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 September 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 November 14, 2004 was
134,346,053.

<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 -
                    September 30, 2004 and December 31, 2003..................2

            Condensed Consolidated Statement of Operations - Three
                    and Nine months ended September 30, 2004 and
                    September 30, 2003........................................4

            Condensed Consolidated Statement of Cash Flows -
                    Nine months ended September 30, 2004 and
                    September 30, 2003........................................5

            Notes to Condensed Consolidated Financial Statements..............6

Item 2.     Management's Discussion and Analysis of Financial
                    Condition and Results of Operations......................14

Item 3.     Quantitative and Qualitative Disclosures About Market Risk.......19

Item 4.     Controls and Procedures..........................................19


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

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



                                       1
<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)




                                                     September 30,  December 31,
              ASSETS                                      2004           2003
                                                     ------------   ------------
                                                     (unaudited)
Current Assets:
   Cash and cash equivalents                         $         61   $         -
   Accounts receivable, net                                   104            71
   Prepaid assets and other current receivables                17            13
                                                     ------------   ------------
                  Total Current Assets                        182            84

Property and equipment, net                                    14           142
Patents and completed technology, net of
   accumulated amortization of
   $100 and $80, respectively                                   -            20
                                                     ------------   ------------
       Total Assets                                  $        196   $        246
                                                     ============   ============



            See notes to condensed consolidated financial statements.


                                       2
<PAGE>

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


                                                     September 30,  December 31,
               LIABILITIES AND                          2004           2003
            STOCKHOLDERS' DEFICIT                    ------------   ------------
                                                     (unaudited)
Current Liabilities:
   Checks written in excess of cash                  $          -   $        13
   Accounts payable                                         1,006         1,031
   Related party payable                                      320           278
   Current portion of long term debt                          246             -
   Line of credit                                               7            64
   Other accrued liabilities                                4,915         3,937
                                                     ------------   ------------

                  Total Current Liabilities                 6,494         5,323

Long Term Debt                                              2,645         1,575
                                                     ------------   ------------

                   Total Liabilities                        9,139         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 September 30, 2004 and December 31,
     2003, respectively.
     The shares had an aggregate liquidation
     Value of $3,856 and $4,142 at
     September 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
     September 30, 2004 and December 31, 2003,
     respectively.                                            127           118
   Additional Paid-in Capital                              67,446        67,664
   Accumulated Deficit                                    (76,254)      (74,172)
                                                     ------------   ------------
                                                           (8,680)       (6,389)

   Treasury Stock, 3,437,500 shares                          (263)         (263)
                                                     ------------   ------------
               Total Stockholders' Deficit                 (8,943)       (6,652)
                                                     ------------   ------------
   Total Liabilities and Stockholders' Deficit       $        196   $       246
                                                     ============   ============

            See notes to condensed consolidated financial statements.


                                       3
<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              Nine months ended
                                                     Sept 30,      Sept 30,     Sept 30,       Sept 30,
                                                       2004          2003         2004           2003
                                                    ----------    ----------    ---------    -----------
<S>                                                 <C>           <C>           <C>          <C>
Contract revenues                                   $      155    $      166    $     449    $      462
Costs and expenses:
   Cost of sales                                           180           212          687           615
   Research and development                                  -             4            7            63
   General and administrative                              466           383        1,393         1,069
   Depreciation and amortization                            20            65          149           203
                                                    ----------    ----------    ---------    -----------
            Total costs and expenses                       666           664        2,236         1,950
                                                    ----------    ----------    ---------    -----------

Loss from operations                                      (511)         (498)      (1,787)       (1,488)
                                                    ----------    ----------    ---------    -----------
Other income (expense):
   Interest expense                                       (115)         (221)        (295)         (379)
                                                    ----------    ----------    ---------    -----------

            Net other income (expense)                    (115)         (221)        (295)         (379)
                                                    ----------    ----------    ---------    -----------

Loss before income taxes                                  (626)         (719)      (2,082)       (1,867)

   Income taxes                                             --            --           --            --
                                                    ----------    ----------    ---------    -----------
   Net loss                                         $     (626)   $     (719)   $  (2,082)   $   (1,867)
                                                    ==========    ==========    =========    ===========

   Loss per share - basic and diluted               $    (0.01)   $    (0.01)   $   (0.02)   $    (0.02)
                                                    ==========    ==========    =========    ===========

Number of weighted average shares outstanding (000's)
       basic and diluted                               127,273        94,834      125,046        83,462
                                                    ==========    ==========    =========    ===========


</TABLE>

            See notes to condensed consolidated financial statements.




                                       4
<PAGE>

              COMMODORE APPLIED TECHNOLOGIES, INC. AND SUBSIDIARIES

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

                                                          Nine months ended
                                                     September 30, September 30,
                                                          2004          2003
                                                       ----------    -----------

Cash flows from operating activities:
   Net loss                                            $   (2,082)   $   (1,867)
   Adjustments to reconcile net loss to
    net cash used in operating activities:
      Depreciation and amortization                           149           203
      Amortization of debt discount                            22            35
      Changes in assets and liabilities:
          Accounts receivable, net                            (33)           10
          Prepaid assets                                       (4)           81
          Checks written in excess of cash                    (13)
          Accounts payable                                    (25)            7
          Other liabilities                                   755           614
                                                       ----------    -----------

              Net cash used in operating activities        (1,231)         (917)

Cash flows from investing activities:
         Purchase of equipment                                 (1)          (11)
         Advances from (to) related parties                    42           (80)
                                                       ----------    -----------
              Net cash used in investing activities            41           (91)

Cash flows from financing activities:
      Increase in (repayment of) line of credit               (57)           --
      Increase in notes and loans payable                   1,294           991
      Payments on notes and loans payable                      --           (40)
      Proceeds from exercised warrants                         14            --
                                                       ----------    -----------

              Net cash provided by financing activities     1,251           951

Increase (decrease) in cash                                    61           (57)
Cash, beginning of period                                      --            59
                                                       ----------    -----------

Cash, end of period                                    $       61    $        2
                                                       ==========    ===========

            See notes to condensed consolidated financial statements.

                                       5
<PAGE>
             COMMODORE APPLIED TECHNOLOGIES, INC. AND SUBSIDIARIES

        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)


                               September 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 U.S.  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 and nine month periods ended September
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 nine months ended September 30, 2004, and
for the years ended December 31, 2003,  2002, and 2001,  Applied incurred losses
of $2,082,000, $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
September 30, 2004 and December 31, 2003,  respectively.  These  allowances  are
included in other accrued liabilities in the accompanying financial statements.

         In as much  as  Applied  rescinded  certain  options  during  2002  and
reissued new options to the option holders,  the options are considered variable
options and will be revalued each quarter to determine the effect on operations,
if any.  During the  quarter  ended  September  30,  2004,  no expense  has been
recognized for the variable options as the fair market value of Applied's common
stock at September  30, 2004 was lower than the  exercise  price of the variable
options.

                                       6
<PAGE>

         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.

         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 September 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 nine month periods ended September 30, 2004, 0 and
20,000 shares of Series E Preferred  Stock were  converted  into 0 and 9,071,937
shares of the Company's  common stock,  respectively.  During the three and nine
month  periods ended  September  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 nine month periods ended September 30, 2004, of
$30,089  and  $94,074,   respectively,   which  is  included  in  Other  Accrued
Liabilities.

         During the three and nine month  periods  ended  September 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 nine month periods ended  September 30, 2004, of $37,241 and $110,914,
respectively, which is included in Other Accrued Liabilities.

         During the three and nine month  periods  ended  September 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 nine  month
periods ended September 30, 2004, of $6,049 and $18,016, respectively,  which is
included in Other Accrued Liabilities.


                                       7
<PAGE>

Note C - Other Accrued Liabilities

Other accrued liabilities consist of the following:

                                               September 30,       December 31,
                                                   2004                2003
                                               -------------       ------------
                                                 (unaudited)
Compensation and employee benefits             $       1,791       $      1,373
Dividend payable                                       1,628              1,405
Accrued interest                                         624                351
Loss reserve                                             376                313
Exit and forbearance fees on notes payable               219                219
Related parties                                          185                185
Other                                                     92                 91
                                               -------------       ------------
                                               $       4,915       $      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.

         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.


                                       8
<PAGE>
<TABLE>
<CAPTION>

Three Months Ended September 30, 2004
(Dollars in Thousands)

-------------------------------------------------------------------------------------------------------
                                                                                             Corporate
                                                            Advanced                          Overhead
                                             Total          Sciences        Solution         and Other

<S>                                        <C>             <C>             <C>               <C>
Contract revenues                          $      155      $     155       $      --         $       --

Costs and expenses
     Cost of sales                                180            122              58                 --
     Research and development                      --             --              --                 --
     General and administrative                   466            156              19                291
     Depreciation and amortization                 20             --              20                 --
                                           ----------      ---------       ---------         ----------

              Total costs and expenses            666            278              97                291
                                           ----------      ---------       ---------         ----------

Income (loss) from operations                    (511)          (123)            (97)              (291)

     Interest income                               --             --              --                 --
     Interest expense                            (115)            --              --               (115)
                                           ----------      ---------       ---------         ----------

Loss before income taxes                         (626)          (123)            (97)              (406)

     Income taxes                                  --             --              --                 --
                                           ----------      ---------       ---------         ----------

Net income (loss)                          $     (626)     $    (123)      $     (97)        $     (406)
                                           ==========      =========       =========         ==========

Total assets                               $      196      $     196       $      --         $       --

Expenditures for long-lived assets         $        1      $       1       $      --         $       --

</TABLE>




                                       9
<PAGE>


<PAGE>

<TABLE>
<CAPTION>

Nine Months Ended September 30, 2004
(Dollars in Thousands)

-------------------------------------------------------------------------------------------------------
                                                                                             Corporate
                                                            Advanced                          Overhead
                                             Total          Sciences        Solution         and Other

<S>                                        <C>             <C>             <C>               <C>
Contract revenues                          $      449      $     409       $      40         $       --

Costs and expenses
     Cost of sales                                687            366             321                 --
     Research and development                       7             --               7                 --
     General and administrative                 1,393            279             168                946
      Depreciation and amortization               149             20             129                 --
                                           ----------      ---------       ---------         ----------

              Total costs and expenses          2,236            665             625                946
                                           ----------      ---------       ---------         ----------

Income (loss) from operations                  (1,787)          (256)           (585)              (946)

     Interest income                               --             --              --                 --
     Interest expense                            (295)            --              --               (295)
                                           ----------      ---------       ---------         ----------

Loss before income taxes                       (2,082)          (256)           (585)            (1,241)

     Income taxes                                  --             --              --                 --
                                           ----------      ---------       ---------         ----------

Net Income (loss)                          $   (2,082)     $    (256)      $    (585)        $   (1,241)
                                           ==========      =========       =========         ==========

Total assets                               $      196      $     196       $      --         $       --                 $    --

Expenditures for long-lived assets         $        1      $       1       $      --         $       --

</TABLE>

                                       10
<PAGE>
<TABLE>
<CAPTION>

Three Months Ended September 30, 2003
(Dollars in Thousands)

-------------------------------------------------------------------------------------------------------
                                                                                             Corporate
                                                            Advanced                          Overhead
                                             Total          Sciences        Solution         and Other

<S>                                        <C>             <C>             <C>               <C>
Contract revenues                          $      166      $     149       $      17         $       --

Costs and expenses
     Cost of sales                                212            195              17                 --
     Research and development                       4             --               4                 --
     General and administrative                   383            119              30                234
     Depreciation and amortization                 65              9              56                 --
                                           ----------      ---------       ---------         ----------

              Total costs and expenses            664            323             107                234
                                           ----------      ---------       ---------         ----------

Income (loss) from operations                    (498)          (174)            (90)              (234)

     Interest income                               --             --              --                 --
     Interest expense                            (221)            --              --               (221)
                                           ----------      ---------       ---------         ----------

Loss before income taxes                         (719)          (174)            (90)              (455)

     Income taxes                                  --             --              --                 --
                                           ----------      ---------       ---------         ----------

Income (loss) from continuing operations         (719)          (174)            (90)              (455)

    Loss from discontinued
    Operations                                     --             --              --                 --
                                           ----------      ---------       ---------         ----------

Net income (loss)                          $     (719)     $    (174)      $     (90)        $     (455)
                                           ==========      =========       =========         ==========

Total assets                               $      396      $     168       $     200         $       28

Expenditures for long-lived assets         $        5      $       5       $      --         $       --


</TABLE>

                                       11
<PAGE>

<TABLE>
<CAPTION>

Nine Months Ended September 30, 2003
(Dollars in Thousands)

-------------------------------------------------------------------------------------------------------
                                                                                             Corporate
                                                            Advanced                          Overhead
                                             Total          Sciences        Solution         and Other

<S>                                        <C>             <C>             <C>               <C>
Contract revenues                          $      462      $     445       $      17         $       --

Costs and expenses
     Cost of sales                                615            598              17                 --
     Research and development                      63             --              63                 --
     General and administrative                 1,069            344             127                598
     Depreciation and amortization                203             35             168                 --
                                           ----------      ---------       ---------         ----------

              Total costs and expenses          1,950            977             375                598
                                           ----------      ---------       ---------         ----------

Income (loss) from operations                  (1,488)          (532)           (358)              (598)

     Interest income                               --             --              --                 --
     Interest expense                            (379)            (3)             --               (376)
                                           ----------      ---------       ---------         ----------

Loss before income taxes                       (1,867)          (535)           (358)              (974)

     Income taxes                                  --             --              --                 --
                                           ----------      ---------       ---------         ----------

Net Income (loss)                          $   (1,867)     $    (535)      $    (358)        $     (974)
                                           ==========      =========       =========         ==========

Total assets                               $      396      $     168       $     200         $       28

Expenditures for long-lived assets         $       11      $      11       $      --         $       --

</TABLE>

                                       12
<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  120,721,815 and 34,274,905  shares of
common stock as of September 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.

Note G - Subsequent Events

         Issuance of Common Stock subsequent to September 30, 2004

         The  Company  issued a total of  7,072,982  shares of its common  stock
during the period from  September  30, 2004 to November 14, 2004,  in connection
with  various  conversion  notices  from the holders of the  Company's  Series E
Convertible  Preferred  Stock,  par  value  ($0.001)  per share  (the  "Series E
Preferred")  and the holders of the  Company's  Series F  Convertible  Preferred
Stock, par value ($0.001) per share (the "Series F Preferred").


                                       13
<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, 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.

         The Company will hold its 2003 Annual Meeting at The Fitzpatrick  Hotel
located at 687 Lexington Avenue, New York, NY 10015 on December 21, 2004 - 11:00
a.m. EST. The record date for the  shareholders of the Company for the Company's
2003 Annual Meeting is November 10, 2004.

RESULTS OF OPERATIONS

         Three and Nine Months Ended  September  30, 2004  Compared to Three and
Nine Months Ended September 30, 2003

         Revenues from continuing  operations were $155,000 and $449,000 for the
three and nine months ended September 30, 2004 compared to $166,000 and $462,000
for the three and nine months ended  September  30,  2003.  Such  revenues  were
primarily from the Company's subsidiary Advanced Sciences.

         In the case of Advanced  Sciences,  revenues were $155,000 and $409,000
respectively  for the three and nine months ended September 30, 2004 as compared
with  $149,000 and $445,000  for the three and nine months ended  September  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.  Advanced  Sciences
has two  major  customers,  each of  which  represents  more  than  10% of total

                                       14
<PAGE>

revenue.  The combined revenue for these two customers was $155,000 and $409,000
respectively  (100% of total  revenues)  for the  three  and nine  months  ended
September 30, 2004. Cost of sales was $122,000 and $366,000 respectively for the
three and nine months ended September 30, 2004 compared to $195,000 and $598,000
respectively  for the  three and nine  months  ended  September  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 nine  months  ended
September 30, 2004.

         In the case of Solution,  revenues were $0 and $40,000 respectively for
the three and nine months ended  September 30, 2004 as compared with $17,000 and
$17,000  respectively  for three and nine months ended September 30, 2003. There
were  marginal  revenues  recorded  for the three and nine  month  period  ended
September 30, 2004 due to (i) SET processing  contracts being negotiated but not
yet initiated,  (ii) United States Environmental Protection Agency (the "USEPA")
demonstration  of the SL-2 system at a client  location in Oak Ridge,  Tennessee
for inclusion to the Company's nationwide permit for PCB destruction;  and (iii)
the  relocations  of the SET equipment to Hanford,  Washington.  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 $58,000 and $321,000  respectively for the three and nine months ended
September 30, 2004 as compared to $17,000 and $17,000 respectively for the three
and nine months ended September 30, 2003. The cost of sales,  when incurred,  is
attributable to installation,  set-up,  supplies and salary expenses for the SET
technology.  The cost of sales also  includes  other direct sales and  marketing
expenses  when  incurred.  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 nine months ended  September  30,  2004,  the Company
incurred  research  and  development  costs  of $0 and  $7,000  respectively  as
compared to $4,000 and $63,000  respectively for the three and nine months ended
September 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 nine months ended  September  30, 2004 were  $466,000  and  $1,393,000
respectively as compared to $383,000 and $1,069,000  respectively  for the three
and nine months ended  September 30, 2003.  This  difference is primarily due to
the increased salaries, the majority of which is deferred, for the executives of
the Company for the periods ended September 30, 2004.

         Interest  expense  for  continuing  operations  for the  three and nine
months  ended  September  30, 2004 was $115,000 and  $295,000,  respectively  as
compared to $221,000 and  $379,000,  respectively  for the three and nine months
ended September 30, 2003. The decrease in interest expense is primarily  related
to  the  forbearance  fees  and  exit  fees  of  $219,000  associated  with  the
Milford/Shaar  Bridge  Loan Note  recorded  in the three and nine  months  ended
September 30, 2003.


                                       15
<PAGE>

LIQUIDITY AND CAPITAL RESOURCES

         At September 30, 2004 and December 31, 2003 Advanced  Sciences had a $7
and $64 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 September 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 nine month  periods  ended  September  30, 2004,  the
Company  incurred a net loss of ($626,000)  and  ($2,082,000),  respectively  as
compared to a net loss of  ($719,000)  and  ($1,867,000),  respectively  for the
three and nine months ended September 30, 2003. For the nine-month  period ended
September 30, 2004, and for the years ended  December 31, 2003,  2002, and 2001,
Applied  incurred  losses  of  ($2,082,000),   ($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 nine month periods ended  September 30, 2004,  the
Company converted 0 and 20,000 respectively,  shares of Series E Preferred and 0
shares of Series F Preferred for 0 and  9,071,937,  respectively,  shares of the
Company's common stock. For the three and nine month periods ended September 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
September  30, 2004 and  remains  unpaid as of November  14,  2004.  The warrant
discount remaining on the Weiss Group note at September 30, 2004 is $7,326.

         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

                                       16
<PAGE>

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 $2,648,741
as  of  September  30,  2004  and  remains  unpaid  as  of  November  14,  2004.
Additionally,  as of  November  14,  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  September  30,  2004 and  remains  unpaid as of
November 14, 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.


                                       17
<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;
         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


                                       18
<PAGE>

         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 September 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
              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

         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.  Unregistered Sales of Equity Securities and Use of Proceeds

         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 Information

         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 August 16,
              2004, announcing its June 30, 2004 Quarterly earnings.

         2.   The Company filed a Current Report on Form 8-K, dated September 2,
              2004,  announcing  that  its  wholly  owned  engineering  services
              subsidiary,  Commodore  Advanced  Sciences,  Inc. (CASI), has been
              awarded an environmental sampling and data integration contract by
              Bechtel Jacobs Company, LLC of Oak Ridge, TN.

         3.   The Company filed a Current Report on Form 8-K, dated November 12,
              2004,   announcing  that  has  initiated   correspondence  to  its
              shareholders concerning the 2003 Annual Meeting of shareholders to
              be held on December 21, 2004. Additionally,  the Company announced
              that a protest of a  provisional  contract  award to a team led by
              its wholly owned subsidiary, Commodore Advanced Sciences, Inc. has
              been resolved in the Company's  favor.  Additionally,  the Company
              announced  that a protest  of the Fast Flux Test  Facility  (FFTF)
              contract award by DOE has been filed by the two losing teams,  one
              of which the Company  was a member.  The FFTF  contract  award was
              protested to the Department of Energy,  General  Accounting Office
              and the Small Business Association.


                                       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: November 14, 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