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 March 31, 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 May 14, 2004 was
126,773,071.



<PAGE>
                      COMMODORE APPLIED TECHNOLOGIES, INC.

                                    FORM 10-Q

                                      INDEX


                                                                        Page No.

PART I   FINANCIAL INFORMATION................................................1

Item 1.  Financial Statements (Unaudited)

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

         Condensed Consolidated Statement of Operations -
                 Three months ended March 31, 2004 and
                 March 31, 2003...............................................3

         Condensed Consolidated Statement of Cash Flows -
                 Three months ended March 31, 2004 and
                 March 31, 2003...............................................4

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

Item 2.  Management's Discussion and Analysis of Financial
                 Condition and Results of Operations.........................10

Item 3.  Quantitative and Qualitative Disclosures About Market Risk..........15

Item 4.  Controls and Procedures.............................................15

PART II  OTHER INFORMATION...................................................16

SIGNATURES...................................................................17


                                       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)

                                                       March 31,    December 31,
                   ASSETS                               2004            2003
                                                      ----------    ------------
                                                     (unaudited)
Current Assets:
  Cash and cash equivalents                           $       10    $         -
  Accounts receivable, net                                   122             71
  Prepaid assets and other current receivables                18             13
                                                      ----------    ------------
           Total Current Assets                              150             84

Property and Equipment, net                                   87            142
Intangible Assets
  Patents and completed technology, net of
    accumulated amortization of $90 and
    $80 respectively                                          10             20
                                                      ----------    ------------

           Total Assets                               $      247    $       246
                                                      ==========    ============



            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)


                                                      March 31,     December 31,
                   LIABILITIES AND                       2004           2003
                   STOCKHOLDERS' DEFICIT             ----------    ------------
                                                     (unaudited)
Current Liabilities:
  Checks written in excess of cash                    $       -     $        13
  Accounts payable                                         1,056          1,031
  Related party payable                                      321            278
  Current portion of long term debt                          232              -
  Line of credit                                              34             64
  Other accrued liabilities                                4,298          3,937
                                                      ----------    ------------

           Total Current Liabilities                       5,941          5,323

Long Term Debt                                             1,713          1,575
                                                      ----------    ------------

           Total Liabilities                               7,654          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 March 31, 2004 and
    December 31, 2003, respectively. The shares
    had an aggregate liquidation value of $3,856
    and $4,142 at March 31, 2004 and
    December 31, 2003, respectively.                           1              1
  Common Stock, par value $0.001 per share,
    300,000,000 shares authorized, 126,773,071
    and 117,702,133 shares issued and outstanding,
    at March 31, 2004 and December 31, 2003,
    respectively.                                            127            118
  Additional Paid-in Capital                              67,578         67,664
  Accumulated Deficit                                    (74,850)       (74,172)
                                                      ----------    ------------
                                                          (7,144)        (6,389)

  Treasury Stock, 3,437,500 shares                          (263)          (263)
                                                      ----------    ------------
           Total Stockholders' Deficit                    (7,407)        (6,652)
                                                      ----------    ------------
  Total Liabilities and Stockholders' Deficit         $      247    $       246
                                                      ==========    ============


           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)



                                                         Three months ended
                                                       March 31,      March 31,
                                                         2004           2003
                                                      ----------    ------------

Contract revenues                                     $      182    $       164
Costs and expenses:
  Cost of sales                                              252            205
  Research and development                                     6             59
  General and administrative                                 455            214
  Depreciation and amortization                               64             66
                                                      ----------    ------------
           Total costs and expenses                          777            544
                                                      ----------    ------------
Income (loss) from operations                               (595)          (380)
                                                      ----------    ------------
Other income (expense):
  Interest income                                              -              -
  Interest expense                                           (83)           (50)
                                                      ----------    ------------
           Net other income (expense)                        (83)           (50)
                                                      ----------    ------------
Loss before income taxes                                    (678)          (430)

  Income taxes                                                 -              -
                                                      ----------    ------------
  Net loss                                            $     (678)   $      (430)
                                                      ==========    ============

  Loss per share - basic and diluted                  $     (.01)   $      (.01)
                                                      ==========    ============
Number of weighted average shares outstanding
  (in thousands)                                         118,587         69,314
                                                      ==========    ============



            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)



                                                         Three months ended
                                                       March 31,      March 31,
                                                         2004           2003
                                                      ----------    ------------

Cash flows from operating activities:
   Net loss                                           $     (678)   $      (430)
   Adjustments to reconcile net loss to net
    cash used in operating activities:
       Depreciation and amortization                          64             66
       Amortization of debt discount                           7             35

       Changes in assets and liabilities:
           Accounts receivable                               (51)            50
           Prepaid assets                                     (5)            58
           Checks written in excess of cash                  (13)             -
           Accounts payable                                   25            (23)
           Other liabilities                                 285            170
                                                      ----------    ------------
             Net cash used in operating activities          (366)           (74)

Cash flows from investing activities:
  Purchase of equipment                                        -             (6)
  Advances from (to) related parties, net                     43              3
                                                      ----------    ------------
             Net cash provided by investing
             activities                                       43             (3)

Cash flows from financing activities:
  Increase in (repayment of) line of credit                  (30)             -
  Increase in notes and loans payable                        363            120
  Payments on notes and loans payable                          -            (40)
                                                      ----------    ------------
           Net cash provided by financing activities         333             80

Increase in cash                                              10              3

Cash, beginning of period                                      -             59
                                                      ----------    ------------
Cash, end of period                                   $       10    $        62
                                                      ==========    ============



            See notes to condensed consolidated financial statements.


                                       4
<PAGE>

              COMMODORE APPLIED TECHNOLOGIES, INC. AND SUBSIDIARIES

        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

                                 March 31, 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  U.S.  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 three-month period ended March 31, 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 period ended March 31, 2004, and for the
years ended  December 31,  2003,  2002,  and 2001,  Applied  incurred  losses of
$678,000, $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
March 31, 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 U.S.  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 or greater than 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 March 31, 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  months  ended  March  31,  2004,  20,000  shares of
Preferred  Stock Series E were converted into 9,071,937  shares of common stock.
There were no shares of Preferred Stock Series F converted into shares of common
stock. The Company did not pay accrued dividends on the conversions of Preferred
Stock Series E. The Company accrued  dividends on Preferred Stock Series E and F
and H of $77,042, which is included in Other Accrued Liabilities.

         During  the  three  months  ended  March  31,  2003,  17,500  shares of
Preferred  Stock Series E were converted into 2,450,514  shares of common stock,
and 109,000 shares of Preferred  Stock Series F were  converted into  16,136,715
shares of common stock.  The Company also paid accrued  dividends of $183,000 on
Preferred  Stock  Series E and F through  the  issuance of  2,118,560  shares of
common stock.  The Company  accrued  dividends on Preferred Stock Series E and F
and H of $114,000, which is included in Other Accrued Liabilities.

Note C - Other Accrued Liabilities

         Other accrued liabilities consist of the following:

                                                      March 31,     December 31,
                                                        2004            2003
                                                      ----------    ------------

   Compensation and employee benefits                 $    1,519    $     1,373
   Dividends payable                                       1,482          1,405
   Accrued interest                                          427            351
   Loss reserve                                              376            313
   Exit and forbearance fees on notes payable                219            219
   Related parties                                           185            185
   Other                                                      89             91
                                                      ----------    ------------
                                                      $    4,298    $     3,937
                                                      ==========    ============

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.


                                       6
<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 March 31, 2004
<TABLE>
<CAPTION>
                                                                                                         Corporate
                                                                      Advanced                           Overhead
                                                     Total            Sciences         Solution          and Other

<S>                                                 <C>              <C>              <C>               <C>
Contract Revenues                                   $    182         $     142        $      40         $        -

Costs and expenses
     Cost of Sales                                       252                78              174                  -
     Research and Development                              6                 -                6                  -
     General and Administrative                          455               102               78                275
     Depreciation and Amortization                        64                 9               55                  -
                                                    --------         ---------        ---------         ----------
              Total costs and expenses                   777               189              313                275
                                                    --------         ---------        ---------         ----------
Income (Loss) from Operations                           (595)              (47)            (273)              (275)

     Interest Expense                                    (83)                -                -                (83)
                                                    --------         ---------        ---------         ----------

Net Income (Loss)                                   $   (678)        $     (47)       $    (273)        $     (358)
                                                    ========         =========        =========         ==========

Total Assets                                        $    247         $     148        $      81         $       18

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


                                       7
<PAGE>

Three Months Ended March 31, 2003
 <TABLE>
<CAPTION>
                                                                                                         Corporate
                                                                      Advanced                           Overhead
                                                     Total            Sciences         Solution          and Other

<S>                                                 <C>              <C>              <C>               <C>

Contract Revenues                                   $    164         $     164        $       -         $        -

Costs and expenses
     Cost of Sales                                       205               205                -                  -
     Research and Development                             59                 -               59                  -
     General and Administrative                          214                76               62                 76
     Depreciation and Amortization                        66                10               56                  -
                                                    --------         ---------        ---------         ----------
              Total costs and expenses                   544               291             (177)                76
                                                    --------         ---------        ---------         ----------
Income (Loss) from Operations                           (380)             (127)            (177)               (76)

     Interest Expense                                    (50)               (2)               -                (48)
                                                    --------         ---------        ---------         ----------

Net Income (Loss)                                   $   (430)        $    (129)       $    (177)        $     (124)
                                                    ========         =========        =========         ==========

Total Assets                                        $    571         $     217        $     300         $       54

Expenditures for long-lived assets                  $      6         $       6        $       -         $        -

</TABLE>


                                       8
<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  123,870,308 and 34,274,905  shares of
common stock as of March 31, 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.

                                       9
<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.


                                       10
<PAGE>

RESULTS OF OPERATIONS

Three Months Ended March 31, 2004 Compared to Three Months Ended March 31, 2003

         Revenues  were  $182,000  for the three  months  ended March 31,  2004,
compared to $164,000 for the three months ended March 31, 2003.

         In the case of Advanced Sciences,  revenues were $142,000 for the three
month period ended March 31, 2004 as compared with $164,000 for the period ended
March 31, 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.  Advanced
Sciences  has two major  customers,  each of which  represents  more than 10% of
total revenue. The combined revenue for these two customers was $142,000 or 100%
of total  revenues  for the  period  ending  March 31,  2004.  Cost of sales was
$78,000 for the three month period ended March 31, 2004 compared to $205,000 for
the three month period  ended March 31, 2003.  The decrease in cost of sales can
be  attributed  to a decrease in variable  costs caused by fewer  contracts  and
overall, less work being performed by Advanced Sciences.

         In the case of Commodore  Solution,  Inc.  ("Solution"),  revenues were
$40,000 for the period  ended March 31, 2004 as compared  with $0 for the period
ended March 31, 2003.  Solution had one major  customer  during the  three-month
period  ended  March 31, 2004 which  accounted  for $40,000 or 100% of the total
revenues  for  the  period.  There  were  marginal  revenues  recorded  for  the
three-month  period  ended  March  31,  2004 of which  the  total was due to the
relocation of the SET equipment to Clive, Utah. Revenues,  when recognized,  are
primarily  from  remediation   services  performed  for  engineering  and  waste
treatment companies in the U.S. under a variety of contracts. There was $174,000
cost of sales for the  three-month  period ended March 31, 2004.  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-month  period ended March 31, 2004, the Company  incurred
research  and  development  costs of  $6,000  as  compared  to  $59,000  for the
three-month period ended March 31, 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 the three-month  period ended
March 31, 2004 were $455,000 as compared to $214,000 for the three-month  period
ended March 31, 2003. This difference is primarily due to the deferred  salaries
for the  executives  of the Company for the  three-month  period ended March 31,
2004.

         In the case of  Advanced  Sciences,  general and  administrative  costs
increased  from  $76,000  for the  three-month  period  ended  March 31, 2003 to
$102,000  for the  three-month  period ended March 31,  2004.  This  increase is
primarily due to the increased salary of the President of Advanced Sciences over
the previous  deferred  base amount for the  three-month  period ended March 31,
2004.  Solution  incurred  general and  administrative  costs of $78,000 for the
three-month  period year ended March 31, 2004 as compared  with  $62,000 for the
three-month  period ended March 31, 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;  and (ii)  increased  sales and  marketing  effort  for  Solution's
services, which may result in contracts that will produce revenue in 2004.

                                       11
<PAGE>

         Interest  expense for the three months ended March 31, 2004 was $83,000
as compared to $50,000 for the three months  ended March 31, 2003.  The increase
in  interest  expense  of  $33,000 is  primarily  related  to higher,  amortized
non-cash  interest costs associated with the Blum Note,  Milford/Shaar  Note and
the Weiss Group Note.

LIQUIDITY AND CAPITAL RESOURCES

         At March 31, 2004 and December 31, 2003 Advanced Sciences had a $34,000
and $64,000 outstanding balance, respectively, on its revolving lines 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 March 31, 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-month period ended March 31, 2004, the Company incurred a
net loss of $678,000 as compared to a net loss of $430,000  for the  three-month
period ended March 31, 2003.  For the  three-month  period ended March 31, 2004,
and for the years ended  December 31, 2003,  2002,  and 2001,  Applied  incurred
losses  of  $678,000,  $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-month  period  ended  March 31,  2003,  the  Company
converted 20,000 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-month  period  ended March 31,  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 $253,601 as of March
31, 2004 and remains unpaid as of May 17, 2004. The warrant  discount  remaining
on the Weiss Group Note at March 31, 2004, is $22,008.

         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.

                                       12
<PAGE>

         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.

         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
principal  balance of the  Milford/Shaar  Bridge Loan Notes is  $1,713,749 as of
March 31, 2004 and remains  unpaid as of May 17, 2004.  Additionally,  as of May
17, 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 March 31, 2004 and remains  unpaid as of May 17,
2004 and is included in related party payable.

         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.


                                       13
<PAGE>

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:

         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;

                                       14
<PAGE>

         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 March 31, 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
              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.


                                       15
<PAGE>

                           PART II - OTHER INFORMATION



ITEM 1.  Legal Proceedings

         There have 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 April 15,
              2004, announcing its 2003 Fiscal Year End earnings.



                                       16
<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: May 17, 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)


                                       17