UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                                    FORM 10-Q



 (Mark One)

  X               QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
-----             SECURITIES EXCHANGE ACT OF 1934
                  For the quarterly period ended June 30, 2004
                                       OR
-----             TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
                  THE SECURITIES EXCHANGE ACT OF 1934

                         Commission File Number 1-11871

                      COMMODORE APPLIED TECHNOLOGIES, INC.
                      ------------------------------------
             (Exact name of Registrant as specified in its charter)


                Delaware                                         11-3312952
                --------                                         ----------
    (State or other jurisdiction of                           (I.R.S. Employer
     incorporation or organization)                         Identification No.)


    150 East 58th Street, Suite 3238
           New York, New York                                      10155
    ---------------------------------                              -----
(Address of principal executive office)                          (Zip Code)


Registrant's telephone number, including area code:   (212) 308-5800
                                                      --------------

         Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of
1934  during  the  preceding  12 months  (or for such  shorter  period  that 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 _________

         Indicate by check mark whether the registrant is an  accelerated  filer
(as defined by Exchange Act Rule 12b-2). Yes ____ No __X_.


         The number of shares the common  stock  outstanding  at August 12, 2004
was 127,273,071.



<PAGE>

                      COMMODORE APPLIED TECHNOLOGIES, INC.

                                    FORM 10-Q

                                      INDEX

<TABLE>
<CAPTION>

                                                                                                           Page No.

<S>                                                                                                              <C>
PART I   FINANCIAL INFORMATION....................................................................................1

Item 1.       Financial Statements (Unaudited)

              Condensed Consolidated Balance Sheet -
                      June 30, 2004 and December 31, 2003.........................................................1

              Condensed Consolidated Statement of Operations - Three and Six
                      months ended June 30, 2004 and
                      June 30, 2003...............................................................................3

              Condensed Consolidated Statement of Cash Flows -
                      Six months ended June 30, 2004 and
                      June 30, 2003...............................................................................4

              Notes to Condensed Consolidated Financial Statements................................................5

Item 2.       Management's Discussion and Analysis of Financial
                      Condition and Results of Operations........................................................13

Item 3.       Quantitative and Qualitative Disclosures About Market Risk.........................................18

Item 4.       Controls and Procedures............................................................................18

PART II  OTHER INFORMATION.......................................................................................20

SIGNATURES.......................................................................................................21


</TABLE>
                                       i
<PAGE>
                         PART I - FINANCIAL INFORMATION


ITEM 1:  Financial Statements
         --------------------


              COMMODORE APPLIED TECHNOLOGIES, INC. AND SUBSIDIARIES

                      CONDENSED CONSOLIDATED BALANCE SHEET
                  (Dollars in Thousands, except per share data)
<TABLE>
<CAPTION>

                                                                 June 30,            December 31,
                               ASSETS                              2004                 2003
                                                                   ----                 ----
                                                                (unaudited)
<S>                                                             <C>                <C>
Current Assets:
         Cash and cash equivalents                              $        21        $             -
         Accounts receivable, net                                        97                     71
         Prepaid assets and other current receivables                    17                     13
                                                                -----------        ----------------
                  Total Current Assets                                  135                     84

Property and Equipment, net                                              33                    142
Intangible Assets
         Patents and completed technology, net of
              accumulated amortization of $100 and
              $80 respectively                                            -                     20
                                                                -----------        ----------------

                    Total Assets                                $       168        $           246
                                                                ===========        ================

</TABLE>

            See notes to condensed consolidated financial statements.


                                       1
<PAGE>

              COMMODORE APPLIED TECHNOLOGIES, INC. AND SUBSIDIARIES
                      CONDENSED CONSOLIDATED BALANCE SHEET
                  (Dollars in Thousands, except per share data)
<TABLE>
<CAPTION>


                                                                                  June 30,          December 31,
                          LIABILITIES AND                                           2004                2003
                       STOCKHOLDERS' DEFICIT                                        ----                ----
                                                                                 (unaudited)
<S>                                                                             <C>                 <C>
Current Liabilities:
         Checks written in excess of cash                                       $          -        $         13
         Accounts payable                                                              1,025               1,031
         Related party payable                                                           321                 278
         Current portion of long term debt                                               232                   -
         Line of credit                                                                   17                  64
         Notes payable                                                                     -                   -
         Other accrued liabilities                                                     4,587               3,937
                                                                                ------------        ------------

                  Total Current Liabilities                                            6,182               5,323

Long Term Debt                                                                         2,221               1,575
                                                                                ------------        ------------

                   Total Liabilities                                                   8,403               6,898

Commitments and Contingencies                                                             --                  --

Stockholders' Deficit
         Convertible Preferred Stock, Series E, F &H Par value $0.001 per share,
           5% to 12% cumulative dividends, Series E and F, 3% dividends for
           Series H  1,561,700  authorized, 1,013,700 shares and
           1,033,700 shares issued and outstanding as of June 30, 2004 and
           December 31, 2003, respectively. The shares had an aggregate
           liquidation Value of $3,856 and $4,142 at June 30, 2004 and
           December 31, 2003 Respectively                                                  1                   1
         Common Stock, par value $0.001 per share, 300,000,000 shares
           authorized, 127,273,071 and 117,702,133 issued and outstanding, At
           June 30, 2004 and December 31, 2003, Respectively                             127                 118

         Additional Paid-in Capital                                                   67,519              67,664
         Accumulated Deficit                                                         (75,619)            (74,172)
                                                                                ------------        ------------
                                                                                      (7,972)             (6,389)

         Treasury Stock, 3,437,500 shares                                               (263)               (263)
                                                                                ------------        ------------
                     Total Stockholders' Deficit                                      (8,235)             (6,652)
                                                                                ------------        ------------
         Total Liabilities and Stockholders' Deficit                            $        168        $        246
                                                                                ============        ============
</TABLE>

            See notes to condensed consolidated financial statements.


                                       2
<PAGE>
              COMMODORE APPLIED TECHNOLOGIES, INC. AND SUBSIDIARIES

                 CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
            (Unaudited - Dollars in Thousands, except per share data)

<TABLE>
<CAPTION>

                                                                         Three months ended             Six months ended
                                                                       June 30,         June 30,      June 30,       June 30,
                                                                         2004             2003          2004          2003
                                                                         ----             ----          ----          ----

<S>                                                                   <C>              <C>           <C>            <C>
Contract revenues                                                     $      112       $     132     $     294      $     296
Costs and expenses:
         Cost of sales                                                       255             198           507            403
         Research and development                                              1              --             7             59
         General and administrative                                          472             472           918            686
         Depreciation and amortization                                        65              72           129            138
                                                                      ----------       ---------     ---------      ---------

                  Total costs and expenses                                   793             742         1,561          1,286
                                                                      ----------       ---------     ---------      ---------

Loss from operations                                                        (681)           (610)       (1,267)          (990)
                                                                      ----------       ---------     ---------      ---------
Other expense:
         Interest expense                                                    (97)           (108)         (180)          (158)
                                                                      ----------       ---------     ---------      ---------

                  Net other expense                                          (97)           (108)         (180)          (158)
                                                                      ----------       ---------     ---------      ---------

Loss before income taxes                                                    (778)           (718)       (1,447)        (1,148)
         Income taxes                                                         --              --            --             --
                                                                      ----------       ---------     ---------      ---------

         Net loss                                                     $     (778)      $    (718)    $  (1,447)     $  (1,148)
                                                                      ==========       =========     =========      =========

         Loss per share - basic and diluted                           $    (0.01)      $   (0.01)    $   (0.01)     $   (0.01)
                                                                      ==========       =========     =========      =========

Number of weighted average shares outstanding (000's)                    127,235          84,834       123,921         76,694
                                                                      ==========       =========     =========      =========
</TABLE>

            See notes to condensed consolidated financial statements.

                                       3
<PAGE>


              COMMODORE APPLIED TECHNOLOGIES, INC. AND SUBSIDIARIES

                 CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
            (Unaudited - Dollars in Thousands, except per share data)


<TABLE>
<CAPTION>

                                                                             Six months ended
                                                                        June 30,       June 30,
                                                                          2004           2003
                                                                          ----           ----
<S>                                                                   <C>             <C>
Cash flows from operating activities:
     Net loss                                                         $   (1,447)     $    (1,148)
     Adjustments to reconcile net loss to net
      cash used in operating activities:
         Depreciation and amortization                                       129              138
         Amortization of debt discount                                        15               35

         Changes in assets and liabilities:
                Accounts receivable, net                                     (26)               4
                Prepaid assets                                                (4)              (2)
                Checks written in excess of cash                             (13)               -
                Accounts payable                                              (6)             (30)
                Other liabilities                                            500              687
                                                                      ----------      -----------

                  Net cash used in operating activities                     (852)            (316)

Cash flows from investing activities:
      Purchase of equipment                                                    -               (7)
                                                                      ----------      -----------

                  Net cash used in investing activities                        -               (7)

Cash flows from financing activities:
      Advances from (to) related parties, net                                 43               64
      Increase in (repayment of) line of credit                              (47)               -
      Increase in notes and loans payable                                    863              261
      Payments on notes and loans payable                                      -              (40)
      Proceeds from exercised warrants                                        14                -
                                                                      ----------      -----------

                  Net cash provided by financing activities                  873              285

Increase (decrease) in cash                                                   21              (38)

Cash, beginning of period                                                      -               59
                                                                      ----------      -----------

Cash, end of period                                                   $       21      $        21
                                                                      ==========      ===========

</TABLE>

            See notes to condensed consolidated financial statements.


                                       4
<PAGE>

              COMMODORE APPLIED TECHNOLOGIES, INC. AND SUBSIDIARIES

        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

                                  June 30, 2004


Note A - Basis of Presentation

         The accompanying  unaudited condensed consolidated financial statements
for Commodore  Applied  Technologies,  Inc. and  subsidiaries  (the "Company" or
"Applied") have been prepared in accordance with generally  accepted  accounting
principles for interim  financial  information and with the instructions to Form
10-Q and Article 10 of Regulation S-X. The financial  statement  information was
derived  from  unaudited  financial   statements  unless  indicated   otherwise.
Accordingly,  they do not include all of the information and footnotes  required
by generally accepted accounting principles for complete financial statements.

         In the opinion of  management,  all  adjustments  (consisting of normal
recurring  accruals)  considered  necessary  for a fair  presentation  have been
included. Operating results for the six-month period ended June 30, 2004 are not
necessarily  indicative  of the results that may be expected for the year ending
December 31, 2004.

         The accompanying  unaudited condensed consolidated financial statements
should be read in conjunction with the Company's  audited  financial  statements
included in the Company's annual report on Form 10-K for the year ended December
31, 2003.

         Certain  prior-year  amounts have been  reclassified  to conform to the
current year presentation.

         The  accompanying  financial  statements  have been prepared  under the
assumption  that  Applied  will  continue as a going  concern.  Such  assumption
contemplates  the  realization of assets and the  satisfaction of liabilities in
the normal course of business.  For the six months ended June 30, 2004,  and for
the years ended December 31, 2003,  2002, and 2001,  Applied  incurred losses of
$1,447,000,  $2,957,000,  $5,972,000, and $6,554,000,  respectively. Applied has
also  experienced  net cash  (outflows)  inflows from  operating  activities  of
$(955,000),  $(121,000),  and  $965,000  for the years ended  December 31, 2003,
2002,  and 2001,  respectively.  The  financial  statements  do not  include any
adjustments  that might be necessary  should  Applied be unable to continue as a
going concern.  Applied's  continuation as a going concern is dependent upon its
ability to generate  sufficient  cash flow to meet its  obligations  on a timely
basis,  to obtain  additional  financing as may be required,  and  ultimately to
attain profitability.  Potential sources of cash include new contracts, external
debt,  the sale of new shares of company  stock or  alternative  methods such as
mergers or sale transactions.  No assurances can be given, however, that Applied
will be able to obtain any of these potential sources of cash.

         Anticipated  losses on contracts are provided for by a charge to income
during the period such losses are identified.  Changes in job  performance,  job
conditions,  estimated  profitability  (including  those  arising from  contract
penalty  provisions)  and final contract  settlements may result in revisions to
cost and income and are  recognized  in the  period in which the  revisions  are
determined.  Allowances for anticipated  losses totaled $376,000 and $313,000 at
June 30, 2004 and December 31, 2003, respectively.

         The  consolidated  financial  statements  include  the  accounts of the
Company  and  its  majority-owned  subsidiaries.  All  significant  intercompany
balances and transactions have been eliminated.  The preparation of consolidated
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 the 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.


                                       5
<PAGE>

         The Company accounts for stock-based compensation under the recognition
and measurement principles of APB Opinion No. 25, Accounting for Stock Issued to
Employees,  and related  Interpretations.  No stock-based employee  compensation
cost is reflected in net income  (loss),  as all options  vested had an exercise
price equal to the market  value of the  underlying  common stock on the date of
grant or the date of  repricing.  No options  were  issued or vested  during the
quarters  ended June 30, 2004 and 2003,  therefore,  there would be no effect on
net income and  earnings  per share if the  company  had  applied the fair value
recognition  provisions of FASB Statement No. 123,  Accounting  for  Stock-Based
Compensation, to stock-based employee compensation.


Note B - Supplemental cash flow information

         During the three and six month periods ended June 30, 2004,  20,000 and
0 shares of Series E Preferred  Stock were converted into 9,071,937 and 0 shares
of the  Company's  common  stock,  respectively.  During the three and six month
periods  ended June 30,  2004,  the Company  paid no  dividends  on the Series E
Preferred Stock  conversions.  The Company accrued  dividends on Preferred Stock
Series E for the three and six-month periods ended June 30, 2004, of $34,223 and
$63,985, respectively, which is included in Other Accrued Liabilities.

         During the three and six month  periods  ended June 30, 2004, no shares
of Preferred  Stock Series F were converted into shares of the Company's  common
stock.  The Company accrued  dividends on Preferred Stock Series F for the three
and six-month periods ended June 30, 2004, of $36,836 and $73,673, respectively,
which is included in Other Accrued Liabilities.

         During the three and six month  periods  ended June 30, 2004, no shares
of Preferred  Stock Series H were  converted  into shares of common  stock.  The
company  paid no accrued  dividends  on  Preferred  Stock  Series H. The Company
accrued  dividends  on  Preferred  Stock  Series H for the three  and  six-month
periods  ended June 30,  2004,  of $5,984 and  $11,967,  respectively,  which is
included in Other Accrued Liabilities


Note C - Other Accrued Liabilities

Other accrued liabilities consist of the following:

                                               June 30, 2004   December 31, 2003
                                               -------------   -----------------

Compensation and employee benefits             $       1,645   $          1,373
Dividend payable                                       1,554              1,405
Accrued interest                                         516                351
Loss reserve                                             376                313
Exit and forbearance fees on notes payable               219                219
Related parties                                          185                185
Other                                                     92                 91
                                               -------------  ------------------
                                               $       4,587  $           3,937
                                               =============  ==================

                                       6
<PAGE>

Note D - Segment Information

         The  Company  has  identified  three  reportable  segments  in which it
operates,  based  on  the  guidelines  set  forth  in the  Financial  Accounting
Standards  Board's  Statement of Financial  Accounting  Standards No. 131. These
three segments are as follows:  (i) Commodore  Advanced  Sciences,  Inc.,  which
primarily provides various engineering,  legal,  sampling,  and public relations
services to Government agencies on a cost plus basis; (ii) Commodore  Solutions,
Inc., which is commercializing  technologies to treat mixed and hazardous waste;
and (iii) Corporate overhead and other miscellaneous activities.


                                       7
<PAGE>

         Applied evaluates segment performance based on the segment's net income
(loss).  Applied's  foreign and export sales and assets  located  outside of the
United States are not significant.  Summarized financial information  concerning
Applied's reportable segments is shown in the following tables.


Three Months Ended June 30, 2004
(Dollars in Thousands)
<TABLE>
<CAPTION>

-----------------------------------------------------------------------------------------
                                                                                Corporate
                                                                                Overhead
                                           Total        ASI       Solution      and Other
<S>                                       <C>         <C>         <C>         <C>
Contract revenues                         $   112     $    112    $     --    $        --

Costs and expenses
     Cost of sales                            255          166          89             --
     Research and development                   1           --           1             --
     General and administrative               472           19          71            382
     Depreciation and amortization             65           11          54             --
                                          -------     --------    --------    -----------

              Total costs and expenses        793          196         215            382
                                          -------     --------    --------    -----------
Loss from operations                         (681)         (84)       (215)          (382)

     Interest income                           --           --          --             --
     Interest expense                         (97)          --          --            (97)
     Income taxes                              --           --          --             --
                                          -------     --------    --------    -----------

Net loss                                  $  (778)    $    (84)   $   (215)   $      (479)
                                          =======     ========    ========    ===========

Total assets                              $   168     $    143    $     11    $        14

Expenditures for long-lived assets        $    --     $     --    $     --    $        --

</TABLE>



                                       8
<PAGE>

Six Months Ended June 30, 2004
(Dollars in Thousands)
<TABLE>
<CAPTION>

-----------------------------------------------------------------------------------------
                                                                                Corporate
                                                                                Overhead
                                           Total        ASI       Solution      and Other
<S>                                       <C>         <C>         <C>         <C>
Contract revenues                         $   294     $    254    $     40    $        --


Costs and expenses
     Cost of sales                            507          244         263             --
     Research and development                   7           --           7             --
     General and administrative               918          121         151            646
     Depreciation and amortization            129           20         109             --
                                          -------     --------    --------    -----------

              Total costs and expenses      1,561          385         530            646
                                          -------     --------    --------    -----------

Loss from operations                       (1,267)        (131)       (490)          (646)

     Interest income                           --           --          --             --
     Interest expense                        (180)          --          --           (180)
     Income taxes                              --           --          --             --
                                          -------     --------    --------    -----------

Net Loss                                  $(1,447)    $   (131)   $   (490)   $      (826)
                                          =======     ========    ========    ===========

Total assets                              $   168     $    143    $     11    $        14


Expenditures for long-lived assets        $    --     $     --    $     --    $        --

</TABLE>


                                       9
<PAGE>


Three Months Ended June 30, 2003
(Dollars in Thousands)
<TABLE>
<CAPTION>

-----------------------------------------------------------------------------------------
                                                                                Corporate
                                                                                Overhead
                                           Total        ASI       Solution      and Other
<S>                                       <C>         <C>         <C>         <C>
Contract revenues                         $   132     $    132    $     --    $        --

Costs and expenses
     Cost of sales                            198          198          --             --
     Research and development                  --           --          --             --
     General and administrative               472          149          35            288
     Depreciation and amortization             72           16          56             --
                                          -------     --------    --------    -----------

              Total costs and expenses        742          363          91            288
                                          -------     --------    --------    -----------

Loss from operations                         (610)        (231)        (91)          (288)

     Interest income                           --           --          --             --
     Interest expense                        (108)          (1)         --           (107)
     Income taxes                              --           --          --             --
                                          -------     --------    --------    -----------

Net Loss                                  $  (718)    $   (232)   $    (91)   $      (395)
                                          =======     ========    ========    ===========

Total assets                              $   565     $    157    $    250    $       158

Expenditures for long-lived assets        $    --     $     --    $     --    $        --
</TABLE>

                                       10
<PAGE>


Six Months Ended June 30, 2003
(Dollars in Thousands)
<TABLE>
<CAPTION>

-----------------------------------------------------------------------------------------
                                                                                Corporate
                                                                                Overhead
                                           Total        ASI       Solution      and Other
<S>                                       <C>         <C>         <C>         <C>
Contract revenues                         $   296     $    296    $     --    $        --

Costs and expenses
     Cost of sales                            403          403          --             --
     Research and development                  59           --          59             --
     General and administrative               686          225          97            364
     Depreciation and amortization            138           26         112             --
                                          -------     --------    --------    -----------

              Total costs and expenses      1,286          654         268            364
                                          -------     --------    --------    -----------

Loss from operations                         (990)        (358)       (268)          (364)

     Interest income                           --           --          --             --
     Interest expense                        (158)          (3)         --           (155)
     Income taxes                              --           --          --             --
                                          -------     --------    --------    -----------

Net Loss                                  $(1,148)    $   (361)   $   (268)   $      (519)
                                          =======     ========    ========    ===========

Total assets                              $   565     $    157    $    250    $       158

Expenditures for long-lived assets        $     7     $      7    $     --    $        --
</TABLE>

                                       11
<PAGE>


Note E - Net loss per common share

         Basic net loss per common share ("Basic EPS") excludes  dilution and is
computed by dividing net loss available to common  shareholders  by the weighted
average number of common shares outstanding during the period.  Diluted net loss
per common share  ("Diluted  EPS")  reflects the  potential  dilution that could
occur if stock options or other  contracts to issue common stock were  exercised
or converted into common stock.  The  computation of Diluted EPS does not assume
exercise or conversion of securities that would have an anti-dilutive  effect on
net loss per common share.

         Options and warrants to purchase  123,370,308 and 34,274,905  shares of
common  stock as of June 30, 2004 and 2003,  respectively,  were not included in
the  computation  of Diluted EPS. The  inclusion of the options  would have been
anti-dilutive, thereby decreasing net loss per common share.


Note F - Contingencies

         Applied has matters of  litigation  arising in the  ordinary  course of
business  which in the opinion of  management  will not have a material  adverse
effect on its financial condition or results of operations.





                                       12
<PAGE>


ITEM 2.  Management's Discussion and Analysis of Financial Condition
         -----------------------------------------------------------
         and Results of Operations
         -------------------------


Overview

         Commodore Applied Technologies, Inc. and subsidiaries (the "Company" or
"Applied"),  is engaged in  providing  a range of  engineering,  technical,  and
financial  services to the public and private sectors related to (i) remediating
contamination in soils,  liquids and other materials and disposing of or reusing
certain waste by-products by utilizing SET; and (ii) providing  services related
to,   environmental   management   for  on-site  and  off-site   identification,
investigation  remediation  and management of hazardous,  mixed and  radioactive
waste.

         The Company owns technologies related to the separation and destruction
of mixed waste, polychlorinated biphenyls (PCBs) and chlorofluorocarbons (CFCs).
The Company is currently working on the  commercialization of these technologies
through development efforts,  licensing arrangements and joint ventures. Through
Commodore  Advanced  Sciences,  Inc.  ("Advanced  Sciences")  formerly  Advanced
Sciences,  Inc.,  a  subsidiary  acquired  on October 1, 1996,  the  Company has
contracts with various government  agencies and private companies in the U.S. As
some  government  contracts  are  funded  in  one-year  increments,  there  is a
possibility  for  cutbacks  as these  contracts  constitute  a major  portion of
Advanced  Sciences'  revenues,  and such a reduction would materially affect the
operations.  However, management believes its existing client relationships will
allow the Company to obtain new contracts in the future.

         The Company  currently  requires  additional  cash to sustain  existing
operations and to meet current obligations and ongoing capital requirements. The
Company's   current   monthly   operating   expenses  exceed  cash  revenues  by
approximately $100,000.

         The Company's  auditor's  opinion on our fiscal 2002 and 2003 financial
statements contains a "going concern"  qualification in which they express doubt
about  the  Company's  ability  to  continue  in  business,   absent  additional
financing.  The Company currently  requires  additional cash to sustain existing
operations and to meet current obligations and ongoing capital requirements.



                                       13
<PAGE>

RESULTS OF OPERATIONS

Three and Six Months Ended June 30, 2004 Compared to Three and Six Months  Ended
June 30, 2003

         Revenues  were $112,000 and $294,000 for the three and six months ended
June 30, 2004  compared to $132,000  and  $296,000  for the three and six months
ended June 30, 2003. Such revenues were primarily from the Company's  subsidiary
ASI.

         In the case of ASI,  revenues were  $112,000 and $254,000  respectively
for the three and six months ended June 30, 2004 as compared  with  $132,000 and
$296,000 for the three and six months ended June 30, 2003. Advanced Sciences has
experienced  a  significant  decrease in revenue  caused by fewer  contracts and
overall,  less work being  performed by Advanced  Sciences.  The  revenues  from
Advanced Sciences consisted of engineering and scientific services performed for
the United States government under a variety of contracts, most of which provide
for  reimbursement  of cost plus fixed fees.  Revenue  under  cost-reimbursement
contracts is recorded  under the  percentage of  completion  method as costs are
incurred and include estimated fees in the proportion that costs to date bear to
total estimated costs. ASI has two major customers, each of which represent more
than 10% of total  revenue.  The combined  revenue for these two  customers  was
$112,000 and $254,000  respectively,  (100% of total revenues) for the three and
six  months  ended  June 30,  2004.  Cost of sales  was  $166,000  and  $244,000
respectively  for the three and six  months  ended  June 30,  2004  compared  to
$198,000 and $403,000  respectively  for the three and six months ended June 30,
2003. The decrease in cost of sales is due to greater  efficiencies  in staffing
and further  reduction of sales associated  expenses in the three and six months
ended June 30, 2004.

         In the case of Commodore Solution, Inc. ("Solution"),  revenues were $0
and  $40,000  respectively  for the three and six months  ended June 30, 2004 as
compared  with $0 and $0  respectively  for three and six months  ended June 30,
2003.  Solution had one major  customer  during the three and six-month  periods
ended June 30, 2004 which  accounted  for $40,000 or 100% of the total  revenues
for the period.  Revenues,  when  recognized,  are  primarily  from  remediation
services  performed for engineering  and waste  treatment  companies in the U.S.
under  a  variety  of  contracts.   Cost  of  sales  was  $89,000  and  $263,000
respectively  for the three and six months ended June 30, 2004 as compared to $0
and $0  respectively  for the three and six months ended June 30, 2003. The cost
of sales, when incurred, is attributable to sales and marketing expenses for the
SET technology.  Anticipated losses on engagements, if any, will be provided for
by a charge to income during the period such losses are first identified.

         For the three and six months ended June 30, 2004, the Company  incurred
research and development costs of $1,000 and $7,000  respectively as compared to
$0 and $59,000  respectively  for the three and six months  ended June 30, 2003.
Research and development costs include salaries,  wages, and other related costs
of personnel engaged in research and development  activities,  contract services
and materials,  test equipment and rent for facilities  involved in research and
development  activities.  Research  and  development  costs  are  expensed  when
incurred,  except those costs related to the design or  construction of an asset
having an economic useful life are  capitalized,  and then  depreciated over the
estimated  useful life of the asset.  The decrease in research  and  development
expense is due to the continued commercialization focus of the Company.

         General and administrative  expenses for continuing  operations for the
three and six months ended June 30, 2004 were $472,000 and $918,000 respectively
as compared to $472,000 and $686,000  respectively  for the three and six months
ended June 30, 2003. This difference is primarily due to the increased  salaries
for the executives of the Company for the six-month periods ended June 30, 2004.

         In the case of Advanced Sciences,  general and administrative costs for
the three and  six-month  periods  ended June 30, 2004 were $19,000 and $121,000
respectively  compared to $149,000 and $225,000  respectively  for the three and
six  months  ended  June  30,  2003.  This  decrease  is  primarily  due  to the
reallocation of salary of the President of Advanced  Sciences and the Controller

                                       14
<PAGE>

of CASI to CAT  G&A.  Solution  incurred  general  and  administrative  costs of
$71,000 and $149,000 respectively for the three and six-month periods ended June
30,  2004 as compared  to $35,000  and  $97,000  respectively  for the three and
six-month  periods  ended June 30, 2003.  This increase was primarily due to (i)
expenses  associated with a USEPA  demonstration  of the SL-2 system at a client
location in Clive, Utah for inclusion to the Company's nationwide permit for PCB
destruction;  (ii)  expenses  associated  with  the  fabrication,  shipment  and
mobilization  of the Large Hot Box and ancillary  equipment at a client location
in Oak Ridge,  Tennessee;  and (iii)  increased  sales and marketing  effort for
Solution's services,  which may result in contracts that will produce revenue in
2004.

         Interest  expense for the three and six months  ended June 30, 2004 was
$97,000  and  $180,000,  respectively  as compared  to  $108,000  and  $158,000,
respectively  for the three and six months ended June 30, 2003.  The increase in
interest expense of $22,000 is primarily related to higher,  amortized  non-cash
interest  costs and exit fees  associated  with the  Milford/Shaar  Note and the
Weiss Group Note.

LIQUIDITY AND CAPITAL RESOURCES

         At June 30, 2004 and December 31, 2003 Advanced  Sciences had a $17,000
and $64,000 outstanding balance, respectively, on its revolving line of credit.

         The Company  currently  requires  additional  cash to sustain  existing
operations and to meet current obligations and ongoing capital requirements. The
Company's   current   monthly   operating   expenses  exceed  cash  revenues  by
approximately $100,000 at June 30, 2004.

         The Company's  auditor's  opinion on our fiscal 2002 and 2003 financial
statements contains a "going concern"  qualification in which they express doubt
about  the  Company's  ability  to  continue  in  business,   absent  additional
financing.  The Company currently  requires  additional cash to sustain existing
operations and to meet current obligations and ongoing capital requirements.

         For the three and six month  periods  ended June 30, 2004,  the Company
incurred a net loss of  $778,000  and  $1,447,000  as  compared to a net loss of
$718,000 and $1,148,000 for the three-month  period ended June 30, 2003. For the
six month  period  ended June 30,,  2004,  and for the years ended  December 31,
2003,  2002,  and  2001,  Applied  incurred  losses of  $1,447,000,  $2,957,000,
$5,972,000, and $6,554,000,  respectively. Applied has also experienced net cash
(outflows)  inflows from  operating  activities of $(955,000),  $(121,000),  and
$965,000 for the years ended December 31, 2003, 2002, and 2001, respectively.

         During the three and six month periods ended June 30, 2003, the Company
converted 20,000 and  0,respectively,  shares of Series E Preferred and 0 shares
of Series F Preferred for 9,071,937 and 0, respectively, shares of the Company's
common  stock.  For the three and six month  periods  ended June 30,  2004,  the
Company  converted  no shares of Series H  Preferred  and  issued no stock  with
respect to accrued dividends pertaining to the Series H Preferred.

         In November  2000, the Company  completed  $500,000 in financing in the
form of a loan (the  "Weiss  Group  Note") from a group of four  investors.  The
Weiss  Group Note  bears  interest  at 12% per annum and was due and  payable on
February  12,  2001.  All holders of the Weiss Group Note have  granted  payment
extensions  to the Company  until  January 15, 2005 in exchange for warrants for
2,500,000  shares of the Company's common stock at an exercise price of $0.0285.
The current principal balance of the Weiss Group Note is $252,363 as of June 30,
2004 and remains unpaid as of August 12, 2004. The warrant discount remaining on
the Weiss Group note at June 30, 2004 is $14,672.

                                       15
<PAGE>

         Effective  February  14,  2004,  the  members  of the Weiss  Group Note
voluntarily  cancelled all issued  warrants to purchase  1,500,000  shares at an
exercise  price of $0.05 per share of the  Company's  common stock in connection
with the Weiss Group Note.

         Effective  February 15, 2004, the Company  issued  warrants to purchase
2,500,000  shares of its common stock at an exercise  price of $0.0285 per share
to all holders of the Weiss Group Note in  consideration of the extension of the
due date of such loans by such  persons  from May 31, 2002 to January 15,  2005.
The value of the warrants of approximately $29,344 was recorded as a discount on
the associated notes payable and will be amortized through January 15, 2005. The
Company   believes  that  this  transaction  is  exempt  from  the  registration
requirements  of the  Securities Act under Section 4(2) thereof as a transaction
not involving any public offering of securities.

         On May 23, 2001, a private investor purchased $250,000 of the Company's
common  stock at the market  price.  The  Company  issued the  private  investor
1,973,077  shares  of common  stock of the  Company  as a result  of the  equity
purchase.  In connection with the purchase of the shares of the Company's common
stock,  the  Company  issued the private  investor a 2-year  warrant for 500,000
shares of the  Company's  common stock at an exercise  price of $0.22 per share.
The Company  re-priced this warrant in November 2003 to $0.0285 and extended the
expiration date of this warrant to November 19, 2005. The Company  believes that
this transaction is exempt from the registration  requirements of the Securities
Act under  Section  4(2)  thereof  as a  transaction  not  involving  any public
offering of securities.

         The  private  investor  exercised  this  warrant  on April 7,  2004 and
received 500,000 shares of the Company's common stock.

         On June 13,  2001,  the  Company  issued  and sold to  Milford  Capital
Management, Inc. and the Shaar Fund, Ltd. (hereinafter known as "Milford/Shaar")
one-year,  15% Senior Secured Promissory Notes (the  "Milford/Shaar  Bridge Loan
Notes") in the aggregate principal amount of $1,000,000.  In connection with the
Milford/Shaar Bridge Loan Notes, the Company issued to Milford/Shaar a five-year
warrant for 333,334 shares of the Company's common stock at an exercise price of
$0.22 per share. The Company pledged its equipment and SET related  intellectual
property as collateral for the Milford/Shaar Bridge Loan Notes.

         The Company  made all payments on the  Milford/Shaar  Bridge Loan Notes
until  November 13, 2001.  The Company asked for and received a  forbearance  of
payments on the  Milford/Shaar  Bridge Loan Notes from  November  13, 2001 until
December 31, 2005. In connection with the  Milford/Shaar  Bridge Loan Notes, the
Company  issued to  Milford/Shaar  in February  2004,  a  five-year  warrant for
250,000  shares of the Company's  common stock at an exercise price of $0.03 per
share. The Shaar Fund, Ltd., through the Shaar Bridge Loan, continues to provide
cash installments on a periodic basis in the form of additional  principal.  The
current principal  balance of the Milford/Shaar  Bridge Loan Notes is $2,213,938
as of June 30, 2004 and remains unpaid as of August 12, 2004.  Additionally,  as
of August 12,  2004,  there is  $119,073  in  accumulated  forbearance  fees and
$100,000 due in exit fees on the Milford/Shaar Bridge Loan Notes.

         On October 2, 2002,  Mr.  Bentley Blum, a Director of the Company,  had
previously loaned the Company with $125,000 of cash installments over the period
of one year (the "Blum Loan").  The Company  elected to convert the Blum Loan to
the  Company's  common stock using the  conversion  feature of the 5-day average
closing price of the Company's common stock prior to October 2, 2002. On October
2, 2002,  Blum  issued a  conversion  notice  for  $125,000  of the  outstanding
principal of the Blum Loan into 2,500,000 shares.  Mr. Blum continued to provide
cash  installments  in the form of a loan to the Company  through  February 2004
(the "Blum Demand  Note").  The Blum Demand Note bears  interest at 9% per annum
and has no due date at this  time.  The  current  principal  balance of the Blum
Demand Note is $312,032 as of June 30, 2004 and remains  unpaid as of August 12,
2004, and is included in related party payable.

                                       16
<PAGE>

         On  November  19,  2003,  the  Company  issued a  warrant  to  purchase
27,355,800  shares of its common stock at an exercise price of $0.0285 per share
(the  closing  price of our common  stock on the OTCBB on such date) to the Blum
Asset Trust, a company controlled by Bentley Blum, a Director of the Company, in
consideration  for the loans made to the Company  and the usage of office  space
and  personnel  of the Blum Asset  Trust over the last five  years.  The Company
believes that this transaction is exempt from the  registration  requirements of
the Securities Act under Section 4(2) thereof as a transaction not involving any
public offering of securities.

         The  Company  currently  is  negotiating  with a lender to obtain  debt
financing, to supplement funds generated from operations,  to meet the Company's
cash needs over the next 12 months.  The  Company  intends to meet its long term
capital needs through  obtaining  additional  contracts that will generate funds
from operations and obtaining  additional debt or equity  financing as necessary
or engaging in merger or sale transactions.  There can be no assurance that such
sources of funds  will be  available  to the  Company or that it will be able to
meet its short or long term capital requirements.


NET OPERATING LOSS CARRYFORWARDS

         The  Company  has net  operating  loss  carryforwards  (the  "NOLs") of
approximately  $34,000,000,  which  expire in the years 2010 through  2023.  The
amount  of  NOLs  that  can be  used in any one  year  will  be  limited  by the
applicable  tax laws that are in  effect at the time such NOLs can be  utilized.
The unused NOLs balances may be accumulated and used in subsequent years. A full
valuation  allowance  has been  established  to offset any benefit  from the net
operating loss carryforwards. There can be no assurance that the Company will be
able to generate  sufficient  taxable income in the future to utilize any of the
NOLs.


FORWARD-LOOKING STATEMENTS

         Certain matters discussed in this Quarterly Report are "forward-looking
statements" intended to qualify for the safe harbors from liability  established
by Section 27A of the Securities Act and Section 21E of the Securities  Exchange
Act of 1934, as amended (the "Exchange Act"). These  forward-looking  statements
can generally be  identified  as such because the context of the statement  will
include words such as the Company "believes,"  "anticipates," "expects" or words
of similar  import.  Similarly,  statements  that describe the Company's  future
plans, objectives or goals are also forward-looking statements.

         Such  statements may address  future events and conditions  concerning,
among other things, the Company's results of operations and financial condition;
the  consummation  of  acquisition  and  financing  transactions  and the effect
thereof on the Company's business; capital expenditures;  litigation; regulatory
matters;  and the  Company's  plans and  objectives  for future  operations  and
expansion. Any such forward-looking statements would be subject to the risks and
uncertainties   that  could  cause  actual  results  of  operations,   financial
condition,  acquisitions,  financing  transactions,   operations,  expenditures,
expansion and other events to differ  materially from those expressed or implied
in such forward-looking statements. Any such forward-looking statements would be
subject  to a number  of  assumptions  regarding,  among  other  things,  future
economic, competitive and market conditions generally. Such assumptions would be
based on facts and conditions as they exist at the time such statements are made
as  well  as  predictions  as to  future  facts  and  conditions,  the  accurate
prediction of which may be difficult and involve the assessment of events beyond
the Company's control.

         Further,  the  Company's  business  is subject to a number of risks and
uncertainties that would affect any such forward-looking statements. These risks
and uncertainties include, but are not limited to:

                                       17
<PAGE>

         o   the Company's critical need for additional cash to sustain existing
             operations and meet existing  obligations and capital  requirements
             (the  Company's  auditor's  opinion  on our  fiscal  2002  and 2003
             financial  statements  contains a "going concern"  qualification in
             which they express doubt about the Company's ability to continue in
             business, absent additional financing);
         o   the ability to generate  profitable  operations  from a large scale
             remediation project;
         o   the ability of the Company to renew its nationwide  permit to treat
             PCBs;
         o   the  ability  of the  Company  to  implement  its waste  processing
             operations,   including   obtaining   commercial  waste  processing
             contracts and processing waste under such contracts in a timely and
             cost effective manner.;
         o   the timing and award of contracts by the U.S.  Department of Energy
             for the cleanup of waste sites administered by it;
         o   the Company's ability to integrate acquired companies;
         o   the acceptance and  implementation of the Company's waste treatment
             technologies in the government and commercial sectors;
         o   the  Company's  ability to obtain and  perform  under  other  large
             technical support services projects;  developments in environmental
             legislation and regulation;
         o   the ability of the Company to obtain future  financing on favorable
             terms;
         o   other circumstances affecting anticipated revenues and costs;
         o   the  expiration of the Company's  nationwide  EPA permit expired in
             September  2001.  (the permit may be renewed  subject to  providing
             additional information. The Company has not resubmitted information
             for a new permit); and
         o   the  ability  of  the  Company  to  replicate  on  a  large  scale,
             economically  viable  basis,  the  results of its  technology  test
             results.

         These risks and uncertainties could cause actual results of the Company
to differ  materially  from those  projected or implied by such  forward-looking
statements.


ITEM 3.  Quantitative and Qualitative Disclosures About Market Risk
         ----------------------------------------------------------

         Not applicable.

ITEM 4.  Controls and Procedures
         -----------------------

         a)   Evaluation of disclosure  controls and procedures.  As required by
              Rule  13a-15e  under the Exchange  Act, as of June 30,  2004,  the
              Company  carried out an  evaluation  of the  effectiveness  of the
              design and  operation  of the  Company's  disclosure  controls and
              procedures.  This evaluation was carried out under the supervision
              and with the participation of the Company's management,  including
              the  Company's  President  and Chief  Executive  Officer,  and the
              Company's Chief Financial  Officer and Chief  Accounting  Officer.
              Based upon that  evaluation,  the  Company's  President  and Chief
              Executive   Officer,   and  Chief  Financial   Officer  and  Chief


                                       18
<PAGE>

              Accounting  Officer have concluded  that the Company's  disclosure
              controls and procedures  are effective in timely  alerting them to
              material  information  relating  to  the  Company  required  to be
              included  in  the  Company's  periodic  SEC  filings.   Disclosure
              controls and procedures are controls and other procedures that are
              designed to ensure that  information  required to be  disclosed in
              Company  reports  filed or  submitted  under the  Exchange  Act is
              recorded,  processed,  summarized  and  reported,  within the time
              periods specified in the Securities and Exchange Commission's rule
              and forms.  Disclosure  controls and procedures  include,  without
              limitation,  controls  and  procedures  designed  to  ensure  that
              information  required to be  disclosed  in Company  reports  filed
              under  the  Exchange  Act  is  accumulated  and   communicated  to
              management,  include the Company's  Chief Executive  Officer,  and
              Chief   Financial   Officer  and  Chief   Accounting   Officer  as
              appropriate,   to  allow  timely  decisions   regarding   required
              disclosures.

         b)   Changes  in  internal  controls.  There  have been no  changes  in
              internal  controls  or in other  factors  during  our most  recent
              fiscal  quarter that has  significantly  affected or is reasonably
              likely  to  significantly   affect  our  internal   controls  over
              financial reporting,  including any corrective actions with regard
              to significant deficiencies and material weaknesses.



                                       19
<PAGE>

                           PART II - OTHER INFORMATION


ITEM 1.  Legal Proceedings

         Therehave been no material legal  proceedings to which the Company is a
party which have not been disclosed in previous  filings with the Securities and
Exchange  Commission.  There are no material  developments to be reported in any
previously reported legal proceedings.

ITEM 2.  Change in Securities

         Not applicable

ITEM 3.  Defaults among Senior Securities

         Not applicable.

ITEM 4.  Submission of  Matters to a Vote of Security Holders

         Not applicable.

ITEM 5.  Other Events

         Not applicable.

ITEM 6.  Exhibits and Reports on Form 8 - K

         (a) Exhibits -

         1.   31.1 - Certification Pursuant to Section 302 of the Sarbanes-Oxley
              Act of 2002
         2.   31.2 - Certification Pursuant to Section 302 of the Sarbanes-Oxley
              Act of 2002
         3.   32.1 -  Certification  Pursuant  to 18  U.S.C.  Section  1350,  as
              Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
         4.   32.2 -  Certification  Pursuant  to 18  U.S.C.  Section  1350,  as
              Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002


         (b)  Reports on Form 8-K.

         1.   The  Company  filed a Current  Report  on Form 8-K,  dated May 19,
              2004, announcing its March 31, 2004 Quarterly earnings.

                                       20
<PAGE>

                                   SIGNATURES


Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned thereunto duly authorized.






Date: August 12, 2004               COMMODORE APPLIED TECHNOLOGIES, INC.
                                    (Registrant)


                                    By /s/ James M. DeAngelis
                                       -----------------------------------------
                                       James M. DeAngelis - Senior Vice
                                       President and Chief Financial Officer
                                       as both a duly authorized officer of the
                                       registrant and the principal financial
                                       officer of the registrant)




                                       21