<PAGE>

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549

                                   FORM 10-KSB

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(Mark one)

[x] ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
    1934

       For the fiscal year ended September 30, 2002

[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
    OF 1934

       For the transition period from ______________ to _____________

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                         Commission File Number: 0-10999

                        COMPOSITE TECHNOLOGY CORPORATION
        (Exact name of small business issuer as specified in its charter)

           Nevada                                               59-2025386
----------------------------                            ------------------------
  (State of incorporation)                              (IRS Employer ID Number)

          18881 Von Karman Avenue, Suite 1630, Irvine, California 92612
          -------------------------------------------------------------
               (Address of principal executive offices) (Zip Code)

                            (949) 756-1091 (Issuer's
                            ------------------------
                                telephone number)

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      Securities registered under Section 12 (b) of the Exchange Act: None

         Securities registered under Section 12(g) of the Exchange Act:
                         Common Stock: $0.001 par value

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Check whether the issuer has (1) filed all reports required to be files by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period the Company was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes [X] No [ ]

Check if there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B contained in this form, and no disclosure will be contained, to
the best of Company's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-KSB or any amendment to
this Form 10-KSB. [ ]

The issuer's revenues for the fiscal year ended September 30, 2002 was $-0-.

The aggregate market value of voting common equity held by non-affiliates as of
December 6, 2002 was approximately $4,108,794, using the closing price of the
Company's common stock of $0.16 per share on November 29, 2002.

As of December 6, 2002 there were 75,154,929 shares of Common Stock issued and
outstanding.

Transitional Small Business Disclosure Format : Yes [ ]    No   [X]

                                       1
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                        COMPOSITE TECHNOLOGY CORPORATION

                                TABLE OF CONTENTS



                                                                     Page Number
                                                                     -----------
PART I

Item 1 -   Description of Business                                             3
Item 2 -   Description of Property                                            14
Item 3 -   Legal Proceedings                                                  14
Item 4 -   Submission of Matters to a Vote of Security Holders                15

PART II

Item 5 -   Market for Company's Common Stock and Related Stockholders
           Matters                                                            15
Item 6 -   Management's Discussion and Analysis or Plan of Operation          18
Item 7 -   Index to Financial Statements                                      20
Item 8 -   Changes in and Disagreements with Accountants                      20
           on Accounting and Financial Disclosures                            20

PART III

Item 9 -   Officers and Directors                                             20
Item 10 -  Executive Compensation                                             21
Item 11 -  Security Ownership of Certain Beneficial Owners And Management     23
Item 12 -  Certain Relationships and Related Transactions                     23
Item 13 -  Controls and Procedures                                            24

PART IV

Item 13 - Exhibits and Reports on 8-K                                         25

SIGNATURES                                                                    26

CERTIFICATIONS PURSUANT TO SARBANES OXLEY ACT OF 2002                         27


                                       2
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CAUTION REGARDING FORWARD-LOOKING INFORMATION
---------------------------------------------

All statements contained in this Form 10-KSB, other than statements of
historical facts, that address future activities, events or developments are
forward-looking statements, including, but not limited to, statements containing
the words "believe," "anticipate," "expect" and words of similar import. These
statements are based on certain assumptions and analyses made by us in light of
our experience and our assessment of historical trends, current conditions and
expected future developments as well as other factors we believe are appropriate
under the circumstances. However, whether actual results will conform to the
expectations and predictions of management is subject to a number of risks and
uncertainties that may cause actual results to differ materially.

Such risks include, among others, the following: international, national and
local general economic and market conditions: our ability to sustain, manage or
forecast our growth; raw material costs and availability; new product
development and introduction; existing government regulations and changes in, or
the failure to comply with, government regulations; adverse publicity;
competition; the loss of significant customers or suppliers; fluctuations and
difficulty in forecasting operating results; changes in business strategy or
development plans; business disruptions; the ability to attract and retain
qualified personnel; the ability to protect technology; and other factors
referenced in this and previous filings.

Consequently, all of the forward-looking statements made in this Form 10-KSB are
qualified by these cautionary statements and there can be no assurance that the
actual results anticipated by management will be realized or, even if
substantially realized, that they will have the expected consequences to or
effects on our business operations.

As used in this Form 10-KSB, unless the context requires otherwise, "we" or "us"
or the "Company" means Composite Technology Corporation and its subsidiaries.

                                     PART I

ITEM 1 - DESCRIPTION OF BUSINESS

INTRODUCTION
------------

Composite Technology Corporation (CTC or Company) is commercializing advanced
composite technology products that are designed to provide solutions to problems
in the electrical system infrastructure. Using technologies conceived and
invented by its own team of consultants, CTC's first products are patent pending
higher performance electrical cables to relieve congestion on transmission and
distribution lines. These new cables provide utilities significant performance
and economic benefits compared to traditional cables. There are no known
barriers to immediate market penetration for CTC's proprietary, patent pending
cable into the worldwide $50+ billion market. The Company is arranging rapid
deployment of the technology by partnering with existing cable manufacturers
here and abroad. Follow-on products include proprietary electrical towers and
poles, wind turbine erection and support systems, and building components.

The Company was incorporated under the laws of the State of Florida on February
26, 1980 as Eldorado Gold & Exploration, Inc. On January 13, 1987, the Company
amended its Articles of Incorporation to change the corporate name to Eldorado
Financial Group, Inc. and modified the Company's capital structure to allow for
the issuance of up to 100,000,000 shares of common stock at $0.001 par value per
share.

On June 27, 2001, the Company changed its state of Incorporation from Florida to
Nevada by means of a merger with and into Eldorado Financial Group, Inc., a
Nevada corporation formed on June 25, 2001 solely for the purpose of effecting
the reincorporation.

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<PAGE>

On November 3, 2001, the Company exchanged 60,000,000 shares of restricted,
unregistered common stock for 100.0% of the issued and outstanding common stock
of Transmission Technology Corporation (TTC), a privately-owned Nevada
corporation incorporated on March 28, 2001. TTC was first formed to secure a
license agreement related to patent-pending composite reinforced electrical
transmission lines utilizing composite core materials. TTC became a wholly-owned
subsidiary of the Company. The Bylaws of TTC became the Articles of
Incorporation and Bylaws of the Company.

In conjunction with the November 3, 2001 transaction, the Company, in November
2001, changed its corporate name to CTC and amended its Articles of
Incorporation to allow for the issuance of up to 5,000,000 shares of $0.001 par
value Preferred Stock from none previously authorized and for the issuance of up
to 200,000,000 shares of $0.001 par value Common Stock from the 100,000,000
shares previously authorized.

On December 28, 2001, the Company's Board of Directors, and the Board of
Directors for TTC established the initial year-end of September 30 for our
wholly-owned subsidiary, TTC and, concurrently, elected to change the fiscal
year-end of CTC from December 31 to September 30. This action was taken after an
evaluation and review of the November 3, 2001 acquisition transaction, the
operations of both CTC and TTC during the period since our last annual filing on
Form 10-KSB and consideration of future economic events and opportunities.

The acquisition of TTC, on November 3, 2001, by CTC effected a change in control
and was accounted for as a" reverse acquisition" whereby TTC is the accounting
acquiror for financial statement purposes. Accordingly, for all periods
subsequent to the reset year-end of September 30, 2001, the financial statements
of the Company reflect the historical financial statements of TTC from its
inception on March 28, 2001 and the operations of CTC subsequent to September
30, 2001, as retroactively adjusted for the transactions on November 3, 2001.


PRINCIPAL PRODUCT
-----------------

Our principal product is our award winning proprietary Aluminum Conductor
Composite Core (ACCC) cable which has been developed over the past year. We have
filed patent applications for our ACCC technologies, which are new electrical
transmission and distribution cable designs that are able to deliver more power
(ampacity) than conventional ACSR (aluminum conductor steel reinforced) cables
in use today. ACCC cables are lighter than conventional steel reinforced cables
and have a higher ampacity rating, thus allowing them to replace existing
overhead lines without structural modification of the supporting tower systems
while allowing more power to be transmitted. We believe that the use of this
technology to replace existing lines can improve the reliability and reduce the
stress on the overloaded electrical infrastructure at a fraction of the cost and
in a much shorter time period than is required to create expensive new
rights-of-way and build new tower systems. However, if new system construction
is required to support new generation sources, we believe the size and cost of
the new towers can be significantly reduced due to the lower weight and higher
ampacity of the ACCC conductors.

The US Department of Energy and electrical industry leaders agree that there is
an immediate need for a reasonably priced higher performance cable, such as our
ACCC cable. Recently, industry research has focused primarily on
superconductors, which are very expensive and require constant cooling with
liquid nitrogen. While superconductors perform with low transmission losses,
their much higher price, larger size, and increased maintenance constraints make
them suitable only for select underground lines in highly congested power
centers. It is very doubtful that this technology will be used in overhead
transmission or distribution systems in the foreseeable future.

In November 2002, our ACCC cable was recognized as the "Most Promising
Pre-Commercial Technology Development of the Year" by the 4th Annual Global
Energy Awards, sponsored by Platts/BUSINESSWEEK. This prestigious international
award, according to Platts/BUSINESSWEEK Global Energy Awards, is to determine
the world's best players in the energy marketplace and to help promising
technologies achieve broad recognition and usage in a world of ever-increasing
demands for energy.

                                       4
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Since the late 1880's, overhead electrical transmission lines have used cables
that are made from steel wires that are helically wrapped by aluminum wires,
generally known as ACSR (aluminum conductor steel reinforced) cable. ACCC cable
is the same weight per foot as ACSR cable of comparable outside diameter. ACCC
has higher tensile strength and has half of the thermal expansion of
conventional cables. However, ACCC has 28.8% more aluminum content due to its
smaller core diameter and the use of trapezoidal wire wrappings. Therefore, ACCC
cable is able to carry additional electrical current (ampacity) on existing
structures with little modification for supporting connections. Since the
composite core of ACCC cable is non- conductive, unlike ACSR steel-core cable,
there is no inductive field effect due to the conductor being wound around a
steel core, which then lowers the electromagnetic field (US Department of Energy
reports say EMF can be reduced by more than 50% through the use of composite
core cables). Since the composite core of the ACCC cable is stronger than ACSR
cable, and since the same cross-sectional area used by the steel wires can be
packed with greater density using composite-core shapes, the ACCC cable core has
areas that can be designed to hold fiber optic cables. With the addition of
devices capable of intelligent sensing of temperature, sag, and line problems,
ACCC cable can also be used for the transmission of all types of optical
communications and control data.

The first ACCC cables planned for production are designed to replace the ACSR
"Drake" size (795 kcmil area) commonly used in transmission lines and in larger
distribution lines. There are many other similar versions of ACSR cables with
different specifications that can also be produced using the same arrangement as
the proposed ACCC cable versions of the Drake models. ACCC's unique core simply
replaces the steel wires in the center of the ACSR with pultruded composite
profiles. Therefore, the handling and splicing of the ACCC cable is similar to
conventional cables, except for the joining of the composite core.

The primary benefits of replacing ACSR cable with our CRAC cable are as follows:
1.   Greater ampacity (electrical current carrying capacity), principally
     because the cable has the ability to handle more elevated temperatures with
     less sag in the line, 28.8% more aluminum area, and because of lower
     resistance with less inductive field resulting from a core that is now
     non-conductive.
2.   Glass composites have 50% less thermal expansion than steel, which results
     in less sag at elevated temperatures. This means that our ACCC cable can be
     rated with a higher ampacity, without sag causing the cable to encroach on
     safe operating clearances.
3.   Our ACCC cable is designed to have similar stiffness and tensioning
     requirements to match ACSR so that ACCC cable can be used to retrofit
     (reconductor) existing towers and poles.
4.   Our ACCC can be produced with minor modifications to existing cable
     production plants, thus avoiding significant capital expenditure for new
     cable-wrapping equipment.

Another key advantage of ACCC cable is that the outside conductive wire portion
of the cable is the same diameter and configuration as the conventional ACSR
cable, which means that it can be handled and spliced with minimal re-training
of utility linemen. The only difference is the splicing of the inside composite
core (and the splicing of the fiber optic bundle, if requested by the utility).
The splicing techniques have been developed and demonstrated by technicians
retained by us. Although the price of ACCC cable may initially be slightly more
than the conventional cable it replaces, we believe that the use of ACCC cable
will be far less expensive than the installation costs of new additional lines
and support structures

Electricity now accounts for nearly 40% of total energy consumption in the
United States and in other countries with similar levels of economic
development. The electricity system has emerged as the world's most critical
infrastructure, in the sense that it enables all other infrastructures to
function. To ensure the capability and reliability of electricity systems in the
twenty-first century, new advanced materials, polymers, composites and special
structures will be required. High-performance polymeric cables, such as our ACCC
cables, are expected to meet the needs of the electrical industry because it is
the same weight or lighter, ACCC has a higher current carrying capacity and ACCC
is better able to tolerate high stresses during emergency overload conditions.

The Company, through its subsidiary Transmission Technology Corporation, also
holds an exclusive license for patent pending composite reinforced aluminum
conductor (CRAC) cable technologies and all further improvements. Due to non
performance on the part of the license issuer, the Company filed legal action to
require the license issuer, WBG, Inc. and its related parties, to comply with
the terms of the agreement. This litigation is still underway and the Company
feels it will prevail. However, the Company does not believe the outcome of this
litigation will affect the commercialization of the Company's proprietary patent
pending products. SEE "INTELLECTUAL PROPERTY" AND "LEGAL PROCEEDINGS."

                                       5
<PAGE>

SALES AND DISTRIBUTION
----------------------

During Fiscal 2002, the Company developed numerous key contacts with several
North American and foreign cable manufacturers having existing mature customer
bases for our products. These are cable manufacturing companies with
established, successful distribution networks to deploy our products. We have
also opened discussions with direct end-users of our products. We anticipate any
or all of these distribution channels/methods may yield successful results
during the next 12 months. We may also seek to distribute our products through
joint ventures and/or other contractual relationships designed to fit the laws
and tax structures of the countries where they will be domiciled.

We have not to date made any sales of our product. Our initial ACCC conductor
sales efforts are being targeted at potential customers that have the greatest
need for a solution to congested line circuits or aging transmission systems.
This is a narrowly defined market with great potential for immediate sales to
solve significant reliability and power delivery problems, such as seen in the
California and Brazilian marketplace over the past three years. We have
initiated discussions with potential customers for our ACCC conductor including
generation companies and transmission grid owners located throughout the United
States and the world, as well as various local, state and federal government
agencies in the United States, Canada and Mexico.

Our products are targeted at an industry which is mature in North America and
developing in various other countries around the world, such as China and South
America. The power generation and distribution industry is relatively
conservative by nature and evolution. However, events impacting domestic
electric distribution over the past three years cause us to believe that our
products will be accepted on a more rapid than "normal" product evaluation
process. We intend to provide our prospective customers with demonstrations of
the product under controlled conditions. We are in the process of arranging to
produce ACCC cable for demonstrations during Fiscal 2003 in the North American,
Chinese, European and South American markets.

Following a parallel path sales strategy, we have, and continue to be in,
contact with selected companies or agencies that are in early stages of project
development of generation facilities requiring new transmission or distribution
systems. We believe that one or more of these may elect to integrate ACCC cable
into their systems.

Until and unless we secure multiple customer relationships, it is likely that we
will experience periods during which we will be highly dependent on one or a
limited number of customers.

MANUFACTURING
-------------

We have not started to manufacture any products. In order to reduce market entry
costs, we anticipate establishing subcontractor relationships, licenses and/or
joint ventures to manufacture our ACCC cable product line, although no such
relationships or joint ventures are currently in place. Any of these methods
will allow us to produce ACCC cables with much lower initial capital
expenditures. This will promote more rapid deployment of the Company's products.

We plan to produce our proprietary high speed neural-networked manufacturing
systems for our own use and for sale to our joint venture partners and/or
licensees, as appropriate. We will, in some instances, produce cable through
relationships with existing cable makers, by having them add helically stranded
combinations of individual aluminum wires around the composite core and/or using
pultrusion machines which the Company will supply.

In any of these scenarios, we anticipate a need for additional capital to
facilitate the manufacturing of our products. It is probable that we will
attempt to sell equity securities, either through private placements or
secondary public offerings, to raise the necessary capital to facilitate our
business plan. We may also secure exclusive license payments and/or exclusive
venture relationship payments from prospective manufacturers and/or deposits on
products/machines ordered.

Our principal raw materials will be glass and carbon fibers, plus various
polymer resins. The prices for these raw materials are subject to market forces
largely beyond our control, including energy costs, organic chemical feedstocks,
market demand, and freight costs. The prices for these raw materials have varied
significantly in the past and may vary significantly in the future.

                                       6
<PAGE>

The composite cores that have been produced and tested have been made by
pultruding high strength glass fibers and a high strength epoxy under high
tension to achieve very high tensile strength in a process known as "thermoset."
The principal advantage of perfecting the referenced process to achieve similar
tensile strengths as the "thermoset pultrusion" is that the production line
should be able to run at higher speeds resulting in lower manufacturing costs
per foot of product. The thermoset polymers identified by the Company have
proven resistance to high electrical energy fields, higher temperatures, and
weathering.

Our objective is to build an efficient, high speed, thermoset pultrusion system
for use in manufacturing the composite core. Additionally, we intend to build
and test a high-speed equipment line while proceeding to market a "pultruded
thermoset" core. We believe that there are additional potential improvements to
the ACCC design that should be pursued and could be implemented with minimal
retraining on the part of the utility companies. Future market developments
include cables for water crossings, marine cables, underground cables, and
various other wire applications, such as "last mile" cables.

Our team of specialists has a long, successful track record as the leading
pultrusion technology experts in the composites product engineering and
equipment design fields. The pultrusion process is a composite manufacturing
method that resembles extrusion, except that the fiber and polymer materials are
pulled through a heated die having the shape of the part to be made. Organic
compounds from resin baths and the enclosed die are contained in this process
equipment package. Production is a highly automated continuous process, and
conductor core lengths of many miles are possible, but are limited by reel
sizes, handling, and transportation constraints.


INTELLECTUAL PROPERTY
---------------------

The Company filed U.S. Provisional Patent Application No. 60/374,879 on April
23, 2002. CTC was granted a license to file corresponding foreign patent
applications from the United States Patent and Trademark Office on May 29, 2002,
and CTC has preserved all of its foreign filing options. The inventors of record
on CTC's Provisional Patent Application are Dr. Clem Hiel and Mr. George
Korzeniowski. Dr. Hiel is world-renowned in the field of composite materials
engineering and design. Mr. Korzeniowski has a long and very distinguished
career dealing directly with design, building and operating pultrusion
processing equipment for composite products manufacturing. CTC'?s Provisional
Patent Application deals with novel composite materials, a range of materials
for such composites, processing to produce composite materials, range of
operating characteristics, and various products made from such composite
materials. The primary products disclosed are electrical transmission conductors
that substitute the related composite materials in place of standard steel
reinforced cable. The composite materials are characterized by both chemistry
and physical properties, and particular examples are included. Product
characteristics such as ampacity, elevated operating temperatures, lower
electrical resistance, light weight, high strength composite fiber packing
density, corrosion, stiffness, thermal expansion, toughness, fatigue life, creep
resistance, wear resistance and fiber strength are addressed. Novel pultrusion
processing techniques are also disclosed, which techniques are applicable to
both the conductor applications as well as other composite based products.
Numerous cross sectional cable designs are disclosed, as well as various methods
and designs for splicing composite cables.

Based on available information, and after prior art searches by the Company's
patent strategists, we believe CTC's Provisional Patent Application provides the
basis for CTC to, over time, be issued a number of separate and distinct
patents. The Company's Provisional Patent Application will continue to be
supplemented with new information based on CTC's prototype preparation and
testing. The Company's Provisional Patent Application specifically focuses on
materials and conductors conforming to industry specifications and requirements,
as presently in place and as anticipated for the future. If CTC is successful in
being granted patent protection consistent with the disclosures in this
application, it is anticipated that CTC will have a dominant position in the
field of composite-based electrical conductors.

CTC's subsidiary, Transmission Technology Corporation ("TTC"), entered into an
exclusive technology license agreement with W.B.G., Inc., a California
corporation ("WBG"), on May 7, 2001 (the "License Agreement"). The License
Agreement related to patent pending composite reinforced aluminum conductor
technologies and all improvements and gave TTC an exclusive license to the
technologies covered by the License Agreement.

                                       7
<PAGE>

In the License Agreement, WBG represented and warranted to TTC that WBG had the
right to enter into the License Agreement, including without limitation the
right to grant TTC the exclusive rights to the technologies covered by the
License Agreement. WBG also agreed to provide TTC full disclosure of all current
and future technologies covered by the License Agreement as well as disclosure
of any interested parties in such technologies. TTC agreed to pay WBG to design,
build, install and provide specifications, manuals and training to complete
commercial product equipment lines for the technologies, with the price and
specifications to be mutually agreed upon. TTC would advance funds to WBG for
each phase as required under a mutually agreed upon budget and schedule. If WBG
is unable to supply said additional commercial product lines, then TTC has the
right to produce same. No such disclosures have been made nor budgets provided
to CTC as of September 30, 2002 or subsequent thereto at the time of this
writing. TTC also agreed to pay royalties to WBG based upon a sliding scale from
5% down to 2% of gross sales as defined in the License Agreement.

As of September 30, 2002 and subsequent thereto, the Company, TTC and WBG are
involved in litigation regarding the interpretation and enforcement of the
License Agreement. (SEE ITEM 3 - LEGAL PROCEEDINGS). Management is of the
opinion that the license agreement will be upheld and no valuation impairment of
the original agreed-upon acquisition cost has been provided in the accompanying
financial statements.

Goldsworthy has no relevant patents issued to date. To the best of our
knowledge, Goldsworthy and his affiliate companies have filed a patent
application that might be potentially relevant to CTC's intended products. This
application was filed on November 1, 1999. The application received a final
rejection from the US Patent and Trade Office on June 9, 2001. We have no
knowledge of the status of the application following this final rejection, in
spite of numerous requests pursuant to court ordered discovery. The Goldsworthy
application generally discloses a composite reinforced electrical transmission
conductor. The application was not prepared with a great deal of specificity,
which makes it more unlikely that it will ever issue as a patent.
Confidentiality restrictions prevent us from providing more detailed
information, but our patent and legal advisors are carefully monitoring the
matter. If the application somehow issues as a patent, the CTC license grants
CTC the exclusive licensing rights to the patent and all improvements. We are
aware of no valid grounds to support Goldsworthy's position that the license is
no longer in full force and effect.

MARKETABILITY
-------------

The U.S. Department of Energy has reported that much of the nation's electrical
transmission and distribution infrastructure is rapidly becoming incapable of
meeting the demands of our modern economy. Traditionally, utilities would be
adding new transmission capacity to handle the expected load increase, but
because of difficulty in obtaining permits and the uncertainty over receiving an
adequate rate of return on investment, the total of transmission circuit miles
added annually has been stagnant. Obtaining approval to site and build new
electricity transmission is becoming more difficult due to environmental
concerns, the perceived health effects of electric and magnetic fields, interest
groups' concerns, and the concern that property values would decline along
transmission line routes. In the period from 1985 to 1990, 10,000 new circuit
miles were added in the United States, while only 4,000 circuit miles were added
in the period from 1990 to 1995. Therefore, we believe that there is an
increased need for new conductors that deliver more power at a reasonable cost
on the existing tower system. Our marketing and research efforts during Fiscal
2002, combined with our November 2002 award for the "Most Promising
Pre-Commercial Technology Development of the Year" by the 4th Annual Global
Energy Awards, sponsored by Platts/BUSINESSWEEK, have resulted in increased
inquiries as to the feasibility and availability of our ACCC product.
Accordingly, we believe that we will be able to acquire a reasonable market
share of the anticipated demand for both new and replacement conductors.

COMPETITION
-----------

There are three principal manufacturers of traditional bare overhead (ACSR)
conductors which supply the United States market: Southwire Company, with
approximately 42% of the market, and General Cable Corporation and Alcan Cable,
which supply most of the balance of the market. Outside of the United States
market, key manufacturers for ACSR cable include Norcable, Pirelli Cable,
Jaingsu Far East Group Company, Ltd., and others.

The following developmental-stage efforts may eventually compete with ACCC
cable:
o Minnesota Mining and Manufacturing Co., also known as 3M, in partnership with
Electricite de France, has developed a new lightweight, high performance
conductor which is expected to have at least double the ampacity of ACSR;
however its price is reported to be seven to eight times higher than ACSR. Some
testing groups have reportedly stated that preliminary demonstrations have
proven this approach to yield lower than anticipated results.

                                       8
<PAGE>

o Korea Electric Power Corporation completed 24 overhead transmission line
upgrade projects between 1994 and 1997, where they replaced existing conductors
with high-ampacity conductors using existing towers and rights-of-way. They used
the "Super Thermal Resistant Aluminum Alloy Conductor with Invar Reinforcement"
("STACIR"), first introduced in 1994. The cable can operate to 210 degrees
Celsius with its ampacity approximately doubled. The cost of STACIR is estimated
to be four to seven times higher than ACSR with slightly increased line losses.
Market acceptance of this product has not occurred.
o Several companies are in the preliminary stages of developing superconducting
technology in the form of liquid nitrogen-cooled superconductor power cables,
which are capable of conducting with very low losses. The disadvantage is that
the cost of such cables is expected to be up to fifty (50) times the current
price of conventional systems, so that it would only be practical in specific
short underground installations in downtown metropolitan areas. Overhead use is
not presently anticipated.

GOVERNMENTAL REGULATION
-----------------------

The Company knows of no specific government regulations governing the design and
specifications of bare overhead conductors in the United States. The manufacture
of ACCC cable is not subject to any specific government regulations other than
those regulations that traditionally apply to manufacturing activities such as
the Occupational Safety and Health Act of 1970.

Our intended operations are generally subject to various federal, state, and
local laws and regulations relating to the protection of the environment. These
environmental laws and regulations, which have become increasingly stringent,
are implemented principally by the Environmental Protection Agency and
comparable state agencies, and govern the management of hazardous wastes, the
discharge of pollutants into the air and into surface and underground waters,
and the manufacture and disposal of certain substances. The Company anticipates
no difficulty in meeting these standards.

RESEARCH AND DEVELOPMENT
------------------------

The Company has spent considerable funds on research and development of its
proprietary, patent pending ACCC and related electrical system component
technologies. We anticipate the need continue spending significant funds to
protect the ACCC technologies. We intend to seek patents with respect to certain
new hardware components, new related structures, and advanced production
equipment lines, although we have not filed any patent applications or obtained
any patents to date. The costs associated with development work on new equipment
lines is expected to be recovered through the purchase of such equipment by our
licensees, manufacturing partners, or joint ventures.

The Company has not spent significant funds for the research and development of
exclusive licensed composite reinforced aluminum conductor technologies as that
has been funded with various state and federal government grants obtained by the
licensor of such technology. SEE "--INTELLECTUAL PROPERTY" AND "ITEM 3 - LEGAL
PROCEEDINGS."

EMPLOYEES
---------

As of the date of this filing, CTC currently has two full time employees; Benton
H Wilcoxon and C. William Arrington. The Company has entered into consulting
contracts with various consultants and composite experts to provide us with the
necessary technical skills which are required to bring our products to market.
Contracts also exist for legal, patent strategy and accounting services.
Recruiting efforts will continue as we bring our products to market.

                                       9
<PAGE>

RISK FACTORS
------------

WE ARE A "START-UP" COMPANY AND HAVE A LIMITED OPERATING HISTORY.

We are a "start-up" company and have a limited operating history. We are subject
to business risks that are typical of "start-up" companies and "lead-time"
factors are expected to affect the timing of our receipt of revenues. There can
be no assurance that we will be able to generate any revenues. Until we generate
significant revenues, we will experience negative cash flows and financial
losses. Our ability to generate revenues may be affected by numerous factors. No
assurance can be given that a demand for our product will develop or, if it does
develop, that it will be sufficient to justify our investment in developing our
intended business.

WE EXPECT FUTURE LOSSES AND WE MAY NOT BECOME PROFITABLE.

Prior to acquiring TTC, we were a shell corporation having no operating history,
revenues from operations, or assets since December 31, 1989. We have not had any
revenues from operations subsequent to acquiring TTC. We anticipate that we will
experience significant quarterly and annual losses for the foreseeable future.

We may not ever become profitable. If we do achieve profitability, we may not be
able to sustain or increase profitability on a quarterly or annual basis. We
expect the need to significantly increase our general administrative and product
prototype and equipment prototype production expenses, as necessary. As a
result, we will need to generate significant revenues to achieve and maintain
profitability.

OUR INDEPENDENT AUDITORS HAVE ISSUED A QUALIFIED REPORT WITH RESPECT TO OUR
ABILITY TO CONTINUE AS A GOING CONCERN.

Our accountants have issued a report relating to our audited financial
statements which contains a qualification with respect to our ability to
continue as a going concern because, among other things, we have no viable
operations or significant assets. For the fiscal year ended September 30, 2002
and the nine months ended September 30, 2001, we had a comprehensive loss of
approximately $(5,752,377) and approximately $(493,450), respectively. For the
same periods, we used net cash used in operating activities of approximately
$(715,923) and $(263,345), respectively. As of September 30, 2002, our
accumulated deficit was $(6,259,920), after taking into account the TTC
reorganization.

OUR PRODUCT MAY NOT BE ACCEPTED BY OUR POTENTIAL CUSTOMERS.

While we have received numerous serious inquiries about our products and
technology, there can be no assurance that we will be able to profit from the
development or manufacture of our products as planned, or that we will be
successful in consummating sales of our products to our potential customers. Our
ability to successfully commercialize our products will depend in part on the
acceptance of our products by our potential customers, primarily the major
utility companies. The failure of utility companies to purchase our products
would have a material adverse effect on our business, results of operations and
financial condition. Any unfavorable publicity concerning us or any of our
products could have an adverse effect on our ability to achieve acceptance of
our products by utility companies and to commercialize our products, which could
have a material adverse effect on our business, results of operations and
financial condition.

WE MAY NOT BE ABLE TO MANAGE OUR GROWTH EFFECTIVELY.

Our acquisition of TTC has placed and will continue to place a significant
strain on our managerial, operational, and financial resources. Failure to
manage our growth effectively could have a material adverse effect on our
business, results of operations and financial condition. Significant additional
growth will be necessary for the Company to achieve its plan of operation.

OUR FAILURE TO RAISE NECESSARY CAPITAL COULD RESTRICT OUR GROWTH, LIMIT OUR
ABILITY TO DEVELOP AND MARKET OUR PRODUCT AND HINDER OUR ABILITY TO COMPETE.

In order to fully exploit our business plan, we anticipate the need to raise
significant additional funds. Failure to obtain adequate capital would: (i)
restrict our growth; (ii) limit our ability to market our product; (iii) limit
the development of our product; (iv) hinder our ability to compete; and (v)
hinder our ability to continue our business operations. Any of these
consequences would have a material adverse effect on our business, results of
operations and financial condition.

                                       10
<PAGE>

TO SATISFY OUR CAPITAL REQUIREMENTS, WE MAY SEEK TO RAISE FUNDS IN THE PUBLIC OR
PRIVATE CAPITAL MARKETS.

Our ability to raise additional funds in the public or private markets will be
adversely affected if the results of our business operations are not favorable,
or if any products developed are not well-received. We may seek additional
funding through corporate collaborations and other financing vehicles or from
loans or investments from new or existing stockholders. There can be no
assurance that any such funding will be available to us, or if available, that
it will be available on acceptable terms. If adequate funds are not available,
we will not be able to complete the commercialization of any products that we
may have developed. As a result, we may be required to discontinue our
operations without obtaining any value for our products under development,
thereby eliminating stockholder equity, or we could be forced to relinquish
rights to some or all of our products under development in return for an amount
substantially less than we expended to develop such products. If we are
successful in obtaining additional financing, the terms of the financing may
have the effect of diluting the holdings or adversely affecting the rights of
the holders of Common Stock.

WE MAY NOT BE ABLE TO DIVERSIFY OUR OPERATIONS INTO OTHER INDUSTRIES.

Because of the limited financial resources that we have, we may not be able to
diversify our activities into other areas outside the development, production,
and commercialization of cable and support systems for use in electrical power
transmission and distribution systems. Our inability to diversify our products
into other areas will subject us to economic fluctuations within this industry
and therefore increase the risks associated with our operations.

WE MAY NOT BE ABLE TO PROTECT OUR PROPRIETARY RIGHTS AND MAY INFRINGE ON THE
PROPRIETARY RIGHTS OF OTHERS.

Establishment of patents and other proprietary rights is important to our
success and our competitive position. Accordingly, we intend to devote
substantial resources to the establishment and protection of patents and other
proprietary rights. There can be no assurance that the actions taken by us to
establish and protect any patents or other proprietary rights will be adequate
to prevent imitation of our products by others or to prevent others from
prohibiting sales of any products we may develop in violation of the patents and
proprietary rights of others. Moreover, no assurance can be given that others
will not assert rights in, or ownership of, patents and other proprietary rights
we may establish or acquire or that we will be able to successfully resolve such
conflicts.

There can be no assurance that any patents related to the technology licensed
under the License Agreement will be issued. Additionally, as further explained
in Item 3 of this Form 10-KSB, the enforceability of the License Agreement is
currently subject to litigation. In the event a court or an arbitration panel
determines that the License Agreement is unenforceable, it might have a material
adverse effect on us, our businesses and our prospects. "SEE ITEM 3--LEGAL
PROCEEDINGS."

WE DEPEND ON KEY PERSONNEL AND WE MAY NOT BE ABLE TO ATTRACT AND RETAIN
QUALIFIED EMPLOYEES.

Our success will be largely dependent, in particular, upon the continuing
services of Benton H Wilcoxon, our Chief Executive Officer, and C. William
Arrington, our President. If Mr. Wilcoxon or Mr. Arrington were unable to
provide services to us for whatever reason, our business would be adversely
affected. Neither Mr. Wilcoxon nor Mr. Arrington have entered into employment
agreements with the Company.

In addition, our ability to develop and market our products and to achieve
profitability will depend on our ability to attract and retain highly talented
personnel. We face intense competition for personnel from other companies. There
can be no assurance that we will be successful in attracting and retaining key
personnel. The loss of key personnel, or the inability to attract and retain the
additional, highly-talented employees required for the development and
commercialization of our products, could adversely affect our results of
operations and our business.

                                       11
<PAGE>

A FAILURE TO ESTABLISH AND MAINTAIN RELATIONSHIPS WITH STRATEGIC PARTNERS MAY
HARM OUR BUSINESS.

We will depend on establishing and maintaining relationships with strategic
partners. Our ability to develop, produce, and market our products is dependent
upon our ability to establish and maintain relationships with other companies
and individuals. We may not be able to enter into relationships with these
companies on commercially reasonable terms or at all. Even if we enter into
these relationships, not all such relationships may result in benefits for our
company.

WE CANNOT CONTROL THE COST OF OUR RAW MATERIALS.

Our principal raw materials will be glass and carbon fibers, plus various
polymer resins. The prices for these raw materials are subject to market forces
largely beyond our control, including energy costs, organic chemical feedstocks,
market demand, and freight costs. The prices for these raw materials have varied
significantly and may vary significantly in the future. We may not be able to
adjust our product prices, especially in the short-term, to recover the costs of
increases in these raw materials. Our future profitability may be adversely
affected to the extent we are unable to pass on higher raw material and energy
costs to our customers.

WE ARE CONTROLLED BY A SMALL NUMBER OF STOCKHOLDERS.

Currently, three stockholders in the aggregate beneficially own or control
approximately 66% of the outstanding Common Stock. As a result, these persons
will have the ability to control substantially all matters submitted to our
stockholders for approval and to control our management and affairs. "SEE ITEM
11--SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT."

WE WILL LIKELY EXPERIENCE CUSTOMER CONCENTRATION.

Until and unless we secure multiple customer relationships, it is likely that we
will experience periods during which we will be highly dependent on one or a
limited number of customers. Dependence on a single or a few customers will make
it difficult to satisfactorily negotiate attractive prices for our products and
will expose us to the risk of substantial losses if a single dominant customer
stops conducting business with us.

OUR BUSINESS MAY BE SUBJECT TO INTERNATIONAL RISKS.

We are pursuing international business opportunities, including in China,
Mexico, Brazil and Africa. Risks inherent in international operations include
unexpected changes in regulatory requirements, export restrictions, tariffs and
other trade barriers; challenges in staffing and managing foreign operations;
differences in technology standards, employment laws and business practices;
longer payment cycles and problems in collecting accounts receivable; political
instability; changes in currency exchange rates; currency exchange controls; and
potentially adverse tax consequences.

WE MUST COMPLY WITH ENVIRONMENTAL REGULATIONS.

Our intended operations are subject to various federal, state, and local laws
and regulations relating to the protection of the environment. These
environmental laws and regulations, which have become increasingly stringent,
are implemented principally by the Environmental Protection Agency and
comparable state agencies, and govern the management of hazardous wastes, the
discharge of pollutants into the air and into surface and underground waters,
and the manufacture and disposal of certain substances. There are no material
environmental claims currently pending or, to our knowledge, threatened against
us. In addition, we believe our planned operations will be implemented in
compliance with the current laws and regulations. We estimate that any expenses
incurred in maintaining compliance with current laws and regulations will not
have a material effect on our earnings or capital expenditures. However, there
can be no assurance that current regulatory requirements will not change, that
currently unforeseen environmental incidents will not occur, or that past
non-compliance with environmental laws will not be discovered.

                                       12
<PAGE>

WE WILL EXPERIENCE COMPETITION FROM OTHER COMPANIES IN THE INDUSTRY.

Our competitors include makers of traditional bare overhead wire and other
companies with developmental-stage products that have the potential to compete
with ACCC cable. While existing competing manufacturers have been unable to
significantly increase the performance of the current electrical power
transmission and distribution cables, there is no certainty that unique
technological advances won't be achieved by our competition, with better capital
resources, in the future. Such competitors could develop a more efficient
product or undertake more aggressive and costly marketing campaigns than us
which may adversely affect our marketing strategies which could have a material
adverse effect on our business, results of operations or financial condition. In
addition, as we introduce new products, we will compete directly with a greater
number of companies. There can be no assurance that we can compete successfully
against current or future competitors nor can there be any assurance that
competitive pressures faced by us will not result in increased marketing costs,
loss of market share or otherwise will not materially adversely affect our
business, results of operations and financial condition. SEE "ITEM
1--DESCRIPTION OF BUSINESS--COMPETITION."

THERE IS CURRENTLY A LIMITED TRADING MARKET FOR OUR COMMON STOCK.

The Common Stock is traded in the over-the-counter market through the OTC
Bulletin Board. There is currently an active trading market for the Common
Stock; however there can be no assurance that an active trading market will be
maintained. Trading of securities on the OTC Bulletin Board is generally limited
and is effected on a less regular basis than that effected on other exchanges or
quotation systems (such as the NASDAQ Stock Market), and accordingly investors
who own or purchase Common Stock will find that the liquidity or transferability
of the Common Stock is limited. Additionally, a stockholder may find it more
difficult to dispose of, or obtain accurate quotations as to the market value,
of Common Stock. There can be no assurance that the Common Stock will ever be
included for trading on any stock exchange or through any other quotation system
(including, without limitation, the NASDAQ Stock Market).

THE APPLICATION OF THE "PENNY STOCK RULES" COULD ADVERSELY AFFECT THE MARKET
PRICE OF OUR COMMON STOCK.

As long as the trading price of our Common Stock is below $5.00 per share, the
open-market trading of our Common Stock will be subject to the "penny stock"
rules. The "penny stock rules" impose additional sales practice requirements on
broker-dealers who sell securities to persons other than established customers
and accredited investors (generally those with assets in excess of $1,000,000 or
annual income exceeding $200,000 or $300,000 together with their spouse). For
transactions covered by these rules, the broker-dealer must make a special
suitability determination for the purchase of securities and have received the
purchaser's written consent to the transaction before the purchase.
Additionally, for any transaction involving a penny stock, unless exempt, the
broker-dealer must deliver, before the transaction, a disclosure schedule
prescribed by the Securities and Exchange Commission relating to the penny stock
market. The broker-dealer also must disclose the commissions payable to both the
broker-dealer and the registered representative and current quotations for the
securities. Finally, monthly statements must be sent disclosing recent price
information on the limited market in penny stocks. These additional burdens
imposed on broker-dealers may restrict the ability of broker-dealers to sell the
Common Stock and may affect your ability to resell the Common Stock.

Stockholders should be aware that, according to Securities and Exchange
Commission Release No. 34-29093, the market for penny stocks has suffered in
recent years from patterns of fraud and abuse. Such patterns include (i) control
of the market for the security by one or a few broker-dealers that are often
related to the promoter or issuer; (ii) manipulation of prices through
prearranged matching of purchases and sales and false and misleading press
releases; (iii) boiler room practices involving high-pressure sales tactics and
unrealistic price projections by inexperienced sales persons; (iv) excessive and
undisclosed bid-ask differential and markups by selling broker-dealers; and (v)
the wholesale dumping of the same securities by promoters and broker-dealers
after prices have been manipulated to a desired level, along with the resulting
inevitable collapse of those prices and with consequent investor losses. Our
management is aware of the abuses that have occurred historically in the penny
stock market. Although we do not expect to be in a position to dictate the
behavior of the market or of broker-dealers who participate in the market,
management will strive within the confines of practical limitations to prevent
the described patterns from being established with respect to our securities.

                                       13
<PAGE>

OUR STOCK PRICE IS VOLATILE.

The market price of the Common Stock may be subject to significant fluctuations
in response to our operating results, announcements of new products or market
expansions by us or our competitors, changes in general conditions in the
economy, the financial markets, the electrical power transmission and
distribution industry, or other developments and activities affecting us, our
customers, or our competitors, some of which may be unrelated to our
performance. The sale or attempted sale of a large amount of Common Stock into
the market may also have a significant impact on the trading price of Common
Stock. The closing bid prices for the Common Stock has fluctuated from a high of
$10.75 to a low of $0.085 during the last twelve months.

WE DO NOT ANTICIPATE PAYING DIVIDENDS IN THE FORESEEABLE FUTURE.

We have not paid dividends on the Common Stock and do not anticipate paying such
dividends in the foreseeable future.

WE ARE RESPONSIBLE FOR THE INDEMNIFICATION OF OUR OFFICERS AND DIRECTORS.

Our By-laws provide for the indemnification of our directors, officers,
employees, and agents, under certain circumstances, against attorney's fees and
other expenses incurred by them in any litigation to which they become a party
arising from their association with or activities on behalf of our company. This
indemnification policy could result in substantial expenditures, which we may be
unable to recoup.


ITEM 2 - DESCRIPTION OF PROPERTY

We do not own any real estate. We rent office space in Irvine, California on a
month to month basis at a rate of $4,600 per month. If we decide to manufacture
the ACCC cable ourselves, we will incur additional costs and expenses related to
obtaining the appropriate manufacturing facilities through either real estate
leases or direct ownership.

We do not anticipate investing in real estate or interests in real estate, real
estate mortgages, or securities of or interests in persons primarily engaged in
real estate activities. We currently have no formal investment policy, and we do
not intend to undertake investments in real estate as a part of our normal
operations.


ITEM 3 - LEGAL PROCEEDINGS

The following discussion discusses all known or anticipated material legal
proceedings commenced by or against CTC or its wholly owned subsidiary,
Transmission Technology Corporation ("TTC"):

TRANSMISSION TECHNOLOGY CORPORATION V. W. BRANDT GOLDSWORTHY & ASSOCIATES, INC.
et al, Case No. 01-07118, was filed in August 15, 2001 before the United States
District Court, Central District of California. The principal parties to the
suit at this time are Transmission Technology Corporation ("TTC"), C. William
Arrington, Composite Technology Corporation ("CTC"), W. Brandt Goldsworthy &
Associates, Inc. ("WBGA"), W.B.G., Inc. ("WBG"), Tom Sawyer, and Composite Power
Corporation.

On or about May 7, 2001, TTC, now a wholly-owned subsidiary of CTC, entered into
a written agreement with WBG granting TTC the exclusive license to all WBG
teleconductor technologies, including Composite Reinforced Aluminum Conductor
and Advanced Composite Reinforced Aluminum Conductor and any improvements by
WBGA. The litigation concerns the interpretation and enforcement of the License
Agreement. Management intends to vigorously pursue its claims. CTC is continuing
to independently develop its own composite reinforced conductor cable, and has
filed for patent protection for what it believes to be numerous novel and
superior features of its own patent pending technologies.

                                       14
<PAGE>

DR. CLEM HIEL ET AL. V. W. BRANDT GOLDSWORTHY & ASSOCIATES, INC. et al., Case
No. 02CC05443, was filed on April 9, 2002 in the State of California for the
County of Orange and has now been transferred and is pending before the Superior
Court of the State of California for the County of Los Angeles. The principal
parties are Dr. Clem Hiel, Dr. Alonso Rodriguez (both of whom are former
employees of WBG and/or WBGA and are currently consultants of CTC), WBGA, WBG
and W. Brandt Goldsworthy. CTC has agreed to bear the expense of this proceeding
because it affects two of CTC's consultants. These consultants are involved in
the commercialization of CTC's novel aluminum conductor composite core cable.

JARBLUM V. TRANSMISSION TECHNOLOGY CORPORATION et al., Case No. SC-072087, was
filed on May 13, 2002 in the Superior Court of the State of California for the
County of Los Angeles, West District. The principal parties are Plaintiff
William Jarblum and Defendants TTC, CTC, and C. William Arrington. Plaintiff
seeks $250,000 in unpaid legal fees. CTC believes that it has valid defenses and
intends to vigorously contest the claim. Due to CTC's cash position, a judgment
in favor of Plaintiff on this claim could have a material negative effect on
CTC's plan of operation.

TRANSMISSION TECHNOLOGY CORPORATION ET AL. V. TOM SAWYER, Case No. 02CC10972,
was filed on June 21, 2002 in the Superior Court of the State of California for
the County of Orange and has now been transferred to the United States District
Court, Central District of California after being allowed to be included in the
action of TTC vs WBG/WBGA et al. The principal parties are TTC, CTC, Arrington,
Wilcoxon, and Sawyer. Plaintiffs seek declaratory relief and an injunction
against Sawyer, as well as damages arising from various tort causes of actions,
including without limitation tortuous interference with contract, fraud, legal
malpractice, and breach of fiduciary duty. This proceeding is indirectly related
to the litigation concerning the License Agreement.

TRANSMISSION TECHNOLOGY CORPORATION ET AL. V. MICHAEL WINTERHALTER, et al., Case
No. 02CC12539 was filed July 26, 2002 in the Superior Court of the State of
California for the County of Orange. TTC/CTC filed suit against Winterhalter (a
WBG employee or business associate) based on his campaign against TTC/CTC by
contacting third parties and disparaging TTC/CTC and threatening third parties
with lawsuits for dealing with TTC/CTC. This proceeding is indirectly related to
the litigation concerning the License Agreement.

Other than the matters discussed above, we are not a party to any material
pending legal proceedings.


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

There were no stockholder meetings and no matters were submitted to the security
holders for a vote during the period from January 1, 2001 to September 30, 2002.


                                     PART II

ITEM 5 - MARKET FOR COMPANY'S COMMON STOCK AND RELATED STOCKHOLDER MATTERS

The Common Stock is not listed on any stock exchange. The Common Stock is traded
over-the-counter on the OTC Bulletin Board under the symbol "CPTC." The
following table sets forth the high and low sale information for the Common
Stock for the period from April 20, 2001 through November 25, 2002, as reported
by the OTC Bulletin Board. The Common Stock did not trade on any exchange or
over-the-counter for the period from January 1, 2000 through April 19, 2001.

                                                         High              Low
                                                         ----              ---
Fiscal Year 2001
----------------
April 20, 2001 through June 30, 2001                     $1.00            $0.13
July 1, 2001 through September 30, 2001                  $1.00            $0.13

Fiscal Year 2002
----------------
October 1, 2001 through December 31, 2001                $10.75           $0.40
January 1, 2002 through March 31, 2002                   $7.00            $1.30
April 1, 2002 through June 30, 2002                      $.70             $.14
July 1, 2002 through September 30, 2002                  $.54             $.105

Fiscal Year 2003
----------------
October 1, 2002 through November 25, 2002                $.23             $.085


                                       15
<PAGE>

These quotations reflect inter-dealer prices, without retail mark-up, mark-down
or commission and may not represent actual transactions. As of November 25,
2002, there were 75,154,929 shares of Common Stock outstanding and owned by
approximately 396 stockholders of record.

We have never paid any dividends on the Common Stock. We currently anticipate
that any future earnings will be retained for the development of our business
and do not anticipate paying any dividends on the Common Stock in the
foreseeable future.

SALES OF UNREGISTERED SECURITIES

On April 12, 2001, TTC issued 950,000 shares of TTC Common Stock to Red Guard
Industries, Inc. ("Red Guard") in reliance upon the exemption from registration
set forth in Section 4(2) of the Securities Act in consideration for marketable
and restricted securities in such entities. The initial exchange transaction was
valued at approximately $137,750. Pursuant to the Reorganization Agreement, each
share of TTC Common Stock was exchanged for 15.88 shares of Common Stock.

On April 12, 2001, TTC issued 165 shares of 10% Series A Cumulative Convertible
Preferred Stock (the "TTC Series A Preferred") to Red Guard in reliance upon the
exemption from registration set forth in Section 4(2) of the Securities Act of
1933, as amended (the "Securities Act"), in consideration for the rights to the
CRAC technology. Each share of TTC Series A Preferred was convertible into one
share of TTC Common Stock at an original conversion price of $0.20 per share.

On July 12, 2001, TTC granted Red Guard an option to purchase up to $500,000 of
10% Series B Cumulative Convertible Preferred Stock of TTC (the "TTC Series B
Preferred") at $100 per share (the "Red Guard Option") and a warrant to purchase
up to 120,000 shares of TTC Common Stock at $20.00 per share (the "Red Guard
Warrant") in reliance upon the exemption from registration set forth in Section
4(2) of the Securities Act in consideration for revising the conversion terms of
the TTC Series A Preferred, including an increase in the conversion from $0.20
to $7.50 per share. The Red Guard Option was exercisable at any time and expired
on January 12, 2002. The Red Guard Warrant is exercisable at any time and
expires on June 12, 2006.

During August 2001, TTC issued 10,000 shares of TTC Common Stock to AMJ
Logistics, Inc., a privately owned software company ("AMJ"), in reliance upon
the exemption from registration set forth in Section 4(2) of the Securities Act
and paid $10,000 in consideration for 72,665 shares of the common stock of AMJ.
Pursuant to the Reorganization Agreement, each share of TTC Common Stock was
exchanged for 15.88 shares of Common Stock. During August 2001, Red Guard
exercised a portion of the Red Guard Option and purchased 1,000 shares of TTC
Series B Preferred in reliance upon the exemption from registration set forth in
Section 4(2) of the Securities Act for $100,000. Each share of TTC Series B
Preferred is convertible into five shares of TTC Common Stock at a conversion
price of $20.00.

On October 11, 2001, TTC issued 320 shares of TTC Series B Preferred to an
individual in reliance upon the exemption from registration set forth in Section
4(2) of the Securities Act for approximately $32,000. Each share of TTC Series B
Preferred is convertible into five shares of TTC Common Stock at a conversion
price of $20.00. On October 18, 2001, Red Guard exercised a portion of the Red
Guard Warrant and purchased 500 shares of TTC Common Stock in reliance upon the
exemption from registration set forth in Section 4(2) of the Securities Act for
$10,000. Pursuant to the Reorganization Agreement, each share of TTC Common
Stock was exchanged for 15.88 shares of Common Stock.

On October 24, 2001, TTC issued 1,000 shares of TTC Common Stock to an unrelated
entity in reliance upon the exemption from registration set forth in Section
4(2) of the Securities Act for approximately $61,500. Pursuant to the
Reorganization Agreement, each share of TTC Common Stock was exchanged for 15.88
shares of Common Stock.

On October 26, 2001, TTC issued 1,740 of TTC Common Stock to an individual in
reliance upon the exemption from registration set forth in Section 4(2) of the
Securities Act for approximately $107,010. Pursuant to the Reorganization
Agreement, each share of TTC Common Stock was exchanged for 15.88 shares of
Common Stock.

                                       16
<PAGE>

On October 30, 2001, TTC issued an aggregate 79,402 equivalent post-acquisition
shares of restricted, unregistered common stock to its corporate law firm at an
agreed-upon value of approximately $300,000 as a retainer for future legal
services to be provided during a one-year period from October 30, 2001. The
retainer shares shall vest against normal monthly billings from the law firm to
the Company using the agreed-upon valuation of $3.78 per share, regardless of
the open market price of the Company's common stock during the billing month. If
the aggregate market value of the 79,402 shares are worth less than $450,000 in
the open market at the average mean of the bid and ask price for the shares
during the one-month period just preceding the first anniversary of the retainer
agreement (October 30, 2002) then the law firm will have 15 days to make a
written election to either a) exercise a downward adjustment in the agreed-upon
price of $3.78 to an amount of not less than $1.89 per share, which would cause
the Company to issue up to an additional 79,402 equivalent post-acquisition
shares to the law firm or b) put all 79,402 shares back to the Company and
require payment in cash for the legal services provided during the initial term
of the agreement. During January 2002, the Company and the law firm agreed to
rescind this transaction and the 79,402 shares were returned to the Company. All
future transactions between the Company and the law firm will be conducted on a
cash transaction basis.

Pursuant to the Reorganization Agreement, on November 3, 2001, we issued
57,546,000 shares of Common Stock to certain stockholders of TTC in reliance
upon the exemption from registration set forth in Section 4(2) of the Securities
Act, in exchange for 95.91% of the TTC Common Stock. In addition, since November
3, 2001, we have issued 2,374,598 shares of Common Stock to certain stockholders
of TTC in reliance upon the exemption from registration set forth in Section
4(2) of the Securities Act, in exchange for the remaining shares of TTC Common
Stock.

On November 3, 2001, certain consultants were issued an aggregate of 450,000
shares of Common Stock in reliance upon the exemption from registration set
forth in Section 4(2) of the Securities Act as compensation for the services
they provided in connection with the acquisition of TTC.

During December 2001, we issued 42,500 shares of Common Stock to AMJ in reliance
upon the exemption from registration set forth in Section 4(2) of the Securities
Act in exchange for 37,335 shares of the common stock of AMJ.

On May 22, 2002, the Company issued 40,000 shares of the Company's restricted,
unregistered common stock to an unrelated entity for various consulting
services. This transaction was valued at approximately $16,000, which
approximates the "fair value" of the Company's stock on the date of the
transaction using the discounted closing price of the Company's common stock as
quoted on the NASDAQ Electronic Bulletin Board. The Company relied upon the
exemption from registration as set forth in Section 4(2) of the Securities Act
of 1933 for the issuance of these shares.

In July and August 2002, the Company issued an aggregate 350,000 shares of the
Company's restricted, unregistered common stock to two separate unrelated
entities for consulting services. These transactions were valued at
approximately $95,000, which approximates the "fair value" of the Company's
stock on the date of the transaction using the discounted closing price of the
Company's common stock as quoted on the NASDAQ Electronic Bulletin Board. The
Company relied upon the exemption from registration as set forth in Section 4(2)
of the Securities Act of 1933 for the issuance of these shares.

In July and September, 2002, the Company issued an aggregate 866,173 shares of
the Company's restricted, unregistered common stock to four separate
individuals, several of whom were existing shareholders of the Company, for
conversion of short-term working capital loans and accrued, but unpaid,
interest. These transactions were valued at approximately $152,729, which
equaled the outstanding debt and was in excess of the "fair value" of the
Company's stock on the date of the transaction using the discounted closing
price of the Company's common stock as quoted on the NASDAQ Electronic Bulletin
Board. The Company relied upon the exemption from registration as set forth in
Section 4(2) of the Securities Act of 1933 for the issuance of these shares.

                                       17
<PAGE>

On August 22, 2002, the Company sold 65,790 shares of restricted, unregistered
common stock to an individual for cash proceeds of approximately $25,000. This
transaction was consummated in excess of the "fair value" of the Company's stock
on the date of the transaction using the discounted closing price of the
Company's common stock as quoted on the NASDAQ Electronic Bulletin Board. The
Company relied upon the exemption from registration as set forth in Section 4(2)
of the Securities Act of 1933 for the issuance of these shares.


ITEM 6 - MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

RESULTS OF OPERATIONS
---------------------

We have had no revenue for either the year ended September 30, 2002 or the
transitional nine months ended September 30, 2001. The initial capitalization of
TTC occurred early in April 2001.

General and administrative expenses for the year ended September 30, 2002 and
the nine months ended September 30, 2001 were approximately $5,750,000 and
$356,000, respectively. Included in these expenses for the year ended September
30, 2002 were approximately (1) $1,563,000 in non-cash charges for consulting
and legal services which were paid with common stock issued pursuant to a Form
S-8 Registration Statement filed with the U. S. Securities and Exchange
Commission on February 27, 2002, (2) approximately $1,664,000 in non-cash
charges for the recognition of the intrinsic valuation of issued stock options
during Fiscal 2002 and (3) approximately $527,000 in non-cash charges for
issuances and sales of common stock at prices less than the "fair value" of the
securities on the date of issuance. Legal and professional fees associated with
the use of outside consultants for the development of our ACCC cable, regulatory
reporting thereof and subsequent financial consulting and legal services
composed approximately $1,360,000 (23.6%) of the Fiscal 2002 expenses. Accrued
officer compensation of approximately $264,900 (4.6%) and travel expenses of
approximately $138,000 (2.40%) composed other key expenditures for the year
ended September 30, 2002.

General and administrative expenses for the period from March 28, 2001 (date of
inception) through September 30, 2001 were approximately $356,000, including a
non-cash charge of approximately $76,000 related to charges to operations for
common stock issued at equivalent prices below the "fair value" of similar
transactions within a comparable time period. Other significant expenses during
this period were accrued officer compensation, approximately $60,000 (23.42%)
and travel and lodging expenses of approximately $41,500 (11.64%) of the total
expenses for the Fiscal 2001 period. Further, during this time period, the
Company incurred legal and professional fees associated with the reverse
acquisition of Transmission Technology Corporation, regulatory reporting thereof
and subsequent financial consulting and legal services composed approximately
$117,700 (33.4%) of the total year-to-date expenses.

On April 12, 2001, the Company exchanged 15,086,000 equivalent post-acquisition
shares of restricted, unregistered common stock with Red Guard for various
marketable and restricted securities in various unrelated entities. The initial
exchange transaction was valued using an agreed-upon valuation of approximately
$137,750. As of June 30, 2001, upon evaluations in accordance with Statement of
Financial Accounting Standards No. 121 "Accounting for the Impairment of
Long-Lived Assets and Long-Lived Assets to be Disposed of", management
recognized an aggregate permanent valuation impairment of approximately $132,730
against these holdings.

On September 30, 2002, the Company and Red Guard consummated a transaction
whereby Red Guard exchanged 100.0% of the issued and outstanding Series A
Preferred Stock; all accrued, but unpaid, dividends; certain short-term working
capital loans; and all accrued, but unpaid, interest in return for certain of
the Company's investment interests in other companies.

As of the respective periods ended September 30, 2002 and 2001, the Company
recognized a net loss of approximately $(5,752,000) and $(492,000). This equates
to a net loss per share of approximately $(0.08) and $(0.01) based upon the
weighted-average number of shares outstanding for the respective
post-acquisition periods.

                                       18
<PAGE>

PLAN OF OPERATION
-----------------

We plan to produce a limited production of composite core and to subcontract the
helical winding of aluminum conductors so that a certification test can be
completed in early 2003. We expect that the planned test will be conducted by an
arm of the Electric Power Research Institute. The week-long test will be closely
monitored after which time we anticipate receiving orders from utility
companies, although the full data development period and demonstration will
continue for at least two years. By June 30, 2003, we plan to finalize the
design and produce a working prototype of the specialized production line
capable of economically manufacturing high strength composite core. We are
presently negotiating various possible strategic relationships, including joint
ventures with conventional ACSR cable manufacturers, in which we will either
sell our composite core, license or sell our production equipment, or enter into
an agreement with respect to the production of cable using our composite core.
The equipment can be used for other types of high strength composite production
with various modifications in the event that there is any delay in the
acceptance of the composite reinforced cable. We intend to establish an
equipment and product prototype development facility in Orange County,
California. We plan to continue negotiating joint ventures for the production of
our products in other countries, including in China, Mexico, Africa, Europe, the
Middle East, India and Brazil.

LIQUIDITY AND CAPITAL RESOURCES
-------------------------------

At September 30, 2002, the Company had working capital of approximately
$(1,159,000) as compared to working capital of approximately$57,000 at the most
recent fiscal year-end of September 30, 2001.

During the year ended September 30, 2002, the Company sold a combination of
preferred and common stock for gross proceeds of approximately $641,000, which
was used to support operations and working capital needs.

Between January 2002 and September 2002, various individuals and entities,
including Red Guard Industries, Inc., an affiliated entity, made various
short-term working capital loans to the Company aggregating $223,000. As of
September 30, 2002, loans aggregating approximately $161,000 had been converted
to an aggregate 866,173 shares of restricted common stock. The remaining debt,
approximately $62,000 plus accrued interest owed to Red Guard Industries, Inc.,
was exchanged along with 100% of the issued and outstanding Series A Preferred
Stock for certain of the Company's investment interests in other companies.

We plan to obtain capital through loans or equity offerings in order to have the
funds required to complete the implementation of our plan of operation. We
currently have no material commitments for capital expenditures.

We anticipate receiving orders for our products by the end of FY-2003. Prior to
that, we will be dependent on the receipt of additional financing from third
parties. If such financing is not available, we may be required to discontinue
operations.

We expect to recover some equipment development costs through the sale of
equipment to production joint ventures, although there can be no assurance that
we will sell any such equipment or enter into any such joint ventures.

It may be necessary for management and/or significant stockholders to obtain or
provide additional working capital necessary to support and preserve the
integrity of the corporate entity. However, there is no legal obligation for
either management or significant stockholders to provide additional future
funding.

PRODUCT RESEARCH AND DEVELOPMENT
--------------------------------

We believe research and development activities are important to our success.
Over the next 12 calendar months, we anticipate completing various other
composite reinforced cable designs and the development of the hardware required
to splice, terminate, and extend the cable. Additionally, we plan to design,
seek patents for, and produce prototypes of novel composite structures. We plan
to complete a unique prototype production equipment line that will allow for the
production of several types of products, which will allow us to expand to
different products.

ACQUISITION OF PLANT AND EQUIPMENT
----------------------------------

We do not own any real estate or significant equipment. We do anticipate the
need for prototype equipment and product manufacturing capability in the near
future and are actively searching for facilities. The precise space requirements
are being finalized since we anticipate the requirement for prototype equipment
development to occur in early 2003.

                                       19
<PAGE>

PERSONNEL
---------

We currently have two full time employees; Benton H Wilcoxon, and C. William
Arrington. Since we are in the "start-up" phase of our business plan, we have
not been able to pay salaries to date. However, salaries are being accrued at a
monthly rate of $5,000 since April 1, 2001 for each of Mr. Wilcoxon and Mr.
Arrington.

Numerous technical skills will be required to bring our products to market.
Recruiting efforts have begun and will continue in the near future. Independent
consultants, accountants and attorneys have been retained in the past and will
continue to be used extensively in the future.


ITEM 7 - FINANCIAL STATEMENTS

Our financial statements appear at the end of this report beginning with the
Index to Financial Statements on page F-1 of this report.

ITEM 8 - CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURES.

None.

                                    PART III

ITEM 9 - OFFICERS AND DIRECTORS

The following table sets forth the names, ages, and positions of our directors
and officers.

<TABLE>
<CAPTION>

         Name                  Age            Position Held         Officer/Director since (1)
         ----                  ---            -------------         --------------------------

<S>                            <C>            <C>                                <C>
Benton H Wilcoxon              53             Chief Executive Officer            2001
                                              Director, and Secretary

C. William Arrington           61             President and Director             2001

Robert Nikolay                 63             CFO (Retired Nov.2002)             2001

</TABLE>

The directors named above will serve until the next annual meeting of our
stockholders or until their successors are duly elected and have qualified.
Directors will be elected for one-year terms at the annual stockholders meeting.
Officers will hold their positions at the pleasure of the board of directors,
absent any employment agreement, of which none currently exists. Other than as
set forth in the Reorganization Agreement, there is no arrangement or
understanding between any of our directors or officers and any other person
pursuant to which any director or officer was or is to be selected as a director
or officer, and there is no arrangement, plan or understanding as to whether
non-management stockholders will exercise their voting rights to continue to
elect the current board of directors. There are also no arrangements, agreements
or understandings between non-management stockholders that may directly or
indirectly participate in or influence the management of our affairs.

There is no family relationship among any of our directors and executive
officers.

BIOGRAPHICAL INFORMATION

BENTON H WILCOXON, 53, has been our Chief Executive Officer and Secretary since
November 3, 2001. He also is Chairman and Chief Executive Officer of TTC. From
1998 to 2001, he was a consultant for Magnesium Alloy Corporation, a Canadian
company involved in the development of magnesium salt deposits. Between 1998 and
2000, he also served as a consultant to Macallan & Callanish Ltd. regarding
business in Russia and the Ukraine. Mr. Wilcoxon held senior positions with
Ashurst Technology Ltd., a Bermuda corporation, from 1991 to 1997, culminating
as Chairman, Chief Executive Officer and President. Ashurst Technology Ltd.
commercialized advanced materials technologies, primarily from the Ukraine. Mr.
Wilcoxon currently is a Director of Magnesium Alloy Corporation, which is traded
on the Canadian Venture Exchange.

                                       20
<PAGE>

C. WILLIAM ARRINGTON, 61, has been our President since November 3, 2001. He also
is President and Chief Operating Officer of TTC. Mr. Arrington has headed his
own consulting firm for more than the past five years. He has over 30 years
experience in the electrical energy industry, both generation and transmission.
Mr. Arrington is also a Director of Eaglecrest Exploration, Ltd., a precious
metals exploration company traded on the Canadian Venture Exchange.

ROBERT NIKOLEY, 63, was our Chief Financial Officer from December 28, 2001
through November 2002. From November 3, 2001 until December 28, 2001, he
performed the duties of that position as a consultant. From June 2001 until
joining us, Mr. Nikoley was Chief Financial Office and from March 2000 until
June 2001 he was Controller of WebQuest International, Inc., a company traded on
the OTCBB. He served as CFO of International Fuel Technology, Inc., a company
engaged in the development of diesel fuel additives, from 1996 through 1999. .

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Securities Exchange Act of 1934 (the "Exchange Act")
requires our directors and executive officers, and persons who beneficially own
more than ten percent of a registered class of our equity securities, to file
with the Securities and Exchange Commission (the "Commission") initial reports
of beneficial ownership and reports of changes in beneficial ownership of our
Common Stock. The rules promulgated by the Commission under Section 16(a) of the
Exchange Act require those persons to furnish us with copies of all reports
filed with the Commission pursuant to Section 16(a). The information in this
section is based solely upon a review of Forms 3, Forms 4, and Forms 5 received
by us. Mr. Wilcoxon and Mr. Nikoley timely filed Form 4s to report changes in
their beneficial ownership during fiscal 2002. Mr. Arrington had no changes in
his benefical ownership during fiscal 2002. Form 5s were not required to be file
under Rule 16a-3(f)(2) because all transactions otherwise required to be
reported on Form 5 were reported before the due date of the Form 5.

ITEM 10 - EXECUTIVE COMPENSATION

None of our executive officers received compensation in excess of $100,000 for
the fiscal years ended September 30, 2002 or 2001, respectively.. The following
table summarizes all compensation received by our Chief Executive Officer in
fiscal years 2000, 2001 and 2001.

<TABLE>
<CAPTION>
                                                                                 Long-Term Compensation
                                                                       ---------------------------------------
                                       Annual Compensation                        Awards              Payouts
                             ----------------------------------------  ----------------------------  ---------
                                                       Other           Restricted   Securities
                                                       Annual          Stock        Underlying       LTIP       All Other
Name and             Fiscal  Salary     Bonus          Compensation     Award(s)    Options/SARs     Payouts    Compensation
Principal Position    Year   ($)        ($)            ($)             ($)          (#)              ($)        ($)
                     ------- ---------  -------------  --------------  -----------  ---------------  ---------  ----------------
<S>                   <C>      <C>            <C>            <C>             <C>       <C>               <C>           <C>
Benton H Wilcoxon     2002     0(1)           -              -               -         -                 -             -
Chief Executive       2001     0(1)           -              -               -         40,000(2)         -             -
  Officer

C. William Arrington  2002     0(3)           -              -               -         -                 -             -
President             2001     0              -              -               -

</TABLE>

(1) Mr. Wilcoxon began accruing, but has not received, a monthly salary of
$5,000 as of April 1, 2001.

(2) Represents options to purchase 40,000 shares of TTC Common Stock at an
exercise price of $5.50 per share. The options expire on June 7, 2011.

(3) Mr. Arrington began accruing, but has not received, a monthly salary of
$5,000 as of October 1, 2001.

The following table shows all grants during the fiscal year ended September 30,
2002 of stock options under our stock option plans to the named executive
officers.

           OPTIONS/SAR GRANTS IN FISCAL YEAR ENDED SEPTEMBER 30, 2002
                               (Individual Grants)
--------------------------------------------------------------------------------

                       Number of         Percent of      Exercise or  Expiration
                       Securities      Total Options     Base Price      Date
                       Underlying        Granted to        ($/Sh)
                         Option          Employees
                      Granted (#)      during Fiscal
        Name                             Year (%)
------------------- ---------------- ------------------ ------------- ----------

Benton H Wilcoxon      40,000(1)           46.8%            5.50        6/7/11

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

                                       21
<PAGE>

(1) Represents options to purchase 40,000 shares of TTC Common Stock.


The following table provides information as to the number and value of
unexercised options to purchase TTC Common Stock held by the named executive
officers at September 30, 2002. None of the named executive officers exercised
any options during the fiscal year ended September 30, 2002.

<TABLE>
<CAPTION>
                                   Number of Securities Underlying        Value of Unexercised In-the-Money
                                   Unexercised Options at Fiscal Year-    Options at Fiscal Year-End ($)
              Name                 End (#) Exercisable/Unexercisable      Exercisable/Unexercisable
---------------------------------  -------------------------------------- ----------------------------------
<S>                                <C>                                     <C>
Benton H Wilcoxon                  40,000 /0 (1)                           (2)

</TABLE>

(1)      Represents options to purchase 40,000 shares of TTC Common Stock.

(2)      There was no public market for TTC Common Stock as of September 30,
         2002 and, therefore, the Board of Directors has no basis to make any
         determination with respect to the value of the options to purchase
         shares of TTC Common Stock.

EMPLOYMENT AGREEMENTS, TERMINATION OF EMPLOYMENT AND CHANGE-IN-CONTROL
ARRANGEMENTS

We currently have no employment agreements with any of our executive officers,
nor any compensatory plans or arrangements resulting from the resignation,
retirement or any other termination of any of our executive officers, from a
change-in-control, or from a change in any executive officer's responsibilities
following a change-in-control.

COMPENSATION OF DIRECTORS

Directors do not receive compensation for their services as directors, but are
to reimbursed for expenses incurred in attending board meetings.





                (Remainder of this page left blank intentionally)


                                       22
<PAGE>


ITEM 11 - SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth, as of November 30, 2002, the number of shares of
our Common Stock owned of record and beneficially by executive officers,
directors and persons who hold 5% or more of our outstanding Common Stock. Also
included are the shares held by all executive officers and directors as a group.

     Name and Address                        Shares owned       Percentage owned
     ----------------                        ------------       ----------------

Benton H. Wilcoxon                            20,250,512 (1)         27%
     18881 Von Karman Avenue
     Suite 1620
     Irvine CA 92612

C. William Arrington                          20,250,512             27%
     18881 Von Karman Avenue
     Suite 1620
     Irvine CA 92612

G. William Harrison                            8,973,940 (2)         12%
     26218 James Drive
     Grosse Ile MI 48138

Cede & Company                                 9,258,659 (3)         12%
     P. O. Box 20, Bowling Green Station
     New York NY 10274

All officers and directors as a group,
     including affiliates                     40,101,024             54%

Represents beneficial ownership via shares directly owned by Benton H Wilcoxon
     (19,811,312 shares); and the related parties of Benton H Wilcoxon: Sasha
     Wilcoxon (109,800 shares); Kumara Wilcoxon (109,800 shares); Cristiana
     Wilcoxon (109,800 shares); and Patricia Wilcoxon-Truitt (109,800 shares).
     Mr. Wilcoxon was the Vice President and Treasurer of Red Guard through
     December 2001.

Represents beneficial ownership of shares indirectly owned or controlled by G.
     William Harrison: George W. Harrison, Jr. Trust (1,410,000 shares); Peggy
     R. Harrison Trust (40,000 shares); George W. Harrison, III Living Trust
     (883,471 shares); Kathleen M. Harrison Living Trust (760,684 shares);
     Ronald A. Harrison (3,000 shares); Bridgestone Capital Group, LLC (Mr.
     Harrison is Chairman of the Board and President) (76,785 shares); and Red
     Guard Industries, Inc. (Mr. Harrison is Chairman of the Board) (5,800,000
     shares). Red Guard Industries, Inc. also owns 1,000 shares of the TTC
     Series B Preferred Stock and a warrant to purchase 119,500 shares of TTC
     common stock.

Represents the aggregate sum of all shares held in street name by various
shareholders.


ITEM 12 - CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Red Guard acquired 165 shares of TTC Series A Preferred in April 2001. In July
2001, Red Guard and TTC agreed to increase the conversion price from $.20 per
share of TTC Common Stock to $7.50 and to extend the date the shares became
initially convertible into TTC Common Stock from July 12, 2001 to November 14,
2001. In exchange Red Guard received the Red Guard Option and the Red Guard
Warrant. During August 2001, Red Guard exercised a portion of the Red Guard
Option and purchased 1,000 shares of TTC Series B Preferred for $100,000. On
October 18, 2001, Red Guard exercised a portion of the Red Guard Warrant and
purchased 500 shares of TTC Common Stock for $10,000.

                                       23
<PAGE>


Between December 21, 2001 and February 11, 2002, Red Guard made five (5)
short-term working capital loans to the Company aggregating $57,000. Each
respective loan was for a term of six months and bore interest at 10 1/2% per
annum. On September 30, 2002, the Company and Red Guard consummated a
transaction whereby Red Guard exchanged 100.0% of the issued and outstanding
Series A Preferred Stock; all accrued, but unpaid, dividends; certain short-term
working capital loans; and all accrued, but unpaid, interest in return for
certain of the Company's investment interests in other companies.

Prior to the consummation of the transactions contemplated by the Reorganization
Agreement, Glenn Little was the controlling stockholder of the Company, owning
8,548,899 shares of Common Stock. On November 3, 2001, as part of the
transactions contemplated by the Reorganization Agreement, he contributed,
without consideration, 3,116,515 shares of Common Stock to the Company for
cancellation. In addition, for his services in connection with the transaction,
he was issued 185,000 shares of Common Stock.

During Fiscal 2001, we have made interest-free advances to Mr. Wilcoxon and Mr.
Arrington approximately $13,600 and $55,100, respectively, which are offset
against accrued, but unpaid, salaries in the accompanying financial statements.
As of September 30, 2002, the Company owed Mr. Arrington an aggregate $30,072
for out-of-pocket expenses, which is in addition to accrued, but unpaid, salary
in the accompanying financial statements.


ITEM 13 - CONTROLS AND PROCEDURES

As required by Rule 13a-15 under the Exchange Act, within the 90 days prior to
the filing date of this report, the Company carried out an evaluation of the
effectiveness of the design and operation of the Company's disclosure controls
and procedures. This evaluation was carried out under the supervision and with
the participation of the Company's management, including the Company's President
and Chief Executive Officer along with the Company's Chief Financial Officer.
Based upon that evaluation, the Company's President and Chief Executive Officer
along with the Company's Chief Financial Officer concluded that the Company's
disclosure controls and procedures are effective. There have been no significant
changes in the Company's internal controls or in other factors, which could
significantly affect internal controls subsequent to the date the Company
carried out its evaluation.

Disclosure controls and procedures are controls and other procedures that are
designed to ensure that information required to be disclosed in Company reports
filed or submitted under the Exchange Act is recorded, processed, summarized and
reported, within the time periods specified in the Securities and Exchange
Commission's rules and forms. Disclosure controls and procedures include,
without limitation, controls and procedures designed to ensure that information
required to be disclosed in Company reports filed under the Exchange Act is
accumulated and communicated to management, including the Company's Chief
Executive Officer and Chief Financial Officer as appropriate, to allow timely
decisions regarding required disclosure.



         (Remainder of this page left blank intentionally)


                                       24
<PAGE>


                                     PART IV

ITEM 13- EXHIBITS AND REPORTS ON FORM 8-K

EXHIBITS
--------
Number            Description
------            -----------

2.1***            Articles of Merger of ElDorado Financial Group, Inc., a
                  Florida corporation, into ElDorado Financial Group, Inc., a
                  Nevada corporation
2.2*              Agreement and Plan of Reorganization By and Among Transmission
                  Technology Corporation, Certain of its Stockholders, and
                  ElDorado Financial Group, Inc. dated November 3, 2001
3.1***            Articles of Incorporation of the Company
3.2***            By-Laws of the Company
10.1***           2001 TTC Incentive Compensation Stock Option Plan
10.2**            Technology License Agreement by and between W.B.G., Inc. and
                  Transmission Technology Corporation dated May 7, 2001.
21                Subsidiaries of the Registrant
23.1              Consent of Independent Certified Public Accountants

(*) Incorporated herein by reference to Form 8-K filed with the U. S. Securities
and Exchange Commission on November 20, 2001.
(**) Incorporated herein by reference to Form 8-K filed with the U. S.
Securities and Exchange Commission on January 11, 2002.
(***) Incorporated herein by reference to Form 10-KSB filed with the U. S.
Securities and Exchange Commission on February 14, 2002.

REPORTS ON FORM 8-K
-------------------

July 15, 2002 Updating status of various litigation through July 14, 2002.


                                       25
<PAGE>

SIGNATURES
In accord with Section 13 or 15(d) of the Securities Exchange Act of 1934, as
amended, the registrant caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.

COMPOSITE TECHNOLOGY CORPORATION
Dated: January 9, 2003                                    /s/ Benton H Wilcoxon
       ---------------                           ------------------------------
                                                              Benton H Wilcoxon
                                                      Chief Executive Officer,
                                                 Acting Chief Financial Officer
                                                        Director, and Secretary

In accordance with the Securities Exchange Act of 1934, as amended, this report
has been signed below by the following persons on behalf of the registrant and
in the capacities and on the dates indicated.

Dated:  January 9, 2003                                   /s/ Benton H Wilcoxon
        ---------------                          ------------------------------
                                                              Benton H Wilcoxon
                                                       Chief Executive Officer,
                                                 Acting Chief Financial Officer

                                                        Director, and Secretary
Dated:  January 9, 2003                                /s/ C. William Arrington
        ---------------                          ------------------------------
                                                           C. William Arrington
                                                         President and Director


                                       26
<PAGE>


                 CERTIFICATION PURSUANT TO 18 USC, SECTION 1350,
  AS ADOPTED PURSUANT TO SECTIONS 302 AND 906 OF THE SARBANES-OXLEY ACT OF 2002


In connection with the Annual Report of Composite Technology Corporation
(Registrant) on Form 10-KSB for the year ended September 30, 2002, as filed with
the U. S. Securities and Exchange Commission, on the date hereof, I, Benton H
Wilcoxon, Chief Executive Officer and Acting Chief Financial Officer of the
Company, certify to the best of my knowledge, pursuant to 18 USC 1350, as
adopted pursuant to ?302 and promulgated as 18 USC 1350 pursuant to ?906 of the
Sarbanes-Oxley Act of 2002, that:

(1)  I have reviewed this Annual Report on Form 10-KSB of Composite Technology
     Corporation for the year ended September 30, 2002.

(2)  Based on my knowledge, this Annual Report does not contain any untrue
     statement of a material fact or omit to state a material fact necessary to
     make the statements made, in light of the circumstances under which such
     statements were made, not misleading with respect to the period covered by
     this quarterly report;

(3)  Based on my knowledge, the financial statements, and other financial
     information included in this Annual Report, fairly present in all material
     respects the financial condition, results of operations and cash flows of
     the registrant as of, and for, the periods presented in this Annual Report;

(4)  The registrant's other certifying officers, if any, and I are responsible
     for establishing and maintaining disclosure controls and procedures (as
     defined in Exchange Act Rules 13a-14 and 15d-14) for the Registrant and
     have:
     (a)  designed such disclosure controls and procedures to ensure that
          material information relating to the Registrant, including its
          consolidated subsidiaries, is made known to us by others within those
          entities, particularly during the period in which this Annual Report
          is being prepared;
     (b)  evaluated the effectiveness of the Registrant's disclosure controls
          and procedures as of a date within 90 days prior to the filing date of
          this Annual Report (the "Evaluation Date"); and
     (c)  presented in this Annual Report our conclusions about the
          effectiveness of the disclosure controls and procedures based on our
          evaluation as of the Evaluation Date;

(5)  The Registrant's other certifying officers, if any, and I have disclosed,
     based on our most recent evaluation, to the Registrant's auditors and the
     audit committee of Registrant's board of directors (or persons performing
     the equivalent functions):
     (a)  all significant deficiencies in the design or operation of internal
          controls which could adversely affect the Registrant's ability to
          record, process, summarize and report financial data and have
          identified for the Registrant's auditors any material weaknesses in
          internal controls; and
     (b)  any fraud, whether or not material, that involves management or other
          employees who have a significant role in the Registrant's internal
          controls; and

(6)  The Registrant's other certifying officers, if any, and I have indicated in
     this Annual Report whether or not there were significant changes in
     internal controls or in other factors that could significantly affect
     internal controls subsequent to the date of our most recent evaluation,
     including any corrective actions with regard to significant deficiencies
     and material weaknesses.


/s/ Benton H Wilcoxon                                    Dated: January 9, 2003
---------------------                                           ---------------

Benton H Wilcoxon
Chief Executive Officer and
Acting Chief Financial Officer

                                       27
<PAGE>

                              COMPOSITE TECHNOLOGY
                                   CORPORATION
                    (formerly Eldorado Financial Group, Inc.)

                              Financial Statements
                                       and
                          Independent Auditor's Report

                           September 30, 2002 and 2001



                               S. W. HATFIELD, CPA
                          certified public accountants

                     Use our past to assist your future (sm)


<PAGE>

                 COMPOSITE TECHNOLOGY CORPORATION AND SUBSIDIARY
                    (formerly Eldorado Financial Group, Inc.)

                                    CONTENTS


                                                                           Page
                                                                           ----

REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS                          F-2

CONSOLIDATED FINANCIAL STATEMENTS

   Consolidated Balance Sheets
     as of September 30, 2002 and 2001                                      F-3

   Consolidated Statements of Operations and Comprehensive Loss
     for the year ended September 30, 2002 and
     for the nine months ended September 30, 2001                           F-5

   Consolidated Statements of Changes in Shareholders' Equity
     for the year ended September 30, 2002 and
     for the nine months ended September 30, 2001                           F-6

   Consolidated Statements of Cash Flows
     for the year ended September 30, 2002 and
     for the nine months ended September 30, 2001                           F-8

   Notes to Consolidated Financial Statements                              F-10




                                       F-1

<PAGE>

S. W. HATFIELD, CPA
certified public accountants

Member:    Texas Society of Certified Public Accountants
           Press Club of Dallas


               REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
               --------------------------------------------------


Board of Directors and Stockholders
Composite Technology Corporation
   (formerly Eldorado Financial Group, Inc.)

We have audited the accompanying consolidated balance sheets of Composite
Technology Corporation (formerly Eldorado Financial Group, Inc.) (a Nevada
corporation) and Subsidiary as of September 30, 2002 and 2001, respectively, and
the related consolidated statements of operations and comprehensive loss,
changes in shareholders' equity and cash flows for the year ended September 30,
2002 and for the nine months ended September 30, 2001, respectively. These
consolidated financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these consolidated
financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audits to obtain reasonable assurance about whether the consolidated
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the consolidated financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well
as evaluating the overall consolidated 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 consolidated financial position of
Composite Technology Corporation (formerly Eldorado Financial Group, Inc.) and
Subsidiary as of September 30, 2002 and 2001, and the consolidated results of
its operations and cash flows for the year ended September 30, 2002 and for the
nine months ended September 30, 2001, respectively, in conformity with generally
accepted accounting principles generally accepted in the United States of
America.

The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note C to the
consolidated financial statements, the Company has no viable operations or
significant assets and is dependent upon significant shareholders to provide
sufficient working capital to maintain the integrity of the corporate entity.
These circumstances create substantial doubt about the Company's ability to
continue as a going concern and are discussed in Note C. The financial
statements do not contain any adjustments that might result from the outcome of
these uncertainties.



                                                         S.W. HATFIELD, CPA
Dallas, Texas
October 15, 2002 (except for Notes P and O
  as to which the date is December 30, 2002)

                     Use our past to assist your future (sm)

(secure mailing address)                   (overnight delivery/shipping address)
P. O. Box 820395                               9002 Green Oaks Circle, 2nd Floor
Dallas, Texas  75382-0395                               Dallas, Texas 75243-7212
214-342-9635 (voice)                                          (fax) 214-342-9601
800-244-0639                                                      SWHCPA@aol.com
                                       F-2

<PAGE>
<TABLE>

                      COMPOSITE TECHNOLOGY CORPORATION AND SUBSIDIARY
                         (formerly Eldorado Financial Group, Inc.)
                                CONSOLIDATED BALANCE SHEETS
                                September 30, 2002 and 2001
<CAPTION>

                                             (post-           (post-           (pre-
                                            acquisition)    acquisition)    acquisition)
                                            September 30,   September 30,   September 30,
                                                2002           2001             2001
                                            -------------   -------------   -------------
<S>                                         <C>             <C>             <C>
                                          ASSETS
                                          ------
CURRENT ASSETS
   Cash on hand and in bank                 $     13,956    $     33,013    $         --
   Advances to officers                               --           8,742              --
   Prepaid expenses and other                     96,571          33,359              --
                                            -------------   -------------   -------------
     TOTAL CURRENT ASSETS                        110,527          75,114              --
                                            -------------   -------------   -------------

PROPERTY AND EQUIPMENT - AT COST
   Office furniture and equipment                 13,296           7,400              --
   Manufacturing equipment                        11,918              --              --
                                            -------------   -------------   -------------
                                                  25,214           7,400              --
   Accumulated depreciation                       (4,606)         (1,234)             --
                                            -------------   -------------   -------------
     NET PROPERTY AND EQUIPMENT                   20,608           6,166              --
                                            -------------   -------------   -------------

OTHER ASSETS
   Pre-acquisition, unconsolidated effect
     of common stock issued to acquire
     Transmission Technology Corporation              --              --          60,000
   Contract rights                               165,000          65,000              --
   Investments in other companies                  1,000          45,020              --
                                            -------------   -------------   -------------

     TOTAL OTHER ASSETS                          166,000         210,020          60,000
                                            -------------   -------------   -------------

   TOTAL ASSETS                             $    297,135    $    291,300    $     60,000
                                            =============   =============   =============

                                       - CONTINUED -



The accompanying notes are an integral part of these financial statements.

                                            F-3
</TABLE>
<PAGE>
<TABLE>

                         COMPOSITE TECHNOLOGY CORPORATION AND SUBSIDIARY
                            (formerly Eldorado Financial Group, Inc.)
                             CONSOLIDATED BALANCE SHEETS - CONTINUED
                                   September 30, 2002 and 2001
<CAPTION>
                                                        (post-        (post-          (pre-
                                                     acquisition)   acquisition)   acquisition)
                                                     September 30,  September 30,  September 30,
                                                         2002           2001           2001
                                                     ------------   ------------   ------------
<S>                                                  <C>            <C>            <C>
                              LIABILITIES AND SHAREHOLDERS' EQUITY
                              ------------------------------------
CURRENT LIABILITIES
   Accounts payable - trade                          $   969,837    $     9,625    $        --
   Accrued interest payable                                9,851             --             --
   Accrued dividends payable                              14,092          8,222             --
   Accrued officer compensation                          275,928             --             --
                                                     ------------   ------------   ------------
     TOTAL CURRENT LIABILITIES                         1,269,708         17,847             --
                                                     ------------   ------------   ------------
LONG-TERM LIABILITIES
   Deferred compensation - fair
     value of vested stock options                     1,664,275             --             --
                                                     ------------   ------------   ------------
     TOTAL LIABILITIES                                 2,933,983         17,847             --
                                                     ------------   ------------   ------------

COMMITMENTS AND CONTINGENCIES


SHAREHOLDERS' EQUITY (DEFICIT)
   Preferred stock - $0.001 par value
     5,000,000 shares authorized
     1,320, 1,165, and -0- issued and outstanding,
     respectively                                              1              1             --
   Common stock - $0.001 par value
     200,000,000 shares authorized
     73,714,929, 66,500,000, and 66,500,000
     shares issued and outstanding,  respectively         73,715         66,500         66,500
   Additional paid-in capital                          3,549,356        708,624      2,094,714
   Accumulated deficit                                (6,259,920)      (501,672)    (2,101,214)
                                                     ------------   ------------   ------------
   TOTAL SHAREHOLDERS' EQUITY (DEFICIT)               (2,636,848)       273,453         60,000
                                                     ------------   ------------   ------------
   TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY        $   297,135    $   291,300    $    60,000
                                                     ============   ============   ============


The accompanying notes are an integral part of these financial statements.

                                               F-4
</TABLE>

<PAGE>
<TABLE>

                        COMPOSITE TECHNOLOGY CORPORATION AND SUBSIDIARY
                           (formerly Eldorado Financial Group, Inc.)
                  CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
                               Year ended September 30, 2002 and
                              Nine months ended September 30, 2001
<CAPTION>

                                                   (post-           (post-          (pre-
                                                 acquisition)    acquisition)    acquisition)
                                                     Year         Nine months     Nine months
                                                    ended           ended           ended
                                                 September 30,   September 30,   September 30,
                                                     2002            2001            2001
                                                 -------------   -------------   -------------
<S>                                              <C>             <C>             <C>
REVENUES                                         $         --    $         --    $         --
                                                 -------------   -------------   -------------
EXPENSES
   Officer compensation                               264,900          60,000              --
   General and administrative expenses                352,024          71,136             477
   Legal, professional and consulting fees          2,923,488         117,700              --
   Reorganization expenses                                 --          30,000          90,000
   Interest expense                                    16,818             150              --
   Depreciation                                         3,372           1,234              --
   Compensation expense related to common
     stock issuances at less than "fair value"        527,500          76,000              --
   Compensation expense related to fair
     value of vested stock options                  1,664,275              --              --
                                                 -------------   -------------   -------------
     TOTAL OPERATING EXPENSES                       5,752,377         356,220          90,477
                                                 -------------   -------------   -------------

LOSS FROM OPERATIONS                               (5,752,377)       (356,220)        (90,477)

OTHER INCOME (EXPENSE)
   Carrying value impairment adjustment
     on investments in other companies                     --        (137,230)             --
                                                 -------------   -------------   -------------
LOSS BEFORE PROVISION FOR INCOME TAXES             (5,752,377)       (493,450)        (90,477)

PROVISION FOR INCOME TAXES                                 --              --              --
                                                 -------------   -------------   -------------
NET LOSS                                           (5,752,377)       (493,450)        (90,477)

OTHER COMPREHENSIVE INCOME                                 --              --              --
                                                 -------------   -------------   -------------
COMPREHENSIVE LOSS                               $ (5,752,377)   $   (493,450)   $    (90,477)
                                                 =============   =============   =============

Earnings per share of common stock
   outstanding computed on net income
   - basic and fully diluted                     $      (0.08)   $      (0.01)   $      (0.01)
                                                 =============   =============   =============
Weighted-average number of shares
   outstanding - basic and fully diluted           68,537,780      69,156,748      69,156,748
                                                 =============   =============   =============



The accompanying notes are an integral part of these financial statements.

                                              F-5
</TABLE>
<PAGE>
<TABLE>

                                           COMPOSITE TECHNOLOGY CORPORATION AND SUBSIDIARY
                                              (formerly Eldorado Financial Group, Inc.)
                                     CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
                                                  Year ended September 30, 2002 and
                                                Nine months ended September 30, 2001
<CAPTION>

                                             Convertible                                  Additional
                                           Preferred Stock           Common Stock           paid-in      Accumulated
                                         Shares      Amount      Shares       Amount         capital       deficit         Total
                                        ---------  ---------  ------------  ------------   ------------  ------------   ------------
<S>                                     <C>        <C>        <C>           <C>            <C>           <C>            <C>
BALANCES AT JANUARY 1, 2001,
   PRE-ACQUISITION                            --   $     --     9,166,515   $     9,167    $ 2,001,570   $(2,010,737)   $        --

Cancellation of stock by
  controlling shareholder
  for no compensation                         --         --    (3,116,515)       (3,117)         3,117            --             --
Issuance of common stock in
  November 2001, concurrent
   with a change in control
   transaction for reorganization
   and consulting expenses                    --         --       450,000           450         89,550            --         90,000
Capital contributed to support
   operations                                 --         --            --            --            477            --            477
Stock issued in November 2001 to
  effect a change in control and
  acquire Transmission Technology
  Corporation                                 --         --    60,000,000        60,000             --            --         60,000
Net loss for the period
  (pre-acquisition)                           --         --            --            --             --       (90,477)       (90,477)
                                        ---------  ---------  ------------  ------------   ------------  ------------   ------------
BALANCES AT SEPTEMBER 30, 2001,
   PRE-ACQUISITION                            --         --    66,500,000   $    66,500    $ 2,094,714   $(2,101,214)   $    60,000

Initial capitalization of
  Transmission Technology
  Corporation                                 --         --     2,500,000         2,500             --            --          2,500
Recapitalization due to reverse
  acquisition transaction with
  Transmission Technology
  Corporation                              1,165          1    (2,500,000)       (2,500)    (1,386,090)    2,101,214        712,625
Dividends on preferred stock                  --         --            --            --             --        (8,222)        (8,222)
Net loss for the period
  (post-acquisition)                          --         --            --            --             --      (493,450)      (493,450)
                                        ---------  ---------  ------------  ------------   ------------  ------------   ------------
BALANCES AT SEPTEMBER 30, 2001,
   POST-ACQUISITION                        1,165   $      1    66,500,000   $    66,500    $   708,624   $  (501,672)   $   273,453
                                        =========  =========  ============  ============   ============  ============   ============

                                                            - CONTINUED -

The accompanying notes are an integral part of these financial statements.

                                                                 F-6
</TABLE>

<PAGE>
<TABLE>

                                           COMPOSITE TECHNOLOGY CORPORATION AND SUBSIDIARY
                                              (formerly Eldorado Financial Group, Inc.)
                                     CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
                                                  Year ended September 30, 2002 and
                                                Nine months ended September 30, 2001
<CAPTION>
                                             Convertible                                   Additional
                                           Preferred Stock           Common Stock            paid-in     Accumulated
                                         Shares      Amount      Shares       Amount         capital       deficit         Total
                                        ---------  ---------  ------------  ------------   ------------  ------------   ------------
<S>                                     <C>        <C>        <C>           <C>            <C>           <C>            <C>
BALANCES AT SEPTEMBER 30, 2001,
   POST-ACQUISITION                        1,165   $      1    66,500,000   $    66,500    $   708,624   $  (501,672)   $   273,453

Issuance of Series B preferred
   stock for cash                            320         --            --            --         32,000            --         32,000

Issuance of common stock for
   Cash                                       --         --     2,065,790         2,066        956,444            --        958,510
   Consulting and legal fees                  --         --     4,319,868         4,320      1,977,169            --      1,981,489
   Investment in other company                --         --        42,500            42        191,408            --        191,450
   Conversion of working
     capital loans and accrued
     interest                                 --         --       866,173           866        152,730            --        153,596
Cancellation of common stock
   upon cancellation of contract              --         --       (79,402)          (79)      (299,921)           --       (300,000)
Exchange of preferred stock and
   accrued dividends for investments
   in other companies                       (165)        --            --            --       (169,098)           --       (169,098)
Dividends on preferred stock                  --         --            --            --             --        (5,871)        (5,871)
Net loss for the year                         --         --            --            --             --    (5,752,377)    (5,752,377)
                                        ---------  ---------  ------------  ------------   ------------  ------------   ------------
BALANCES AT SEPTEMBER 30, 2002,
   POST-ACQUISITION                        1,320   $      1    73,714,929    $   73,715    $ 3,549,356   $(6,259,920)   $(2,636,848)
                                        =========  =========  ============  ============   ============  ============   ============

The accompanying notes are an integral part of these financial statements.

                                                                 F-7
</TABLE>

<PAGE>

<TABLE>

                         COMPOSITE TECHNOLOGY CORPORATION AND SUBSIDIARY
                            (formerly Eldorado Financial Group, Inc.)
                              CONSOLIDATED STATEMENTS OF CASH FLOWS
                                Year ended September 30, 2002 and
                              Nine months ended September 30, 2001
<CAPTION>

                                                       (post-        (post-           (pre-
                                                     acquisition)  acquisition)    acquisition)
                                                         Year        Nine months    Nine months
                                                        ended          ended          ended
                                                     September 30,  September 30,  September 30,
                                                         2002           2001          2001
                                                     ------------   ------------   ------------
<S>                                                  <C>            <C>            <C>
CASH FLOWS FROM OPERATING ACTIVITIES
   Net loss for the period                           $(5,752,377)   $  (493,450)   $   (90,477)
   Adjustments to reconcile net loss
     to net cash provided by operating activities
       Depreciation                                        3,372          1,234             --
       Amortization of prepaid expenses originally
         paid with common stock                           62,597          6,016             --
       Compensation expense related to common
         stock issuances at less than "fair value"       527,500         76,000             --
       Compensation expense related to fair
         value of vested stock options                 1,664,275             --             --
       Carrying value impairment adjustment
         on investments in other companies                    --        137,230             --
       Consulting, legal and other expenses
         paid with common stock                        1,563,263             --         90,000
       (Increase) Decrease in
         Prepaid expenses and other                         (615)            --             --
       Increase (Decrease) in
         Accounts payable - trade                        960,212          9,625             --
         Accrued interest payable                          9,851             --             --
         Accrued officer compensation                    246,000             --             --
                                                     ------------   ------------   ------------
NET CASH USED IN OPERATING ACTIVITIES                   (715,923)      (263,345)          (477)
                                                     ------------   ------------   ------------
CASH FLOWS FROM INVESTING ACTIVITIES
   Cash advanced by (to) officers                         38,670         (8,742)            --
   Purchase of property and equipment                    (17,814)        (7,400)            --
   Cash paid for investments in other companies               --        (40,000)            --
                                                     ------------   ------------   ------------
NET CASH USED IN INVESTING ACTIVITIES                     20,856        (56,142)            --
                                                     ------------   ------------   ------------
CASH FLOWS FROM FINANCING ACTIVITIES
   Cash contributed to support operations                     --             --            477
   Proceeds from short-term working capital loans        223,000             --             --
   Proceeds from sale of preferred stock                  32,000        100,000             --
   Proceeds from sale of common stock                    421,010        252,500             --
                                                     ------------   ------------   ------------
NET CASH PROVIDED BY FINANCING ACTIVITIES                676,010        352,500            477
                                                     ------------   ------------   ------------
INCREASE (DECREASE) IN CASH                              (19,057)        33,013             --
Cash at beginning of period                               33,013             --             --
                                                     ------------   ------------   ------------
CASH AT END OF PERIOD                                $    13,956    $    33,013    $        --
                                                     ============   ============   =============

                                          - CONTINUED -

The accompanying notes are an integral part of these financial statements.

                                               F-8
</TABLE>

<PAGE>
<TABLE>

                         COMPOSITE TECHNOLOGY CORPORATION AND SUBSIDIARY
                            (formerly Eldorado Financial Group, Inc.)
                              CONSOLIDATED STATEMENTS OF CASH FLOWS
                                Year ended September 30, 2002 and
                              Nine months ended September 30, 2001
<CAPTION>

                                                       (post-        (post-           (pre-
                                                     acquisition)  acquisition)    acquisition)
                                                         Year        Nine months    Nine months
                                                        ended          ended          ended
                                                     September 30,  September 30,  September 30,
                                                         2002           2001          2001
                                                     ------------   ------------   ------------
<S>                                                  <C>            <C>            <C>
SUPPLEMENTAL DISCLOSURE OF
   INTEREST AND INCOME TAXES PAID
     Interest paid for the period                    $        --    $       150    $         --
                                                     ============   ============   =============
     Income taxes paid for the period                $        --    $        --    $         --
                                                     ============   ============   =============

SUPPLEMENTAL DISCLOSURE OF
   NON-CASH INVESTING AND FINANCING ACTIVITIES
     Redemption of Series A Preferred Stock
       for investments in other companies            $   169,098    $        --    $         --
                                                     ============   ============   =============
     Conversion of short-term working capital
       loans to common stock                         $   161,000    $        --    $         --
                                                     ============   ============   =============




The accompanying notes are an integral part of these financial statements.

                                               F-9
</TABLE>

<PAGE>


                 COMPOSITE TECHNOLOGY CORPORATION AND SUBSIDIARY
                    (formerly Eldorado Financial Group, Inc.)

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE A - ORGANIZATION AND DESCRIPTION OF BUSINESS

Composite Technology Corporation (CTC or Company) was incorporated under the
laws of the State of Florida on February 26, 1980 as Eldorado Gold &
Exploration, Inc. On January 13, 1987, the Company amended its Articles of
Incorporation to change the corporate name to Eldorado Financial Group, Inc. and
modified the Company's capital structure to allow for the issuance of up to
100,000,000 shares of common stock at $0.001 par value per share.

On June 27, 2001, the Company changed its state of Incorporation from Florida to
Nevada by means of a merger with and into Eldorado Financial Group, Inc., a
Nevada corporation formed on June 25, 2001 solely for the purpose of effecting
the reincorporation. The Articles of Incorporation and Bylaws of the Nevada
corporation are the Articles of Incorporation and Bylaws of the surviving
corporation. Such Articles of Incorporation did not make any changes to the
capital structure of the Company.

On November 3, 2001, the Company exchanged 60,000,000 shares of restricted,
unregistered common stock for 100.0% of the issued and outstanding common stock
of Transmission Technology Corporation, a privately-owned Nevada corporation
incorporated on March 28, 2001. Transmission Technology Corporation (TTC) was
formed to own a license agreement related to patent-pending composite reinforced
electrical transmission lines utilizing composite core materials. Transmission
Technology Corporation became a wholly-owned subsidiary of the Company.

In conjunction with the November 3, 2001 transaction, the Company, in November
2001, changed its corporate name to Composite Technology Corporation and amended
its Articles of Incorporation to allow for the issuance of up to 5,000,000
shares of $0.001 par value Preferred Stock from none previously authorized and
for the issuance of up to 200,000,000 shares of $0.001 par value Common Stock
from the 100,000,000 shares previously authorized.

The acquisition of Transmission Technology Corporation, on November 3, 2001, by
the Company effected a change in control and was accounted for as a" reverse
acquisition" whereby Transmission Technology Corporation is the accounting
acquiror for financial statement purposes. Accordingly, for all periods
subsequent to the reset year-end of September 30, 2001, the financial statements
of the Company reflect the historical financial statements of Transmission
Technology Corporation from its inception on March 28, 2001 and the operations
of the Company subsequent to September 30, 2001.


NOTE B - PREPARATION OF FINANCIAL STATEMENTS

On December 28, 2001, the Company's Board of Directors, and the Board of
Directors for TTC established the initial year-end of September 30 for the
Registrant's wholly-owned subsidiary, Transmission Technology Corporation and,
concurrently, elected to change the fiscal year-end of CTC from December 31 to
September 30.

The preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America 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.



                                      F-10

<PAGE>


                 COMPOSITE TECHNOLOGY CORPORATION AND SUBSIDIARY
                    (formerly Eldorado Financial Group, Inc.)

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED


NOTE B - PREPARATION OF FINANCIAL STATEMENTS - CONTINUED

Management further acknowledges that it is solely responsible for adopting sound
accounting practices, establishing and maintaining a system of internal
accounting control and preventing and detecting fraud. The Company's system of
internal accounting control is designed to assure, among other items, that 1)
recorded transactions are valid; 2) valid transactions are recorded; and 3)
transactions are recorded in the proper period in a timely manner to produce
financial statements which present fairly the financial condition, results of
operations and cash flows of the Company for the respective periods being
presented

The accompanying consolidated financial statements contain the accounts of
Composite Technology Corporation (formerly Eldorado Financial Group, Inc.) and
its wholly-owned subsidiary, Transmission Technology Corporation. All
significant intercompany transactions have been eliminated. The consolidated
entities are collectively referred to as "the Company".

For segment reporting purposes, the Company operates in only one industry
segment and makes all operating decisions and allocates resources based on the
best benefit to the Company as a whole.


NOTE C - RELATED PARTY TRANSACTIONS

Prior to the November 3, 2001 acquisition of Transmission Technology Corporation
(TTC) by the Company, TTC engaged in significant transactions involving both
Preferred Stock and Common Stock of TTC with Red Guard Industries, Inc. (Red
Guard), an entity in which a shareholder, officer, and director of TTC, and
subsequently, of the Company, is also a shareholder and was an officer through
December 2001. Key transactions involving this relationship included the
issuance of the Series A and Series B Preferred Stock, the issuance of Common
Stock to acquire various marketable and restricted securities in various
unrelated entities and to acquire the rights to negotiate to acquire the license
to manufacture, develop and sell certain patent-pending Composite Reinforced
Aluminum Conductor technology.

On September 30, 2002, the Company and Red Guard consummated a transaction
whereby Red Guard exchanged 100.0% of the issued and outstanding Series A
Preferred Stock; all accrued, but unpaid, dividends; certain short term working
capital loans; and all accrued, but unpaid, interest, in return for certain of
the Company's investment interests in other companies


NOTE D - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

1.   Cash and cash equivalents
     -------------------------

     For Statement of Cash Flows purposes, the Company considers all cash on
     hand and in banks, including accounts in book overdraft positions,
     certificates of deposit and other highly-liquid investments with maturities
     of three months or less, when purchased, to be cash and cash equivalents.

2.   Property and Equipment
     ----------------------

     Property and equipment are recorded at historical cost. These costs are
     depreciated over the estimated useful lives of the individual assets,
     generally 4 to 10 years, using the straight-line method.

                                      F-11

<PAGE>

                 COMPOSITE TECHNOLOGY CORPORATION AND SUBSIDIARY
                    (formerly Eldorado Financial Group, Inc.)

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED


NOTE D - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED

2.   Property and Equipment - continued
     ----------------------------------

     Gains and losses from disposition of property and equipment are recognized
     as incurred and are included in operations.

3.   Marketable Securities
     ---------------------

     Investments in the equity securities of other companies that have readily
     determinable fair values (as defined in Statement of Financial Accounting
     Standards No. 115, "Accounting for Certain Investments in Debt and Equity
     Securities" (SFAS 115) are classified, at the date of acquisition, into
     three categories and accounted for as follows:

       Available-for-Sale Securities - Equity securities not classified in other
       categories are reported at fair value, with unrealized gains and losses
       excluded from earnings and reported in a separate component of
       shareholders' equity.

       Trading Securities - Equity securities that are bought and held
       principally for the purpose of selling them in the near term are reported
       at fair value. Unrealized gains and losses are included in earnings.

       Held-to-Maturity Securities - Equity securities that the Company has the
       positive intent and ability to hold to maturity are reported at amortized
       cost.

     Other investments that do not have a readily determinable fair value are
     recorded at amortized cost.

     The Company evaluates the carrying value of all marketable securities
     classified as "held-to-maturity" or "other investments that do not have a
     readily determinable fair value" on a quarterly basis in accordance with
     Statement of Financial Accounting Standards No. 121 "Accounting for the
     Impairment of Long-Lived Assets and Long-Lived Assets to be Disposed of".
     Any permanent impairment, if any, is charged to operations in the quarter
     in which the determination of impairment is made.

     For purposes of computing realized gains and losses, the specific
     identification method is used.

4.   Reorganization costs
     --------------------

     CTC and TTC have adopted the provisions of AICPA Statement of Position
     98-5, "Reporting on the Costs of Start-Up Activities" whereby all
     organization and initial costs incurred with the incorporation and initial
     capitalization of TTC, the costs associated with the reverse acquisition of
     TTC by CTC and costs incurred by TTC related to the reverse acquisition
     transaction with CTC were charged to operations in the period the
     respective costs were incurred.

5.   Research and development expenses
     ---------------------------------

     Research and development expenses are charged to operations as incurred.


                                      F-12

<PAGE>

                 COMPOSITE TECHNOLOGY CORPORATION AND SUBSIDIARY
                    (formerly Eldorado Financial Group, Inc.)

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED


NOTE D - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED

6.   Advertising expenses
     --------------------

     Advertising and marketing expenses are charged to operations as incurred.

7.   Income taxes
     ------------

     The Company utilizes the asset and liability method of accounting for
     income taxes. At September 30, 2002 and 2001, respectively, the deferred
     tax asset and deferred tax liability accounts, as recorded when material,
     consist of temporary differences. Temporary differences represent
     differences in the recognition of assets and liabilities for tax and
     financial reporting purposes, primarily allowance for doubtful accounts and
     accumulated depreciation.

     As of September 30, 2002 and 2001, the deferred tax asset related to the
     Company's net operating loss carryforward is fully reserved. Due to the
     provisions of Internal Revenue Code Section 338, the Company may have no
     net operating loss carryforwards available to offset financial statement or
     tax return taxable income in future periods as a result of a change in
     control involving 50 percentage points or more of the issued and
     outstanding securities of the Company.

8.   Income (Loss) per share
     -----------------------

     Basic earnings (loss) per share is computed by dividing the net income
     (loss) by the weighted-average number of shares of common stock and common
     stock equivalents (primarily outstanding options and warrants). Common
     stock equivalents represent the dilutive effect of the assumed exercise of
     the outstanding stock options and warrants, using the treasury stock
     method. The calculation of fully diluted earnings (loss) per share assumes
     the dilutive effect of the exercise of outstanding options and warrants at
     either the beginning of the respective period presented or the date of
     issuance, whichever is later. As of September 30, 2002 and 2001, the
     Company's outstanding stock options are considered anti-dilutive due to the
     Company's net operating loss position.


NOTE E - FAIR VALUE OF FINANCIAL INSTRUMENTS

The carrying amount of cash, accounts receivable, accounts payable and notes
payable, as applicable, approximates fair value due to the short term nature of
these items and/or the current interest rates payable in relation to current
market conditions.

Interest rate risk is the risk that the Company's earnings are subject to
fluctuations in interest rates on either investments or on debt and is fully
dependent upon the volatility of these rates. The Company does not use
derivative instruments to moderate its exposure to interest rate risk, if any.

Financial risk is the risk that the Company's earnings are subject to
fluctuations in interest rates or foreign exchange rates and are fully dependent
upon the volatility of these rates. The Company does not use derivative
instruments to moderate its exposure to financial risk, if any.


                                      F-13

<PAGE>

                 COMPOSITE TECHNOLOGY CORPORATION AND SUBSIDIARY
                    (formerly Eldorado Financial Group, Inc.)

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED


NOTE F - YEAR-END CHANGE AND COMPARABILITY (UNAUDITED)

On December 28, 2001, the Company's Board of Directors elected to change the
fiscal year-end of the Company from December 31 to September 30. Additionally,
the Board of Directors established the initial year-end of September 30 for the
Registrant's wholly-owned subsidiary, Transmission Technology Corporation. The
following unaudited information presents selected annualized financial data as
if the fiscal year had been reset as of September 30, 2001, respectively.

                                                          (pre-acquisition)
                                                           October 1, 2000
                                                               through
                                                         September 30, 2001
                                                         ------------------

         Revenues                                           $         --
         Gross profit                                                 --
         Income taxes                                                 --
         Loss from continuing operations                         (90,636)
         Earnings per share                                          nil
         Proforma weighted-average number
           of shares issued and outstanding                   66,500,000


NOTE G - CONTRACT RIGHTS

On April 12, 2001, TTC issued 165 shares of restricted, unregistered Series A
Cumulative and Convertible Preferred Stock to Red Guard to acquire the rights to
negotiate to acquire the license from W.B.G., Inc. ("WBG") to manufacture,
develop and sell certain patent-pending Composite Reinforced Aluminum Conductor
technology. This transaction was valued at an agreed-upon amount of
approximately $165,000. WBG and Red Guard were and are unrelated entities.

TTC entered into a technology license agreement with WBG on May 7, 2001 (the
"License Agreement"). The License Agreement related to patent pending composite
reinforced aluminum conductor technologies and all improvements and gave TTC an
exclusive license to the technologies covered by the License Agreement.

In the License Agreement, WBG represented and warranted to TTC that WBG had the
right to enter into the License Agreement, including without limitation the
right to grant TTC the exclusive rights to the technologies covered by the
License Agreement.

TTC agreed to pay royalties to WBG, initially at a maximum rate of 5% of Gross
Revenues (as defined in the License Agreement) received by TTC from the sale of
the technology products until sales of product have equaled the design capacity
of the first commercial composite core production line. Design capacity shall be
defined as the pultruded composite core capacity stated on the specifications by
the builder (WBG) as mutually agreed upon by TTC. The royalty shall decline by
one percent (1%) of Gross Revenues upon the addition of each new composite core
production line until the fourth line is installed whereupon WBG would receive a
royalty of two percent (2%) of Gross Revenues received by TTC from the sale of
the technology products. In the event of any sub-license agreements, TTC shall
pay the same royalty to WBG as it would if it sold the products itself.


                                      F-14

<PAGE>

                 COMPOSITE TECHNOLOGY CORPORATION AND SUBSIDIARY
                    (formerly Eldorado Financial Group, Inc.)

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED


NOTE G - CONTRACT RIGHTS - CONTINUED

WBG also agreed to provide TTC full disclosure of all current and future
technologies covered by the License Agreement as well as disclosure of any
interested parties in such technologies. TTC agreed to pay WBG to design, build,
install and provide specifications, manuals and training to complete commercial
product equipment lines for the technologies, with the price and specifications
to be mutually agreed upon. TTC would advance funds to WBG for each phase as
required under a mutually agreed upon budget and schedule. If WBG is unable to
supply said additional commercial product lines, then TTC shall have the right
to produce same. No such requirements exist as of September 30, 2002 or
subsequent thereto.

As of September 30, 2002 and subsequent thereto, the Company, TTC and WBG are
involved in litigation regarding the interpretation and enforcement of the
License Agreement. (See Note O - Litigation Contingencies). Management is of the
opinion that the license agreement will be upheld and no valuation impairment of
the original agreed-upon acquisition cost has been provided in the accompanying
financial statements.


NOTE H - INVESTMENTS IN OTHER COMPANIES

Investments in other companies consists of the following at September 30, 2002
and 2001:

                                            Carrying value at  Carrying value at
                                              September 30,      September 30,
     Investee company                            2002                2001
     ----------------                       -----------------  -----------------
Held-to-Maturity
----------------
   Integrated Performance Systems, Inc.          $1,000            $ 1,000
   STL Group, Inc.                                   --              1,000
   TMA Ventures, LLC/ MEMX, Inc.                     --              1,000
   AMJ Logistics, Inc.                               --             42,020
                                                 ------            -------
       Totals                                    $1,000            $45,020
                                                 ======            =======

On April 12, 2001, the Company exchanged 15,086,000 equivalent post-acquisition
shares of restricted, unregistered common stock with Red Guard for various
marketable and restricted securities in various unrelated entities. The initial
exchange transaction was valued using an agreed-upon valuation of approximately
$137,750.

Through September 30, 2001, upon evaluations in accordance with Statement of
Financial Accounting Standards No. 121 "Accounting for the Impairment of
Long-Lived Assets and Long-Lived Assets to be Disposed of", management has
recognized an aggregate permanent valuation impairment of approximately $137,230
against these holdings.



                                      F-15

<PAGE>

                 COMPOSITE TECHNOLOGY CORPORATION AND SUBSIDIARY
                    (formerly Eldorado Financial Group, Inc.)

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED


NOTE H - INVESTMENTS IN OTHER COMPANIES - CONTINUED

On April 12, 2001, the Company exchanged 15,086,000 equivalent post-acquisition
shares of restricted, unregistered common stock with Red Guard for various
marketable and restricted securities in various unrelated entities. The initial
exchange transaction was valued using an agreed-upon valuation of approximately
$137,750.

Through September 30, 2001, upon evaluations in accordance with Statement of
Financial Accounting Standards No. 121 "Accounting for the Impairment of
Long-Lived Assets and Long-Lived Assets to be Disposed of", management has
recognized an aggregate permanent valuation impairment of approximately $137,230
against these holdings.

On September 30, 2002, the Company and Red Guard consummated a transaction
whereby Red Guard exchanged 100.0% of the issued and outstanding Series A
Preferred Stock; all accrued, but unpaid, dividends; certain short term working
capital loans; and all accrued, but unpaid, interest, in return for all of the
Company's investment interests in other companies, except for the investment in
Integrated Performance Systems, Inc.

Integrated Performance Systems, Inc. (IPS) is a publicly-traded electronics
manufacturing corporation located in Frisco, Texas. IPS is a manufacturer and
supplier of performance-driven circuit boards for high-speed digital computer
and telecommunications applications. The Company acquired an aggregate 3,000
shares of IPS in the April 12, 2001 transaction.

STL Group, Inc. (STL) is a privately-owned company based in Cleveland, Ohio
involved in manufacturing and distributing patented and FDA approved solid
surgical implants and other surgical products. The Company acquired an aggregate
15,000 post-STL forward split shares of STL in the April 12, 2001 transaction.

TMA Ventures, LLC/MEMX, Inc. is a privately-owned company which was formed in
2000 to commercialize micro electro-mechanical systems "MEMS" technologies
licensed by Sandia National Laboratories, specifically to make an all optical
cross-connect microchip for optical switches. The Company acquired an aggregate
3,389 units in TMA Ventures, Inc., which convert on a one-for-one basis into
shares in MEMX, Inc., in the April 12, 2001 transaction.

AMJ Logistics, Inc. (AMJ) is a privately-owned software company based in Tucson,
Arizona. AMJ's primary product is an open-architecture, event-driven,
object-oriented integrated Electronic Data Interchange (EDI) system providing
transaction accountability for a complete audit trail for history and accurate
tracing of costs.

The Company, on August 11, 2001, executed a 30-day purchase option to acquire up
to an additional 110,000 unregistered, restricted shares of AMJ at prices
ranging between $12.40 and $16.00 per share. During August 2001, the Company
paid $10,000 in cash and issued 158,800 equivalent post-acquisition shares of
restricted, unregistered common stock, valued at $4,500.00, to acquire
approximately 72,665 shares of AMJ common stock under this option.

On September 29, 2001, the Company made an advance of $30,000 cash to AMJ. On
October 13, 2001, AMJ and the Company agreed to convert this $30,000 advance and
an additional advance of $20,000, made on October 3, 2001, into 3,125 shares of
AMJ restricted, unregistered common stock.


                                      F-16

<PAGE>

                 COMPOSITE TECHNOLOGY CORPORATION AND SUBSIDIARY
                    (formerly Eldorado Financial Group, Inc.)

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED


NOTE H - INVESTMENTS IN OTHER COMPANIES - CONTINUED

In December 2001, the Company and AMJ settled the outstanding balances on the
purchase option agreement with the issuance of 42,500 shares of the Company's
restricted, unregistered common stock to AMJ in exchange for 37,335 shares of
restricted, unregistered AMJ common stock. This transaction was valued at
approximately $909,635, which approximated the discounted "fair value" of the
Company's common stock based upon the quoted closing price of the Company's
unrestricted equity securities as quoted on the date of the transaction.

As a result of all AMJ transactions, through December 31, 2001, the Company
owned an aggregate 114,125 shares of AMJ, including the initial 1,000 shares
acquired in the April 12, 2001 transaction.


NOTE I - INCOME TAXES

The components of income tax (benefit) expense for the year ended September 30,
2002 and the nine months ended September 30, 2001, respectively, are as follows:

                                    (post-           (post-          (pre-
                                  acquisition)    acquisition)    acquisition)
                                      Year         Nine months     Nine months
                                     ended           ended           ended
                                  September 30,   September 30,   September 30,
                                      2002            2001            2001
                                  -------------   -------------   -------------

       Federal:
         Current                    $     --        $     --        $     --
         Deferred                         --              --              --
                                    --------        --------        --------
                                          --              --              --
       State:
         Current                          --              --              --
         Deferred                         --              --              --
                                    --------        --------        --------
                                          --              --              --
                                    --------        --------        --------

         Total                      $     --        $     --        $     --
                                    ========        ========        ========

As of September 30, 2002, the Company has a net operating loss carryforward of
approximately $5,200,000 to offset future taxable income. Subject to current
regulations, this carryforward will begin to expire in 2020. The amount and
availability of the net operating loss carryforwards may be subject to
limitations set forth by the Internal Revenue Code. Factors such as the number
of shares ultimately issued within a three year look-back period; whether there
is a deemed more than 50 percent change in control; the applicable long-term tax
exempt bond rate; continuity of historical business; and subsequent income of
the Company all enter into the annual computation of allowable annual
utilization of the carryforwards.


                (Remainder of this page left blank intentionally)


                                      F-17

<PAGE>

                 COMPOSITE TECHNOLOGY CORPORATION AND SUBSIDIARY
                    (formerly Eldorado Financial Group, Inc.)

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED


NOTE I - INCOME TAXES - CONTINUED

The Company's income tax expense for the year ended September 30, 2002 and the
nine months ended September 30, 2001, are as follows:
<TABLE>
<CAPTION>

                                                            (post-           (post-          (pre-
                                                         acquisition)    acquisition)    acquisition)
                                                            Year         Nine months     Nine months
                                                            ended           ended           ended
                                                         September 30,   September 30,   September 30,
                                                             2002            2001            2001
                                                         -------------   -------------   -------------
<S>                                                      <C>             <C>             <C>

Statutory rate applied to income before income taxes     $ (1,955,800)   $   (167,800)   $    (30,800)
Increase (decrease) in income taxes resulting from:
     State income taxes                                            --              --              --
     Other, including reserve for deferred tax asset        1,955,800         167,800          30,800
                                                         -------------   -------------   -------------
       Income tax expense                                $         --    $         --    $         --
                                                         =============   =============   =============
</TABLE>


Temporary differences, consisting primarily of statutory deferrals of expenses
for organizational costs, statutory differences in the depreciable lives for
property and equipment, between the financial statement carrying amounts and tax
bases of assets and liabilities and timing of the deductibility of accrued
executive compensation give rise to deferred tax assets and liabilities as of
September 30, 2002 and 2001, respectively:

                                                   September 30,   September 30,
                                                      2002             2001
                                                   -------------  -------------
       Deferred tax assets
         Net operating loss carryforwards          $  1,768,000   $     64,825
         Less valuation allowance                    (1,768,000)       (64,825)
                                                   -------------  -------------
       Net Deferred Tax Asset                      $         --   $         --
                                                   =============  =============

During the year ended September 30, 2002 and the nine months ended September 30,
2001, respectively, the reserve for the deferred current tax asset increased by
approximately $1,703,175 and $64,825, respectively.


NOTE J - PREFERRED STOCK TRANSACTIONS

Preferred stock consists of the following as of September 30, 2002 and 2001,
respectively:
<TABLE>
<CAPTION>

                                                 September 30            September 30,
                                                    2002                     2001
                                             ---------------------    --------------------
                                             # shares    par value    # shares   par value
                                             --------    ---------    --------   ---------
<S>                                          <C>         <C>          <C>        <C>
Series A Cumulative Convertible Stock             --     $     --         165    $     --
Series B Cumulative Convertible Stock          1,320            1       1,000           1
                                             --------    ---------    --------   ---------
     Totals                                    1,320     $      1       1,165           1
                                             ========    =========    ========   =========
</TABLE>


                                      F-18

<PAGE>

                 COMPOSITE TECHNOLOGY CORPORATION AND SUBSIDIARY
                    (formerly Eldorado Financial Group, Inc.)

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED


NOTE J - PREFERRED STOCK TRANSACTIONS - CONTINUED

On April 12, 2001, TTC authorized and allocated 165 shares of Series A 10.0%
Cumulative Convertible Preferred Stock. The Series A Preferred Stock (Series A
Stock) was issued at $1,000.00 per share. The Series A Shares shall be entitled
to receive cumulative cash dividends at a rate of 10.0% per annum of the issue
price ($1,000.00 per share) from the date of issuance of the shares until such
shares are converted into common stock or redeemed by the Company. The dividends
shall be payable quarterly on the last day of March, June, September and
December in each year, commencing on September 30, 2001. The Series A Shares are
convertible into common stock at an negotiated conversion rate of $0.47 per
effective post-acquisition share at the election of the holder beginning 90 days
after the date of issuance. The Series A Shares are callable at any time by TTC
at a price of 102.0% of issue value upon a 10-day advance written notice. These
shares were issued on April 12, 2001 to Red Guard, to acquire the rights to
negotiate to acquire the license to manufacture, develop and sell certain
patent- pending Composite Reinforced Aluminum Conductor technology. This
transaction was valued at an agreed-upon amount of approximately $165,000.

On June 27, 2001, TTC authorized and allocated 2,000 shares of Series B 10%
Cumulative Convertible Preferred Stock. The Series B Preferred Stock (Series B
Stock) was issued at $100.00 per share. The Series B Stock shall be entitled to
receive cumulative cash dividends at a rate of 10.0% per annum of the issue
price ($100.00 per share) from the date of issuance of the shares until such
shares are converted into common stock or redeemed by the Company. The dividends
shall be payable quarterly on the last day of March, June, September and
December in each year, commencing on September 30, 2001. Any dividends on the
Series B Stock that are not paid within 30 days after the date upon which
payment thereof is due shall bear interest at 10.0% per annum from such date
until ultimately paid. The shares are convertible into common stock at a rate of
$1.25 per effective post-acquisition share at the election of the holder
beginning 90 days after the date of issuance. The Series B Stock is callable at
a price of 109.0% at any time by TTC upon 10-day advance written notice. TTC
sold 1,000 Series B Shares to Red Guard for cash proceeds of approximately
$100,000 on August 28, 2001 and 320 shares to an unrelated third party for cash
proceeds of approximately $32,000 on October 11, 2001.

On September 30, 2002, the Company and Red Guard consummated a transaction
whereby Red Guard exchanged 100.0% of the issued and outstanding Series A
Preferred Stock; all accrued, but unpaid, dividends; certain short- term working
capital loans; and all accrued, but unpaid, interest in return for certain of
the Company's investment interests in other companies.


NOTE K - COMMON STOCK TRANSACTIONS

On November 3, 2001, in connection with a business combination transaction, the
Company's then controlling shareholder surrendered and cancelled an aggregate
3,116,515 shares of common stock to the Company for no consideration. The effect
of this transaction was to reduce the common stock account by the par value
(approximately $3,117) and increase the additional paid-in capital account. This
transaction reduced the issued and outstanding common stock to 6,050,000 shares.

On November 3, 2001, the Company executed an Agreement and Plan of
Reorganization whereby the Company issued an aggregate 60,000,000 shares of
restricted, unregistered common stock to the shareholders of Transmission
Technology Corporation (TTC) in exchange for 100.0% of the issued and
outstanding stock of TTC. TTC was incorporated as a Nevada corporation on March
28, 2001 to own a license agreement related to patent- pending composite
reinforced electrical transmission lines utilizing composite core materials.
Transmission Technology Corporation became a wholly-owned subsidiary of the
Company.

                                      F-19

<PAGE>

                 COMPOSITE TECHNOLOGY CORPORATION AND SUBSIDIARY
                    (formerly Eldorado Financial Group, Inc.)

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED


NOTE K - COMMON STOCK TRANSACTIONS - CONTINUED

On November 3, 2001, the Company issued an aggregate 450,000 shares of
restricted, unregistered common stock to four (4) unrelated entities and/or
individuals as compensation for various financial consulting services provided
in the above discussed Agreement and Plan of Reorganization. This transaction
was valued at approximately $90,000, which approximates the "fair value" of the
Company's stock on the date of the transaction using the discounted closing
price of the Company's common stock as quoted on the NASDAQ Electronic Bulletin
Board.

Upon completion of the November 3, 2001 reverse acquisition transaction, the
Company had an aggregate 66,500,000 shares of issued and outstanding common
stock.

On October 30, 2001, TTC issued an aggregate 79,402 equivalent post-acquisition
shares of restricted, unregistered common stock to its corporate law firm at an
agreed-upon value of approximately $300,000 as a retainer for future legal
services to be provided during a one-year period from October 30, 2001. The
retainer shares shall vest against normal monthly billings from the law firm to
the Company using the agreed-upon valuation of $3.78 per share, regardless of
the open market price of the Company's common stock during the billing month. If
the aggregate market value of the 79,402 shares are worth less than $450,000 in
the open market at the average mean of the bid and ask price for the shares
during the one-month period just preceding the first anniversary of the retainer
agreement (October 30, 2002) then the law firm will have 15 days to make a
written election to either a) exercise a downward adjustment in the agreed-upon
price of $3.78 to an amount of not less than $1.89 per share, which would cause
the Company to issue up to an additional 79,402 equivalent post- acquisition
shares to the law firm or b) put all 79,402 shares back to the Company and
require payment in cash for the legal services provided during the initial term
of the agreement. During January 2002, the Company and the law firm agreed to
rescind this transaction and the 79,402 shares were returned to the Company. All
future transactions between the Company and the law firm will be conducted on a
cash transaction basis.

On December 4, 2001, the Company issued 42,500 shares of the Company's
restricted, unregistered common stock in exchange for 37,335 shares of
restricted, unregistered AMJ common stock. This transaction was valued at
approximately $191,450, which approximates the "fair value" of the Company's
stock on the date of the transaction using the discounted closing price of the
Company's common stock as quoted on the NASDAQ Electronic Bulletin Board.

On February 27, 2002, the Company filed a Registration Statement Under The
Securities Act of 1933 on Form S-8 to register an aggregate 9,000,000 shares of
common stock pursuant to the 2002 Non-Qualified Stock Compensation Plan. During
the period from February 28, 2002 through September 30, 2002, the Company issued
an aggregate 5,929,868 shares of common stock pursuant to this plan. These
shares were issued at prices ranging between $0.19 and $1.85 per share, as based
on the closing quoted stock price on the respective date of each transaction.
These transactions were valued at an aggregate of approximately $2,701,490.

On May 22, 2002, the Company issued 40,000 shares of the Company's restricted,
unregistered common stock to an unrelated entity for various consulting
services. This transaction was valued at approximately $16,000, which
approximates the "fair value" of the Company's stock on the date of the
transaction using the discounted closing price of the Company's common stock as
quoted on the NASDAQ Electronic Bulletin Board.


                                      F-20

<PAGE>

                 COMPOSITE TECHNOLOGY CORPORATION AND SUBSIDIARY
                    (formerly Eldorado Financial Group, Inc.)

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED


NOTE K - COMMON STOCK TRANSACTIONS - CONTINUED

In July and August 2002, the Company issued an aggregate 350,000 shares of the
Company's restricted, unregistered common stock to two separate unrelated
entities for consulting services. These transactions were valued at
approximately $95,000, which approximates the "fair value" of the Company's
stock on the date of the transaction using the discounted closing price of the
Company's common stock as quoted on the NASDAQ Electronic Bulletin Board.

In July and September, 2002, the Company issued an aggregate 866,173 shares of
the Company's restricted, unregistered common stock to four separate
individuals, several of whom were existing shareholders of the Company, for
conversion of short-term working capital loans and accrued, but unpaid,
interest. These transactions were valued at approximately $152,729, which
equaled the outstanding debt and was in excess of the"fair value" of the
Company's stock on the date of the transaction using the discounted closing
price of the Company's common stock as quoted on the NASDAQ Electronic Bulletin
Board.

On August 22, 2002, the Company sold 65,790 shares of restricted, unregistered
common stock to an individual for cash proceeds of approximately $25,000. This
transaction was consummated in excess of the"fair value" of the Company's stock
on the date of the transaction using the discounted closing price of the
Company's common stock as quoted on the NASDAQ Electronic Bulletin Board.


NOTE L - STOCK OPTIONS

On July 12, 2001, TTC granted to Red Guard an option to purchase up to $500,000
of 10% Series B Cumulative Convertible Preferred Stock of TTC (the "TTC Series B
Preferred") at $100 per share (the "Red Guard Option") and a warrant to purchase
up to 120,000 shares of TTC Common Stock at $20.00 per share (the "Red Guard
Warrant") in reliance upon the exemption from registration set forth in Section
4(2) of the Securities Act as an inducement for revising the initial conversion
terms of the TTC Series A Preferred. The Red Guard Option and Warrant was
granted to Red Guard as an inducement to modify the conversion price of the TTC
Series A Preferred from an initial conversion price of $0.20 per share, as
adjusted for TTC stock splits prior to the November 3, 2001 reverse acquisition
transaction with CTC, to $0.47 per share after accounting for the effects of the
CTC reverse acquisition transaction. The Red Guard Option was exercisable at any
time and expired on January 12, 2002.

On August 28, 2001, Red Guard exercised a portion of the Series B option and
purchased an aggregate $100,000 of Series B Preferred from the Company. On
October 11, 2001, Red Guard assigned an additional portion of this option to an
unrelated individual who then exercised the option to purchase an aggregate
$32,000 of Series B Preferred from the Company The following table summarizes
all common stock options granted from the grant date through March 31, 2002:
<TABLE>
<CAPTION>

                        Options        Options          Options             Options      Exercise price
                        granted       exercised        terminated          outstanding      per share
                        -------       ---------        ----------          -----------      ---------
<S>                     <C>           <C>              <C>                 <C>              <C>
     Series B
        Preferred       $500,000       $132,000          $368,000          $     --         $100.00

     Totals             $500,000       $132,000          $368,000          $     --
</TABLE>


                                      F-21

<PAGE>

                 COMPOSITE TECHNOLOGY CORPORATION AND SUBSIDIARY
                    (formerly Eldorado Financial Group, Inc.)

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED


NOTE L - STOCK OPTIONS - CONTINUED

On May 15, 2001, TTC established the 2001 Incentive Compensation Stock Option
Plan (Plan). The purpose of the Plan is to grant options to purchase the
Company's common stock to employees of the Company and any subsidiaries to
attract and retain persons of ability and provide incentives for them to exert
their best efforts on behalf of the Company. The Plan is administered by either
the Company's Board of Directors or a committee established and appointed by the
Board of Directors. Under the Plan, the Board has reserved 4,764,000 shares of
common stock to support the underlying options which may be granted. The
exercise price of the underlying shares will be determined by the Board of
Directors; however, the exercise price may not be lower than 100.0% of the mean
of the last reported bid and asked price of the Company's common stock as quoted
on the NASDAQ Bulletin Board or any other exchange or organization. The term of
each option will be established by the Board of Directors at the date of issue
and may not exceed 10 years. The Plan shall automatically terminate on May 15,
2021 and no options under the Plan may be granted after May 15, 2011.

In June 2001, the TTC Board of Directors granted an aggregate 1,357,740 options
to various officers and employees to purchase an equivalent number of shares of
TTC restricted, unregistered common stock. The options were issued exercise
prices of either $0.31 or $0.35 per share and expire in either June 2006 or June
2011.

On March 31, 2002, the Company granted an aggregate 5,200,000 options to various
consulting professionals to purchase an equivalent number of shares registered
under the Company's Form S-8, filed in February 2002. The options were issued at
exercise prices between $0.40 and $2.00 per share. These options expire at
various dates between March 31, 2003 and December 31, 2011.

On April 1, 2002, the Company granted 750,000 options to a consulting
professional to purchase an equivalent number of shares registered under the
Company's Form S-8, filed in February 2002. The options were issued at an
exercise price of $0.50 per share. The options vested as follows: 150,000
immediately upon issue and 150,000 per year on the grant anniversary date from
April 1, 2003 through April 1, 2006.

The following table summarizes all common stock options granted through
September 30, 2002.
<TABLE>
<CAPTION>

                       Options         Options         Options        Options    Exercise price     Options
                       granted        exercised      terminated      outstanding    per share      not vested
                       -------        ---------      ----------      -----------    ---------      ----------
<S>                   <C>             <C>             <C>            <C>          <C>              <C>
2001 employees        1,357,740           -              -           1,357,740    $0.31 - $0.35       52,382
2002 consultants      5,950,000       (2,000,000)     (125,000)      3,825,000    $0.08 - $2.00    3,166,666
                    -----------      ------------   -----------    -----------    -------------    ---------
     Totals           7,307,740       (2,000,000)     (125,000)      5,182,740                     3,219,048
                    ===========      ============   ===========    ===========                     =========
</TABLE>

The weighted average exercise price of all issued and outstanding options at
September 30, 2002 is approximately $0.68 and approximately 1,963,692 of the
issued and outstanding options are vested and eligible for exercise.

Effective September 30, 2002, the Company's Board of Directors elected to
expense the imputed compensation cost related to stock options granted during
Fiscal 2002. The calculations to estimate the fair value of the options were
made using the Black-Scholes pricing model which required making significant
assumptions, which are listed as follows:


                                      F-22

<PAGE>

                 COMPOSITE TECHNOLOGY CORPORATION AND SUBSIDIARY
                    (formerly Eldorado Financial Group, Inc.)

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED


NOTE L - STOCK OPTIONS - CONTINUED
<TABLE>
<CAPTION>
<S>                                 <C>
Expected life of the option:        The initial life of the corresponding option, either five (5) or ten (10) years
Expected volatility in
   the Company's stock price:       100.0%, which was based on fluctuations of the Company's stock price over
                                    the past Fiscal year.
Expected dividends:                 Zero (0.00) based on past performance
Anticipated risk free
    interest rate:                  Estimated to be 6.0% at September 30, 2002
</TABLE>

This calculation resulted in approximately $1,664,275 being charged to
operations for the year ended September 30, 2002 for stock options outstanding.


NOTE M - STOCK WARRANT

On July 12, 2001, TTC issued to Red Guard, as an inducement to modify the
conversion price of the TTC Series A Preferred from an initial conversion price
of $0.20 per share, as adjusted for TTC stock splits prior to the November 3,
2001 reverse acquisition transaction with CTC, to $0.47 per share after
accounting for the effects of the CTC reverse acquisition transaction, a stock
warrant to purchase 1,905,600 shares of TTC restricted, unregistered common
stock at a price of $1.26 per share, in reliance upon the exemption from
registration set forth in Section 4(2) of the Securities Act of 1933. This
warrant is exercisable at any time after its issuance and expires on June 12,
2006. Due to the uncertainty related to the ultimate exercise for purchase of
any shares covered by this warrant, TTC did not assign any compensation expense
upon the issuance of this warrant.

The Company (CTC) intends to substitute CTC shares of common stock in place of
the TTC stock prescribed in the above warrant.

On October 18, 2001, the holder of the Warrant to purchase shares of the
Company's common stock exercised 7,940 warrants and purchased 7,940 shares of
restricted, unregistered common stock for $10,000 cash.

The following table presents the status of the issued and outstanding stock
warrants as of September 30, 2002:
<TABLE>
<CAPTION>

                                        Warrants      Warrants
                                       originally   outstanding at
                                         issued    September 30, 2002   Exercise price
                                         ------    ------------------   --------------
<S>                                     <C>              <C>            <C>
Series A Preferred Stock Warrants       1,905,600        1,897,660      $1.26 per share
                                      -----------      -----------
Totals at September 30, 2002            1,905,600        1,897,660
                                      ===========      ===========
</TABLE>


NOTE N - COMMITMENTS

The Company operates in leased offices, located in Irvine, California, on a
month-to-month agreement at a rate of approximately $4,600 per month.


                                      F-23

<PAGE>

                 COMPOSITE TECHNOLOGY CORPORATION AND SUBSIDIARY
                    (formerly Eldorado Financial Group, Inc.)

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED


NOTE O - LITIGATION CONTINGENCIES

The following discussion discusses all known or anticipated material legal
proceedings commenced by or against CTC or its wholly owned subsidiary,
Transmission Technology Corporation ("TTC"):

TRANSMISSION TECHNOLOGY CORPORATION V. W. BRANDT GOLDSWORTHY & Associates, Inc.
et al, Case No. 01-07118, was filed in August 15, 2001 before the United States
District Court, Central District of California. The principal parties to the
suit are Transmission Technology Corporation ("TTC"), C. William Arrington,
Composite Technology Corporation ("CTC"), W. Brandt Goldsworthy & Associates,
Inc. ("WBGA"), W.B.G., Inc. ("WBG"), Tom Sawyer, and Composite Power
Corporation.

On or about May 7, 2001, TTC, a wholly-owned subsidiary of CTC, entered into a
written agreement with WBG granting TTC the exclusive license to all WBG
teleconductor technologies, including Composite Reinforced Aluminum Conductor
and Advanced Composite Reinforced Aluminum Conductor and any improvements by
WBGA. The litigation concerns the interpretation and enforcement of the License
Agreement. Management intends to vigorously pursue its claims. CTC is continuing
to independently develop its own composite reinforced conductor cable, and has
filed for patent protection for what it believes to be numerous novel and
superior features of its technologies.

DR. CLEM HIEL ET AL. V. W. BRANDT GOLDSWORTHY & Associates, Inc. et al., Case
No. 02CC05443, was filed on April 9, 2002 in the State of California for the
County of Orange and has now been transferred and is pending before the Superior
Court of the State of California for the County of Los Angeles. The principal
parties are Dr. Clem Hiel, Dr. Alonso Rodriguez (both of whom are former
employees of WBG and/or WBGA and are currently consultants of CTC), WBGA, WBG
and W. Brandt Goldsworthy. CTC has agreed to bear the expense of this proceeding
because it affects two of CTC's consultants. These consultants are involved in
the commercialization of CTC's novel aluminum conductor composite core cable.

JARBLUM V. TRANSMISSION TECHNOLOGY CORPORATION ET AL., Case No. SC-072087, was
filed on May 13, 2002 in the Superior Court of the State of California for the
County of Los Angeles, West District. The principal parties are Plaintiff
William Jarblum and Defendants TTC, CTC, and C. William Arrington. Plaintiff
seeks $250,000 in unpaid legal fees. CTC believes that it has valid defenses and
intends to vigorously contest the claim. Due to CTC's cash position, a judgment
in favor of Plaintiff on this claim could have a material negative effect on
CTC's plan of operation.

TRANSMISSION TECHNOLOGY CORPORATION ET AL. V. TOM SAWYER, Case No. 02CC10972,
was filed on June 21, 2002 in the Superior Court of the State of California for
the County of Orange and has now been transferred to the United States District
Court, Central District of California after being allowed to be included in the
action of TTC vs WBG/WBGA et al. The principal parties are TTC, CTC, Arrington,
Wilcoxon, and Sawyer.

Plaintiffs seek declaratory relief and an injunction against Sawyer, as well as
damages arising from various tort causes of actions, including without
limitation tortuous interference with contract, fraud, legal malpractice, and
breach of fiduciary duty. This proceeding is indirectly related to the
litigation concerning the License Agreement.


                                      F-24

<PAGE>

                 COMPOSITE TECHNOLOGY CORPORATION AND SUBSIDIARY
                    (formerly Eldorado Financial Group, Inc.)

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED


NOTE O - LITIGATION CONTINGENCIES - CONTINUED

TRANSMISSION TECHNOLOGY CORPORATION ET AL. V. MICHAEL WINTERHALTER, ET AL., Case
No. 02CC12539 was filed July 26, 2002 in the Superior Court of the State of
California for the County of Orange.

TTC/CTC filed suit against Winterhalter (a WBG employee or business associate)
based on his campaign against TTC/CTC by contacting third parties and
disparaging TTC/CTC and threatening third parties with lawsuits for dealing with
TTC/CTC. This proceeding is indirectly related to the litigation concerning the
License Agreement.

Other than the matters discussed above, the Company is not a party to any other
legal proceedings.


NOTE P - COMMITMENTS

PROFESSIONAL SERVICES CONSULTING AGREEMENTS
-------------------------------------------

The Company has entered into various consulting agreements for professional and
product development services as follows:

A contract with an individual for product development and research services at a
rate of $15,000 per month. This agreement commenced in April 2002 and is for an
initial term of one year with automatic renewals, subject to 30 day cancellation
by either party. This agreement also included a "signing bonus" of $10,000 cash
and 10,000 shares of common stock issued pursuant to a Registration Statement
under the Securities Act of 1933 on Form S-8. Further, the Company is obligated
to pay the individual interest on unpaid amounts at a rate of 10.0% per annum.

A contract with an individual for product development research at a rate of $500
per day. This contract is cancellable at any time by either party.

A contract with an unrelated partnership for legal services at a rate of $300
per hour, payable in common stock issued pursuant to a Registration Statement
under the Securities Act of 1933 on Form S-8. The Company is required to issue
common stock in blocks of 100,000 shares to prepay for these legal services.
This agreement commenced in January 2002 for a one-year term. This agreement
also contained the granting of options to purchase up to 200,000 shares of
common stock pursuant to a Registration Statement under the Securities Act of
1933 on Form S-8 at a price of $1.75 per share for 100,000 options and $2.00 per
share for 100,000 per share. The options vested on the grant date.

A contract with a corporation, who's controlling officer sits on the Company's
product development/advisory board, for product development and research
services at a rate of $19,500 per month. This agreement commenced in January
2002 and expires in December 2006. This agreement also contained the granting of
options to purchase up to 635,000 shares of common stock pursuant to a
Registration Statement under the Securities Act of 1933 on Form S-8 at a price
of $1.31 per share. The options vest in pro-rata equal segments of 20.0% of the
total grant on an annual basis starting in December 2002. The Company is
obligated to pay the individual interest on unpaid amounts at a rate of 10.0%
per annum and is obligated to pay a royalty to the individual equal to 0.35% of
gross revenues on all products sold by the Company using technology developed by
this individual.


                                      F-25

<PAGE>

                 COMPOSITE TECHNOLOGY CORPORATION AND SUBSIDIARY
                    (formerly Eldorado Financial Group, Inc.)

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED


NOTE P - COMMITMENTS - CONTINUED

PROFESSIONAL SERVICES CONSULTING AGREEMENTS - CONTINUED
-------------------------------------------------------

A contract with a corporation, who's controlling officer sits on the Company's
product development/advisory board, for product development and research
services at a rate of $25,000 per month. This agreement commenced in January
2002 and runs for an indefinite time period. This agreement also contained the
granting of options to purchase up to 750,000 shares of common stock pursuant to
a Registration Statement under the Securities Act of 1933 on Form S-8 at a price
of $1.00 per share. The options vest in pro-rata equal segments of 20.0% of the
total grant on an annual basis starting in December 2002. The Company is
obligated to pay the individual interest on unpaid amounts at a rate of 10.0%
per annum and is obligated to pay a royalty to the individual equal to 0.35% of
gross revenues on all products sold by the Company using technology developed by
this individual.

A contract with an individual to provide Chief Financial Officer services at a
rate of $7,000 per month. This agreement commenced in January 2002 and was
terminated in November 2002.

FINANCIAL SERVICES AGREEMENTS
-----------------------------

A contract with an unrelated corporation for financial consulting services at a
rate of $500,000 per year, payable in common stock issued pursuant to a
Registration Statement under the Securities Act of 1933 on Form S-8. This
agreement commenced in March 2002 and expires in March 2004. This agreement also
contained the granting of options to purchase up to 1,000,000 shares of common
stock pursuant to a Registration Statement under the Securities Act of 1933 on
Form S-8 at a price of $0.10 per share. The options vest in pro-rata equal
segments in April 2002, January 2003 and January 2004.

A contract with an unrelated individual for financial consulting services at a
rate of $100,000 per year, payable in 75,000 shares of common stock issued
pursuant to a Registration Statement under the Securities Act of 1933 on Form
S-8. This agreement commenced in March 2002 and automatically renews annually
unless cancelled by either party with the appropriate notice, as defined in this
agreement. This agreement also contained the granting of options to purchase up
to 250,000 shares of common stock pursuant to a Registration Statement under the
Securities Act of 1933 on Form S-8 at a price of $1.25 per share. The options
vest in pro-rata equal segments of 1/12 of the total grant on a monthly basis
starting in March 2002. This contract will be cancelled by the Company in the
first calendar quarter of 2003.

A contract with an individual for financial consulting services for 1,000,000
shares of common stock issued pursuant to a Registration Statement under the
Securities Act of 1933 on Form S-8. This contract commenced on January 2002 and
expires in January 2003. This agreement commenced in January 2002 for a one-year
term. This agreement also contained the granting of options to purchase up to
1,000,000 shares of common stock pursuant to a Registration Statement under the
Securities Act of 1933 on Form S-8 at a price of $0.40 per share. The options
vested on the grant date and have all been exercised as of September 30, 2002.
Further, the Company is obligated to pay the individual a success fee equal to
10.0% on all equity capital raised by the individual. As of September 30, 2002,
the Company had no obligation under the "success fee" portion of this agreement.


                                      F-26

<PAGE>

                 COMPOSITE TECHNOLOGY CORPORATION AND SUBSIDIARY
                    (formerly Eldorado Financial Group, Inc.)

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED


NOTE P - COMMITMENTS - CONTINUED

FINANCIAL SERVICES AGREEMENTS - CONTINUED
-----------------------------------------

A finders fee agreement for capital financing with an unrelated corporation on a
"successful efforts" basis at a rate of 5.0% of the total gross investment
received by the Company as facilitated under this agreement. Further, if
successful, the Company will issue to the finder a warrant to purchase up to
300,000 shares of common stock at a strike price equal to the price paid by the
respective investor under this agreement. This contract will be cancelled by the
Company in the first calendar quarter of 2003.

A finders fee agreement for capital financing with an unrelated corporation on a
"successful efforts" basis at a rate of 6.0% of the total gross investment
received by the Company as facilitated under this agreement and 200,000 shares
of unregistered, restricted common stock. Further, if successful by
early-November 2002 (as defined in the agreement), the Company will issue an
additional 200,000 shares of restricted, unregistered common stock to the
consultant. This agreement expired in December 2002.

A consulting agreement with an unrelated entity for the procurement of qualified
consultants to deliver capital financing on a "successful efforts" basis for a
one-time fee of 400,000 shares of unregistered, restricted common stock as
compensation for all consultants. Further, the entity will also receive a
commission of 10.0% in cash and 10.0% in equivalent warrants for stock for
successful funding through sources identified by this entity.

A finders fee agreement for capital financing with an unrelated entity which
requires a one-time fee of 40,000 shares of unregistered, restricted common
stock with registration rights upon the delivery of a qualified Letter of Intent
for the funding of either equity, subordinated debt or senior debt. Further, the
agreement requires a cash commission equal to 8.0% if the investment is in the
form of equity; 6.0% if the investment is in the form of subordinated debt and
2.0% if the investment is in the form of senior debt. This contract will be
cancelled by the Company in the first calendar quarter of 2003.

A finders fee agreement for capital financing with an unrelated individual on a
"successful efforts" basis at a rate of 4.0% of the total gross investment
received by the Company as facilitated under this agreement. This agreement is
expected to be either cancelled or significantly modified during the first
calendar quarter of 2003.

A finders fee agreement for capital financing with an unrelated entity on a
"successful efforts" basis at a rate of 5.0% of the gross proceeds raised from
sources introduced by this entity, with a minimum fee of $100,000. This
agreement is dated August 2002 and has defined cancellation terms. The Company
anticipates cancelling this agreement during the first calendar quarter of 2003.


NOTE Q - SUBSEQUENT EVENTS

In November 2002, the Company issued a Private Placement Memorandum to issue a
Unit at $0.10 per unit. Each Unit consists of one share of unregistered,
restricted common stock and one Series E warrant to purchase one share of
unregistered, restricted common stock. In November and December 2002, the
Company sold an aggregate 1,172,500 Units for gross proceeds of approximately
$117,250. The Company also paid a 10.0% commission to an unrelated broker as
compensation for these capital placement activities.


                                      F-27

<PAGE>

                 COMPOSITE TECHNOLOGY CORPORATION AND SUBSIDIARY
                    (formerly Eldorado Financial Group, Inc.)

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED


NOTE Q - SUBSEQUENT EVENTS - CONTINUED

During the fourth quarter of 2002, the Company issued a separate Private
Placement Memorandum to issue a Unit at $1.80 per Unit. Each Unit consisted of
10 shares of unregistered, restricted common stock; 10 Series A warrants and 5
Series B warrants. The Company sold an aggregate 6,400 Units for gross proceeds
of approximately $11,520. The Company paid no commissions in connection with
these capital placement activities.

The Company, subsequent to September 30, 2002, issued an aggregate 1,500,000
shares of common stock registered pursuant to a Registration Statement under the
Securities Act of 1933 on Form S-8 to two individuals for legal services
(500,000 shares) and product development/research services (1,000,000 shares).



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                                      F-28