GENERAL DEVELOPMENT

Cadema Corporation (the "Company") finances and operates business enterprises that have the potential to generate profits and positive cash flow.

The predecessor of the Company (Nevada Resources, Inc.) was incorporated in Nevada in 1980, at which time it acquired certain mining equipment and interests in undeveloped mining properties. The Company has been publicly held since 1980. In 1985, the Company decided to diversify its operations and, in September 1986, effected a merger with Cadema, Inc., a privately held company. Although the Company originally was engaged in mineral exploration, the 1986 acquisition of Cadema, Inc. changed the Company's primary business to the commercialization of medical technology. All mining interests have been sold or have been allowed to lapse. The Company was re-incorporated in Delaware in December 1986 and changed its name to Cadema Corporation.

From 1986 until July 1992, the Company's business had been the sale of medical products cleared by the Food and Drug Administration (FDA) and the development of new products for which FDA clearance was sought. In 1987, the Company raised approximately $3,900,000 in net proceeds through the public sale of preferred stock to finance these operations. The Company left the medical products business with the sale of its medical product lines in 1990 and 1992.

On July 15, 1992, the Company acquired SuperCads, Inc. (known by its business name of "Cognition") and its primary business changed to computer software products. Cognition was sold in May 1993, and with this sale the Company no longer engaged in the computer software business.

On December 31, 1993, the Company entered into a Joint Venture Agreement with Danzer Industries, Inc., formerly Global Environmental Corp., which created Global Environmental Offshore Company ("Global") which previously engaged in contracting for the design and installation of air pollution control equipment and facilities in areas located outside the United States. Global previously provided design, assembly and project management services related to the construction of air pollution control systems. Global's business was inactive during fiscal 2000, 1999 and 1998. Cadema owns 51% of Global.

Unless the context otherwise indicates, all references herein to Cadema or the Company include Cadema Corporation and its subsidiary and predecessors.

The Company is still exploring other possible acquisitions and mergers, as it has done in the past, seeking to enter into new operating businesses and to use the Company's liquid assets in connection therewith.

The Company has also used available cash to purchase, hold and dispose of equity interests in various high technology companies as outlined in a plan approved by stockholders in 1988. Securities transactions in 2000 resulted in a realized gain of $19,009 and an unrealized loss of $61,322. The Company intends to continue to invest in trading securities, including but not limited to stocks, bonds, options and warrants. The Company previously invested, and expects in the future to invest, primarily in stocks of smaller, lesser known and often more speculative companies, which while entailing above average risk, offer the potential of above average return on investment. See Note 5 to Consolidated Financial Statements.

NUMBER OF EMPLOYEES

The Company's Chief Executive Officer and President, Mr. Roger D. Bensen, was the sole employee as of December 31, 2000 and was not compensated for serving in such capacity.