE FOR FUTURE SALE

      Prior to this  offering,  the Company had 13,634,000  Shares  outstanding.
Upon  completion of this offering and assuming the full exercise of the Warrants
there will be 14,784,000 shares of Common Stock of the Company  outstanding.  Of
these shares, 8,500,000 were issued by the Company in transactions not involving
a public  offering  in  December  1995,  and are  thus  treated  as  "restricted
securities" within the meaning of Rule 144 under the Securities Act.

      In general,  under Rule 144 as currently  in effect,  a person (or persons
whose shares are aggregated) who has beneficially owned his or her shares for at
least two years, is entitled to sell, within any three-month period, a number of
shares  that  does  not  exceed  the  greater  of (i) 1% of the  number  of then
outstanding  shares or (ii) the  average  weekly  trading  volume of such shares
during the four calendar weeks  preceding  each such sale.  Sales under Rule 144
are also subject to certain manner-of-sale  provisions,  filing requirements and
the public availability of certain information about the Company.

      No precise  predictions  can be made of the  effect,  if any,  that market
sales of  restricted  Shares or their  eligibility  for sale under Rule 144 will
have on the market price  prevailing from time to time.  Nevertheless,  sales of
substantial  amounts  of the  restricted  Shares  on  the  public  market  could
adversely affect such market price and could impair the Company's future ability
to raise capital through the sale of equity securities.

                          DESCRIPTION OF CAPITAL STOCK

      The authorized capital stock of the Company consists of 500,000,000 shares
of Common  Stock,  of which  13,634,000  shares of  Common  Stock are  currently
outstanding  and  14,784,000  shares  of Common  Stock  will be  outstanding  if
Warrants are  exercised  in full.  All issued and  outstanding  shares of Common
Stock of the Company are, and the Shares offered hereby when issued and paid for
will be, validly issued,  fully paid and  nonassessable.  The Shares do not have
preemptive rights and are not convertible or redeemable. 

      The Company is currently  incorporated  in Colorado and its certificate of
incorporation  provides  for the  issuance of  100,000,000  shares of  Preferred
Stock, par value $0.00001 per share, and 500,000,000 shares of Common Stock, par
value $0.00001 per share.  On September 16, 1996,  the Company began  soliciting
proxies to be voted at the  Company's  Annual  Meeting to be held on October 16,
1996.  Among the matters to be voted upon at the Annual  Meeting is  shareholder
approval of the  Company's  Plan of Merger in which the Company  will merge into
its  wholly-owned  subsidiary  incorporated  in the  State of  Delaware,  Casdim
Delaware,   Inc.  ("Casdim   Delaware").   Casdim   Delaware's   certificate  of
incorporation  authorizes the issuance of 30,000,000 shares of Common Stock, par
value $.01 per share, with no provision for preferred shares. Upon completion of
the  merger,  each  outstanding  share of the  Company's  Common  Stock  will be
converted into a share of common stock of Casdim Delaware, and Casdim Delaware's
name will be changed to the

                                      -35-

<PAGE>



Company's name. The assets and business  operations of Casdim Delaware after the
merger  will be  identical  to those  of the  Company  immediately  prior to the
merger.

      Under its current certificate of incorporation,  the Board of Directors of
the Company,  without  action by the  stockholders,  is  authorized to issue the
shares of Preferred Stock in one or more series and, within certain limitations,
to  determine  the  voting  rights  (including  the right to vote as a series on
particular matters), preferences as to dividends and in liquidation, conversion,
redemption  and other rights of each such series.  The Board of Directors  could
issue a series with rights more favorable with respect to dividends, liquidation
and  voting  than those held by the  holders of any class of common  stock.  The
Company  presently has no outstanding  shares of Preferred  Stock and has agreed
with the investors in its May 1996 Private Placement to amend its certificate of
incorporation to authorize the issuance of common stock only. 

      The  authority  of the Board to issue the  Preferred  Stock could have the
effect of  discouraging  attempts  to obtain  control of the Company by means of
merger,  tender  offer,  proxy contest or otherwise or could delay and make more
costly any such  attempt.  The voting and  conversion  rights  provided  to such
shares could  adversely  affect the voting power of the holders of Common Stock.
There are presently no agreements or understandings with respect to the issuance
of Preferred Stock and the Board of Directors has no present  intention to issue
any shares of Preferred Stock.

Common Stock

      The holders of shares of Common Stock have one vote per share. None of the
shares have or will have preemptive or cumulative  voting rights, be redeemable,
or be liable for assessments or further calls.  None of the shares will have any
conversion rights except as specified above.

      Subject  to the  rights of holders  of any  Preferred  Stock  which may be
issued,  the  holders  of shares of any class of common  stock are  entitled  to
dividends  when and as declared  by the Board of  Directors  from funds  legally
available therefor and, upon liquidation,  to share pro rata in any distribution
to  stockholders.  The Company does not anticipate  declaring or paying any cash
dividends for the foreseeable future. See "Dividend Policy."

      The  shares  of  Common  Stock  beneficially  owned  by Mr.  Shimshon  and
Cedarwood aggregate  approximately 60.5% of the shares of Common Stock currently
outstanding  and will  amount  to  55.8% of the  shares  of  Common  Stock to be
outstanding  upon  completion  of the  offering  hereby.  They  will  be able to
exercise  substantial  influence over the election of directors and other issues
which  are   submitted  to  the   stockholders   of  the   Company.   See  "Risk
Factors--Control."

Transfer Agent and Registrar

      TranSecurities  Corporation of Spokane,  Washington acts as transfer agent
and registrar for the Common Stock.

                                      -36-

<PAGE>

                              PLAN OF DISTRIBUTION

      The  Shares  offered  hereby  may be sold  from  time  to  time as  market
conditions permit in the  over-the-counter  market, or otherwise,  at prices and
terms then prevailing or at prices related to the then-current  market price, or
in  negotiated  transactions.  The Shares  offered  hereby  may be sold  without
limitation by one or more of the following methods: (i) a block trade in which a
broker or dealer so  engaged  will  attempt  to sell the shares as agent but may
position  and  resell a portion  of the block as  principal  to  facilitate  the
transaction;  (ii)  purchases by a broker or dealer as  principal  and resale by
such  broker  or dealer  for its  account  pursuant  to this  Prospectus;  (iii)
ordinary  brokerage  transactions  and transactions in which the broker solicits
purchasers;  (iv)  face-to-face  transactions  between  sellers  and  purchasers
without a broker-dealer  or otherwise.  In effecting  sales,  brokers or dealers
engaged by the Selling  Shareholders may arrange for other brokers or dealers to
participate.  Such brokers or dealers may receive  commissions or discounts from
Selling Shareholders in amounts to be negotiated  immediately prior to the sale.
Such  brokers or dealers and any other  participating  brokers or dealers may be
deemed to be  "underwriters"  within  the  meaning  of the  Securities  Act,  in
connection with such sales.

      The Selling  Shareholders  have  advised the Company that they will comply
with Rule 10b-6  promulgated under the Exchange Act in connection with all sales
of Shares  issuable upon exercise of the Warrants or otherwise  offered  hereby.

      The Company  will pay the  expenses of this  offering  which  expenses are
estimated to be approximately $75,000.

                                  LEGAL MATTERS

      Certain  legal  matters will be passed upon by Carter,  Ledyard & Milburn,
New York, New York counsel for the Company.  The validity of the issuance of the
Shares  offered  hereby will be passed  upon by Brenman  Key &  Bromberg,  P.C.,
Denver, Colorado.

                                     EXPERTS

      The financial statements of Casdim International Systems, Inc. at December
31, 1994 and 1995 and for the two years in the period  ended  December 31, 1995,
appearing in this  Prospectus  and  Registration  Statement have been audited by
Hocker, Lovelett, Hargens & Yennie, P.C., independent accountants,  as set forth
in their  report  thereon  appearing  elsewhere  herein and in the  Registration
Statement,  and are  included  in  reliance  upon  such  report  given  upon the
authority of such firm as experts in accounting and auditing.


                                      -37-

<PAGE>



                             AVAILABLE INFORMATION

      The  Company  files  certain  reports  and  other   information  with  the
Commission.  Such reports and other  information  can be inspected and copied at
the public reference facilities maintained by the Commission at Judiciary Plaza,
450 Fifth Street, N.W., Washington, D.C. 20549 or at the Regional Offices of the
Commission:  Suite 1400,  Citicorp  Center,  500 West Madison  Street,  Chicago,
Illinois  60661 and Seven World Trade  Center,  13th Floor,  New York,  New York
10048.  Copies of such  material  can be obtained at  prescribed  rates from the
Public  Reference  Section  of  the  Commission  at  450  Fifth  Street,   N.W.,
Washington,   D.C.   20549.   The  Commission  also  maintains  a  Web  site  at
http://www.sec.gov.   which  contains   reports,   proxy  statements  and  other
information regarding registrants that file electronically with the Commission.

      The  Company  has  filed  with  the  Commission  in  Washington,  D.C.,  a
Registration Statement on Form SB-2 under the Securities Act of 1933, as amended
(the "Securities  Act"), with respect to the Shares offered hereby.  For further
information  with  respect to the Company  and the  securities  offered  hereby,
reference is made to the Registration  Statement and to the financial statements
and exhibits filed as part thereof.  Statements  contained in this Prospectus as
to the contents of any contract or other documents are not necessarily complete,
and in each instance  reference is made to the copy of such contract or document
filed as an exhibit to the  Registration  Statement,  each such statement  being
qualified in all respects by such reference.


                                      -38-

<PAGE>





                   INDEX TO CONSOLIDATED FINANCIAL STATEMENTS




                                                                        Page
Report of Independent Accountants.....................................  F-2

Consolidated Balance Sheets at December 31, 1994 and 1995.............  F-3

Consolidated Statements of Operations for the years 
ended December 31, 1994 and 1995......................................  F-4

Consolidated Statements of Stockholders' Equity for the 
years ended December 31, 1994 and 1995................................  F-5

Consolidated Statements of Cash Flows for the years ended
December 31, 1994 and 1995............................................  F-6
                                                                        
Notes to Consolidated Financial Statements............................  F-7


              INDEX TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

   Consolidated Balance Sheets at June 30, 1996 and
      December 31, 1995...............................................  F-13

   Consolidated Statements of Income for the six
      months ended June 30, 1996 and 1995.............................  F-14

   Consolidated Statements of Cash Flows for the six
      months ended June 30, 1996 and 1995.............................  F-15

   Notes to Interim Consolidated Financial Statements.................  F-16




                                       F-1

<PAGE>



                    HOCKER, LOVELETT, HARGENS & YENNIE, P.C.
                          Certified Public Accountants


                          INDEPENDENT AUDITORS' REPORT



To the Board of Directors 
CASDIM INTERNATIONAL SYSTEMS, INC.
Riverton, WY 82501

We  have  audited  the  accompanying   consolidated  balance  sheets  of  CASDIM
INTERNATIONAL  SYSTEMS, INC. (a corporation) and its subsidiaries as of December
31,  1995  and  1994,  and  the  related  consolidated   statements  of  income,
stockholders' equity and cash flows for the years then ended. These consolidated
statements   are  the   responsibility   of  the   company's   management.   Our
responsibility  is to express an opinion on these financial  statements based on
our audit.

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

In our opinion, the consolidated  financial statements referred to above present
fairly, in all material respects, the financial position of CASDIM INTERNATIONAL
SYSTEMS,  INC. (a corporation)  and its subsidiaries as of December 31, 1995 and
1994 and the results of their  operations,  stockholders'  equity and their cash
flows for the years then ended, in conformity with generally accepted accounting
principles.


/s/Hocker, Lovelett, Hargens & Yennie, P.C.
April 8, 1996
Riverton, Wyoming




                                       F-2

<PAGE>



                       CASDIM INTERNATIONAL SYSTEMS, INC.
                           CONSOLIDATED BALANCE SHEETS
                           DECEMBER 31, 1995 AND 1994

     ASSETS                                      1995            1994
                                               --------        --------
CURRENT ASSETS
     Cash                                    $       26      $    9,488
     Accounts receivable
       Trade                                    155,783       1,085,353
       Other - Note 2                         1,202,505         302,825
                                             ----------      ----------
         Total                                1,358,314       1,397,666

PROPERTY AND EQUIPMENT - NOTE 3
     Property and equipment                     111,727          60,042
     Less accumulated depreciation           (   20,919)     (    4,458)
                                             ----------      ----------
       Net                                       90,808          55,584

OTHER ASSETS
     Patent, net - Note 4                       467,659           -
                                             ----------      ----------

               TOTAL                         $1,916,781      $1,453,250
                                             ==========      ==========

     LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
     Accounts payable
       Trade                                 $   38,763      $   37,239
       Other - Note 5                           465,417          50,919
       Deposit                                     -          1,234,516
     Current maturities of debt - Note 6        674,702         186,912
                                             ----------      ----------
         Total                                1,178,882       1,509,586

LONG-TERM DEBT
     Accrued severance pay, net - Note 7         12,986           9,566

MINORITY INTEREST IN CONSOLIDATED SUBSIDIARY     72,372       (   7,164)
                                              ----------      ---------

               TOTAL                          1,264,240       1,511,988

STOCKHOLDER'S EQUITY
     Common stock, $.00001 par value,
       500,000,000 shares authorized
       9,634,000 shares issued and
       outstanding, 285,000 shares
       held in treasury stock                       945             745
     Additional paid in capital                 194,480          94,680
     Less treasury stock (cost)              (    1,425)     (    1,425)
     Retained earnings (deficit)                458,541      (  152,738)
                                             ----------      ----------
         Total                                  652,541      (   58,738)
                                             ----------      ----------

               TOTAL                         $1,916,781      $1,453,250
                                             ==========      ==========

See accompanying notes to consolidated financial statements



                                       F-3

<PAGE>




                       CASDIM INTERNATIONAL SYSTEMS, INC.
                        CONSOLIDATED STATEMENTS OF INCOME
                 FOR THE YEARS ENDED DECEMBER 31, 1995 AND 1994




                                                1995            1994
                                             ----------      ----------

SALES                                        $2,011,110      $  188,351

COST OF SALES                                   468,353          51,739
                                             ----------      ----------

GROSS PROFIT                                  1,542,757         136,612

SALES, ADMINISTRATIVE AND GENERAL EXPENSES      237,016         199,411
                                             ----------      ----------

INCOME (LOSS) FROM OPERATIONS                 1,305,741      (   62,799)

OTHER INCOME (EXPENSES)
     Interest expense                        (   75,272)     (   54,361)
     Investment activity loss                (   93,142)          -
     Gain (loss) foreign translation         (    6,203)            214
                                             ----------      ----------
          Total                              (  174,617)     (   54,147)
                                             ----------      ----------

INCOME (LOSS) FROM OPERATIONS BEFORE TAXES    1,131,124      (  116,946)

INCOME TAX (EXPENSE) BENEFIT                 (  440,309)         34,334
                                             ----------      ----------

NET INCOME (LOSS)                            $  690,815      $(  82,612)
                                             ==========      ==========



NET EARNINGS (LOSS) PER SHARE                $      .36      $(     .07)
                                             ==========      ==========

WEIGHTED AVERAGE NUMBER OF
  SHARES OUTSTANDING                          1,899,000       1,134,000
                                             ==========      ==========






See accompanying notes to consolidated financial statements







                                       F-4

<PAGE>

<TABLE>

                                               CASDIM INTERNATIONAL SYSTEMS, INC.
                                        CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY
                                        FOR THE YEARS ENDED DECEMBER 31, 1995 AND 1994


<CAPTION>
                                                 ADDITIONAL
                                                  COMMON         PAID IN       TREASURY      RETAINED
                     SHARES          STOCK        CAPITAL         STOCK        EARNINGS       TOTAL
                     ------          -----        -------         -----        --------       -----
<S>               <C>            <C>           <C>           <C>            <C>            <C>
Balance 1/1/94
as previously
reported           56,700,000    $       710   $    92,180   $    (1,425)   $   (77,294)   $    14,171

Sales                                      0         2,500             0              0          2,500

Business
consolidation
as if             (55,566,000)            39             0             0              0             39

Net Loss, as if
consolidated                               0             0             0        (82,612)       (82,612)

Less minority
interest                                   4             0             0         (7,168)        (7,164)
                  -----------    -----------   -----------   -----------    -----------    -----------
Balance,
12/31/94            1,134,000            745        94,680        (1,425)      (152,738)       (58,738)

Sales                                    200        99,800             0              0        100,000

50:1 reverse
stock split         8,500,000

Net income                                 0             0             0        690,815        690,815

Less minority
interest                                   0             0             0        (79,536)       (79,536)
                  -----------    -----------   -----------   -----------    -----------    -----------
Balance
12/31/95            9,634,000    $       945   $   194,480   $    (1,425)   $   458,541    $   652,541
                  ===========    ===========   ===========   ===========    ===========    ===========

<FN>
See accompanying notes to consolidated financial statements.
</FN>
</TABLE>



                                       F-5

<PAGE>



                       CASDIM INTERNATIONAL SYSTEMS, INC.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                 FOR THE YEARS ENDED DECEMBER 31, 1995 AND 1994

                                                     1995            1994
                                                  ----------      ---------
CASH FLOWS FROM OPERATING ACTIVITIES:

         Net income (loss)                       $  690,815      $(  82,612)
         Adjustments to reconcile net income
           to net cash provided by operating
           activities:
            depreciation and amortization            48,802           4,458
         Changes in operating assets and
           liabilities:
           (Increase) Decrease In:
           Accounts receivable - trade              929,570      (1,085,353)
           Accounts receivable - other           (  899,680)     (  302,825)
         (Decrease) Increase In:
           Accounts payable - trade                   1,524          37,275
           Accounts payable - other                 414,498          50,919
           Deposits                              (1,234,516)      1,234,516
                                                 ----------      ----------

                Net cash (used) by
                  operating activities           (   48,987)     (  143,622)

CASH FLOWS FROM INVESTING ACTIVITIES:

         Purchase of property and equipment      (   51,685)     (   60,042)
         Purchase of patent                      (  500,000)           -
                                                 ----------      ----------

                Net cash used in investing
                  activities                     (  551,685)     (   60,042)

CASH FLOWS FROM FINANCING ACTIVITIES

         Proceeds from notes payable                487,790         186,912
         Severance pay                                3,420           9,566
         Proceeds from issuance of stock            100,000           2,500
                                                 ----------      ----------

                Net cash provided by financing
                  activities                        591,210         198,978
                                                 ----------      ----------

DECREASE IN CASH                                 (    9,462)     (    4,686)

CASH
         Beginning of year                            9,488          14,174
                                                 ----------      ----------

         End of year                             $       26      $    9,488
                                                 ==========      ==========


See accompanying notes to consolidated financial statements.



                                       F-6

<PAGE>


                       CASDIM INTERNATIONAL SYSTEMS, INC.
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS


1.       General

         The  Company  designs  and  develops  interactive  kiosks and  performs
         network integration.

2.       Summary of Significant Accounting Policies:

         This summary of significant accounting policies of CASDIM INTERNATIONAL
         SYSTEMS,  INC., (the Company) and its subsidiaries,  CASDIM INTERACTIVE
         SYSTEMS USA, INC. and CASDIM INTERACTIVE SYSTEMS,  LTD.,  (ISRAEL),  is
         presented  to  assist  in   understanding   the   Company's   financial
         statements.  The financial  statements and notes are representations of
         the Company's management,  which is responsible for their integrity and
         objectivity.

         a.        Accounting  principles - The Company's  financial  statements
                   are prepared in accordance with generally accepted accounting
                   principles  ("GAAP") in Israel and in the United  States.  As
                   applicable to these  financial  statements,  such  accounting
                   principles  are  in  all  material   respects   substantially
                   identical.

         b.        Name change - Effective December 11, 1995, S.W. Financial
                   Corp.'s name was changed to CASDIM INTERNATIONAL SYSTEMS,
                   INC.

         c.        Principles of consolidation - In 1995,  CASDIM  INTERNATIONAL
                   SYSTEMS, INC. issued 8,500,000 shares of  stock  after a 50:1
                   reverse stock  split  to  acquire 100%  of CASDIM INTERACTIVE
                   SYSTEMS  USA, INC., which  owns  90%  of  CASDIM  INTERACTIVE
                   SYSTEMS, LTD., (ISRAEL).  The  business  combination has been
                   accounted for using the  pooling  method of  accounting.  The
                   consolidated financial statements include the accounts of the
                   Company and its subsidiaries.

         d.        Rates of exchange - Assets and liabilities,  in or linked to,
                   foreign   currency   are   included   on  the  basis  of  the
                   representative  exchange rate prevailing at the balance sheet
                   date.  Representative  exchange rates between the NIS and the
                   U.S.  dollar at December  31, 1995 and 1994 were NIS 3.135=US
                   $1.00, NIS 3.018=US $1.00 respectively.






                                       F-7

<PAGE>


                       CASDIM INTERNATIONAL SYSTEMS, INC.
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS



         e.        Foreign  operations  -  CASDIM  INTERACTIVE  SYSTEMS,   LTD.,
                   (ISRAEL)  maintains  its  accounts  in  nominal  New  Israeli
                   Shekels  ("NIS").  Certain  of  the  dollar  amounts  in  the
                   financial  statements may represent the dollar  equivalent of
                   other  currencies,  including the New Israeli Shekel ("NIS"),
                   which may not be exchangeable for dollars.

                   Transactions   and  balances   denominated   in  dollars  are
                   presented at their dollar  amounts.  Non-dollar  transactions
                   and balances are remeasured  into dollars in accordance  with
                   the  principles  set  forth  in the  Statement  of  Financial
                   Accounting   Standards  ("FAS")  No.  52,  "Foreign  Currency
                   Translation," of the Financial  Accounting Standards Board of
                   the United States.

                   Accordingly, items have been remeasured as follows:

                            Monetary items-at the current exchange rate at each
                            balance sheet date;

                            Nonmonetary items-at historical exchange rates;

                            Income and expense  items-at  exchange rates current
                            as  of  the  date  of  recognition  of  those  items
                            (excluding  depreciation  and other  items  deriving
                            from nonmonetary items);

                            Exchange   gains  and  losses  from   aforementioned
                            remeasurement  (which are  immaterial for each year)
                            are reflected in the statements of income.

                   Linkage  Basis -  Balances  which are  linked to the  Israeli
                   Consumer  Price Index (the "CPI") are  presented on the basis
                   of the  index  at the  balance  sheet  date,  which  index is
                   published  subsequently.  Balances  denominated in, or linked
                   to, currencies other than the dollar are presented  according
                   to the exchange rates prevailing at the balance sheet date.

                   The Israeli CPI increase by 8.1% for the year ending December
                   31, 1995 and 14.45% in the year ending December 31, 1994.

                   The effects of the inflationary erosion of monetary items and
                   interest is  included in  financial  income or  expenses,  as
                   appropriate.





                                       F-8

<PAGE>


                       CASDIM INTERNATIONAL SYSTEMS, INC.
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS


         f.        Fixed Assets - Fixed assets are stated at cost.  Depreciation
                   has been calculated by the straight-line method over the
                   estimated useful lives of the assets.

                                                              Years
                                                              -----
                            Leasehold improvements             10

                            Motor vehicles                     7

                            Office furniture and
                              equipment (mainly computers
                              and peripheral equipment)       5-20

                   Leasehold    improvements    are   depreciated    using   the
                   straight-line  method over the period of each  lease,  not to
                   exceed the estimated useful life of the improvements.

         g.        Cash and Cash  Equivalents - For purposes of the statement of
                   cash flows,  the Company  considers cash and cash equivalents
                   to consist of all cash,  either on hand or in banks including
                   time  deposits,   and  any  highly  liquid  debt  instruments
                   purchased with a maturity of three months or less.

         h.        Bad Debts -  Uncollectible  accounts  receivables are charged
                   directly  against  earnings  when they are  determined  to be
                   uncollectible.  Use of  this  method  does  not  result  in a
                   material  difference  from the valuation  method  required by
                   generally accepted accounting principles.

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

         j.        Comparative  Statements - The comparative statements for 1995
                   and 1994 have been  restated as if the  individual  companies
                   had been combined during the entire periods.

         k.        Recognition  of  Income  - Income  deriving  from  long  term
                   contracts are recognized upon percentage completion basis. At
                   December 31, 1995 the Company completed 78% of its $2,074,029
                   (NIS 6,502,080)  contract with Kupat Holim Leumit.  Estimated
                   costs amount to $743,762 (NIS 2,331,695).





                                       F-9

<PAGE>


                       CASDIM INTERNATIONAL SYSTEMS, INC.
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS


         l.        Deferred income taxes - Deferred income taxes are provided
                   for temporary differences between the assets and liabilities,
                   as measured in the financial statements, and for tax purposes
                   at the tax rate expected to be in force when these
                   differences reverse, in accordance with Statement No. 109 of
                   the Financial Accounting Standards Board ("FASB") (Accounting
                   for Income Taxes).  Deferred income taxes are not material to
                   the financial statements.

         m.        Net Income per Share - Net income per share is computed on
                   the weighted shares adjusted for the issuance of shares and
                   consolidation.


3.       Other Receivables and Prepaid Expenses
                                                    1995            1994
                                                 ----------      ----------
         Employees                               $    -          $    3,314
         Deferred taxes                               -              34,334
         Prepaid expenses                            52,103          26,205
         Related parties                          1,150,402         194,578
         Income tax withheld                          -              44,394
                                                 ----------      ----------
                                                 $1,202,505      $  302,825
                                                 ==========      ==========
4.       Fixed Assets

         Cost                                       1995            1994
                                                 ----------      ----------
         Leasehold improvement                   $    2,428      $    2,181
         Furniture & equipment                       89,325          56,433
         Motor vehicles                              19,974           1,428
                                                 ----------      ----------
                                                    111,727          60,042
         Accumulated depreciation
         Leasehold improvement                          384             127
         Furniture & equipment                       17,441           4,241
         Motor vehicles                               3,094              90
                                                 ----------      ----------
                                                     20,919           4,458
                                                 ----------      ----------

                                                 $   90,808      $   55,584
                                                 ==========      ==========

5.       Patent
         On January 1995, the Company acquired a pending patent No. 108935
         from CASDIM SOFTWARE SYSTEMS, LTD. for the sum of $500,000 (US
         dollars).  The patent is being depreciated using the straight-line
         method over the period of ten years.






                                      F-10

<PAGE>


                       CASDIM INTERNATIONAL SYSTEMS, INC.
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS



6.       Other Payable and Accrued Liabilities
                                                    1995            1994
                                                 ----------      ----------
         Provision for taxes, net                $  364,520      $    -
         Payroll and related amounts                 17,191           8,913
         Accrued expenses                             8,953          16,278
         Government authorities                      74,753          25,728
                                                 ----------      ----------

                                                 $  465,417      $   50,919
                                                 ==========      ==========


7.       Current Maturities of Debt
                                                    1995            1994
                                                 ----------      ----------
         Note payable bank, due March 31, 
         1996,  plus accrued  interest at 17.5%
         collateralized by fixed assets, 
         securities, notes and negotiable
         documents                               $  180,806      $    -

         Bank overdraft, due December 31,
         1996, plus accrued interest at 20.5%       493,896         186,912
                                                 ----------      ----------

                TOTAL                            $  674,702      $  186,912
                                                 ==========      ==========


8.       Accrued Severance Pay

         The  liability of the Company for  severance  pay is  calculated on the
         basis of the latest salary paid to its employees and the length of time
         they  have  worked  for the  Company.  Pursuant  to  Israeli  law,  the
         liability is covered by a provision in the Company's  balance sheet and
         amounts deposited with the severance pay funds and insurance  policies.
         The  insurance  policies are owned by the Company and have been entered
         by  the  Company  on  behalf  of  individual  employees.   The  amounts
         accumulated  with the  insurance  company  are not under the  Company's
         control or management  and are therefore not reflected in the Company's
         balance sheet.  The amounts  deposited with the severance pay funds are
         available for withdrawal in accordance with provisions of the Severance
         Pay Law, 1963. The Company has no other liability for pension expenses.

9.       Minority Interest

         Minority interest is calculated at 10% of the net shareholders'
         equity in CASDIM INTERACTIVE SYSTEMS, LTD., ISRAEL.



                                      F-11

<PAGE>


                       CASDIM INTERNATIONAL SYSTEMS, INC.
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS



10.      Taxes on Income

         CASDIM INTERACTIVE SYSTEMS,  LTD., ISRAEL, is subject to the income tax
         law  (inflationary  adjustments)  pursuant  to  which  its  results  of
         operations for tax purposes are measured in real terms in accordance in
         the Israeli CPI. Under the Income Tax Law  (Adjustments  for Inflation)
         1985,  income for tax  purposes is measured in terms of earnings in NIS
         and  adjusted  for changes in the CPI.  The  theoretical  tax  expense,
         assuming  all income was taxed at the  regular  rate  applicable  to an
         Israeli corporation and the actual tax expense is virtually  identical.
         Any differences are immaterial to the financial  statements  taken as a
         whole.

11.      Related Party Transactions

         On October, 1995, the Company transferred $1,000,000 or (NIS 3,000,000)
         to  CASDIM  SOFTWARE  SYSTEMS,  LTD.,  of which US  $700,000  served as
         advance  payment on account of the purchase and  adaptation  of related
         software products for the "MEDICAL  MULTIMEDIA KIOSK" which is expected
         to be sold in 1996 to Kupat Holim Leumit,  the largest H.M.O. in Israel
         and US $300,000 was a short-term loan. The principal amount of the loan
         is linked to the Israeli CPI.  The Company also  acquired a patent from
         the related party. See details at Note 5.

12.      Commitments and Contingent Liabilities

         Lease  commitment:  The  Company's  premises  are leased under a rental
         agreement  which expires on December 31, 1997.  The annual rental under
         the lease is Adjusted NIS 225,720 (US  $72,000).  The rent is linked to
         the US dollar.

13.      Unlinked Monetary Balances

         Currents assets:                           1995            1994
                                                 ----------      ----------
              Cash                               $        2      $    1,376
              Trade receivables                      12,618         157,376
              Other receivables                      97,403          43,907
                                                 ----------      ----------
                                                 $  110,023      $  202,659
                                                 ==========      ==========
         Current liabilities
              Trade payables                          3,140           5,400
              Other payables                         37,699           7,383
              Deposits                                 -            179,005
              Short-term bank debts                  54,651          27,102
                                                 ----------      ----------
                                                 $   95,490      $  198,890
                                                 ==========      ==========

         The above amounts reflect the exposure of the Company to the effects of
         inflation at each balance sheet date.



                                      F-12

<PAGE>



                       CASDIM INTERNATIONAL SYSTEMS, INC.
                           CONSOLIDATED BALANCE SHEETS

                                          June 30,            December 31,
                                            1996                  1995
                                            ----                  ----
                                         (Unaudited)           (Audited)
                                     ASSETS
CURRENT ASSETS
    Cash...............................   $2,721,553          $         26
    Accounts receivable
             Trade.....................      371,094               155,783
             Other.....................    1,102,776             1,202,505
                                          ----------             ---------
                                           4,195,423             1,358,314
PROPERTY AND EQUIPMENT
    Property and equipment.............      153,897               111,727
    Less accumulated depreciation......      (25,291)              (20,919)
                                          ----------           -----------
                                             128,606                90,808
OTHER ASSETS
    Deposits...........................       10,200                  --
    Start-up costs - Net...............       24,292                  --
    Patent, net - Note 3...............      425,000               467,659
                                          ----------            ----------
                                             459,492               467,659
                                          ----------            ----------
                      Total............   $4,783,521            $1,916,781
                                          ==========            ==========

                      LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES
    Accounts payable
             Trade....................... $   73,622            $   38,763
             Other.......................    479,299               465,417
    Current maturities of debt...........    954,895               674,702
                                          ----------            ----------
                                           1,607,816             1,178,882
 
LONG-TERM DEBT
    Accrued severance pay - Note 4.......     35,947                12,986
    Minority interest in consolidated
      subsidiary.........................       --                  72,372
                                          ----------            ----------
                      Total..............     35,947             1,264,240

STOCKHOLDER'S EQUITY - Notes 5 & 6
    Common stock, $.00001 par value,
      500,000,000 shares authorized
      3,634,000 shares issued and
      outstanding 285,000 shares held as
      treasury stock.....................        985                   945
    Additional paid in capital...........  3,046,582               194,480
    Less treasury stock (cost)...........    (1,425)               (1,425)
    Retained earnings....................     93,616               458,541
                                          ----------            ----------
             Total shareholders' equity..  3,139,758               652,541
                                          ----------            ----------
             Total liabilities and
               shareholders' equity...... $4,783,521            $1,916,781
                                          ==========            ==========


See accompanying notes to consolidated financial statements.



                                      F-13

<PAGE>



                       CASDIM INTERNATIONAL SYSTEMS, INC.
                        CONSOLIDATED STATEMENTS OF INCOME
                                   (UNAUDITED)


                                          Six Months          Six Months
                                        Ended June 30,      Ended June 30,
                                             1996                1995
                                            ------              -----
Sales.................................   $   262,034          $ 348,704
Cost of sales.........................        56,028            166,665
                                          ----------          ---------
Gross profit..........................       206,006            182,039
Selling, general and adminis-
   trative expenses...................       591,443            216,809
                                           ----------          ---------
Income (loss) from operations               (385,437)           (34,770)

Other income (expense)
     Interest income..................         9,211                 --
     Interest expense.................       (34,807)           (40,504)
     Gain (loss) from foreign
        currency translation..........       (32,252)           (11,858)
                                          ----------          ---------
                 Total................       (57,848)           (52,362)
                                          ----------          ---------

Income (loss) from operations
    before taxes......................      (443,285)           (87,132)
Income tax (expense) benefit..........         --                26,011
                                           ----------         ---------
Net income (loss).....................     $(443,285)         $ (61,121)
                                           ==========         ==========
Net income (loss) per share of
    common stock......................     $    (.04)         $    (.05)
                                           ==========         ==========
Net income (loss) per share of
common stock on a fully diluted
basis.................................     $    (.04)         $    (.05)
                                           ==========         ==========
Total average number of
    shares outstanding................    12,384,969          1,134,000
                                         ============        ===========


See accompanying notes to consolidated financial statements.




                                      F-14

<PAGE>



                       CASDIM INTERNATIONAL SYSTEMS, INC.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                 FOR THE SIX MONTHS ENDED JUNE 30, 1996 AND 1995


                                                          1996          1995
                                                          ----          ----
                                                       (Unaudited)   (Unaudited)

CASH FLOWS FROM OPERATING ACTIVITIES:
  Net (loss).......................................   $(443,285)      $(61,121)
  Adjustments to reconcile net income to net
         cash provided by operating activities:
     Depreciation and amortization.................      50,239         31,543
     Stock option compensation.....................     164,063             --
  Changes in operating assets and liabilities:
    (Increase) decrease in:                            (209,323)       469,498
       Accounts receivable - trade.................
       Accounts receivable - other.................      99,729       (782,118)
    (Decrease) Increase in:
       Accounts payable - trade....................     134,859        111,902
       Accounts payable - other....................      13,882        (15,995)
     Deposits......................................         --         283,592
                                                         -------       --------
       Net cash provided (used by)
       operating activities........................    (189,836)         7,301
                                                        -------        --------

CASH FLOWS FROM INVESTING ACTIVITIES:
     Payment for start-up costs....................     (27,500)          --
     Purchase of property and equipment............     (42,170)       (35,845)
     Purchase of patent............................           --      (500,000)
     Payment of security deposit...................     (10,200)           --
                                                         ------        -------
       Net cash used in investing activities.......     (79,870)      (535,845)
                                                         -------       -------

CASH FLOWS FROM FINANCING ACTIVITIES
     Proceeds from notes payable..................      280,193        487,993
     Severance pay................................       22,961          1,826
     Proceeds from issuance of stock..............    2,688,079           --
                                                      ----------       --------
          Net cash provided by financing           
            activities...........................     2,991,233        489,819
                                                      ----------       --------

NET INCREASE (DECREASE) IN CASH...................    2,721,527         (8,725)

CASH
     Beginning of period...........................          26          9,488
                                                      ----------      ---------
      End of period................................  $2,721,553      $     763
                                                      ==========      =========


See accompanying notes to consolidated financial statements.



                                      F-15

<PAGE>



                       CASDIM INTERNATIONAL SYSTEMS, INC.
               NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS

1.       Basis of Presentation

         The  accompanying  financial  information  is  unaudited,  but,  in the
         opinion of  management,  reflects all  adjustments  (which include only
         normally  recurring   adjustments)  necessary  to  present  fairly  the
         Company's financial position,  operating results and cash flows for the
         periods  presented.   Certain  information  and  footnote   disclosures
         normally included in financial  statements  prepared in accordance with
         generally accepted accounting principles have been condensed or omitted
         pursuant to the rules and  regulations  of the  Securities and Exchange
         Commission.  The financial  information  should be read in  conjunction
         with the audited  financial  statements  and notes thereto for the year
         ended December 31, 1995 included in the Company's Annual Report on Form
         10-KSB filed with the Securities and Exchange  Commission.  The results
         of  operations  for the  six-month  period  ended June 30, 1996 are not
         necessarily indicative of the results to be expected for the full year.

2.       Summary of Significant Accounting Policies:

         This summary of significant accounting policies of CASDIM INTERNATIONAL
         SYSTEMS,  INC., (the Company) and its subsidiaries,  CASDIM INTERACTIVE
         SYSTEMS  USA,  INC.  and CASDIM  INTERACTIVE  SYSTEMS,  LTD.,  (ISRAEL)
         ("CISL"),  is  presented  to  assist  in  understanding  the  Company's
         financial   statements.   The  financial   statements   and  notes  are
         representations of the Company's  management,  which is responsible for
         their integrity and objectivity.

                   a.       Principles  of  consolidation  -  In  1995,  CASDIM
                            INTERNATIONAL  SYSTEMS, INC. issued 8,500,000 shares
                            of stock after a 50:1 reverse stock split to acquire
                            100% of  the voting  and  equity  shares  of  CASDIM
                            INTERACTIVE  SYSTEMS  USA,  INC., which owns 100% of
                            the voting and equity shares  of CISL.  The business
                            combination has been accounted for using the pooling
                            method  of  accounting.  The consolidated  financial
                            statements  include  the accounts of the Company and
                            its subsidiaries.

                   b.       Foreign  operations - CISL maintains its accounts in
                            nominal New Israeli Shekels ("NIS").  Certain of the
                            dollar  amounts  in  the  financial  statements  may
                            represent the dollar equivalent of other currencies,
                            including the New Israeli Shekel ("NIS"),  which may
                            not be exchangeable for dollars.




                                      F-16

<PAGE>


                            Transactions and balances denominated in dollars are
                            presented  at  their  dollar   amounts.   Non-dollar
                            transactions   and  balances  are  remeasured   into
                            dollars in accordance  with the principles set forth
                            in the Statement of Financial  Accounting  Standards
                            ("FAS") No. 52, "Foreign  Currency  Translation," of
                            the  Financial  Accounting  Standards  Board  of the
                            United States.

                            Accordingly, certain items relating to the Company's
                            Israel subsidiary have been remeasured as follows:

                                    Monetary items-at the current exchange rate
                                    at each balance sheet date;

                                    Nonmonetary items-at historical exchange
                                    rates;

                                    Income and expense  items-at  exchange rates
                                    current  as of the  date of  recognition  of
                                    those  items  (excluding   depreciation  and
                                    other  items   deriving   from   nonmonetary
                                    items);

                                    Exchange     gains    and    losses     from
                                    aforementioned   remeasurement   (which  are
                                    immaterial  for each year) are  reflected in
                                    the statements of income.

                                    Linkage Basis - Balances which are linked to
                                    the  Israeli   Consumer   Price  Index  (the
                                    "CPI"),  are  presented  on the basis of the
                                    index at the balance sheet date, which index
                                    is    published    subsequently.    Balances
                                    denominated  in,  or linked  to,  currencies
                                    other   than  the   dollar   are   presented
                                    according to the exchange  rates  prevailing
                                    at the balance sheet date.

                            The effects of the inflationary  erosion of monetary
                            items and interest is included in  financial  income
                            or expenses as appropriate.

         c.        Fixed Assets - Fixed assets are stated at cost.  Depreciation
                   has been calculated by the straight-line method over the
                   estimated useful lives of the assets.





                                      F-17

<PAGE>



                                                           Years
                                                           -----
                   Leasehold improvements                    10

                   Motor vehicles                            7

                   Office furniture and
                            equipment (mainly computers
                            and peripheral equipment)       5-20

                   Leasehold    improvements    are   depreciated    using   the
                   straight-line  method over the period of each  lease,  not to
                   exceed the estimated useful life of the improvements.

         d.        Cash and Cash  Equivalents - For purposes of the statement of
                   cash flows,  the Company  considers cash and cash equivalents
                   to consist of all cash,  either on hand or in banks including
                   time  deposits,   and  any  highly  liquid  debt  instruments
                   purchased with a maturity of three months or less.

         e.        Bad Debts -  Uncollectible  accounts  receivables are charged
                   directly  against  earnings  when they are  determined  to be
                   uncollectible.  Use of  this  method  does  not  result  in a
                   material  difference  from the valuation  method  required by
                   generally accepted accounting principles.

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

3.       Patent

         In January 1995, the Company  acquired a pending patent No. 108935 from
         CISL  for the  sum of  $500,000  (US  dollars).  The  patent  is  being
         depreciated  using  the  straight-line  method  over the  period of ten
         years.

4.       Accrued Severance Pay

         The liability of the Company for severance pay for the employees of its
         Israeli subsidiary is calculated on the basis of the latest salary paid
         to its  employees  and the  length  of time they  have  worked  for the
         Company. Pursuant to Israeli law, the liability is covered



                                      F-18

<PAGE>



by a provision in the  Company's  balance sheet and amounts  deposited  with the
severance pay funds and insurance policies.  The insurance policies are owned by
CISL and have been entered into by CISL on behalf of its  individual  employees.
The amounts  accumulated with the insurance company are not under CISL's control
or management and are therefore not reflected in the Company's balance sheet.

5.       Capital Stock

         On May 3,  1996  the  Company  completed  a  private  placement  of its
         securities  in which  4,000,000  shares of common stock were issued for
         $3,000,000, before expenses of $311,897.


6.       Stock Warrants and Stock Options

         Stock Compensation Plans

         The Company has two stock option plans.  Under its 1996 Employee  Stock
         Option Plan (the "Employee  Plan") the Company may grant options for up
         to 400,000 shares of its common stock to its employees.  Under the 1996
         Directors  Stock Option Plan (the  "Directors  Plan"),  the Company may
         grant  options  for  up to  100,000  shares  of  common  stock  to  its
         directors.  The Employee Plan and the Directors Plan have been approved
         by the  directors of the Company and will be presented to the Company's
         shareholders  at the next  annual  meeting for their  ratification.  No
         options have been granted under such plans.

         Under the Employee Plan, the exercise price of incentive  stock options
         ("ISOs")  may not be less than  100% (or 110%,  if at the time of grant
         the optionee  owns more than 10% of the voting stock of the Company) of
         the fair  market  value of the  shares of  common  stock at the date of
         grant.  The purchase  price of each share subject to an option,  or any
         portion thereof, which is not designated as an ISO may not be less than
         75% of the fair market of such shares on the date of grant. The term of
         each option  under the  Employee  Plan may be for a period of up to ten
         years (five years if the recipient is a 10% or more shareholder). Under
         the Directors  Plan,  the exercise price of each option may not be less
         than 100% of the fair market value of the shares of common stock on the
         date of grant. Options granted under the Directors Plan may have a term
         of up to ten years.

         Under a public  relations  retainer  agreement (the  "Agreement")  with
         Sunrise Financial Group, Inc. ("Sunrise"),  the Company agreed to issue
         Sunrise options to purchase up to 700,000 shares of its common stock as
         consideration for its public relations services. Of such



                                      F-19

<PAGE>



options,  460,000  options  vested as of April 24,  1996 and options to purchase
10,000 shares of common stock vest monthly for a 24-month period, subject to the
continued  provision of services by Sunrise.  Options to purchase 480,000 shares
of  common  stock had  vested as of June 30,  1996.  Under  the  Agreement,  the
purchase  price of each share  subject to an option is $1.00.  The term of these
options will expire in April 2001.  The Company has accounted for the fair value
of the grant of options to Sunrise in accordance  with FASB  Statement  123. The
compensation  cost that has been charged  against income for the options granted
to Sunrise was $164,063.

         Stock Warrants

         The Company issued stock warrants  exercisable into 1,150,000 shares of
         common stock in connection with its May 1996 private placement.
         The  warrants,  which are  exercisable  at $1.00 per share,  have been
         included in the computation of fully diluted earnings per share.



                                      F-20

<PAGE>


===============================================   ==============================
No   dealer,  salesperson  or other  person has
been  authorized to give any  information or to
make any  representation  not contained in this        
Prospectus  in  connection  with the offer made
hereby.  If given or made, such  information or        5,450,000 Shares
representation  must  not  be  relied  upon  as
having  been  authorized  by the Company or the
Underwriters.    This   Prospectus   does   not          Common Stock
constitute an offer to sell or  solicitation of
an  offer  to  purchase  by any  person  in any
jurisdiction  in which  such an offer  would be
unlawful.   Neither   the   delivery   of  this
Prospectus  nor any sale made  hereunder  shall
under any circumstances  create any implication
that  the  information   contained   herein  is
correct as of any time  subsequent  to the date
hereof.






       -------------------------------                [Logo of Company appears
                                                      here centered above name]
              TABLE OF CONTENTS                          CASDIM INTERNATIONAL
                                         Page                SYSTEMS INC.
Prospectus Summary.........................3
Risk Factors...............................6
Use of Proceeds...........................13
Price Range of Common Stock...............13               _______________
Dividend Policy...........................14 
Capitalization............................14                  PROSPECTUS
Selected Financial Data...................15               _______________
Management's Discussion and Analysis 
  of Financial Condition and Results
  of Operations...........................16
Business..................................20
Management................................30
Certain Transactions......................31
Principal and Selling Stockholders........33
Shares Eligible for Future Sale...........35
Description of Capital Stock..............35
Plan of Distribution......................37
Legal Matters.............................37               October 11, 1996
Experts...................................37
Available Information.....................38
Financial Statements.....................F-1



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