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                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D. C. 20549

                                  FORM 10-KSB/A

[ ]      Annual Report Under Section 13 or 15(d) of The Securities Exchange Act
         of 1934

[X]      Transition Report Under Section 13 or 15(d) of The Securities Exchange
         Act of 1934

         For the transition period from January 1, 2001 to September 30, 2001.

                         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 (Registrant's telephone number)

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

Securities registered under Section 12(g) of the Exchange Act:  Common Stock,
                                                       $.001 par value

Check whether the issuer: (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period the registrant 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 registrant'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 nine months ended September 30, 2001. $0.

As of February 8, 2002, the aggregate market value of the registrant's Common
Stock held by non-affiliates (assuming for these purposes but without conceding
that all officers, directors and greater than 10% stockholders are "affiliates"
of the registrant), was $18,340,866.54, based upon the closing price of $2.07
per share of Common Stock on the OTC Bulletin Board.

As of January 31, 2002, there were 66,463,098 shares of Common Stock issued and
outstanding.

The following documents are incorporated by reference:  None.

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

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                                           TABLE OF CONTENTS
                                                                                           Page Number
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<S>          <C>                                                                                 <C>
PART I

ITEM 1.      Description of Business                                                              3
ITEM 2.      Description of Property                                                             13
ITEM 3.      Legal Proceedings                                                                   13
ITEM 4.      Submission of Matters to a Vote of Security Holders                                 15

PART II

ITEM 5.      Market for Company's Common Stock and Related Stockholder Matters                   15
ITEM 6.      Management's Discussion and Analysis or Plan of Operation                           16
ITEM 7.      Index to Financial Statements                                                       18
ITEM 8.      Changes in and Disagreements with Accountants
             on Accounting and Financial Disclosures                                             18

PART III

ITEM 9.      Officers and Directors                                                              18
ITEM 10.     Executive Compensation                                                              20
ITEM 11.     Security Ownership of Certain Beneficial Owners and Management                      21
ITEM 12.     Certain Relationships and Related Transactions                                      21
ITEM 13.     Exhibits and Reports on Form 8-K                                                    23

SIGNATURES                                                                                       24
                                                   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

DESCRIPTION OF BUSINESS
-----------------------
INTRODUCTION

The Company is engaged in the development of high-strength composite materials,
high-speed neural-networked pultrusion manufacturing systems for composites, and
novel designed composite products commercialization. These composite
technologies will initially include applications in the areas of electricity
delivery, structural strength members for civil engineering applications, tower
structures, and related materials inspection systems.

Through our subsidiary, Transmission Technology Corporation, a Nevada
corporation ("TTC"), we are engaged in the development, production, and
commercialization of composite reinforced cable and support systems for use in
electrical power transmission and distribution systems.

Composite Technology Corporation (CTC) was initially 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, we changed our 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.

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On November 3, 2001, we entered into an Agreement and Plan of Reorganization
(the "Reorganization Agreement"), with TTC and certain stockholders of TTC,
whereby such stockholders of TTC exchanged all of their shares of common stock
("TTC Common Stock") in TTC for an aggregate of 57,546,000 shares of our common
stock, par value $.001 per share ("Common Stock"). As a result, TTC became our
majority-owned subsidiary and such stockholders of TTC became the holders of
89.9% of the issued and outstanding shares of Common Stock. Since then, the
remaining holders of TTC Common Stock have also exchanged their shares of TTC
Common Stock for an additional 2,374,598 shares of Common Stock, so that we now
own all the outstanding shares of TTC Common Stock. The former stockholders of
TTC now own an aggregate of 59,920,598 shares of Common Stock, representing
90.2% of the issued and outstanding Common Stock. Prior to entering into the
Reorganization Agreement, we had no operating history, revenues from operations,
or assets since December 31, 1989. In addition, we have not had any revenues
from operations subsequent to acquiring TTC.

In conjunction with the November 3, 2001 transaction, we changed our corporate
name to Composite Technology Corporation and amended our 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 16, 2001, we entered into a non-binding letter of agreement to
establish a joint venture in China with Jiangsu Far East Group Company, Ltd. for
the manufacture and sale of composite reinforced aluminum conductors for
electrical transmission and distribution systems in China. The parties are
negotiating the terms of a definitive joint venture agreement, although there
are no assurances that a definitive agreement will be executed.

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 proprietary Composite Reinforced Aluminum Conductor
("CRAC") cable. We have obtained an exclusive license for patent pending CRAC
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. CRAC 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 CRAC
conductors. SEE "--INTELLECTUAL PROPERTY" AND "ITEM 3 - LEGAL PROCEEDINGS."

We believe that there is an immediate need for a reasonably priced higher
performance cable, such as our CRAC 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 higher price, larger size, and increased maintenance
constraints make them suitable only for short underground lines in highly
congested power centers.

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Since the late 1880's, overhead transmission lines have used cables that are
made from straight steel wires that are helically wrapped by aluminum wires,
generally known as ACSR (aluminum conductor steel reinforced) cable. CRAC cable
is over 20% lighter than ACSR cable, has higher tensile strength and has half of
the thermal expansion. Therefore, CRAC cable is able to carry additional
electrical current (ampacity) on existing structures with little modification
for supporting connections. Furthermore, since the composite core of CRAC 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 appears to
lower the electromagnetic field. Since the composite core of the CRAC 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
CRAC cable core has areas that can be designed to hold a fiber optic cable
bundle. With the addition of devices capable of intelligent sensing of
temperature, sag, and line problems, CRAC cable can also be used for the
transmission of all types of optical communications and control data.

The first CRAC cables planned for production are designed to replace the ACSR
"Drake" model commonly used in transmission lines and the smaller ACSR "Linnet"
model commonly used in 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 CRAC cable versions of the Drake and Linnet
models. CRAC's unique core simply replaces the steel wires in the center of the
ACSR with pultruded composite profiles that leave an area which may hold a fiber
optic cable bundle; however, the current carrying aluminum wire layers that are
helically stranded around the CRAC cable core in the CRAC design are the same as
in the ACSR design. Therefore, the handling and splicing of the CRAC cable is
similar to ACSR, except for the joining of the composite core and the fiber.

The primary benefits of replacing ACSR cable with our CRAC cable are as follows:

         o    Greater ampacity (electrical current carrying capacity),
              principally because the cable has the ability to handle more
              elevated temperatures with less sag in the line and because of
              lower resistance with less inductive field resulting from a core
              that is now non-conductive.
         o    Glass composites have 50% less thermal expansion than steel, which
              results in less sag and reduced movement in wind. This means that
              our CRAC cable can be rated with a higher ampacity, without sag
              causing the cable to encroach on safe operating clearances.
         o    The fiber optic cable can be used with sensors in the line to
              detect the temperature of the cable and other conditions, which
              allows the operator to maximize the amount of power sent down the
              line, without having to estimate the line's actual condition.
         o    The cable can be produced with minor modifications to existing
              cable production plants.
         o    Replacement composite core weight reduction results in overall
              cable weight reduction.

Another key advantage of CRAC 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. The splicing techniques have
been developed and demonstrated by technicians retained by us. Although the
price of CRAC cable may initially be slightly greater than the proportionate
increased ampacity it provides, we believe that the replacement of ACSR cable
with CRAC cable will be less expensive than the installation costs of new
additional lines and support structures. Moreover, the optical fibers could
provide additional revenue streams for the transmission and distribution system.

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 CRAC
cables, are expected to meet the needs of the electrical industry because they
are lighter, have a higher current carrying capacity and are better able to
tolerate high stresses during emergency overload conditions.

                                        5





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SALES AND DISTRIBUTION:

We intend to seek companies with established, successful distribution networks
to distribute our products. We may also seek to distribute our products through
joint ventures.

We have not to date made any sales of our product. Our initial CRAC 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 niche market with great potential for immediate sales to solve
significant reliability and power delivery problems, such as seen in the
California marketplace over the past two years. We have initiated discussions
with potential customers for our CRAC 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.

Because we will introduce our products in a conservative industry, we intend to
provide our prospective customers with demonstrations of the product under
controlled conditions. We are in the process of arranging to produce CRAC cable
for demonstrations during 2002 in the North American, Chinese, and South
American markets.

Following a parallel sales path strategy, we are contacting 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 CRAC 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 do not currently manufacture any products. In order to reduce market entry
costs, we are considering establishing subcontractor relationships and/or joint
ventures to manufacture our CRAC cable product line, although no such
relationships or joint ventures are currently in place. Both methods will allow
us to produce CRAC cables with much lower initial capital expenditures. To
establish a composite core manufacturing facility would require a significant
capital expenditure, the funds for which are not currently available.

We plan to produce our proprietary high speed neural-networked manufacturing
systems for our own use and for sale to our joint venture partners, 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 that we will supply.

Our principal raw materials will be e-glass fibers and 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 has varied significantly
and may vary significantly in the future.

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 "high-strength thermoplastic pultrusion" equipment line
while proceeding to market a "pultruded thermoset" core. We believe that there
are additional potential improvements to the CRAC design that should be pursued
and could be implemented with minimal retraining on the part of the utility
companies. Future market developments include marine cables, underground cables,
large fiber optic cables, and various other wire applications, such as "last
mile" cables.

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.

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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 initial cores will be made in this manner, although at a higher cost than
the use of an engineered plastic in a "thermoplastic" pultrusion process. The
principal advantage of perfecting the "thermoplastic pultrusion" 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 in addition to the fact that
thermoplastic, sometimes known as "engineered plastics," is less expensive per
pound. Both polymers have proven resistance to high electrical energy fields,
higher temperatures, and weathering.

INTELLECTUAL PROPERTY:

TTC entered into a 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 gave TTC an exclusive license to the technologies covered by
the License Agreement. The License Agreement currently is the basis for our
rights to the composite reinforced aluminum conductor technologies. We also
intend to file patent applications for several cable designs resulting from our
development and testing work. We believe that patents and other proprietary
rights are 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, the patents and other
proprietary rights that we may establish or acquire, or that we will be able to
successfully resolve such conflicts. SEE "ITEM 3--LEGAL PROCEEDINGS."

MARKET:

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 have been declining. 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. We believe that we will be able to attain 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 42-45% of the market, and General Cable Corporation and Alcan
Inc., which supply most of the balance of the market. Outside of the United
States market, key manufacturers for ACSR cable include Pirelli Cable, Jaingsu
Far East Group Company, Ltd., and others.

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The following developmental-stage efforts also have potential to compete with
CRAC 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
              expected to be seven to eight times higher than ACSR. The cable is
              not yet available and a preliminary demonstration is expected to
              be conducted in the third quarter of 2002.
         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 four to seven times higher than
              ACSR with slightly increased line losses.
         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 ACSR
              cable, so that it would only be practical in specific short
              underground installations in downtown metropolitan areas.

GOVERNMENTAL REGULATION:

There are no specific government regulations governing the design and
specifications of bare overhead conductors in the United States. The manufacture
of CRAC 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 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.

RESEARCH AND DEVELOPMENT:

We have not spent significant funds on research and development because
development of the CRAC technology 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." We anticipate the
need to spend significant funds to protect the CRAC technology. 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 manufacturing partners, joint ventures, or
licensees.

EMPLOYEES:

We currently have three full time employees; Benton H Wilcoxon, C. William
Arrington, and Robert Nikoley. Numerous technical skills will be required to
bring our products to market. Recruiting efforts have begun and will continue in
the near future.

RISK FACTORS:

WE ARE A DEVELOPMENT STAGE COMPANY AND HAVE A LIMITED OPERATING HISTORY.

We are a development stage company and have a limited operating history. We are
subject to business risks that are typical of development stage companies, and
"start-up" 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.

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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 at least through the next 18
months.

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 a result, we will need
to generate significant revenues to achieve and maintain profitability.

OUR ACCOUNTANTS 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, 2001,
we had a comprehensive loss of $493,450, and for the same period, our net cash
used in operating activities was $263,345. As of September 30, 2001, our
accumulated deficit was $501,672, after taking into account the TTC
reorganization.

OUR PRODUCT MAY NOT BE ACCEPTED BY OUR POTENTIAL CUSTOMERS.

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
marketing 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.
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 recent growth, primarily as a result of 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.

We need to raise significant additional funds in order to achieve our business
objectives. Failure to raise these additional funds 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.

                                        9





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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 would 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.

                                        10





<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
on 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 e-glass fibers and 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 approximately
86.7% 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. 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.

                                        11





<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 CRAC cable. Competing manufacturers are seeking to increase the performance
of the current electrical power transmission and distribution cables. 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.

So long as the trading price of Common Stock is below $5.00 per share, trading
of 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.

                                        12





<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 sales prices for the Common Stock have fluctuated from a high of
$10.75 to a low of $0.40 during the first quarter of the 2002 fiscal year.

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 $3,120.00 per month. If we decide to
manufacture the CRAC cable ourselves, we will seek appropriate manufacturing
facilities available for lease.

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

TTC entered into the License Agreement with WBG on May 7, 2001. The License
Agreement related to patent pending composite reinforced aluminum conductor
technologies and gave TTC an exclusive license to the technologies covered by
the License Agreement. TTC became a majority-owned subsidiary of the Company, on
November 3, 2001 pursuant to the Reorganization 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 rate of 5%
of Gross Revenues (as defined in 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 to be mutually agreed upon. TTC would
advance funds to WBG for each phase as required under a mutually agreed upon
budget and schedule.

In the event of any controversy or claim relating to the License Agreement, or a
breach thereof, the parties agreed the dispute would initially be subject to
mediation proceedings. If the controversy, claim or breach was not resolved by
mediation, the parties agreed to arbitration in accordance with the Commercial
Arbitration Rules of the American Arbitration Association.

All information herein with respect to the License Agreement is qualified in its
entirety by reference to the License Agreement, a copy of which is attached as
Exhibit 10.3 to our Form 8-K filed on January 11, 2002 , and is incorporated
herein by reference.

                                        13





<PAGE>

TTC sought information from WBG relating to the technologies pursuant to the
License Agreement but did not receive a response. As a result, TTC sought to
invoke the mediation provision of the License Agreement. WBG declined to engage
in mediation. In August 2001, TTC commenced an arbitration proceeding with the
American Arbitration Association against WBG and W. Brandt Goldsworthy &
Associates, Inc., a California corporation related to WBG ("WBG&A").

On August 15, 2001, TTC also filed suit against WBG and WBG&A in the United
States District Court for the Central District of California (Case No.
01-CV-7118). The suit sought (i) specific performance of the License Agreement,
including supplying the requested information and subjecting to arbitration,
(ii) an injunction against WBG and WBG&A licensing the technologies to any other
parties, and (iii) damages and costs.

In their answers, WBG and WBG&A argued a number of defenses and also asserted
certain counterclaims. One defense raised was that TTC did not have standing or
capacity to sue. WBG and WBG&A contended that Tom Sawyer, the lawyer who
incorporated TTC, is the sole stockholder and director of TTC and that he had
not authorized the filing of the suit. Mr. Sawyer claimed that he purchased all
of the authorized common stock for $24.00. Subsequently and separately, on
October 4, 2001, Mr. Sawyer made a demand to TTC's counsel to dismiss the suit
with prejudice based on his claim that he was the sole stockholder and director
of TTC. In addition, on October 5, 2001, Mr. Sawyer, allegedly on behalf of TTC,
and WBG executed a Mutual Rescission of the License Agreement.

The counterclaims raised by WBG and WBG&A included alleged untrue and misleading
advertising and unfair competition (against TTC and C. William Arrington, an
officer of the Company and TTC) for claiming rights in the technologies and a
claim for declaratory relief (against TTC, Mr. Arrington, Mr. Sawyer and
Composite Power Corporation, a Nevada corporation ("CPC")). On September 24,
1999, a Nevada state court had issued an injunction against Mr. Arrington, a
former officer and director of CPC, in his individual capacity from "contacting,
soliciting business from or otherwise doing business with any individuals,
entities or financiers connected or related in any way to any of CPC's
projects." WBG&A was mentioned as an entity that had a business relationship
with CPC but the technologies licensed by the License Agreement are completely
unrelated to CPC or any of its projects. Mr. Arrington had signed the License
Agreement on behalf of TTC and WBG and WBG&A contended that Mr. Arrington's
signature violated the injunction and made the License Agreement void and
illegal. WBG and WBG&A also sought a declaratory judgment that Mr. Sawyer is the
sole director and stockholder of TTC and that the License Agreement is void and
illegal. Management's position is that after the formation of TTC, Mr. Sawyer
had no futher involvement with TTC after May 2001 and was certainly not a
director, officer, or stockholder at the time of the alleged recission of the
license agreement or the acquisition of TTC by the Company. The injunction was
dissolved by the Nevada state court on August 31, 2001 and Mr. Arrington was
limited only against doing business with anyone involved in specific CPC
projects, none of which related to TTC, the Company or the License Agreement.
Furthermore, that limitation as well is no longer in effect as the Nevada state
court dismissed all claims against Mr. Arrington with prejudice on January 10,
2002. CPC has never initiated any proceedings with the Nevada state court
claiming any violation of the injunction and the court has issued no order and
has never found that Mr. Arrington was ever not fully in compliance with the
injunction.

On December 10, 2001, the United States District Court held a hearing on TTC's
request for an injunction. No decision has yet been rendered. With regard to
TTC's arbitration demand, arbitrators have been appointed. A hearing on TTC's
petition to enforce the arbitration provisions of the License Agreement is
currently awaiting scheduling. WBG and WBG&A are seeking to have the court halt
the arbitration and instead have all issues settled by the court.

The License Agreement currently is the basis for TTC's rights to the CRAC
technologies. In the event a court or an arbitration panel determines that the
License Agreement is unenforceable in any way, it would have a material adverse
effect on the Company, its business and its prospects.

We believe that TTC has raised valid claims in its suit and claim for
arbitration and that WBG's and WBG&A's defenses and counterclaims are without
merit. TTC will defend itself and Mr. Arrington, as an officer of TTC,
vigorously against the alleged counterclaims of WBG and WBG&A.

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

                                        14





<PAGE>

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, 2001.

                                     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 December 31, 2001, 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.

Fiscal Year 2001                                          High             Low
----------------                                          ----             ---

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                                          High             Low
----------------                                          ----             ---

October 1, 2001 through December 31, 2001                $10.75          $0.40
January 1, 2002 through February 8, 2002                  $7.00          $1.30

These quotations reflect inter-dealer prices, without retail mark-up, mark-down
or commission and may not represent actual transactions. As of January 31, 2002,
there were 66,463,098 shares of Common Stock outstanding and owned by
approximately 350 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.

                                        15





<PAGE>

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.

On October 30, 2001, TTC issued 5,000 shares of TTC Common Stock to a corporate
law firm in reliance upon the exemption from registration set forth in Section
4(2) of the Securities Act as a retainer for future legal services to be
provided during the one-year period commencing on October 30, 2001. Pursuant to
the Reorganization Agreement, each share of TTC Common Stock was exchanged for
15.88 shares of Common Stock.

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.

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

Plan of Operation
-----------------
We have not had revenues from operations in the fiscal years ended December 31,
2000 and September 30, 2001.

Summary ------- We plan to subcontract a limited production of composite core
and the helical winding of aluminum conductors so that a significant
demonstration test in an operating transmission line can be commenced by June
30, 2002. We expect that the planned test will be conducted by a major American
utility company along with a consortium of approximately 15 other utility
companies and the Electric Power Research Institute. The test will be closely
monitored for three months after which time we anticipate receiving orders from
utility companies, although the demonstration will continue for at least two
years. By June 30, 2002, 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 and Brazil.

                                        16





<PAGE>

On April 12, 2001, during the initial formation stages of TTC, TTC exchanged
15,086,000 equivalent post- acquisition shares of restricted, unregistered CTC
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. These shares were initially
anticipated to increase the value of TTC as the entity transitioned into a
"publicly-owned" phase and to increase shareholder value in future periods.
Subsequent to the acquisition of these minor (less than 5%) equity investments
in other companies, management conducted periodic evaluations of the carrying
value of these investments 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". As a result of these evaluations, based
upon the best information available to management, a cumulative impairment of
the carrying value of these investments of approximately $137,230 was recognized
against these equity holdings.

One of the investments, in AMJ Logistics, Inc. (AMJ), a privately-owned software
company based in Tucson, Arizona, involved additional transactions. 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.

On August 11, 2001, management, upon evaluation of the development process and
market acceptance of AMJ's product line and potential future appreciation of the
AMJ investment, 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
CTC 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.

In December 2001, CTC and AMJ settled the outstanding balances on the purchase
option agreement with the issuance of 42,500 shares of CTC restricted,
unregistered common stock to AMJ in exchange for 37,335 shares of restricted,
unregistered AMJ common stock.

As a result of all AMJ transactions, through December 31, 2001, the Company owns
an aggregate 114,125 shares of AMJ (approximately 7.0%), including the initial
1,000 shares acquired in the April 12, 2001 transaction. Management continually
evaluates the carrying value of all of the equity investments in other
companies, including the AMJ common stock investment, 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" and is
of the opinion that no further impairment exists at either the date of the
initial incremental investment or at the end of any respective quarter.

Liquidity and Capital Resources
-------------------------------
At the present time we have no liquidity. 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 beginning in approximately
September 2002. 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.

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.

                                        17





<PAGE>

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 by June 30, 2002.

Personnel
---------
We currently have three full time employees; Benton H Wilcoxon, C. William
Arrington, and Robert Nikoley. Since we are in the development stage 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.
                                                                Officer/Director
Name                        Age     Position Held                  since (1)
----                        ---     -------------                  ---------

Benton H Wilcoxon           52      Chief Executive Officer,         2001
                                      Director, and Secretary

C. William Arrington        60      President and Director           2001

Robert Nikoley              62      Chief Financial Officer          2001

(1) As of November 3, 2001, Glenn Little resigned as the President and Chief
Financial Officer and as a member of the Board of Directors, Matthew Blair
resigned as Secretary and Treasurer, Benton H Wilcoxon became Chief Executive
Officer and Secretary, and C. William Arrington became President. On December
28, 2001, Robert Nikoley became Chief Financial Officer. On February 10, 2002,
Mr. Wilcoxon and Mr. Arrington were appointed to the Board of Directors and Mr.
Blair resigned as a Director.

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.

                                        18





<PAGE>

BIOGRAPHICAL INFORMATION

BENTON H WILCOXON, 52, 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.

C. WILLIAM ARRINGTON, 60, 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, 62, has been our Chief Financial Officer since December 28,
2001. From November 3 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 Officer of WebQuest International, Inc. ("WebQuest"), a company traded
on the OTC Bulletin Board. Between March 2000 and June 2001, he was Controller
of WebQuest. WebQuest helps develop business opportunities for emerging growth
companies. He served as Chief Financial Officer of International Fuel
Technology, Inc., a company engaged in the development of diesel fuel additives,
from 1996 through 1999. Mr. Nikoley is a Director of WebQuest.

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.

Neither Mr. Little nor Mr. Blair has made any filings under Section 16(a). Each
of Mr. Wilcoxon, Mr. Arrington, Mr. Nikoley, Red Guard, and G. William Harrison
has filed a Form 3 but such Forms were not filed on a timely basis.

                                        19





<PAGE>
ITEM 10 - EXECUTIVE COMPENSATION

None of our executive officers received compensation in excess of $100,000 for
the fiscal years ended December 31, 1999, December 31, 2000, or September 30,
2001. The following table summarizes all compensation received by our Chief
Executive Officer in fiscal years 1999, 2000, and 2001.
<TABLE>
<CAPTION>
                                                                 Long-Term Compensation
                                                                 ----------------------
                                        Annual Compensation             Awards           Payouts
                                        -------------------             ------           -------

                                                Other          Restricted   Securities
Name and                                        Annual         Stock        Underlying     LTIP      All Other
Compensation          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     2001      0(1)      -        -               -         40,000(2)        -           -
Chief Executive
Officer

Glenn A. Little (3)   2001       0        -        -               -            -             -           -
President             2000       0        -        -               -            -             -           -
                      1999       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)  Although Mr. Little did not have the title of Chief Executive Officer, as
     President, he served in a similar capacity until his resignation on
     November 3, 2001.

The following table shows all grants during the fiscal year ended September 30,
2001 of stock options under our stock option plans to the named executive
officers.
<TABLE>

           OPTIONS/SAR GRANTS IN FISCAL YEAR ENDED SEPTEMBER 30, 2001
                               (Individual Grants)
<CAPTION>
                                           Percent of
                             Number of     Total Options
                             Securities    Granted to
                             Underlying    Employees        Exercise or
                             Option        during           Base Price    Expiration
          Name               Granted (#)   Fiscal Year(%)   ($/Sh)        Date
--------------------         -----------   --------------   -----------   -----------
<S>                          <C>              <C>              <C>          <C> <C>
Benton H Wilcoxon            40,000(1)        46.8%            5.50         6/7/11
</TABLE>

(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, 2001. None of the named executive officers exercised
any options during the fiscal year ended September 30, 2001.
<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>                                <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, 2001
     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.

                                        20





<PAGE>

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 and are
not reimbursed for expenses incurred in attending board meetings.

ITEM 11 - SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth, as of February 10, 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.

                                                            Percent of Class
Name and Address                    Number of Shares 1     Beneficially Owned 2
----------------                    ------------------     --------------------

Benton H Wilcoxon 3,4                   20,250,514               30.5%
C. William Arrington 3                  20,250,514               30.5%
Robert Nikoley 3                            0                    0%
Red Guard Industries, Inc. 5,6          14,932,699               22.5%
G. William Harrison 5,6                 17,101,748               25.7%
All Directors and Executive
Officers as a Group
(3 persons)                             40,501,028               61.0%

(1)  Unless otherwise indicated, the persons named in the table have sole voting
     and investment power with respect to all shares of Common Stock shown as
     beneficially owned by them.

(2)  Based on 66,463,098 shares of Common Stock issued and outstanding.

(3)  The address of each such person is c/o Composite Technology Corporation,
     18881 Von Karman Avenue, Suite 1630, Irvine, California 92612

(4)  Mr. Wilcoxon owns 34.0% of the common stock of Red Guard and he also is
     Vice President and Treasurer of Red Guard. Mr. Wilcoxon disclaims
     beneficial ownership of the Common Stock and the securities of TTC owned by
     Red Guard.

(5)  The address for Red Guard is 393 Lange, Troy, Michigan 48093. Red Guard
     also owns (i) 165 shares of the TTC Series A Preferred and 1,000 shares of
     the TTC Series B Preferred, and (ii) a warrant to purchase 119,500 shares
     of TTC Common Stock.

(6)  The address for Mr. Harrison is 20 Oxford Boulevard, Pleasant Ridge,
     Michigan 48069. Mr. Harrison's living trust owns 1,058,471 shares of Common
     Stock and an additional 772,684 shares of Common Stock are owned by a
     living trust for the benefit of Mr. Harrison's wife. Bridgestone Capital
     Group, LLC ("Bridgestone") owns 337,894 shares of Common Stock. Mr.
     Harrison is the President and Chief Executive Officer of Bridgestone and he
     and the trust for the benefit of his wife own a majority of the membership
     interests in Bridgestone. In addition, Mr. Harrison is the Chairman and
     Chief Executive Officer of Red Guard and he and the trust for the benefit
     of his wife own a majority of the common stock of Red Guard. As a result,
     he beneficially owns the Common Stock and the securities of TTC owned by
     Bridgestone and Red Guard and such Common Stock owned by them and the trust
     for the benefit of Mr. Harrison's wife are included in the 17,101,748
     shares of Common Stock stated as being beneficially owned by Mr. Harrison
     above.

ITEM 12 - CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

On December 26, 2000, we cancelled an aggregate total of 833,485 shares of
issued and outstanding Common Stock. Management at that time, upon extensive
research into transactions approved by former officers and or controlling
stockholders, determined that all of such shares had been issued improperly,
inasmuch as no corporate authorization of the issuances existed and no
consideration was received for such shares.

                                        21





<PAGE>

Specifically, the cancellations were as follows:

       400,000 shares were purchased by Glenn Little, a former officer and
       director of the Company, from another former officer of the Company for
       $15,000 and returned to our treasury with no consideration received by
       Glenn Little.

       403,485 shares issued to former officers, directors and individuals were
       issued improperly as (A) at the time of such issuance, our corporate
       charter had been revoked by the Secretary of State of Florida for failure
       to make required filings and to pay associated fees and (B) we received
       no consideration for such shares. Many of the certificates representing
       these shares were never delivered and were in the possession of the
       transfer agent.

       30,000 shares issued to a company in anticipation of fees due for
       investment banking activities were issued improperly as (A) there was no
       action by our Board of Directors authorizing the issuance of any of such
       shares, and (B) at the time of such issuance, our corporate charter had
       been revoked by the Secretary of State of Florida for failure to make
       required filings and to pay associated fees.

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.

Between January 3, 2002 and January 28, 2002, Red Guard made four short-term
working capital loans to the Company aggregating $57,000. Each respective loan
is for six months (maturing from July 3, 2002 to July 28, 2002) and bears
interest at 10 1/2% per annum.

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.

We have made interest-free advances in the amounts of approximately $13,628 and
$55,114 to Mr. Wilcoxon and Mr. Arrington, respectively, which are offset
against accrued, but unpaid, salaries.

                                        22





<PAGE>

ITEM 13 - EXHIBITS AND REPORTS ON FORM 8-K

(a) The following exhibits are filed herewith:

Exhibit
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

4.1***   See Exhibits 3.1 and 3.2 for provisions of the Articles of
         Incorporation and By-laws of the Company defining the rights of holders
         of Common Stock of the Company

4.2****   Warrant to Purchase 120,000 Shares of Common Stock of Transmission
         Technology Corporation dated July 12, 2001

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

31.1     Certification pursuant to Section 302 of Sarbanes-Oxley Act of
         2002 - Chief Executive Officer
31.2     Certification pursuant to Section 302 of Sarbanes-Oxley Act of
         2002 - Chief Financial Officer
32.1     Certifications pursuant to Section 906 of Sarbanes-Oxley Act of
         2002.

*    Incorporated herein by reference to Form 8-K filed with the Securities and
     Exchange Commission on November 20, 2001.

**   Incorporated herein by reference to Form 8-K filed with the 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.

**** Incorporated herein by reference to Form 10-KSB filed with the U.S.
     Securities and Exchange Commission on June 12, 2002.

(b) Reports on Form 8-K filed during the quarter ended September 30, 2001: None

                                        23





<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: February 3, 2004                  By: /S/ BENTON H WILCOXON
                                          ----------------------------------
                                          Benton H Wilcoxon
                                          Chief Executive Officer, Director,
                                          Chief Financial Officer 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: February 3, 2004                  By: /S/ BENTON H WILCOXON
                                          ----------------------------------
                                          Benton H Wilcoxon
                                          Chief Executive Officer, Director,
                                          Chief Financial Officer and Secretary

                                        24





<PAGE>
<TABLE>

                    COMPOSITE TECHNOLOGY CORPORATION AND SUBSIDIARY
                   (formerly Eldorado Financial Group, Inc.)
                           (a development stage enterprise)

                                       CONTENTS

<S>                                                                               <C>
                                                                                  Page
                                                                                  ----

REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS                                 F-2

RESTATED CONSOLIDATED FINANCIAL STATEMENTS

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

   Restated Consolidated Statements of Operations and Comprehensive Loss Period
     from March 28, 2001 (date of formation) through September 30, 2001            F-4

   Restated Consolidated Statements of Changes in Shareholders' Equity Period
     from March 28, 2001 date of formation) through September 30, 2001             F-5

   Restated Consolidated Statements of Cash Flows
     Period from March 28, 2001 (date of formation) through September 30, 2001     F-6

   Notes to Restated Consolidated Financial Statements                             F-7

</TABLE>

                                         F-1





<PAGE>

                  REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

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

We have audited the accompanying restated consolidated balance sheets of
Composite Technology Corporation (formerly Eldorado Financial Group, Inc.) (a
Nevada corporation) and Subsidiary (a development stage enterprise) as of
September 30, 2001 and the related restated consolidated statements of
operations and comprehensive loss, changes in shareholders' equity and cash
flows for the period from March 28, 2001 (date of formation) through September
30, 2001. These restated 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 audit 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 restated
consolidated financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the restated consolidated financial statements. An audit also
includes assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall restated consolidated financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.

In our opinion, the restated consolidated financial statements referred to above
present fairly, in all material respects, the restated consolidated financial
position of Composite Technology Corporation (formerly Eldorado Financial Group,
Inc.) as of September 30, 2001 and the results of its restated operations and
its cash flows for the March 28, 2001 (date of formation) through September 30,
2001, 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
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.

We initially issued a Report of Independent Certified Public Accountants
(Opinion) on the above listed financial statements on January 4, 2002. In
conjunction with management's preparation for the audit of the Company's
financial statements for the year ended September 30, 2003, as more fully
discussed in Note B, management made the determination that a more appropriate
method of financial disclosure for the November 3, 2001 business combination
between Composite Technology Corporation and Transmission Technology Corporation
was proper. This change, with which we concur, is reported in the accompanying
financial statements. Accordingly, we withdraw our Opinion dated January 4, 2002
and no further reliance should be placed on this Opinion.

                                                         /s/ S. W. HATFIELD, CPA
Dallas, Texas
December 5, 2003

                                         F-2





<PAGE>

                 COMPOSITE TECHNOLOGY CORPORATION AND SUBSIDIARY
                    (formerly Eldorado Financial Group, Inc.)
                        (a development stage enterprise)
                      RESTATED CONSOLIDATED BALANCE SHEETS
                               September 30, 2001

                                                                   September 30,
                                                                            2001
                                                                   -------------
                                        ASSETS
                                        ------
CURRENT ASSETS
   Cash on hand and in bank                                           $  33,013
   Advances to officers                                                   8,742
   Prepaid expenses                                                      33,359
                                                                      ----------
     TOTAL CURRENT ASSETS                                                75,114
                                                                      ----------
PROPERTY AND EQUIPMENT - AT COST
   Office furniture and equipment                                         7,400
   Accumulated depreciation                                              (1,234)
                                                                      ----------
     NET PROPERTY AND EQUIPMENT                                           6,166
                                                                      ----------
OTHER ASSETS
   Contract rights                                                      165,000
   Investments in other companies                                        45,020
                                                                      ----------
     TOTAL OTHER ASSETS                                                 210,020
                                                                      ----------
   TOTAL ASSETS                                                       $ 291,300
                                                                      ==========
                         LIABILITIES AND SHAREHOLDERS" EQUITY
                         ------------------------------------
CURRENT LIABILITIES
   Accounts payable - trade                                           $   9,625
   Accrued dividends payable                                              8,222
                                                                      ----------
     TOTAL CURRENT LIABILITIES                                           17,847
                                                                      ----------
COMMITMENTS AND CONTINGENCIES

SHAREHOLDERS" EQUITY (DEFICIT)
   Preferred stock - $0.001 par value
     5,000,000 shares authorized
     1,165 shares issued and outstanding                                      1
   Common stock - $0.001 par value
     200,000,000 shares authorized
     66,500,000 shares issued and outstanding                            66,500
   Additional paid-in capital                                           708,624
   Accumulated deficit                                                 (501,672)
                                                                      ----------
   TOTAL SHAREHOLDERS" EQUITY (DEFICIT)                                 273,453
                                                                      ----------
   TOTAL LIABILITIES AND SHAREHOLDERS" EQUITY                         $ 291,300
                                                                      ==========

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

                                      F-3





<PAGE>

                 COMPOSITE TECHNOLOGY CORPORATION AND SUBSIDIARY
                    (formerly Eldorado Financial Group, Inc.)
                        (a development stage enterprise)
      RESTATED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
   Period from March 28, 2001 (date of formation) through September 30, 2001

                                                   Period from     Cumulative
                                                  March 28, 2001  development
                                                    (date of    stage operations
                                                    formation)   March 28, 2001
                                                      through        through
                                                   September 30,   September 30,
                                                       2001            2001
                                                   -------------   -------------

REVENUES                                           $         --    $         --
                                                   -------------   -------------
EXPENSES
   General and administrative expenses                  131,136         131,136
   Legal, professional and consulting fees              117,700         117,700
   Reorganization expenses                               30,000          30,000
   Interest expense                                         150             150
   Depreciation                                           1,234           1,234
   Compensation expense related to common
     stock issuances at less than "fair value"           76,000          76,000
                                                   -------------   -------------
     Total operating expenses                           356,220         356,220
                                                   -------------   -------------
LOSS FROM OPERATIONS                                   (356,220)       (356,220)

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

PROVISION FOR INCOME TAXES                                   --              --
                                                   -------------   -------------
NET LOSS                                               (493,450)       (493,450)

OTHER COMPREHENSIVE INCOME                                   --              --
                                                   -------------   -------------
COMPREHENSIVE LOSS                                 $   (493,450)   $   (493,450)
                                                   =============   =============

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

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

                                      F-4





<PAGE>
<TABLE>

                                           COMPOSITE TECHNOLOGY CORPORATION AND SUBSIDIARY
                                             (formerly Eldorado Financial Group, Inc.)
                                                  (a development stage enterprise)
                                 RESTATED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS" EQUITY
                              Period from March 28, 2001 (date of formation) through 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>
Common stock issued at formation                     --        --    2,500,000   $  2,500   $       --    $       --    $    2,500

Issuance of Preferred Stock
   for Technology rights                            165        --           --         --      165,000            --       165,000
   for Cash                                       1,000         1           --         --       99,999            --       100,000

Issuance of Common Stock
   for Cash                                          --        --      125,000        125      249,875            --       250,000
   for Investments in Other Companies                --        --      970,000        970      217,280            --       218,250
   for Prepaid Representation Agreement              --        --      175,000        175       39,200            --        39,375

Recapitalization effect of reverse acquisition
   between Transmission Technology Corporation
   and Composite Technology Corporation              --        --   62,730,000     62,730      (62,730)           --            --

Dividends on preferred stock                         --        --           --         --           --        (8,222)       (8,222)

Net loss for the period (post-acquisition)           --        --           --         --           --      (493,450)     (493,450)
                                               ---------  --------  -----------  ---------  -----------   -----------   ------------
BALANCES AT SEPTEMBER 30, 2001                    1,165   $     1   66,500,000   $ 66,500   $  708,624    $ (501,672)   $  273,453
                                               =========  ========  ===========  =========  ===========   ===========   ============

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

                                                                F-5
</TABLE>





<PAGE>
<TABLE>

                             COMPOSITE TECHNOLOGY CORPORATION AND SUBSIDIARY
                                (formerly Eldorado Financial Group, Inc.)
                                    (a development stage enterprise)
                             RESTATED CONSOLIDATED STATEMENTS OF CASH FLOWS
               Period from March 28, 2001 (date of formation) through September 30, 2001
<CAPTION>

                                                                         Period from       Cumulative
                                                                        March 28, 2001    development
                                                                            (date of    stage operations
                                                                           formation)    March 28, 2001
                                                                            through          through
                                                                         September 30,    September 30,
                                                                              2001             2001
                                                                         --------------   --------------
<S>                                                                      <C>              <C>
CASH FLOWS FROM OPERATING ACTIVITIES
   Net loss for the period                                               $    (493,450)   $    (493,450)
   Adjustments to reconcile net loss
     to net cash provided by operating activities
       Depreciation                                                              1,234            1,234
       Amortization of prepaid expenses paid
         with common stock                                                       6,016            6,016
       Compensation expense related to common
         stock issuances at less than "fair value"                              76,000           76,000
       Carrying value impairment adjustment
         on investments in other companies                                     137,230          137,230
       Increase (Decrease) in
         Accounts payable - trade                                                9,625            9,625
                                                                         --------------   --------------
NET CASH USED IN OPERATING ACTIVITIES                                         (263,345)        (263,345)
                                                                         --------------   --------------
CASH FLOWS FROM INVESTING ACTIVITIES
   Cash advanced to officers                                                    (8,742)          (8,742)
   Purchase of property and equipment                                           (7,400)          (7,400)
   Cash paid for investments in other companies                                (40,000)         (40,000)
                                                                         --------------   --------------
NET CASH USED IN INVESTING ACTIVITIES                                          (56,142)         (56,142)
                                                                         --------------   --------------
CASH FLOWS FROM FINANCING ACTIVITIES
   Cash contributed to support operations                                           --               --
   Proceeds from sale of preferred stock                                       100,000          100,000
   Proceeds from sale of common stock                                          252,500          252,500
                                                                         --------------   --------------
NET CASH PROVIDED BY FINANCING ACTIVITIES                                      352,500          352,500
                                                                         --------------   --------------
INCREASE (DECREASE) IN CASH                                                     33,013           33,013
Cash at beginning of period                                                         --               --
                                                                         --------------   --------------
CASH AT END OF PERIOD                                                    $      33,013    $      33,013
                                                                         ==============   ==============
SUPPLEMENTAL DISCLOSURE OF INTEREST AND INCOME TAXES PAID
     Interest paid for the period                                        $         150    $         150
     Income taxes paid for the period                                    $          --    $          --

SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES
     Preferred stock issued to acquire technology rights                 $     165,000    $     165,000
     Common stock issued to acquire investments in other companies       $     142,250    $     142,250
     Common stock issued for prepaid representation agreement            $      39,375    $      39,375

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

                                                  F-6
</TABLE>





<PAGE>

                 COMPOSITE TECHNOLOGY CORPORATION AND SUBSIDIARY
                   (formerly Eldorado Financial Group, Inc.)
                        (a development stage enterprise)

               NOTES TO RESTATED 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.

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. This action was taken after an evaluation and review of the
November 3, 2001 acquisition transaction, the operations of both the Company and
Transmission Technology Corporation during the period since the last annual
filing on Form 10-KSB and consideration of future economic events and
opportunities.

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.

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".

                                      F-7





<PAGE>

                 COMPOSITE TECHNOLOGY CORPORATION AND SUBSIDIARY
                   (formerly Eldorado Financial Group, Inc.)
                        (a development stage enterprise)

         NOTES TO RESTATED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

NOTE A - ORGANIZATION AND DESCRIPTION OF BUSINESS - CONTINUED

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

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 B - RESTATEMENT OF FINANCIAL INFORMATION

The November 3, 2001 change in control of the Company, effected by the
acquisition of Transmission Technology Corporation (a development stage
enterprise), created a situation whereby the consolidated overall operations of
the Company reverted back to that of a development stage enterprise. A
development stage enterprise is one where substantially all of its efforts are
devoted to establishing a new business plan and either the planned principal
operations have not commenced or the planned principal operations have
commenced, but there has been no significant revenue therefrom.

As a result of the November 3, 2001 transaction, the financial statements of the
Company reflect the historical financial statements of Transmission Technology
Corporation from its inception on March 28, 2001, as adjusted for the effective
recapitalization of the Company on November 3, 2001. The accompanying financial
statements have been restated to present the cumulative financial information,
as required by accounting principles generally accepted in the United States of
America, for the development stage activities of the consolidated entity.

While Composite Technology Corporation (formerly Eldorado Financial Group, Inc.)
was not a development stage enterprise but, rather, a dormant entity with
discontinued operations, management of Composite Technology is of the opinion
that development stage reporting for the consolidated entity is more
appropriate.

Management is restating it's financial statements for all quarterly and annual
periods, commencing with the Transitional Report on Form 10-KSB for the period
ended September 30, 2001 through the quarterly period ended June 30, 2003. The
financial statements will be restated to present the cumulative financial
information, as required by accounting principles generally accepted in the
United States of America, for the development stage activities of the
consolidated entity. There will be no change to the previously reported results
of operations or balance sheet composition for any of the aforementioned
periods. The restatement will consist only of adding the cumulative from
inception balances on the Statement of Operations and Comprehensive Loss and the
Statements of Cash Flows.

Accordingly, for all periods subsequent to December 31, 2000, the financial
statements of the Company reflect the historical financial statements of
Transmission Technology Corporation from its inception on March 28, 2001, as
adjusted, retroactively, for the effective recapitalization of the Company on
November 3, 2001.

                                      F-8





<PAGE>

                 COMPOSITE TECHNOLOGY CORPORATION AND SUBSIDIARY
                   (formerly Eldorado Financial Group, Inc.)
                        (a development stage enterprise)

         NOTES TO RESTATED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

NOTE C - GOING CONCERN UNCERTAINTY

We are engaged in the development, production, and commercialization of
composite reinforced cable and support systems for use in electrical power
transmission and distribution systems. The Company continues to be in the
process of research and development related to its product line and has not
commenced operations. Accordingly, the Company is considered in the development
stage.

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 during the final three months of
fiscal 2003. Prior to the consummation, processing and shipment of revenue
generating orders, we anticipate that we will remain dependent on the receipt of
additional financing from third parties. If such financing is not available, we
may be required to discontinue operations.

The Company's current management anticipates that the initial capitalization
will be sufficient to maintain the corporate status of the Company in the
immediate future. Because of the Company's lack of operating assets, the
Company's continuance may become dependent on either future sales of securities
and/or advances or loans from significant stockholders or corporate officers to
provide sufficient working capital to preserve the integrity of the corporate
entity during the development phase.

There is no assurance that the Company will be able to obtain additional equity
or debt funding or, that such funding, if available, will be obtained on terms
favorable to or affordable by the Company.

It is the intent of management and significant stockholders to provide
sufficient 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.

NOTE D - 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, the Company, is also a shareholder and officer. Key transactions
involving this relationship include 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.

NOTE E - 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.

                                      F-9





<PAGE>

                 COMPOSITE TECHNOLOGY CORPORATION AND SUBSIDIARY
                   (formerly Eldorado Financial Group, Inc.)
                        (a development stage enterprise)

         NOTES TO RESTATED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

NOTE E - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED

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.

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

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
       either of the above 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 will be included in earnings
       subsequent to December 31, 1993, the Company's adoption date. As of the
       adoption date of SFAS 115, however, the net unrealized gain has been
       reflected as a separate component of shareholders' equity in accordance
       with SFAS 115.

       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.

                                      F-10





<PAGE>

                 COMPOSITE TECHNOLOGY CORPORATION AND SUBSIDIARY
                   (formerly Eldorado Financial Group, Inc.)
                        (a development stage enterprise)

         NOTES TO RESTATED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

NOTE E - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED

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

     Research and development expenses are charged to operations as incurred.

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, 2001 and December 31, 2000, 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, 2001 and December 31, 2000, 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, 2001, the Company's
     outstanding stock options are considered anti-dilutive due to the Company's
     net operating loss position. As of December 31, 2000, the Company had no
     warrants and/or options issued and outstanding.

NOTE F - 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.

                (Remainder of this page left blank intentionally)

                                      F-11





<PAGE>

                 COMPOSITE TECHNOLOGY CORPORATION AND SUBSIDIARY
                   (formerly Eldorado Financial Group, Inc.)
                        (a development stage enterprise)

         NOTES TO RESTATED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

NOTE G - 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 and 2000,
respectively.

                                             (pre-acquisition) (pre-acquisition)
                                              October 1, 2000 October 1, 1999
                                                   through        through
                                                September 30,   September 30,
                                                    2001           2000
                                                -------------   -------------

      Revenues                                  $         --    $         --
      Gross profit                                        --              --
      Income taxes                                        --              --
      Loss from continuing operations                (90,636)         (1,620)
      Earnings per share                                 nil             nil
      Proforma weighted-average number
        of shares issued and outstanding          66,500,000      66,500,000

NOTE H - 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 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.

TTC entered into a technology license agreement with W.B.G., Inc., an unrelated
California corporation ("WBG"), on May 7, 2001 (the "License Agreement"). The
License Agreement related to patent pending composite reinforced aluminum
conductor technologies and gave TTC an exclusive license to the technologies
covered by the License Agreement. The License Agreement currently is the basis
for our rights to the composite reinforced aluminum conductor technologies. WBG
and Red Guard were and are unrelated entities.

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 production line. Design capacity of each commercial
production line shall be defined as the capacity stated on the specifications by
the builder which is WBG. The royalty shall decline by ONE percent (1%) of Gross
Revenues as sales of product from each additional commercial production line
reaches design capacity. TTC shall pay WBG a minimum 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-12





<PAGE>

                 COMPOSITE TECHNOLOGY CORPORATION AND SUBSIDIARY
                   (formerly Eldorado Financial Group, Inc.)
                        (a development stage enterprise)

         NOTES TO RESTATED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

NOTE H - CONTRACT RIGHTS - CONTINUED

For commercial product line development, TTC agrees to pay WBG to design, build,
test, install, provide specifications, manuals, and training for complete
commercial product equipment lines for each Technology. The price to be mutually
agreed upon based upon costs plus reasonable overhead fees. TTC understands and
agrees that it must advance funds to WBG for each phase as required under a
mutually agreed upon budget and schedule. As of September 30, 2001 and periods
subsequent thereto, no mutually agreed upon budget has been developed or agreed
to by either party. Further, for additional commercial product lines, TTC has
agreed to purchase additional commercial product lines from WBG for all
additional plant lines as required at mutually agreed upon prices and delivery
schedules. 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, 2001 or subsequent thereto.

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 to be mutually
agreed upon. TTC would advance funds to WBG for each phase as required under a
mutually agreed upon budget and schedule.

As of September 30, 2001 and subsequent thereto, the Company, TTC and WBG are
involved in litigation questioning the validity of the original license
agreement (See Note M - 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 I - INVESTMENTS IN OTHER COMPANIES

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

                                                 Initial      Carrying value at
  Investee company                               Valuation    September 30, 2001
  Held-to-Maturity
    Integrated Performance Systems, Inc.         $  10,500        $  1,000
    STL Group, Inc.                                 73,200           1,000
    TMA Ventures, LLC/ MEMX, Inc.                   44,050           1,000
    AMJ Logistics, Inc.
      Equity investment                             24,500          12,020
      Convertible advances                          30,000          30,000
        Totals                                   $ 182,250        $ 45,020

                (Remainder of this page left blank intentionally)

                                      F-13





<PAGE>

                 COMPOSITE TECHNOLOGY CORPORATION AND SUBSIDIARY
                   (formerly Eldorado Financial Group, Inc.)
                        (a development stage enterprise)

         NOTES TO RESTATED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

NOTE I - 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 a permanent valuation impairment of approximately $137,230 against
these holdings.

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.

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.

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

                                      F-14





<PAGE>

                 COMPOSITE TECHNOLOGY CORPORATION AND SUBSIDIARY
                   (formerly Eldorado Financial Group, Inc.)
                        (a development stage enterprise)

         NOTES TO RESTATED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

NOTE J - PREFERRED STOCK TRANSACTIONS

Preferred stock consists of the following as of September 30, 2001 and December
31, 2000:
<TABLE>
<CAPTION>

                                           September 30, 2001      December 31, 2000
                                           ------------------      -----------------
                                          # shares   par value   # shares   par value
                                          --------   ---------   --------   ---------
<S>                                          <C>       <C>         <C>        <C>
Series A Cumulative Convertible Stock        165       $  --          --      $   --
Series B Cumulative Convertible Stock      1,000           1          --          --
                                          --------   ---------   --------   ---------
     Totals                                1,165       $   1          --          --
                                          ========   =========   ========   =========
</TABLE>

On April 12, 2001, the Company 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 the Company 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,
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, the Company 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 the Company upon 10-day advance written notice.
The Company sold 1,000 Series B Shares to Red Guard for cash proceeds of
approximately $100,000 on August 28, 2001.

NOTE K - COMMON STOCK TRANSACTIONS

On December 26, 2000, the Company cancelled an aggregate total of 833,485 shares
of its issued and outstanding common stock. Management, upon extensive research
into transactions approved by former officers and or controlling shareholders,
determined that all of such shares may have been issued improperly, inasmuch as
no corporate authorization of the issuances existed and no consideration was
received by the Company for such shares.

                                      F-15





<PAGE>

                 COMPOSITE TECHNOLOGY CORPORATION AND SUBSIDIARY
                   (formerly Eldorado Financial Group, Inc.)
                        (a development stage enterprise)

         NOTES TO RESTATED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

NOTE K - COMMON STOCK TRANSACTIONS - CONTINUED

Specifically, the cancellations were as follows:

     400,000 shares were purchased by the then majority stockholder from a
     former officer of the Company for a cash consideration of $15,000 and
     returned to the Company's treasury for no consideration.

     403,485 shares issued to former officers, directors and individuals. These
     shares were issued improperly as (a) at the time of such issuance, the
     corporate charter of the Company had been revoked by the Secretary of State
     of Florida for failure to make required filings and to pay associated fees
     and (b) no consideration was received by the Company for such shares. Many
     of the certificates representing these shares were never delivered and
     remained in the possession of the Company's transfer agent since their
     initial issuance.

     30,000 shares issued to a company in anticipation of fees due for
     investment banking activities. These shares were issued improperly as (a)
     there was no action by the Company's Board of Directors authorizing the
     issuance of any of such shares, and (b) at the time of such issuance, the
     corporate charter of the Company had been revoked by the Secretary of State
     of Florida for failure to make required filings and to pay associated fees.

As a result of the cancellation of these 833,485 shares of Company common stock,
the Company then had 9,166,515 shares outstanding. The effect in the
accompanying financial statements was to restate the par value of the issued and
outstanding shares with a corresponding offset to the additional paid-in capital
account. There was no impact on the earnings of the Company as a result of this
event.

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.

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.

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.

                (Remainder of this page left blank intentionally)

                                      F-16





<PAGE>

                 COMPOSITE TECHNOLOGY CORPORATION AND SUBSIDIARY
                   (formerly Eldorado Financial Group, Inc.)
                        (a development stage enterprise)

         NOTES TO RESTATED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

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. 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. The
following table summarizes all common stock options granted from the grant date
through September 30, 2001.
<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    $100,000    $    --        $400,000        $100.00
                     --------    --------    ----------    -----------    -----------
     Totals          $500,000    $100,000    $    --        $400,000
                     ========    ========    ==========    ===========
</TABLE>

On October 11, 2001, Red Guard exercised an additional $32,000 of the Series B
option.

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

                                      F-17





<PAGE>

                 COMPOSITE TECHNOLOGY CORPORATION AND SUBSIDIARY
                   (formerly Eldorado Financial Group, Inc.)
                        (a development stage enterprise)

         NOTES TO RESTATED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

NOTE L - STOCK OPTIONS - CONTINUED

There were no exercise of any options during the periods ended September 30,
2001 and December 31, 2000, respectively. The following table summarizes all
common stock options granted from the Plan's inception through September 30,
2001.
<TABLE>
<CAPTION>
                     Options    Options      Options       Options        Exercise price
                     granted    exercised    terminated    outstanding    per share
                     -------    ---------    ----------    -----------    --------------

<S>  <C>            <C>                                     <C>            <C>     <C>
     2001 options   1,357,740         --           --       1,357,740      $0.31 - $0.35

     Totals         1,357,740         --           --       1,357,740

</TABLE>

The weighted average exercise price of all issued and outstanding options at
September 30, 2001 is approximately $0.33.

Had compensation cost for options granted been determined based on the fair
values at the grant dates, as prescribed by SFAS 123, the Company's net loss and
net loss per share would not have changed significantly as the exercise price of
the options was relatively equivalent to the market price at the grant date.

The calculations to estimate the fair value of the options were made using the
Black-Scholes pricing model which required making significant assumptions. These
assumptions include the expected life of the options, which was determined to be
the initial life of the corresponding option, either five (5) or ten (10) years,
the expected volatility, which was based on fluctuations of the stock price over
a 12 month period, the expected dividends, determined to be zero based on past
performance, and the risk free interest rate, which was estimated using the bond
equivalent yield of 6.0% at September 30, 2001 and December 31, 2000,
respectively.

NOTE M - STOCK WARRANT

On July 12, 2001, the Company 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 the Company's 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, the Company did not assign any compensation
expense upon the issuance of this warrant.
<TABLE>
<CAPTION>
                                        Warrants      Warrants
                                       originally    outstanding at        Exercise
                                         issued     September 30, 2001      price
                                         ------     ------------------      -----

<S>                                     <C>             <C>            <C>
Series A Preferred Stock Warrants       1,905,600       1,905,600      $1.26 per share
                                        ---------       ---------
Totals at September 30, 2001            1,905,600       1,905,600
                                        =========       =========
</TABLE>
                                      F-18





<PAGE>

                 COMPOSITE TECHNOLOGY CORPORATION AND SUBSIDIARY
                   (formerly Eldorado Financial Group, Inc.)
                        (a development stage enterprise)

         NOTES TO RESTATED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

NOTE N - COMMITMENTS

The Company operates in leased offices, located in Irvine, California, on a
month-to-month agreement at a rate of approximately $3,120 per month.

NOTE O - CONTINGENCIES

At various times during Calendar 2001, TTC sought information from WBG relating
to the technologies pursuant to the License Agreement but did not receive a
response. As a result, TTC sought to invoke the mediation provision of the
License Agreement. WBG declined to engage in mediation. On or about August 15,
2001, TTC commenced an arbitration with the American Arbitration Association in
Los Angeles, California against W. Brandt Goldsworthy & Associates (WBG&A) and
W. B. G., Inc. (WBG), an entity affiliated with WBG&A, seeking to enforce the
License Agreement between TTC and WBG dated May 7, 2001.

On or about August 15, 2001, TTC also filed suit against WBG and WBG&A in the
United States District Court for the Central District of California (Case No.
01-CV-7118). The suit sought (i) specific performance of the License Agreement,
including supplying the requested information and subjecting to arbitration,
(ii) an injunction against WBG and WBG&A licensing the technologies to any other
parties, and (iii) damages and costs.

In their answers, WBG and WBG&A argued a number of defenses and also asserted
certain counterclaims. One defense raised was that TTC did not have standing or
capacity to sue. WBG and WBG&A contended that Tom Sawyer, the lawyer who
incorporated TTC, is the sole stockholder and director of TTC and that he had
not authorized the filing of the suit. Mr. Sawyer claimed that he purchased all
of the authorized common stock for $24.00. Subsequently and separately, on
October 4, 2001, Mr. Sawyer made a demand to TTC's counsel to dismiss the suit
with prejudice based on his claim that he was the sole stockholder and director
of TTC. In addition, on October 5, 2001, Mr. Sawyer, allegedly on behalf of TTC,
and WBG executed a Mutual Rescission of the License Agreement.

The counterclaims raised by WBG and WBG&A included alleged untrue and misleading
advertising and unfair competition (against TTC and C. William Arrington, an
officer of the Company and TTC) for claiming rights in the technologies and a
claim for declaratory relief (against TTC, Mr. Arrington, Mr. Sawyer and
Composite Power Corporation, a Nevada corporation ("CPC")). On September 24,
1999, a Nevada state court had issued an injunction against Mr. Arrington, a
former officer and director of CPC, in his individual capacity from "contacting,
soliciting business from or otherwise doing business with any individuals,
entities or financiers connected or related in any way to any of CPC's
projects." WBG&A was mentioned as an entity that had a business relationship
with CPC but the technologies licensed by the License Agreement are completely
unrelated to CPC or any of its projects. Mr. Arrington had signed the License
Agreement on behalf of TTC and WBG and WBG&A contended that Mr. Arrington's
signature violated the injunction and made the License Agreement void and
illegal. WBG and WBG&A also sought a declaratory judgment that Mr. Sawyer is the
sole director and stockholder of TTC and that the License Agreement is void and
illegal. The injunction was dissolved by the Nevada state court on August 31,
2001 and Mr. Arrington was limited only against doing business with anyone
involved in specific CPC projects, none of which related to TTC, the Company or
the License Agreement. Furthermore, that limitation as well is no longer in
effect as the Nevada state court dismissed all claims against Mr. Arrington with
prejudice on January 10, 2002. CPC has never initiated any proceedings with the
Nevada state court claiming any violation of the injunction and the court has
issued no order and has never found that Mr. Arrington was ever not fully in
compliance with the injunction.

                                      F-19





<PAGE>

                 COMPOSITE TECHNOLOGY CORPORATION AND SUBSIDIARY
                   (formerly Eldorado Financial Group, Inc.)
                        (a development stage enterprise)

         NOTES TO RESTATED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

NOTE O - CONTINGENCIES - CONTINUED

Further, TTC and the Company initiated a formal complaint of maleficence against
Mr. Sawyer with the State Bar of Texas as he was acting only as the incorporator
for TTC and was never entitled to assert any claims as sole shareholder of TTC.
The State Bar of Texas has affirmed the appropriateness and merits of the
Company's complaint and has initiated a formal hearing process which could
ultimately lead to the disbarment of Mr. Sawyer and the revocation of his
license to practice law in the State of Texas and other jurisdictions.

On December 10, 2001, the United States District Court held a hearing on TTC's
request for an injunction. No decision has yet been rendered. With regard to
TTC's arbitration demand, arbitrators have been appointed. A hearing on TTC's
petition to enforce the arbitration provisions of the License Agreement is
currently awaiting scheduling. WBG and WBG&A are seeking to have the court halt
the arbitration and instead have all issues settled by the court.

The License Agreement currently is the basis for TTC's rights to the CRAC
technologies. In the event a court or an arbitration panel determines that the
License Agreement is unenforceable in any way, it would have a material adverse
effect on the Company, its business and its prospects. The claims as to Mr.
Sawyer's alleged ownership of, and position with, TTC, in the event they are
supported, would raise serious questions as to the status and authority of the
current management and Board of Directors of TTC and the Company and the effect
and consequences of the Reorganization Agreement.

The motion for a preliminary injunction is sub judice. The petition to compel
arbitration has been completely briefed and there is a hearing set for January
28, 2002. Management and legal counsel are of the opinion that the Company and
TTC have raised valid claims in its suit and claim for arbitration and that
WBG's and WBG&A's defenses and counterclaims are without merit. TTC will defend
itself and Mr. Arrington, as an officer of TTC, vigorously against the alleged
counterclaims of WBG and WBG&A.

Due to the early nature of the arbitration procedure, the Company anticipates no
material impact to either the results of operations, its financial condition or
liquidity based on the uncertainty of outcome, if any, of existing litigation,
either collectively and/or individually, at this time.

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

NOTE P - SUBSEQUENT EVENTS

On October 11, 2001, the Company sold 320 shares of Series B Preferred Stock to
an individual for approximately $32,000 cash.

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.

On October 24, 2001, the Company sold an aggregate 15,880 equivalent
post-acquisition shares of restricted, unregistered common stock to an unrelated
entity for approximately $61,500 cash.

On October 26, 2001, the Company sold an aggregate 27,632 equivalent
post-acquisition shares of restricted, unregistered common stock to an
individual for approximately $107,010.

                                      F-20





<PAGE>

                 COMPOSITE TECHNOLOGY CORPORATION AND SUBSIDIARY
                   (formerly Eldorado Financial Group, Inc.)
                        (a development stage enterprise)

         NOTES TO RESTATED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

NOTE P - SUBSEQUENT EVENTS

On October 30, 2001, the Company issued an aggregate 79,400 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 79,400 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 79,400
equivalent post-acquisition shares to the law firm or b) put all 79,400 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 79,400 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.

                                      F-21