**SECURITIES      & EXCHANGE COMMISSION**

**Washington,      D.C.  20549**

**FORM      10-QSB**

**[X]      QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) **

**OF      THE SECURITIES EXCHANGE ACT OF 1934**

**For      the quarterly period ended June 30, 2005**

**[       ] TRANSITIONAL REPORT UNDER SECTION 13 OR 15(d) **

**OF      THE SECURITIES EXCHANGE ACT OF 1934 (No Fee Required)**

**Commission      File No. 000-24551**

**COMPOSITE      SOLUTIONS, INC.**

| **Florida**                                     | **65-0790758**                      |
|-------------------------------------------------|-------------------------------------|
| State                  or other jurisdiction of | I.R.S.                  Employer    |
| incorporation                  or organization  | Identification                  No. |

**7730      Herschel Street, Suite L, La Jolla, CA 92037**

----

**PART      1 - FINANCIAL INFORMATION**

**Item      1. Financial Statements.**

----

| **Composite                  Solutions, Inc. and Subsidiaries** |
|-----------------------------------------------------------------|
| **(A                  Development Stage Company)**              |
| **Consolidated                  Balance Sheets (unaudited)**    |
|                                                            |

| **ASSETS** |
|------------|

|                                                                               |   | **As                  of**    |       | **As                  of**         |   |
|------------------------------------------------------------------------------------|--------|-------------------------------|------------|------------------------------------|--------|
|                                                                               |   | **June                  30,** |       | **September                  30,** |   |
|                                                                               |   | **2005**                      |       | **2004**                           |   |
|                                                                               |   |                          |       |                               |   |
| **CURRENT                  ASSETS**                                                |   |                          |       |                               |   |   |   |
| Cash                                                                               |   | $                             | -          |                               | $      | 1,265 |   |
| Prepaid                  expenses                                                  |   |                          | 17,106     |                               |   | 27,152 |   |
| **Total                  Current Assets**                                          |   |                          | 17,106     |                               |   | 28,417 |   |
|                                                                               |   |                          |       |                               |   |   |   |
| **NET                  PROPERTY & EQUIPMENT**                                  |   |                          | -          |                               |   | 1,669 |   |
|                                                                               |   |                          |       |                               |   |   |   |
| **Other                  assets**                                                  |   |                          |       |                               |   |   |   |
| Deposits                                                                           |   |                          | -          |                               |   | 15,075 |   |
| Intagible,                  assets, net                                            |   |                          |       |                               |   | - |   |
| Goodwill                                                                           |   |                          |       |                               |   | - |   |
|                                                                               |   |                          |       |                               |   |   |   |
| **TOTAL                  ASSETS**                                                  |   | $                             | 17,106     |                               | $      | 45,161 |   |
|                                                                               |   |                          |       |                               |   |   |   |
| **CURRENT                  LIABILITIES**                                           |   |                          |       |                               |   |   |   |
| Accounts                  payable                                                  |   | $                             | 477,398    |                               | $      | 386,656 |   |
| Billings                  in excess of costs                                       |   |                          | -          |                               |   | - |   |
| Line                  of credit                                                    |   |                          | -          |                               |   | - |   |
| Emloyee                  and director payable                                      |   |                          | 637,615    |                               |   | 610,902 |   |
| Related                  party payable                                             |   |                          | 80,000     |                               |   | 80,000 |   |
| Note                  payable                                                      |   |                          | -          |                               |   | - |   |
| Related                  party notes payable                                       |   |                          | 252,423    |                               |   | 233,227 |   |
| Accrued                  expenses                                                  |   |                          | 130,423    |                               |   | 131,523 |   |
| Accrued                  losses on future contracts                                |   |                          | -          |                               |   | - |   |
| Income                  taxes payable                                              |   |                          | 14,521     |                               |   | 14,521 |   |
|                                                                               |   |                          |       |                               |   |   |   |
| **Total                  Current Liabilities**                                     |   |                          | 1,592,380  |                               |   | 1,456,829 |   |
|                                                                               |   |                          |       |                               |   |   |   |
|                                                                               |   |                          |       |                               |   |   |   |
| **TOTAL                  LIABILITIES**                                             |   |                          | 1,592,380  |                               |   | 1,456,829 |   |
|                                                                               |   |                          |       |                               |   |   |   |
| **STOCKHOLDERS'                  EQUITY (DEFICIT)**                                |   |                          |       |                               |   |   |   |
| Preferred                  stock; $ 0.0001 par value; 10,000,000 shares authorized |   |                          |       |                               |   |   |   |
| 0                  shares issued and outstanding                                   |   |                          | -          |                               |   | - |   |
| Common                  stock; $0.0001 par value; 50,000,000 shares authorized     |   |                          |       |                               |   |   |   |
| 23,565,116                  and 23,565,116 shares issued and outstanding as of     |   |                          |       |                               |   |   |   |
| December                  30, 2004 and 2003, respectively                          |   |                          | 2,355      |                               |   | 2,355 |   |
| Additional                  paid in capital                                        |   |                          | 5,742,024  |                               |   | 5,742,024 |   |
| Retained                  earnings (deficit)                                       |   |                          | (7,319,653 | )                                  |   | (7,156,047 | ) |
|                                                                               |   |                          |       |                               |   |   |   |
| **Total                  Stockholders' Equity (Deficit)**                          |   |                          | (1,575,274 | )                                  |   | (1,411,668 | ) |
|                                                                               |   |                          |       |                               |   |   |   |
|                                                                               |   |                          |       |                               |   |   |   |
| **LIABILITES                  & STOCKHOLDERS' EQUITY (DEFICIT)**               |   | $                             | 17,106     |                               | $      | 45,161 |   |

***See        Notes        to Financial Statements***

----

| **Composite                    Solutions, Inc. and Subsidiaries** |
|-------------------------------------------------------------------|
| **(A                    Development Stage Company)**              |
| **Consolidated                    Statements of Operation**       |
| **(unaudited)**                                                   |
|                                                              |

|                                                                      |   |                                            |        |                                       |   |                                  |   |      |       |  **October                    20,** |   |
|---------------------------------------------------------------------------|--------|-------------------------------------------------|-------------|-------------------------------------------------|--------|---------------------------------------|--------|----------------|------------|------------------------------------------|--------|
|                                                                      |   |                                            |        |                                       |   |                                  |   |      |       |  **1997**                           |   |
|                                                                      |   | **Three**                             |        | **Nine**                              |   |  **(Inception)**                 |   |
|                                                                      |   | **Months                    Ended**   |        | **Months                    Ended**   |   |  **through**                     |   |
|                                                                      |   | **June                    30,**       |        | **June                    30,**       |   |  **June                    30,** |   |
|                                                                      |   | **2005**                                        |        |  **2004**                                  |   | **2005**                              |   |  **2004** |       |  **2005**                           |   |
| **Revenues**                                                              |   |                                            |        |                                            |   |                                  |   |           |       |                                     |   |   |   |   |   |   |
| Contract                    revenue                                       |   |                                            | -           |                                            | $      | 268,776                               |   | $              | -          |                                     | $      | 955,946 |   | $ | 1,700,738 |   |
| Materials                                                                 |   |                                            | -           |                                            |   | -                                     |   |           | -          |                                     |   | - |   |   | 101,789 |   |
| **Total                    revenue**                                      |   |                                            | -           |                                            |   | 268,776                               |   |           | -          |                                     |   | 955,946 |   |   | 1,802,527 |   |
|                                                                      |   |                                            |        |                                            |   |                                  |   |           |       |                                     |   |   |   |   |   |   |
| **Cost                    of Sales**                                      |   |                                            |        |                                            |   |                                  |   |           |       |                                     |   |   |   |   |   |   |
| Salaries                    and consulting fees                           |   |                                            | -           |                                            |   | 4,325                                 |   |           | -          |                                     |   | 19,925 |   |   | 534,098 |   |
| Consulting                    fees - related party                        |   |                                            | -           |                                            |   | 174,376                               |   |           | -          |                                     |   | 226,541 |   |   | 378,981 |   |
| Materials                                                                 |   |                                            | -           |                                            |   | 23,005                                |   |           | -          |                                     |   | 493,474 |   |   | 609,804 |   |
| Cost                    of sales                                          |   |                                            | -           |                                            |   | 201,706                               |   |           | -          |                                     |   | 739,940 |   |   | 1,522,883 |   |
|                                                                      |   |                                            |        |                                            |   |                                  |   |           |       |                                     |   |   |   |   |   |   |
| **GROSS                    PROFIT**                                       |   |                                            | -           |                                            |   | 67,070                                |   |           | -          |                                     |   | 216,006 |   |   | 279,644 |   |
|                                                                      |   |                                            |        |                                            |   |                                  |   |           |       |                                     |   |   |   |   |   |   |
| **Expenses**                                                              |   |                                            |        |                                            |   |                                  |   |           |       |                                     |   |   |   |   |   |   |
| Consulting                    fees                                        |   |                                            | -           |                                            |   | 12,990                                |   |           | -          |                                     |   | 12,990 |   |   | 994,224 |   |
| Consulting                    fees - related party                        |   |                                            | -           |                                            |   | 123,543                               |   |           | -          |                                     |   | 139,793 |   |   | 1,072,431 |   |
| Depreciation                    and amortization                          |   |                                            | -           |                                            |   | 12,664                                |   |           | -          |                                     |   | 25,294 |   |   | 420,932 |   |
| General                    and administrative expenses                    |   |                                            | 928         |                                            |   | 76,364                                |   |           | 33,213     |                                     |   | 103,475 |   |   | 1,574,392 |   |
| Organizational                    expenses                                |   |                                            | -           |                                            |   | -                                     |   |           | -          |                                     |   | - |   |   | 514 |   |
| Professional                    fees - other                              |   |                                            | -           |                                            |   | 42,548                                |   |           | 7,061      |                                     |   | 43,550 |   |   | 437,254 |   |
| Professional                    fees - related party                      |   |                                            | 15,000      |                                            |   | 19,785                                |   |           | 79,327     |                                     |   | 20,165 |   |   | 96,424 |   |
| Salaries                                                                  |   |                                            | -           |                                            |   | 287,170                               |   |           | -          |                                     |   | 298,090 |   |   | 1,750,136 |   |
| Provision                    for future contract losses                   |   |                                            | -           |                                            |   | 1,500                                 |   |           | -          |                                     |   | 1,500 |   |   | 3,013 |   |
| Impairment                    loss                                        |   |                                            | -           |                                            |   | -                                     |   |           | -          |                                     |   | - |   |   | 1,041,888 |   |
|                                                                      |   |                                            |        |                                            |   |                                  |   |           |       |                                     |   |   |   |   |   |   |
| Total                    expenses                                         |   |                                            | 15,928      |                                            |   | 576,564                               |   |           | 119,601    |                                     |   | 644,857 |   |   | 7,391,207 |   |
|                                                                      |   |                                            |        |                                            |   |                                  |   |           |       |                                     |   |   |   |   |   |   |
| **Loss                    from operations**                               |   |                                            | (15,928     | )                                               |   | (509,494                              | )      |           | (119,601   | )                                        |   | (428,851 | ) |   | (7,111,563 | ) |
| **Other                    income (expense)**                             |   |                                            |        |                                            |   |                                  |   |           |       |                                     |   |   |   |   |   |   |
| Interest                    income                                        |   |                                            | -           |                                            |   | -                                     |   |           | -          |                                     |   | - |   |   | 8,363 |   |
| Interest                    income - forgiveness of debt                  |   |                                            | -           |                                            |   | -                                     |   |           | -          |                                     |   | - |   |   | 63,371 |   |
| Other                    income                                           |   |                                            | -           |                                            |   | 4,033                                 |   |           | 975        |                                     |   | 4,033 |   |   | 97,033 |   |
| Gain                    on forgiveness of debt                            |   |                                            | -           |                                            |   | -                                     |   |           | -          |                                     |   | - |   |   | 8,261 |   |
| Other                    expenses                                         |   |                                            | -           |                                            |   | (1,590                                | )      |           | -          |                                     |   | (2,723 | ) |   | (22,319 | ) |
| Loss                    on disposal of asset                              |   |                                            | -           |                                            |   | -                                     |   |           | (759       | )                                        |   | - |   |   | (949 | ) |
| Interest                    expense                                       |   |                                            | (2,607      | )                                               |   | (41,682                               | )      |           | (43,422    | )                                        |   | (43,804 | ) |   | (420,516 | ) |
| Loss                    on forgiveness of debt                            |   |                                            | -           |                                            |   | -                                     |   |           | -          |                                     |   | - |   |   | (11,021 | ) |
| Total                    other income (expense)                           |   |                                            | (2,607      | )                                               |   | (39,239                               | )      |           | (43,205    | )                                        |   | (42,494 | ) |   | (277,777 | ) |
|                                                                      |   |                                            |        |                                            |   |                                  |   |           |       |                                     |   |   |   |   |   |   |
| **Loss                    before provision for income taxes**             |   |                                            | (18,535     | )                                               |   | (548,733                              | )      |           | (162,806   | )                                        |   | (471,345 | ) |   | (7,389,339 | ) |
|                                                                      |   |                                            |        |                                            |   |                                  |   |           |       |                                     |   |   |   |   |   |   |
| **Provision                    for income taxes**                         |   |                                            | -           |                                            |   | 2,400                                 |   |           | 800.00     |                                     |   | 4,200 |   |   | 35,609 |   |
|                                                                      |   |                                            |        |                                            |   |                                  |   |           |       |                                     |   |   |   |   |   |   |
| **Loss                    from continuing operations**                    |   |                                            | **(18,535** | **)**                                           | $      | **(551,133**                          | **)**  | $              | (163,606   | )                                        | $      | **(475,545** | **)** | $ | **(7,424,948** | **)** |
|                                                                      |   |                                            |        |                                            |   |                                  |   |           |       |                                     |   |   |   |   |   |   |
| **Discontinued                    operations**                            |   |                                            |        |                                            |   |                                  |   |           |       |                                     |   |   |   |   |   |   |
| Income                    from discontinued operations (including gain on |   |                                            |        |                                            |   |                                  |   |           |       |                                     |   |   |   |   |   |   |
| sale                    of subsidiary in the amount of $ 177,755)         |   |                                            | -           |                                            |   | -                                     |   |           | -          |                                     |   | - |   |   | 105,295 |   |
| **Net                    Loss**                                           |   |                                            | (18,535     | )                                               | $      | (551,133                              | )      | $              | (163,606   | )                                        | $      | (475,545 | ) | $ | (7,319,653 | ) |
|                                                                      |   |                                            |        |                                            |   |                                  |   |           |       |                                     |   |   |   |   |   |   |
| Loss                    per common share, basic and diluted               |   |                                            |        |                                            |   |                                  |   |           |       |                                     |   |   |   |   |   |   |
| Net                    loss from continuing operations                    |   |                                            | (0.00       | )                                               | $      | (0.02                                 | )      | $              | (0.01      | )                                        | $      | (0.02 | ) | $ | (0.31 | ) |
|                                                                      |   |                                            |        |                                            |   |                                  |   |           |       |                                     |   |   |   |   |   |   |
| Income                    from Discontinued operations                    |   |                                            | -           |                                            | $      | -                                     |   | $              | -          |                                     | $      | - |   | $ | 0.00 |   |
|                                                                      |   |                                            |        |                                            |   |                                  |   |           |       |                                     |   |   |   |   |   |   |
| Net                    Loss                                               |   |                                            | (0.00       | )                                               | $      | (0.02                                 | )      | $              | (0.01      | )                                        | $      | (0.02 | ) | $ | (0.31 | ) |
|                                                                      |   |                                            |        |                                            |   |                                  |   |           |       |                                     |   |   |   |   |   |   |
| Weighted                    Average number of shares, basic and diluted   |   |                                            | 23,565,116  |                                            |   | 22,695,227                            |   |           | 23,565,116 |                                     |   | 21,670,555 |   |   | - |   |

***See        Notes to Financial        Statements***

----

| **COMPOSITE                  SOLUTIONS, INC. AND SUBSIDIARIES**                       |
|---------------------------------------------------------------------------------------|
| **(A                  Development Stage Company)**                                    |
| **Consolidated                  Statements of Changes in Stockholders’ Equity** |
|                                                                                  |

|                                                            |   |       |       |       |   |                          |   | **Deficit**                     |      |                    |   |
|-----------------------------------------------------------------|--------|------------|------------|------------|--------|-------------------------------|--------|---------------------------------|-----------|-------------------------|--------|
|                                                            |   |       |       |       |   |                          |   | **Accumulated**                 |      |                    |   |
|                                                            |   |       |       |       |   | **Additional**                |   | **During                  the** |      | **Total**               |   |
|                                                            |   | **Common** |       | **Common** |   | **Paid                  -In** |   | **Development**                 |      | **Stockholders’** |   |
|                                                            |   | **Shares** |       | **Stock**  |   | **Capital**                   |   | **Stage**                       |      | **Equity**              |   |
|                                                            |   |       |       |       |   |                          |   |                            |      |                    |   |
| **Balance,                  October 20, 1997 (inception)** |   |       | -          |       | $      | -                             |   | $                               | -         |                    | $      | - |   | $ | - |   |
|                                                            |   |       |       |       |   |                          |   |                            |      |                    |   |   |   |   |   |   |
| Common                  stock issued in exchange for            |   |       |       |       |   |                          |   |                            |      |                    |   |   |   |   |   |   |
| services                                                        |   |       | 15,233,910 |       |   | 1,521                         |   |                            | (2,120    | )                       |   | - |   |   | (599 | ) |
|                                                            |   |       |       |       |   |                          |   |                            |      |                    |   |   |   |   |   |   |
| Common                  stock issued for cash                   |   |       | 5,962,500  |       |   | 599                           |   |                            | 18,335    |                    |   | - |   |   | 18,934 |   |
|                                                            |   |       |       |       |   |                          |   |                            |      |                    |   |   |   |   |   |   |
| Net                  loss for year ended September 30, 1998     |   |       |       |       |   |                          |   |                            |      |                    |   | (12,193 | ) |   | (12,193 | ) |
|                                                            |   |       |       |       |   |                          |   |                            |      |                    |   |   |   |   |   |   |
| **Balance,                  September 30, 1998**           |   |       | 21,196,410 |       |   | 2,120                         |   |                            | 16,215    |                    |   | (12,193 | ) |   | 6,142 |   |
|                                                            |   |       |       |       |   |                          |   |                            |      |                    |   |   |   |   |   |   |
| Common                  stock contributed                       |   |       | (7,896,410 | )          |   | (790                          | )      |                            | 790       |                    |   | - |   |   | - |   |
|                                                            |   |       |       |       |   |                          |   |                            |      |                    |   |   |   |   |   |   |
| Pre-acquisition                  income                         |   |       | -          |       |   | -                             |   |                            | -         |                    |   | 47 |   |   | 47 |   |
|                                                            |   |       |       |       |   |                          |   |                            |      |                    |   |   |   |   |   |   |
| Common                  stock issued in acquisition             |   |       | 1,000,000  |       |   | 100                           |   |                            | 47        |                    |   | (47 | ) |   | 100 |   |
|                                                            |   |       |       |       |   |                          |   |                            |      |                    |   |   |   |   |   |   |
| Common                  stock issued for payment of             |   |       |       |       |   |                          |   |                            |      |                    |   |   |   |   |   |   |
| note                  payable                                   |   |       | 200,000    |       |   | 20                            |   |                            | 999,980   |                    |   | - |   |   | 1,000,000 |   |
|                                                            |   |       |       |       |   |                          |   |                            |      |                    |   |   |   |   |   |   |
| Net                  loss for year ended September 30, 1999     |   |       |       |       |   |                          |   |                            |      |                    |   | (574,850 | ) |   | (574,850 | ) |
|                                                            |   |       |       |       |   |                          |   |                            |      |                    |   |   |   |   |   |   |
| **Balance,                  September 30, 1999**           |   |       | 14,500,000 |       |   | 1,450                         |   |                            | 1,017,032 |                    |   | (587,043 | ) |   | 431,439 |   |
|                                                            |   |       |       |       |   |                          |   |                            |      |                    |   |   |   |   |   |   |
| Common                  stock surrendered                       |   |       | (4,300,000 | )          |   | (430                          | )      |                            | 430       |                    |   |   |   |   | - |   |
|                                                            |   |       |       |       |   |                          |   |                            |      |                    |   |   |   |   |   |   |
| Common                  stock issued for cash                   |   |       | 668,333    |       |   | 67                            |   |                            | 759,933   |                    |   |   |   |   | 760,000 |   |
|                                                            |   |       |       |       |   |                          |   |                            |      |                    |   |   |   |   |   |   |
| Common                  stock issued in acquisitions            |   |       | 1,103,371  |       |   | 110                           |   |                            | 808,668   |                    |   |   |   |   | 808,778 |   |
|                                                            |   |       |       |       |   |                          |   |                            |      |                    |   |   |   |   |   |   |
| Common                  stock issued for finder’s fee     |   |       | 100,000    |       |   | 10                            |   |                            | (10       | )                       |   |   |   |   | - |   |
|                                                            |   |       |       |       |   |                          |   |                            |      |                    |   |   |   |   |   |   |
| Common                  stock issued in exchange                |   |       |       |       |   |                          |   |                            |      |                    |   |   |   |   |   |   |
| for                  services                                   |   |       | 300,000    |       |   | 30                            |   |                            | 173,970   |                    |   |   |   |   | 174,000 |   |
|                                                                 |   |       |       |       |   |                          |   |                            |      |                    |   |   |   |   |   |   |
| Net                  loss for year ended September 30, 2000     |   |       |       |       |   |                          |   |                            |      |                    |   | (1,090,715 | ) |   | (1,090,715 | ) |
|                                                            |   |       |       |       |   |                          |   |                            |      |                    |   |   |   |   |   |   |
| **Balance,                  September 30, 2000**           |   |       | 12,371,704 |       |   | 1,237                         |   |                            | 2,760,023 |                    |   | (1,677,758 | ) |   | 1,083,502 |   |
|                                                            |   |       |       |       |   |                          |   |                            |      |                    |   |   |   |   |   |   |
| Common                  stock surrendered                       |   |       | (150,000   | )          |   | (15                           | )      |                            | (93,735   | )                       |   |   |   |   | (93,750 | ) |
|                                                            |   |       |       |       |   |                          |   |                            |      |                    |   |   |   |   |   |   |
| Common                  stock issued for cash                   |   |       | 725,000    |       |   | 73                            |   |                            | 244,927   |                    |   |   |   |   | 245,000 |   |
|                                                            |   |       |       |       |   |                          |   |                            |      |                    |   |   |   |   |   |   |
| Common                  stock issued in exchange for services   |   |       | 1,061,760  |       |   | 106                           |   |                            | 128,227   |                    |   |   |   |   | 128,333 |   |
|                                                            |   |       |       |       |   |                          |   |                            |      |                    |   |   |   |   |   |   |
| Common                  stock issued for finder’s fee     |   |       | 200,000    |       |   | 20                            |   |                            | (20       | )                       |   |   |   |   | - |   |
|                                                            |   |       |       |       |   |                          |   |                            |      |                    |   |   |   |   |   |   |
| Net                  loss for year ended September 30, 2001     |   |       |       |       |   |                          |   |                            |      |                    |   | (1,367,322 | ) |   | (1,367,322 | ) |
|                                                            |   |       |       |       |   |                          |   |                            |      |                    |   |   |   |   |   |   |
| **Balance,                  September 30, 2001**           |   |       | 14,208,464 |       |   | 1,421                         |   |                            | 3,039,422 |                    |   | (3,045,080 | ) |   | (4,237 | ) |

***See          Notes to Financial          Statements***

----

| **COMPOSITE                    SOLUTIONS, INC. AND SUBSIDIARIES**                       |
|-----------------------------------------------------------------------------------------|
| **(A                    Development Stage Company)**                                    |
| **Consolidated                    Statements of Changes in Stockholders’ Equity** |
|                                                                                    |

|                                                                |   |   |       |   |   |   |   |   |      |   |   |       |   |   |       |   |
|---------------------------------------------------------------------|--------|--------|------------|--------|--------|--------|--------|--------|-----------|--------|--------|------------|--------|--------|------------|--------|
| **Balance,                  September 30, 2001**               |   |   | 14,208,464 |   |   | 1,421  |   |   | 3,039,422 |   |   | (3,045,080 | )      |   | (4,237     | )      |
|                                                                |   |   |       |   |   |   |   |   |      |   |   |       |   |   |       |   |
| Common                  stock issued for cash                       |   |   | 2,339,047  |   |   | 234    |   |   | 227,266   |   |   |       |   |   | 227,500    |   |
|                                                                |   |   |       |   |   |   |   |   |      |   |   |       |   |   |       |   |
| Common                  stock issued for compensation               |   |   | 1,183,149  |   |   | 118    |   |   | 206,391   |   |   |       |   |   | 206,509    |   |
|                                                                |   |   |       |   |   |   |   |   |      |   |   |       |   |   |       |   |
| Common                  stock issued in exchange for services       |   |   | 514,034    |   |   | 51     |   |   | 91,568    |   |   |       |   |   | 91,619     |   |
|                                                                |   |   |       |   |   |   |   |   |      |   |   |       |   |   |       |   |
| Common                  stock issued for interest due               |   |   | 47,350     |   |   | 5      |   |   | 5,677     |   |   |       |   |   | 5,682      |   |
|                                                                |   |   |       |   |   |   |   |   |      |   |   |       |   |   |       |   |
| Net                  loss for year ended September 30, 2002         |   |   |       |   |   |   |   |   |      |   |   | (1,166,742 | )      |   | (1,166,742 | )      |
|                                                                |   |   |       |   |   |   |   |   |      |   |   |       |   |   |       |   |
| **Balance,                  September 30, 2002**               |   |   | 18,292,044 |   |   | 1,829  |   |   | 3,570,324 |   |   | (4,211,822 | )      |   | (639,669   | )      |
|                                                                |   |   |       |   |   |   |   |   |      |   |   |       |   |   |       |   |
| Common                  stock issued for cash                       |   |   | 2,404,696  |   |   | 240    |   |   | 365,060   |   |   |       |   |   | 365,300    |   |
|                                                                |   |   |       |   |   |   |   |   |      |   |   |       |   |   |       |   |
| Common                  stock issued to settle accounts payable     |   |   | 582,024    |   |   | 58     |   |   | 70,325    |   |   |       |   |   | 70,383     |   |
|                                                                |   |   |       |   |   |   |   |   |      |   |   |       |   |   |       |   |
| Common                  stock issued for services                   |   |   | 400,000    |   |   | 40     |   |   | 58,960    |   |   |       |   |   | 59,000     |   |
|                                                                |   |   |       |   |   |   |   |   |      |   |   |       |   |   |       |   |
| Common                  stock issued through exercise of options    |   |   | 71,428     |   |   | 7      |   |   | 4,993     |   |   |       |   |   | 5,000      |   |
|                                                                |   |   |       |   |   |   |   |   |      |   |   |       |   |   |       |   |
| Common                  stock issued for interest due               |   |   | 90,363     |   |   | 9      |   |   | 14,412    |   |   |       |   |   | 14,421     |   |
|                                                                |   |   |       |   |   |   |   |   |      |   |   |       |   |   |       |   |
| Common                  stock issued for compensation               |   |   | 50,000     |   |   | 5      |   |   | 8,495     |   |   |       |   |   | 8,500      |   |
|                                                                |   |   |       |   |   |   |   |   |      |   |   |       |   |   |       |   |
| Common                  stock surrendered                           |   |   | (220,000   | )      |   | (22    | )      |   | 22        |   |   |       |   |   | -          |   |
|                                                                |   |   |       |   |   |   |   |   |      |   |   |       |   |   |       |   |
| Recapitalization                  of accounts payable               |   |   |       |   |   |   |   |   |      |   |   |       |   |   |       |   |
| and                  accrued wages                                  |   |   | -          |   |   | -      |   |   | 1,028,366 |   |   |       |   |   | 1,028,366  |   |
|                                                                |   |   |       |   |   |   |   |   |      |   |   |       |   |   |       |   |
| Net                  loss for year ended September 30, 2003         |   |   |       |   |   |   |   |   |      |   |   | (897,736   | )      |   | (897,736   | )      |
|                                                                |   |   |       |   |   |   |   |   |      |   |   |       |   |   |       |   |
| **Balance,                  September 30, 2003**               |   |   | 21,670,555 |   |   | 2,166  |   |   | 5,120,957 |   |   | (5,109,558 | )      |   | 13,565     |   |
|                                                                |   |   |       |   |   |   |   |   |      |   |   |       |   |   |       |   |
| Common                  stock issued for cash                       |   |   |       |   |   |   |   |   |      |   |   |       |   |   | -          |   |
|                                                                |   |   |       |   |   |   |   |   |      |   |   |       |   |   |       |   |
| Common                  stock issued to settle accounts payable     |   |   | 377,788    |   |   | 38     |   |   | 108,172   |   |   |       |   |   | 108,210    |   |
|                                                                |   |   |       |   |   |   |   |   |      |   |   |       |   |   |       |   |
| Common                  stock issued for services                   |   |   | 50,000     |   |   | 5      |   |   | 5,495     |   |   |       |   |   | 5,500      |   |
|                                                                |   |   |       |   |   |   |   |   |      |   |   |       |   |   |       |   |
| Common                  stock issued through exercise of options    |   |   | 125,000    |   |   | 13     |   |   | -         |   |   |       |   |   | 13         |   |
|                                                                |   |   |       |   |   |   |   |   |      |   |   |       |   |   |       |   |
| Common                  stock issued for interest due               |   |   | 9,561      |   |   | 1      |   |   | 955       |   |   |       |   |   | 956        |   |
|                                                                |   |   |       |   |   |   |   |   |      |   |   |       |   |   |       |   |
| Common                  stock issued for compensation               |   |   | 1,000,000  |   |   | 100    |   |   | 219,900   |   |   |       |   |   | 220,000    |   |
|                                                                |   |   |       |   |   |   |   |   |      |   |   |       |   |   |       |   |
| Common                  stock issued for past due royalty late fees |   |   | 44,733     |   |   | 4      |   |   | 13,186    |   |   |       |   |   | 13,190     |   |
|                                                                |   |   |       |   |   |   |   |   |      |   |   |       |   |   |       |   |
| Common                  stock issued for new licensing fee          |   |   | 287,479    |   |   | 29     |   |   | 82,571    |   |   |       |   |   | 82,600     |   |
|                                                                |   |   |       |   |   |   |   |   |      |   |   |       |   |   |       |   |
| Warrants                  issued in debt financing                  |   |   | -          |   |   | -      |   |   | 152,044   |   |   |       |   |   | 152,044    |   |
|                                                                |   |   |       |   |   |   |   |   |      |   |   |       |   |   |       |   |
| Warrants                  issued in consulting                      |   |   | -          |   |   | -      |   |   | 38,744    |   |   |       |   |   | 38,744     |   |
|                                                                |   |   |       |   |   |   |   |   |      |   |   |       |   |   |       |   |
| Net                  loss for year ended September 30, 2004         |   |   |       |   |   |   |   |   |      |   |   | (2,046,489 | )      |   | (2,046,489 | )      |
|                                                                |   |   |       |   |   |   |   |   |      |   |   |       |   |   |       |   |
| **Balance,                  September 30, 2004**               |   |   | 23,565,116 |   | $      | 2,355  |   | $      | 5,742,024 |   | $      | (7,156,047 | )      | $      | (1,411,668 | )      |
|                                                                |   |   |       |   |   |   |   |   |      |   |   |       |   |   |       |   |
|                                                                |   |   |       |   |   |   |   |   |      |   |   |       |   |   |       |   |
| Net                  loss for year ended June 30, 2005              |   |   |       |   |   |   |   |   |      |   |   | (163,606   | )      |   | (163,606   | )      |
|                                                                |   |   |       |   |   |   |   |   |      |   |   |       |   |   |       |   |
| **Balance,                  December 31, 2004**                |   |   | 23,565,116 |   | $      | 2,355  |   | $      | 5,742,024 |   | $      | (7,319,653 | )      | $      | (1,575,274 | )      |

***See        Notes to Financial Statements***

----

| **COMPOSITE                  SOLUTIONS, INC. AND SUBSIDIARIES**       |
|-----------------------------------------------------------------------|
| **(A                  Development Stage Company)**                    |
| **Consolidated                  Statements of Cash Flow (unaudited)** |
|                                                                  |

|   |   |                              |   |                          |   | **October 20,                  1997** |   |
|--------|--------|-----------------------------------|--------|-------------------------------|--------|--------------------------------------------|--------|
|   |   | **Nine**                          |   | **(Inception)**               |   |
|   |   | **Month                  Period** |   | **through**                   |   |
|   |   | **June                  30,**     |   | **June                  30,** |   |
|   |   | **2005**                          |   | **2004**                      |   | **2005**                                   |   |

| **Cash                  flows from operating activities**                                                     |   |   |     |   |   |     |   |   |       |   |
|---------------------------------------------------------------------------------------------------------------|--------|--------|----------|--------|--------|----------|--------|--------|------------|--------|
| Net                  loss                                                                                     |   | $      | (163,606 | )      | $      | (475,545 | )      | $      | (7,319,653 | )      |
| Adjustments                  to reconcile net loss to net cash used in operating                  activities: |   |   |     |   |   |     |   |   |       |   |
| Depreciation                  and amortization                                                                |   |   | -        |   |   | 25,294   |   |   | 420,932    |   |
| Loss                  on disposal of assets                                                                   |   |   | -        |   |   | -        |   |   | 190        |   |
| Amortization                  of discount on notes payable                                                    |   |   |     |   |   | 23,802   |   |   | 23,802     |   |
| Common                  stock issued in exchange for services                                                 |   |   | -        |   |   | -        |   |   | 570,680    |   |
| Common                  stock issued for interest due                                                         |   |   | -        |   |   | 13,691   |   |   | 21,059     |   |
| Common                  stock issued for compensation                                                         |   |   | -        |   |   | 220,000  |   |   | 529,516    |   |
| Warrants                  issued for consulting                                                               |   |   |     |   |   | 38,744   |   |   | 38,744     |   |
| Forgiveness                  of accounts payable                                                              |   |   | -        |   |   | -        |   |   | (48,946    | )      |
| Pre-acquisition                  income                                                                       |   |   | -        |   |   | -        |   |   | 47         |   |
| Loss                  from discontinued operations                                                            |   |   | -        |   |   | -        |   |   | 93,267     |   |
| Gain                  on disposal of subsidiary                                                               |   |   | -        |   |   | -        |   |   | (177,755   | )      |
| Impairment                  loss                                                                              |   |   | -        |   |   | -        |   |   | 1,041,888  |   |
| Provision                  for future contract losses                                                         |   |   | -        |   |   | 1,500    |   |   | -          |   |
| (Increase)                  decrease in operating assets                                                      |   |   | -        |   |   |     |   |   |       |   |
| Accounts                  receivable                                                                          |   |   | -        |   |   | (19,875  | )      |   | -          |   |
| Related                  party receivable                                                                     |   |   | -        |   |   | -        |   |   | -          |   |
| Costs                  in excess of billings                                                                  |   |   | -        |   |   | 4,869    |   |   | -          |   |
| Inventory                                                                                                     |   |   | -        |   |   | -        |   |   | -          |   |
| Prepaid                  expenses and other assets                                                            |   |   | 10,046   |   |   | (24,165  | )      |   | (17,106    | )      |
| Employee                  advances                                                                            |   |   | -        |   |   | -        |   |   | -          |   |
| Deposit                                                                                                       |   |   | 15,075   |   |   | 21       |   |   | -          |   |
| Increase                  (decrease) in operating liabilities                                                 |   |   |     |   |   |     |   |   |       |   |
| Accounts                  payable                                                                             |   |   | 90,742   |   |   | (175     | )      |   | 1,406,237  |   |
| Employee                  and director payable                                                                |   |   | 26,713   |   |   | 55,467   |   |   | 830,593    |   |
| Billings                  in excess of costs                                                                  |   |   | -        |   |   | (37,773  | )      |   | -          |   |
| Related                  party payable                                                                        |   |   | 19,196   |   |   | 21,294   |   |   | 252,575    |   |
| Accrued                  expenses                                                                             |   |   | (1,100   | )      |   | 15,894   |   |   | 212,393    |   |
| Income                  taxes payable                                                                         |   |   | -        |   |   | (8,539   | )      |   | 18,473     |   |
| Net                  cash used in operating activities                                                        |   |   | (2,934   | )      |   | (145,496 | )      |   | (2,103,064 | )      |
|                                                                                                          |   |   |     |   |   |     |   |   |       |   |
| **Cash                  flows from investing activities**                                                     |   |   |     |   |   |     |   |   |       |   |
| Purchase                  of property, plant and equipment                                                    |   |   | 1,669    |   |   | -        |   |   | (29,811    | )      |
| Acquisition                  of intangible assets                                                             |   |   | -        |   |   | (15,264  | )      |   | (650,894   | )      |
| Loans                  made to related party                                                                  |   |   | -        |   |   | -        |   |   | (10,000    | )      |
| Repayments                  of loans to related party                                                         |   |   | -        |   |   | -        |   |   | 10,000     |   |
| Acquisition                  of subsidiary                                                                    |   |   | -        |   |   | -        |   |   | (500,000   | )      |
| Cash                  of discontinued operations                                                              |   |   | -        |   |   | -        |   |   | (19,999    | )      |
| Cash                  of acquired subsidiaries                                                                |   |   | -        |   |   | -        |   |   | 17,261     |   |
| Net                  cash used in investing activities                                                        |   |   | 1,669    |   |   | (15,264  | )      |   | (1,183,443 | )      |

***See          Notes to Financial Statements***

----

| **COMPOSITE                  SOLUTIONS, INC. AND SUBSIDIARIES**       |
|-----------------------------------------------------------------------|
| **(A                  Development Stage Company)**                    |
| **Consolidated                  Statements of Cash Flow (unaudited)** |
|                                                                  |

|   |   |                              |   |                          |   | **October 20,                  1997** |   |
|--------|--------|-----------------------------------|--------|-------------------------------|--------|--------------------------------------------|--------|
|   |   | **Nine**                          |   | **(Inception)**               |   |
|   |   | **Month                  Period** |   | **through**                   |   |
|   |   | **June                  30,**     |   | **June                  30,** |   |
|   |   | **2005**                          |   | **2004**                      |   | **2005**                                   |   |

| **Cash                  flows from financing activities**                |   |   |   |   |   |    |   |   |      |   |
|--------------------------------------------------------------------------|--------|--------|--------|--------|--------|---------|--------|--------|-----------|--------|
| Increase                  (decrease) in line of credit                   |   |   | -      |   |   | (1,153  | )      |   | -         |   |
| Proceeds                  from notes payable                             |   |   | -      |   |   | -       |   |   | 1,064,500 |   |
| Payment                  of notes payable                                |   |   | -      |   |   | (7,822  | )      |   | (424,253  | )      |
| Proceeds                  from note payable to related parties           |   |   | -      |   |   | 266,000 |   |   | 780,416   |   |
| Payments                  on note payable to related parties             |   |   | -      |   |   | -       |   |   | (247,669  | )      |
| Proceeds                  from convertible debenture                     |   |   | -      |   |   | -       |   |   | 500,000   |   |
| Proceeds                  from issuance of common stock, net             |   |   | -      |   |   | 13      |   |   | 1,613,513 |   |
| Net                  cash provided by financing activities               |   |   | -      |   |   | 257,038 |   |   | 3,286,507 |   |
|                                                                     |   |   |   |   |   |    |   |   |      |   |
| Net                  increase (decrease) in cash                         |   |   | (1,265 | )      |   | 96,278  |   |   | 0         |   |
|                                                                     |   |   |   |   |   |    |   |   |      |   |
| Cash,                  beginning of year                                 |   |   | 1,265  |   |   | 49,495  |   |   | -         |   |
|                                                                     |   |   |   |   |   |    |   |   |      |   |
| **Cash,                  end of year**                                   |   | $      | (0     | )      | $      | 145,773 |   | $      | 0         |   |
|                                                                     |   |   |   |   |   |    |   |   |      |   |
| **Supplementary                  disclosures**                           |   |   |   |   |   |    |   |   |      |   |
|                                                                     |   |   |   |   |   |    |   |   |      |   |
| Cash                  paid during year for interest                      |   | $      | -      |   | $      | 17,552  |   | $      | 26,085    |   |
|                                                                     |   |   |   |   |   |    |   |   |      |   |
| Cash                  paid during year for taxes                         |   | $      | -      |   | $      | 9,296   |   | $      | 10,728    |   |
|                                                                     |   |   |   |   |   |    |   |   |      |   |
| **Non-cash                  financing and investing activities**         |   |   |   |   |   |    |   |   |      |   |
|                                                                     |   |   |   |   |   |    |   |   |      |   |
| Note                  payable paid through issuance of common stock      |   | $      |   |   | $      |    |   | $      | 1,000,000 |   |
|                                                                     |   |   |   |   |   |    |   |   |      |   |
| Note                  payable paid through exercise of option            |   | $      |   |   | $      | 5,000   |   | $      | 5,000     |   |
|                                                                     |   |   |   |   |   |    |   |   |      |   |
| Investment                  in subsidiary                                |   | $      |   |   | $      |    |   | $      | 796,732   |   |
|                                                                     |   |   |   |   |   |    |   |   |      |   |
| Interest                  on note payable                                |   | $      |   |   | $      |    |   | $      | 17,825    |   |
|                                                                     |   |   |   |   |   |    |   |   |      |   |
| Forgiveness                  of interest on note payable                 |   | $      |   |   | $      |    |   | $      | (17,825   | )      |
|                                                                     |   |   |   |   |   |    |   |   |      |   |
| Inter-company                  receivable released in sale of subsidiary |   | $      |   |   | $      |    |   | $      | 22,021    |   |
|                                                                     |   |   |   |   |   |    |   |   |      |   |
| Common                  stock acquired in sale of subsidiary             |   | $      |   |   | $      |    |   | $      | (93,750   | )      |
|                                                                     |   |   |   |   |   |    |   |   |      |   |
| 8%                  debenture released in sale of subsidiary             |   | $      |   |   | $      |    |   | $      | (500,000  | )      |
|                                                                     |   |   |   |   |   |    |   |   |      |   |
| Note                  payable released in sale of subsidiary             |   | $      |   |   | $      |    |   | $      | (64,500   | )      |
|                                                                     |   |   |   |   |   |    |   |   |      |   |
| Accrued                  interest released in sale of subsidiary         |   | $      |   |   | $      |    |   | $      | (28,867   | )      |
|                                                                     |   |   |   |   |   |    |   |   |      |   |
| Common                  stock issued to settle accounts payable          |   | $      |   |   | $      | 108,210 |   | $      | 70,383    |   |

***See          Notes to Financial Statements***

----

| **COMPOSITE                  SOLUTIONS, INC. AND SUBSIDIARIES**       |
|-----------------------------------------------------------------------|
| **(A                  Development Stage Company)**                    |
| **Consolidated                  Statements of Cash Flow (unaudited)** |
|                                                                  |

|   |   |                              |   |                          |   | **October 20,                  1997** |   |
|--------|--------|-----------------------------------|--------|-------------------------------|--------|--------------------------------------------|--------|
|   |   | **Nine**                          |   | **(Inception)**               |   |
|   |   | **Month                  Period** |   | **through**                   |   |
|   |   | **June                  30,**     |   | **June                  30,** |   |
|   |   | **2005**                          |   | **2004**                      |   | **2005**                                   |   |

|                                                                    |   |   |   |   |   |   |   |   |       |   |
|-------------------------------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|------------|--------|
| Recapitalization                  of accounts payable and accrued wages |   | $      |   |   | $      | -      |   | $      | (1,028,366 | )      |
|                                                                    |   |   |   |   |   |   |   |   |       |   |
| Line                  of credit converted into note payable             |   | $      |   |   | $      | 49,752 |   | $      | 49,752     |   |
|                                                                    |   |   |   |   |   |   |   |   |       |   |
| Common                  stock issued for intangible assets              |   | $      |   |   | $      | 82,600 |   | $      | 82,600     |   |
|                                                                    |   |   |   |   |   |   |   |   |       |   |
| Warrants                  issued for discount on note payable           |   | $      |   |   | $      | 93,293 |   | $      | 93,293     |   |

***See        Notes to Financial Statements***

----

**COMPOSITE          SOLUTIONS, INC. AND SUBSIDIARIES**

**(A          Development Stage Company)**

**Notes          to Financial Statements**

**As          of June 30, 2005**

**NOTE          1- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES **

**The          Company **

**Basis          of Presentation **

**Unaudited          Financial Statements **

**Intangible          Assets **

*Goodwill          and Other Intangible Assets.  *

----

**COMPOSITE              SOLUTIONS, INC. AND SUBSIDIARIES**

**(A              Development Stage Company)**

**Notes              to Financial Statements**

**As              of June 30, 2005**

**NOTE          1- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES -continued**

**Impairment          of Long-lived Assets **

*Impairment          of Long-Lived Assets and Long-Lived Assets to Be Disposed Of.  *

**Revenue          Recognition **

**Use          of Estimates **

**Stock          Based Compensation **

*Accounting          for Stock Issued to Employees *

**Reclassifications          **

----

**COMPOSITE            SOLUTIONS, INC. AND SUBSIDIARIES**

**(A            Development Stage Company)**

**Notes            to Financial Statements**

**As            of June 30, 2005**

**NOTE          2 - EARNINGS PER SHARE **

**NOTE          3 - RELATED PARTY TRANSACTIONS **

**Related          Party Payable, Consulting Fees, Materials, and Professional Fees**

**Notes          Payable **

**Agreements          **

----

**COMPOSITE            SOLUTIONS, INC. AND SUBSIDIARIES**

**(A            Development Stage Company)**

**Notes            to Financial Statements**

**As            of June 30, 2005**

**NOTE          4 - CONCENTRATIONS OF CREDIT RISK **

**NOTE          5 - GOING CONCERN **

**NOTE          6 - Bankruptcy**

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**Item      2. Management’s Discussion and Analysis**

**General      Overview**

| (1) | Identity                of the Court: The U.S. Bankruptcy Court for the Southern District                of                California. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------|

| (2) | Date                of Order: December                11, 2006. |
|-----|-----------------------------------------------------------------|

| (3) | Summary                of the Plan: This summary highlights only portions of the Plan and                is not                a complete description of  the Plan. This summary is qualified in its                entirety by reference to the full text of the                Plan. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| (4) | Number                of Shares or Other Units Issued: A total of 1,025,000 common shares                in the                Registrant have been issued under the Plan, and the total number                of common                shares now issued and outstanding is 1,050,203. No preferred shares                are                issued and outstanding. In addition, the Registrant issued 800,000                "A"                warrants, 800,000 "B" warrants and 800,000 “C” warrants pursuant to the                Plan. Each warrant allows the holder to acquire one share of common                stock.                No other warrants or options are                outstanding. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (5) | Assets                and Liabilities of the Registrant when Plan was Confirmed: At the                time                the Plan was confirmed the Registrant had assets of approximately                $23,033                and                liabilities of approximately                $1,694,332. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**Business      Areas**

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**Critical      Accounting Policies and Estimates**

**Results      of Operations**

**Stockholders’      Equity**

**Liquidity      and Capital Resources**

**Related      Party Debt Obligations**

|                                             |   | **Relation** |    |    |    |
|--------------------------------------------------|--------|--------------|---------|---------|---------|
| **Employee                and director payable** |   |         |    |    |    |
| Gilbert                Hegemier                  |   | Officer      |    | $       | 191,438 |   |
| Anna                D’Amico                |   | Employee     |    | 14,423  |    |
| Thomas                Bache                      |   | Employee     |    | 90,272  |    |
| Total                                            |   |         |    | $       | 296,133 |   |
| **Related                party payable**         |   |         |    |    |    |
| Blanchard,                Krasner & French   |   | Stockholder  |    | $       | 9,865   |   |
| Smaha                & Daley                 |   | Stockholder  |  x | 19,223  |    |
| UC                Regents                        |   | Stockholder  |    | 61,248  |    |
| Jang                Lee                          |   | Stockholder  |    | 110,816 |    |
| Other                                            |   | Stockholder  |    | 6,368   |    |
| Other                                            |   | Stockholder  |    | 2,300   |    |
| Total                                            |   |         |    | $       | 209,820 |   |

----

| **Accrued                expenses and related party notes payable** |   |                 |   |    |    |
|---------------------------------------------------------------------|--------|----------------------|--------|---------|---------|
| Loan                P&I                                         |   | Employee/Stockholder |   | $       | 217,298 |   |
| Loan                P&I                                         |   | Employee/Stockholder |   | 547,285 |    |
| Loan                P&I                                         |   | Stockholder          |   | 10,252  |    |
| Loan                P&I                                         |   | Stockholder          |   | 47,450  |    |
| Loan                P&I                                         |   | Stockholder          |   | 3,873   |    |
| Total                                                               |   |                 |   | $       | 826,158 |   |

**Management      **

**Cautionary      Statement Regarding Forward-Looking Statements**

**Risks**

**      - **

----

**-      **

**      - **

**      - **

**Part      II**

**Item      1.  Legal Proceedings**

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**Item      6.  Exhibits and Reports on Form 8-K**

**(a)            Exhibits**

| **Exhibit****Number** |   | **Description**                                                               |
|-----------------------|--------|-------------------------------------------------------------------------------|
| 2.1              |   |  Debtor’s                Second Amended Plan of Reorganization (5) |
| 3.1                   |   | Articles                of Incorporation of the Company, as amended(1)        |
| 3.2                   |   | Bylaws                of the Company, as amended(1)                           |
| 10.1                  |   | License                Agreement with UCSD (Case No. SD96-040)(2)             |
| 10.2                  |   | Share                Exchange Agreement(3)                                    |
| 10.3                  |   | Share                Exchange Agreement with and Acquisition of TSC(4)        |
| 31                    |   | Sarbanes-Oxley                Section 302 Certification                  |
| 32                    |   | Sarbanes-Oxley                Section 906 Certification                  |

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| (1) | Incorporated                by reference to the referenced document filed as an exhibit to the                Company’s Registration Statement on Form 10SB12G/A, Commission File No.                000-24551, filed on October 20,                1998. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2) | Incorporated                by reference to the referenced document filed as an exhibit to the                Company’s Annual Report on Form 10-KSB, Commission File No. 000-24551,                filed on January 13, 2000. |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (3) | Incorporated                by reference to the referenced document filed as an exhibit to the                Company’s Current Report on Form 8-K, Commission File No. 000-24551, filed                on July 14, 2000 and August 31,                2000. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (4) | Incorporated                by reference to the referenced documents related to the Acquisition                of TSC                and filed on Form 8-K, Commission File No. 000-24551, on June 26,                2000 and July 25, 2000. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (5) | Incorporated                by reference to the referenced document filed as an exhibit on Form                8-K on                May 11, 2007 |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------|

**(b).**
**Reports      on Form 8-K.**

**Signatures**

| Date:                July __, 2007 |                                     |
|------------------------------------|------------------------------------------|
|                               | Composite                Solutions, Inc. |
|                               |                                     |
|                               |                                     |
|                               | By:                                      | */s/                Thomas C. Bache* |   |
|                               |                                     |   |
|                               |                                     | Thomas                C. Bache, President & CEO |