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

 (Mark One)

  X               QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
-----
                  SECURITIES EXCHANGE ACT OF 1934
                  For the quarterly period ended June 30, 2003
                                       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____ .

         The number of shares the common  stock  outstanding  at August 14, 2003
was 94,515,149


<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 -
                 June 30, 2003 and December 31, 2002.........................1

         Condensed Consolidated Statement of Operations - Three and Six
                 months ended June 30, 2003 and
                 June 30, 2002...............................................3

         Condensed Consolidated Statement of Cash Flows -
                 Six months ended June 30, 2003 and
                 June 30, 2002...............................................4

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

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

Item 3.  Quantitative and Qualitative Disclosures About Market Risk.........20

Item 4.  Controls and Procedures............................................20


PART II  OTHER INFORMATION..................................................21

SIGNATURES..................................................................22


<PAGE>
                         PART I - FINANCIAL INFORMATION

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

              COMMODORE APPLIED TECHNOLOGIES, INC. AND SUBSIDIARIES

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


                                                                   June 30,        December 31,
                               ASSETS                                2003             2002
                                                                 ------------     -------------
                                                                 (unaudited)
<S>                                                              <C>              <C>
Current Assets:
         Cash and cash equivalents                               $         21     $          59
         Accounts receivable, net                                          88                92
         Prepaid assets and other current receivables                     169               167
                                                                 ------------     -------------
                  Total Current Assets                                    278               318

Property and equipment, net                                               247               358
Patents and completed technology, net of
       accumulated amortization of                           .
       $60 and $40, respectively                                           40                60
                                                                 ------------     -------------
       Total Assets                                              $        565     $         736
                                                                 ============     =============

</TABLE>


            See notes to condensed consolidated financial statements.


                                       1
<PAGE>

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

                                                                   June 30,        December 31,
                          LIABILITIES AND                            2003             2002
                       STOCKHOLDERS' DEFICIT                     ------------     -------------
                                                                  (unaudited)
<S>                                                              <C>              <C>
Current Liabilities:
         Accounts payable                                        $      1,047     $       1,077
         Related party payable                                            144                80
         Current portion of long term debt                                  -                 -
         Line of credit                                                     -                 -
         Notes payable                                                  1,151               714
         Other accrued liabilities                                      3,688             2,723
                                                                 ------------     -------------

                  Total Current Liabilities                             6,030             4,594

Long term debt                                                              -               431
                                                                 ------------     -------------

                   Total Liabilities                                    6,030             5,025

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,
         1,048,700 shares and 1,213,700 issued and
         outstanding as of June 30, 2003 and
         December 31, 2002, respectively.  The shares
         had an aggregate liquidation value of
         $4,356 and $6,716 at June 30, 2003 and
         December 31, 2002, respectively.                                   1                 1
         Common Stock, par value $0.001 per share,
         125,000,000 shares authorized, 88,124,270
         and 59,027,062 issued and outstanding, at
         June 30, 2003 and December 31, 2002,
         respectively.                                                     88                59
         Additional paid-in capital                                    67,072            67,129
         Accumulated deficit                                          (72,363)          (71,215)
                                                                 ------------     -------------
                                                                       (5,202)           (4,026)
         Treasury Stock, 3,437,500 shares                                (263)             (263)
                                                                 ------------     -------------
              Total Stockholder's Deficit                              (5,465)           (4,289)
                                                                 ------------     -------------
         Total Liabilities and Stockholders' Deficit             $        565     $         736
                                                                 ============     =============
</TABLE>


            See notes to condensed consolidated financial statements.

                                       2
<PAGE>

              COMMODORE APPLIED TECHNOLOGIES, INC. AND SUBSIDIARIES

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


                                                                           Three months ended            Six months ended
                                                                       June 30,        June 30,       June 30,       June 30,
                                                                         2003            2002           2003           2002
                                                                      ----------       ---------     ---------      ---------
<S>                                                                   <C>              <C>           <C>            <C>
Contract revenues                                                     $      132       $   1,190     $     296      $   2,277
Costs and expenses:
         Cost of sales                                                       198             688           403          1,631
         Research and development                                              -              36            59            113
         General and administrative                                          472             330           686            868
         Depreciation and amortization                                        72              50           138            113
                                                                      ----------       ---------     ---------      ---------
                  Total costs and expenses                                   742           1,104         1,286          2,725
                                                                      ----------       ---------     ---------      ---------

Income (loss) from operations                                               (610)             86          (990)          (448)
                                                                      ----------       ---------     ---------      ---------
Other income (expense):
         Interest income                                                       -               -             -              -
         Interest expense                                                   (108)            (26)         (158)           (68)
                                                                      ----------       ---------     ---------      ---------

                  Net other income (expense)                                (108)            (26)         (158)           (68)
                                                                      ----------       ---------     ---------      ---------

Income (loss) before income taxes                                           (718)             60        (1,148)          (516)
         Income taxes                                                          -               -             -              -
                                                                      ----------       ---------     ---------      ---------

Income (loss) from continuing operations                                    (718)             60        (1,148)          (516)
         Loss from discontinued operations of component DRM
         (including loss on disposal of $4,134 during the three
         months and six months ended June 30, 2002)                            -          (4,752)            -         (4,802)
                                                                      ----------       ---------     ---------      ---------

         Net loss                                                     $     (718)      $  (4,692)    $  (1,148)     $  (5,318)
                                                                      ==========       =========     =========      =========

         Loss per share - from continuing operations - basic          $    (0.01)      $   (0.00)    $   (0.01)     $   (0.01)
         and diluted
         Loss per share - from discontinued operations - basic        $    (0.00)      $   (0.08)    $   (0.00)     $   (0.08)
         and diluted                                                  ----------       ---------     ---------      ---------
         Loss per share - basic and diluted                           $    (0.01)      $   (0.08)    $   (0.01)     $   (0.09)
                                                                      ==========       =========     =========      =========
Number of weighted average shares outstanding (000's)                     84,834          57,645        76,694         57,478
                                                                      ==========       =========     =========      =========

</TABLE>

            See notes to condensed consolidated financial statements.

                                       3
<PAGE>


              COMMODORE APPLIED TECHNOLOGIES, INC. AND SUBSIDIARIES

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


                                                           Six months ended
                                                        June 30,      June 30,
                                                          2003          2002
                                                       ----------   ------------

Cash flows from operating activities:
     Net loss                                          $   (1,148)  $    (5,318)
     Add: net loss from discontinued operations                 -         4,802
     Adjustments to reconcile net loss to net cash
     provided by operating activities:
         Depreciation and amortization                        137           133
         Amortization of debt discount                         35            18
         Other non-cash charges                                 -             -
         Changes in assets and liabilities:
                Accounts receivable, net                        4            43
                Prepaid assets                                 (2)          160
                Accounts payable                              (30)          (47)
                Other liabilities                             687            96
                                                       ----------   -----------

Net cash (used in) provided by continuing operations         (317)         (113)
Net cash provided by discontinued operations                    -           184
                                                       ----------   ------------
                    Net cash provided by
                    operating activities                     (317)           71

Cash flows from investing activities:
         Purchase of equipment                                 (6)            -
         Advances to related parties                           64           (32)
                                                       ----------   -----------
Net cash used in continuing operations                        (58)          (32)
Net cash used in discontinued operations                        -            (4)
                                                       ----------   -----------
                    Net cash used in
                    investing activities                      (58)          (36)

Cash flows from financing activities:
      Increase in (repayment of) line of credit                 -            36
      Increase in notes and loans payable                     261             -
      Payments on notes payable and long-term debt            (40)         (119)
      Proceeds from sale of common stock                        -             -
                                                       ----------   -----------
                  Net cash used in
                  financing activities                        221           (83)

Increase (decrease) in cash                                   (38)          (48)
Cash, beginning of period                                      59           170
                                                       ----------   -----------
Cash, end of period                                    $       21   $       122
                                                       ==========   ===========

            See notes to condensed consolidated financial statements.


                                       4
<PAGE>


              COMMODORE APPLIED TECHNOLOGIES, INC. AND SUBSIDIARIES

        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)


                                  June 30, 2003


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 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 six month periods ended June 30,
2003 are not necessarily  indicative of the results that may be expected for the
year ending December 31, 2003.

         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, 2002.

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

         The  accompanying  financial  statements  have been prepared  under the
assumption  that  Applied  will  continue as a going  concern.  Such  assumption
contemplates  the  realization of assets and the  satisfaction of liabilities in
the normal course of business. For the six-month period ended June 30, 2003, and
the years ended December 31, 2002,  2001 and 2000,  Applied  incurred  losses of
($1,148,000),  ($5,972,000),  ($6,554,000) and ($11,441,000),  respectively. For
the six month period ended June 30, 2003,  and for the years ended  December 31,
2002, 2001 and 2000,  Applied has also  experienced net cash inflows  (outflows)
from operating activities of $(317,000),  $(123,000), $965,000 and $(2,629,000).
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 and 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 $398,000 and $238,000 at
June 30, 2003 and December 31, 2002, respectively. These allowances are included
in other accrued liabilities in the accompanying financial statements.


                                       5
<PAGE>

         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 June 30, 2003, no expense has been  recognized
for the variable  options as the fair market value of Applied's  common stock at
June 30, 2003 was lower than the exercise price of the variable options.

         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.


Note B - Supplemental Cash Flow Information

         During the three and six month periods ended June 30, 2003,  19,500 and
128,500  shares of Series E Preferred  Stock were  converted  into 8,391,418 and
24,528,133 shares of the Company's common stock, respectively.  During the three
and six month  periods  ended June 30, 2003,  the Company paid  dividends on the
Series E Preferred Stock conversions of $0 and $141,929, respectively, converted
into 0 and 1,566,989,  shares of the Company's common stock,  respectively.  The
Company  accrued  dividends  on  Preferred  Stock  Series  E for the  three  and
six-month  periods ended June 30, 2003,  of $54,297 and $130,519,  respectively,
which is included in Other Accrued Liabilities.

         During  the three and six month  periods  ended  June 30,  2003,  0 and
17,500 shares of Preferred  Stock Series F were  converted into 0 and 2,450,514,
shares of the  Company's  common stock,  respectively.  During the three and six
month  periods ended June 30, 2003,  the Company paid  dividends on the Series E
Preferred Stock  conversions of $0 and $39,387,  respectively,  converted into 0
and 551,571,  shares of the Company's  common stock,  respectively.  The Company
accrued  dividends  on  Preferred  Stock  Series F for the three  and  six-month
periods  ended June 30,  2003,  of $36,836 and $68,785,  respectively,  which is
included in Other Accrued Liabilities.

         During the three and six month  periods  ended June 30, 2003, no shares
of Preferred  Stock Series H were  converted  into shares of common  stock.  The
company  paid no accrued  dividends  on  Preferred  Stock  Series H. The Company
accrued  dividends  on  Preferred  Stock  Series H for the three  and  six-month
periods  ended June 30,  2003,  of $6,000 and  $12,000,  respectively,  which is
included in Other Accrued Liabilities.




                                       6
<PAGE>

Note C - Other Accrued Liabilities

Other accrued liabilities consist of the following:

                                                     June 30,       December 31,
                                                        2003            2002
                                                  -------------     ------------

Dividend payable                                  $       1,238     $     1,210
Compensation and employee benefits                        1,105             842
Loss reserve                                                398             238
Related party obligation to issue stock for
converted note payable and accrued interest                 287               -
Exit and forbearance fees on notes payable                  199               -
Related parties                                             185             185
Accrued interest                                            169             155
Other                                                       107              93
                                                  -------------     ------------
                                                  $       3,688     $     2,723
                                                  =============     ============

Note D - Liability to Issue Shares of Common Stock

         During  March 2003,  a  shareholder  and officer  agreed to convert his
$250,000 note payable and $37,000 of accrued  interest due from the Company into
13,189,841  shares of the Company's  common stock. As the issuance of the common
stock has not  occurred as of June 30,  2003,  the Company  has  included  these
amounts in Other Accrued  Liabilities at June 30, 2003. The Company  anticipates
issuing the shares of common stock when the shares are  authorized to be issued.
These shares have not been issued as of August 14, 2003.

Note E - Stock Based Compensation

         The Company accounts for stock-based compensation under the recognition
and measurement principles of APB Opinion No. 25, Accounting for Stock Issued to
Employees,  and related  Interpretations.  No stock-based employee  compensation
cost is reflected in net income  (loss),  as all options  vested had an exercise
price equal to the market  value of the  underlying  common stock on the date of
grant or the date of  repricing.  No options  were  issued or vested  during the
quarters  ended June 30, 2003 and 2002,  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 F - 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  Solution
Technologies,  Inc.,  which is  commercializing  technologies to treat mixed and
hazardous   waste;  and  (iii)  Corporate   overhead  and  other   miscellaneous
activities.

         Dispute Resolution Management, Inc. ("DRM"), from August 30, 2000 (date
of  acquisition  of 81%  of  DRM by the  Company)  to  May  16,  2002  (date  of
dissolution  of 81% of DRM by the  Company),  provided a package of  services to
help companies recover financial  settlements from insurance  policies to defray
costs associated with  environmental  liabilities.  Loss from DRM is recorded in
the discontinued operations section of the segment information.



                                       7
<PAGE>

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


Three Months Ended June 30, 2003
(Dollars in Thousands)
<TABLE>
<CAPTION>
                                                                                     Corporate
                                                                                      Overhead
                                              Total         ASI        Solution       and Other

<S>                                          <C>         <C>          <C>           <C>
Contract revenues                            $    132    $     132    $        -    $          -

Costs and expenses
     Cost of sales                                198          198             -               -
      Research and development                      -            -             -               -
     General and administrative                   472          149            35             288
     Depreciation and amortization                 72           16            56               -
                                             --------    ---------    ----------    ------------
              Total costs and expenses            742          363            91             288
                                             --------    ---------    ----------    ------------
Income (loss) from operations                    (610)        (231)          (91)           (288)

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

Income (loss) from continuing operations         (718)        (232)          (91)           (395)

    Loss from discontinued
    Operations                                      -            -             -               -
                                             --------    ---------    ----------    ------------
Net income (loss)                            $   (718)   $    (232)   $      (91)   $       (395)
                                             ========    =========    ==========    ============

Total assets                                 $    565    $     157    $      250    $        158

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




                                       8
<PAGE>


Six Months Ended June 30, 2003
(Dollars in Thousands)

<TABLE>
<CAPTION>
                                                                                     Corporate
                                                                                      Overhead
                                              Total         ASI        Solution       and Other

<S>                                          <C>         <C>          <C>           <C>
Contract revenues                            $    296    $     296    $        -    $          -

Costs and expenses
     Cost of sales                                403          403             -               -
     Research and development                      59            -            59               -
     General and administrative                   686          225            97             364
     Depreciation and amortization                138           26           112               -
                                             --------    ---------    ----------    ------------
              Total costs and expenses          1,286          654           268             364
                                             --------    ---------    ----------    ------------
Income (loss) from operations                    (990)        (358)         (268)           (364)

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

Income (loss) from continuing                  (1,148)        (361)         (268)           (519)
operations
     Loss from discontinued operations              -            -             -               -
                                             --------    ---------    ----------    ------------

Net Income (loss)                            $ (1,148)   $    (361)   $     (268)   $       (519)
                                             ========    =========    ==========    ============

Total assets                                 $    565    $     157    $      250    $        158

Expenditures for long-lived assets           $      6    $       6    $        -    $          -
</TABLE>



                                       9
<PAGE>


Three Months Ended June 30, 2002
(Dollars in Thousands)
<TABLE>
<CAPTION>
                                                                                                      Corporate
                                                                                                      Overhead
                                              Total         ASI        Solution         DRM           and Other

<S>                                          <C>         <C>          <C>           <C>             <C>
Contract revenues                            $  1,190    $   1,157    $       33    $          -    $          -

Costs and expenses
     Cost of sales                                688          606            82               -               -
     Research and development                      36            -            36               -               -
     General and administrative                   330          185            12               -             133
     Depreciation and amortization                 50            9            41               -               -
                                             --------    ---------    ----------    ------------    ------------
             Total costs and expenses           1,104          800           171               -             133
                                             --------    ---------    ----------    ------------    ------------
Income (loss) from operations                      86          357          (138)              -            (133)

     Interest income                                -            -             -               -               -
     Interest expense                             (26)         (26)            -               -               -
     Income taxes                                   -            -             -               -               -
                                             --------    ---------    ----------    ------------    ------------

Loss from continuing operations                    60          331          (138)              -            (133)
     Loss from discontinued operations         (4,752)           -             -          (4,752)              -
                                             --------    ---------    ----------    ------------    ------------

Net income (loss)                            $ (4,692)   $     331    $     (138)   $     (4,752)   $       (133)
                                             ========    =========    ==========    ============    ============

Total assets                                 $  1,409    $     845    $      484    $          -    $         80

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




                                       10
<PAGE>

Six Months Ended June 30, 2002
(Dollars in Thousands)

<TABLE>
<CAPTION>
                                                                                                      Corporate
                                                                                                      Overhead
                                              Total         ASI        Solution         DRM           and Other

<S>                                          <C>         <C>          <C>           <C>             <C>
Contract revenues                            $  2,277    $   2,244    $       33    $          -    $          -

Costs and expenses
     Cost of sales                              1,631        1,451           180               -               -
     Research and development                     113            -           113               -               -
     General and administrative                   868          395            52               -             421
     Depreciation and amortization                113           22            91               -               -
                                             --------    ---------    ----------    ------------    ------------
              Total costs and expenses          2,725        1,868           436               -             421
                                             --------    ---------    ----------    ------------    ------------
Income (loss) from operations                    (448)         376          (403)              -            (421)

     Interest income                                -            -             -               -               -
     Interest expense                             (68)         (52)            -               -              16
     Income taxes                                   -            -             -               -               -
                                             --------    ---------    ----------    ------------    ------------

Income (loss) from continuing operations         (516)         324          (403)              -            (437)
                                                                                               -
Loss from discontinued operations              (4,802)           -             -          (4,802)              -
                                             --------    ---------    ----------    ------------    ------------

Net Income (loss)                            $ (5,318)   $     324    $     (403)   $     (4,802)   $       (437)
                                             ========    =========    ==========    ============    ============

Total assets                                 $  1,409    $     845    $      484    $          -    $         80

Expenditures for long-lived assets           $      4    $       -    $        -    $          4    $          -
</TABLE>



                                       11
<PAGE>

Note G - 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  34,274,905 and  26,485,113  shares of
common  stock as of June 30, 2003 and 2002,  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 H - 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 I - Subsequent Events

         Issuance of Common Stock subsequent to June 30, 2003

         The  Company  issued a total of  9,608,701  shares of its common  stock
during the period  from June 30, 2003 to August 14,  2003,  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").


                                       12
<PAGE>


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

Overview

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

         Applied  discontinued  the  operations  of  its  previously  81%  owned
subsidiary  DRM, on May 16, 2002 as a result of Applied's  inability to meet the
terms and conditions of the Stock Purchase Agreement with DRM. The loss from the
disposition  of DRM is recorded at $4,134,000 to Applied.  The Company's loss of
the DRM subsidiary may have a material adverse effect on the financial condition
of the  Company  and its cash flow  problems.  The  Company  currently  requires
additional cash to sustain existing  operations and to meet current  obligations
and ongoing capital  requirements.  Excluding DRM, the Company's current monthly
operating expenses exceed cash revenues by approximately $80,000.

         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.  Advanced Sciences has experienced a significant decrease in revenue
caused by fewer  contracts  and overall,  less work being  performed by Advanced
Sciences.  However,  management believes its existing client  relationships will
allow the Company to obtain new contracts in the future.

RESULTS OF OPERATIONS

Three and Six Months Ended June 30, 2003 Compared to Three and Six  Months Ended
June 30, 2002

         Revenues from continuing  operations were $132,000 and $296,000 for the
three and six months ended June 30, 2003 compared to $1,190,000  and  $2,277,000
for the three and six months ended June 30, 2002.  Such revenues were  primarily
from the Company's subsidiary ASI.

         In the case of ASI,  revenues were  $132,000 and $296,000  respectively
for the three and six months ended June 30, 2003 as compared with $1,157,000 and
$2,244,000 for the three and six months ended June 30, 2002.  Advanced  Sciences
has experienced a significant  decrease in revenue caused by fewer contracts and
overall,  less work being  performed by Advanced  Sciences.  The  revenues  from
Advanced Sciences consisted of engineering and scientific services performed for
the United States government under a variety of contracts, most of which provide
for  reimbursement  of cost plus fixed fees.  Revenue  under  cost-reimbursement
contracts is recorded  under the  percentage of  completion  method as costs are
incurred and include estimated fees in the proportion that costs to date bear to
total estimated costs. ASI has two major customers, each of which represent more
than 10% of total  revenue.  The combined  revenue for these two  customers  was
$132,000 and $296,000  respectively  (100% of total  revenues) for the three and
six  months  ended  June 30,  2003.  Cost of sales  was  $198,000  and  $403,000
respectively  for the three and six  months  ended  June 30,  2003  compared  to
$606,000 and $1,451,000 respectively for the three and six months ended June 30,
2002. The decrease in cost of sales is due to greater  efficiencies  in staffing
and further  reduction of sales associated  expenses in the three and six months
ended June 30, 2003.

                                       13
<PAGE>

         In the case of Commodore Solution, Inc. ("Solution"),  revenues were $0
and $0 respectively for the three and six months ended June 30, 2003 as compared
with  $33,000 and $33,000  respectively  for three and six months ended June 30,
2002.  There were no revenues  recorded for the three and six month period ended
June 30, 2003 due to (i) SET processing  contracts  being  completed but not yet
billable  under  current  revenue  recognition  guidelines,  (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 $0 and $0 respectively
for the three and six months  ended June 30,  2003 as  compared  to $82,000  and
$180,000 respectively for the three and six months ended June 30, 2002. The cost
of sales, when incurred, is attributable to sales and marketing expenses for the
SET technology.  Anticipated losses on engagements, if any, will be provided for
by a charge to income during the period such losses are first identified.

         For the three and six months ended June 30, 2003, the Company  incurred
research and  development  costs of $0 and $59,000  respectively  as compared to
$36,000 and  $113,000  respectively  for the three and six months ended June 30,
2002. Research and development costs include salaries,  wages, and other related
costs of personnel  engaged in research  and  development  activities,  contract
services and  materials,  test  equipment  and rent for  facilities  involved in
research and development activities. Research and development costs are expensed
when incurred,  except those costs related to the design or  construction  of an
asset having an economic useful life are capitalized,  and then depreciated over
the estimated useful life of the asset. The decrease in research and development
expense is due to the continued commercialization focus of the Company.

         General and administrative  expenses for continuing  operations for the
three and six months ended June 30, 2003 were $472,000 and $686,000 respectively
as compared to $330,000 and $868,000  respectively  for the three and six months
ended June 30, 2002.  This  difference  is due to the  reduction in staffing and
other expenses.

         Interest  income  was $0 and $0,  respectively,  for the  three and six
month periods ended June 30, 2003  compared to $0 and $0,  respectively  for the
three and six month  period  ended June 30,  2002.  The  Company  did not have a
material  amount of monies on  deposit  to  generate  interest  income for these
periods.

         Interest expense for continuing operations for the three and six months
ended June 30,  2003 was  $108,000  and  $158,000,  respectively  as compared to
$26,000 and  $68,000,  respectively  for the three and six months ended June 30,
2002. The increase in interest  expense is primarily  related to amortization of
interest costs  associated with the Brewer  Promissory Note, the amortization of
interest  costs  associated  with the Weiss Group  Notes,  the  amortization  of
interest  costs and exit fees  associated  with the  Milford/Shaar  Bridge  Loan
Notes.


                                       14
<PAGE>

LIQUIDITY AND CAPITAL RESOURCES

         At June 30, 2003 and December 31, 2002 ASI had a $0 and $0  outstanding
balance, respectively, on its revolving lines of credit.

         For the three and six month  periods  ended June 30, 2003,  the Company
incurred a net loss of ($718,000) and ($1,148,000),  respectively as compared to
a net loss of ($4,692,000) and ($5,318,000),  respectively for the three and six
months ended June 30, 2002.  For the six-month  period ended June 30, 2003,  and
for the years ended December 31, 2002,  2001, and 2000,  Applied incurred losses
of ($1,148,000),  ($5,972,000),  ($6,554,000) and  ($11,441,000),  respectively.
Applied  has  also  experienced  net  cash  (outflows)  inflows  from  operating
activities  of  $(123,000),  $965,000,  and  $(2,629,000)  for the  years  ended
December 31, 2002, 2001, and 2000, respectively.

         During the three and six month periods ended June 30, 2003, the Company
converted  19,500 and 128,500,  respectively,  shares of Series E Preferred  for
8,391,418 and  26,095,122  shares of the Company's  common stock,  respectively.
During  the  three  and six month  periods  ended  June 30,  2003,  the  Company
converted 0 and  17,500,  respectively,  shares of Series F Preferred  for 0 and
3,002,085 shares of the Company's common stock, respectively. The Company issued
no shares of the  Company's  common  stock with  respect  to  accrued  dividends
pertaining  to the Series E and Series F Preferred  conversions  from the period
February 21, 2003 through June 30, 2003.

         During the three and six month periods ended June 30, 2003, the Company
converted  no shares of Series H Preferred  and issued no stock with  respect to
accrued dividends pertaining to the Series H Preferred.

         On June 28,  1996,  the Company  issued  common  stock and  warrants at
initial  public  offering  prices of $6.00 per share and $0.10 per warrant.  The
Company's warrants,  previously extended from June 16, 2001, expired on June 16,
2002. On March 6, 2003,  the  Company's  common stock ceased to be listed on the
American  Stock  Exchange  ("AMEX")  and began  trading in the  over-the-counter
market in the so-called "pink sheets" of the National Quotation Bureau, Inc. and
the OTC Bulletin Board of the National  Association of Securities Dealers,  Inc.
(the "OTCBB"), where it is currently traded under the symbol CXII.

         The  Company's  loss of the DRM  subsidiary  effective May 16, 2002 has
had,  and may  continue  to have,  a material  adverse  effect on the  financial
condition  of the Company  and its cash flow  problems.  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  $80,000 at June 30,
2003.

         In November  1999,  the Company  completed  $2.5  million in  financing
through private  placement.  The Company issued 335,000 shares of a new Series E
Convertible Preferred Stock (the "Series E Preferred"),  convertible into common
stock at the market  price,  after  September  30, 2000 and up through April 30,
2004 at which  time it  automatically  converts  to common  stock.  The Series E
Preferred  has a variable  rate  dividend  averaging  8.15% over the term of the
security.  There are 149,500  shares of Series E Preferred  with a face value of
$1,495,000  outstanding  as of June 30,  2003.  There  is  $761,439  of  accrued
dividends payable on the Series E Preferred as of June 30, 2003.

         In March 2000, the Company  completed $2.0 million in financing through
private  placement.  The  Company  issued  266,700  shares  of a  new  Series  F
Convertible Preferred Stock (the "Series F Preferred"),  convertible into common
stock at the market  price,  after  September  30, 2000 and up through April 30,
2004 at which  time it  automatically  converts  to common  stock.  The Series F
Preferred  has a variable  rate  dividend  averaging  8.15% over the term of the
security.  There are 118,200  shares of Series F Preferred  with a face value of
$1,182,000  outstanding  as of June 30,  2003.  There  is  $458,103  of  accrued
dividends payable on the Series F Preferred as of June 30, 2003.

                                       15
<PAGE>

         In September 2000, the Company  completed  $500,000 in financing in the
form of a loan  (the  "Brewer  Note")  from S.  Brewer  Enterprises,  Inc.  ("SB
Enterprises"),  which is owned by one of its officers and  directors,  Shelby T.
Brewer.  The Brewer Note bears a 9.75% interest rate,  payable  monthly,  with a
balloon  principal  payment at the end of the term.  The Brewer Note was due and
payable on March 15, 2001 and was extended  under the same terms and  conditions
until  December 31, 2001. The Brewer Note was  convertible  into Common Stock at
the market price up through December 31, 2001.

         On March 15,  2001,  SB  Enterprises  executed an Amended and  Restated
Promissory Note (the "Restated Brewer Note"), that extended the maturity date of
the note until December 31, 2001. Additionally,  the conversion price feature of
the Restated  Brewer Note was changed to the 5-day average  closing price of the
Company's  common  stock  prior to a  conversion  notice.  On April 9, 2001,  SB
Enterprises issued a conversion notice for $250,000 of the outstanding principal
of the Brewer Restated Note. The conversion  price was calculated based upon the
previous 5-day average of the closing price of the Company's  common stock,  and
the Restated  Brewer Note was converted into  1,041,667  shares of the Company's
common  stock.  The Company  believes that this  transaction  is exempt from the
registration  requirements  of the  Securities  Act of  1933,  as  amended  (the
"Securities Act"), under Section 4(2) thereof as a transaction not involving any
public offering of securities.

         On December 12, 2002, SB  Enterprises  executed an Amended and Restated
Promissory Note Extension (the "Restated Brewer Note Extension"), which extended
the  maturity  date of the  Restated  Brewer  Note until  January  1,  2004.  In
connection  with the  Restated  Brewer Note  Extension,  the  Company  issued SB
Enterprises a 2-year warrant for 1,000,000  shares of the Company's common stock
at an  exercise  price of $0.05 per share.  On March 14,  2003,  SB  Enterprises
issued a conversion notice for the remaining  principal balance of $250,000 plus
accrued interest of $36,563.  The conversion price was calculated based upon the
previous 5-day average of the closing price of the Company's  common stock,  and
the  Restated  Brewer  Note  will be  converted  into  13,189,842  shares of the
Company's  common stock.  These shares have not been issued to SB Enterprises as
of August 14, 2003 and are  recorded as a liability  for  $286,563.  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.

         In October 2001, Advanced Sciences refinanced their line of credit with
Commerce Funding  Corporation (the "Commerce Credit Line").  The Commerce Credit
Line is not to exceed 85 percent of eligible  receivables  or $1,000,000  and is
due October 2002, and  subsequently  extended until November 2003, with interest
payable  monthly at prime plus 2 percent (6.75 percent as of December 31, 2002).
The  Commerce  Credit  Line is  collateralized  by the  receivables  of Advanced
Sciences and is  guaranteed  by the Company.  The Commerce  Credit Line contains
certain  financial  covenants and  restrictions  including  minimum  ratios that
Advanced  Sciences must satisfy.  Advanced  Sciences was in compliance  with the
covenants of the Commerce Credit Line at August 14, 2003.

         In addition,  the Commerce  Credit Line  agreement  stipulates  that no
payments  shall be made by Advanced  Sciences to the Company  other than monthly
scheduled  payments of  principal  with respect to the  $8,280,000  subordinated
indebtedness  owed by Advanced  Sciences to the Company  (which is eliminated in
consolidation) and intercompany indebtedness not to exceed $20,000 in any month.
In  addition,  Advanced  Sciences  shall  not  incur  indebtedness  in excess of
$25,000,  other than trade payables,  the above  subordinated  indebtedness  and
other  contractual  obligations  to  suppliers  and  customers  incurred  in the
ordinary course of business.



                                       16
<PAGE>

         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;  $75,000
of which was borrowed from the son of Paul E.  Hannesson,  our former  President
and Chief Executive  Officer,  and $25,000 of which was borrowed from Stephen A.
Weiss,  a  shareholder  of  Greenberg  Traurig,  LLP, our former  corporate  and
securities  counsel.  The Weiss Group Note bears interest at 12% per annum,  was
due and payable on February  12, 2001,  and is secured by the first  $500,000 of
loans or dividends that the Company may receive from DRM. As  consideration  for
such loan,  Environmental,  one of the Company's  principal  stockholders owning
approximately 16.58% of the Company's common stock, transferred to the investors
a total of 1,000,000 shares of the Company's common stock. The current principal
balance of the Weiss Group Note is $254,231 and remains  unpaid as of August 14,
2003. All have granted payment extensions until January 1, 2004.

         Effective  April 16,  2001,  the  Company  issued  warrants to purchase
1,000,000  shares of its common  stock at an  exercise  price of $0.22 per share
(the closing  price of our common stock on the AMEX on such date) to all holders
of the Weiss Group Note in consideration of the extension of the due date of the
Weiss Group Note from February 12, 2001 to June 30, 2001.  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.

         Effective  January 24, 2002,  the Company  issued  warrants to purchase
500,000  shares of its common stock at an exercise price of $0.15 per share (the
closing  price of our common  stock on the AMEX on such date) to all  holders of
the Weiss Group Note in  consideration  of the extension of the due date of such
loans by such persons from June 30, 2001 to May 31, 2002.  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.

         Effective  October 29,  2002,  the  lenders  under the Weiss Group Note
voluntarily  cancelled  all  warrants,  issued on April 16,  2001,  to  purchase
1,000,000 shares at an exercise price of $0.22 per share of the Company's common
stock in connection with the Weiss Group Note.  Effective  October 29, 2002, the
lenders under the Weiss Group Note voluntarily cancelled all warrants, issued on
January 24, 2002, to purchase  500,000  shares at an exercise price of $0.15 per
share of the Company's common stock in connection with the Weiss Group Note.

         Effective  October 29, 2002,  the Company  issued  warrants to purchase
1,500,000  shares of its common  stock at an  exercise  price of $0.05 per share
(the closing  price of our common stock on the AMEX on such date) 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 1, 2004.  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
shall pay  Milford/Shaar  principal  and interest on a monthly basis in arrears.
The Milford/Shaar  Bridge Loan Notes may be prepaid at any time without penalty.
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.

                                       17
<PAGE>

         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
August 13, 2002. 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 $984,959 and remains unpaid as of August 14, 2003. Additionally, as of August
14, 2003, there is $119,173 in accumulated  forbearance fees and $100,000 due in
exit fees on the  Milford/Shaar  Bridge  Loan  Notes.  The  Company has not been
notified  of a default of the  Milford/Shaar  Bridge Loan Notes as of August 14,
2003.

         On October 2, 2002,  Mr.  Bentley Blum, a director of the Company,  had
previously  loaned the Company $125,000 in 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 under the conversion feature of the Blum Loan, based upon
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 continues
to provide cash  installments  in the form of a demand note ("Blum Demand Note")
to the Company. The Blum Demand Note bears interest at 9% per annum. The current
principal  balance of the Blum Demand Note is $192,032 and remains  unpaid as of
August 14, 2003. 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 August 30, 2000, the Company entered into a Stock Purchase Agreement
(the  "Agreement")  Applied  completed a stock  purchase  agreement with Dispute
Resolution Management,  Inc. (DRM) and its two shareholders,  William J. Russell
("Russell") and Tamie B. Speciale ("Speciale").

         On May 16,  2002,  William  J.  Russell  and  Tamie  B.  Speciale  (the
"Pledgees")  issued a Notice  of  Default  and  Right to  Pursue  Remedies  (the
"Notice")  to the  Company  claiming  that the  Company is in default  under the
Agreement and the related Stock Pledge Agreement (the "Stock Pledge"). As of May
16, 2002, the Company no longer owned an 81% interest in DRM.

         On August 19, 2002,  the Company  entered  into a settlement  agreement
with DRM (the "DRM  Settlement  Agreement").  Under terms of the DRM  Settlement
Agreement,  the  Company  acknowledged  that  it had  previously  received  back
4,750,000 shares of its common stock from DRM and its  shareholders.  As part of
the DRM  Settlement  Agreement,  the Company  received an  additional  1,187,500
shares of its common stock from DRM and its shareholders.

         Under the DRM  Settlement  Agreement,  as of September  30,  2002,  the
Company also issued 800,000 shares of Series H Preferred stock, par value $0.001
per  share  (the  "Series  H  Preferred  Stock"),  each  such  share of Series H
Preferred  Stock having a stated value of $1.00 per share,  to DRM,  Russell and
Speciale in satisfaction of the remaining  liabilities  relating to the purchase
and  working  capital of DRM.  The Series H  Preferred  Stock has the  following
rights, privileges, and limitations:


         a)     No Series H Preferred  Stock may be converted  prior to June 30,
                2003.  Until July 31, 2005,  only 80,000  shares of the Series H
                Preferred  Stock shall be convertible  in any calendar  quarter.
                The  balance  of any  unconverted  shares of Series H  Preferred
                Stock may be converted at any time on or after August 1, 2005.

         b)     The  conversion  price of the Series H Preferred  Stock shall be
                determined  by the average  closing  price of  Company's  common
                stock in the previous 30 trading days, but in no event shall the
                conversion price be less than $0.20 per share.

                                       18
<PAGE>

         c)     The Series H Preferred Stock shall have a non-cumulative  annual
                dividend of 3%,  payable in cash or shares of Series H Preferred
                Stock within 30 days of the end of the Company's fiscal year, at
                the Company's election.

         d)     The Series H Preferred Stock shall not be transferable.

         There are  800,000  shares of Series H  Preferred  with a face value of
$800,000  outstanding as of June 30, 2003. There is $20,762 of accrued dividends
payable on the Series H Preferred as of June 30, 2003.

         The financial information included in the accompanying form 10Q for the
period ending June 30, 2003 reflects the terms of the DRM Settlement  Agreement.
For the year ended December 31, 2002 the Company recorded a loss on the disposal
of DRM in the amount of $4,134,000. The Company's loss of the DRM subsidiary has
had,  and may  continue  to have,  a material  adverse  effect on the  financial
condition  of the Company  and its cash flow  problems.  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 $86,000.

         The Company's auditor's opinion on our fiscal 2002 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  is  negotiating  with a lender to obtain  debt
financing, to supplement funds generated from operations,  to meet the Company's
cash needs over the next 12 months.  The Company  intends to meet its  long-term
capital needs through  obtaining  additional  contracts that will generate funds
from operations and obtaining  additional debt or equity  financing as necessary
or engaging in merger or sale transactions.  There can be no assurance that such
sources of funds  will be  available  to the  Company or that it will be able to
meet its short or long-term capital requirements.

NET OPERATING LOSS CARRYFORWARDS

         The Company  has net  operating  loss  carryforwards  of  approximately
$32,000,000.  The amount of net operating loss  carryforward that can be used in
any one year will be limited by the  applicable  tax laws which are in effect at
the time such carryforward can be utilized.  A full valuation allowance has been
established to offset any benefit from the net operating loss carryforwards.  It
cannot be  determined  when or if the  Company  will be able to utilize  the net
operating losses.

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

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<PAGE>

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 that
would affect any such forward-looking statements.  These risks and uncertainties
include, but are not limited to, the ability of the Company to commercialize its
technology;  product demand and industry pricing;  the ability of the Company to
obtain patent  protection  for its  technology;  developments  in  environmental
legislation  and  regulation;  the  ability  of the  company  to  obtain  future
financing on favorable  terms;  and other  circumstances  affecting  anticipated
revenues and costs. 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-15 under the Exchange Act,  within the 90 days prior to
                the filing  date of this  report,  the  Company  carried  out an
                evaluation of the  effectiveness  of the design and operation of
                the  Company's   disclosure   controls  and   procedures.   This
                evaluation  was carried out under the  supervision  and with the
                participation  of  the  Company's   management,   including  the
                Company's  President,  and the Company's Chief Financial Officer
                and Chief Accounting  Officer.  Based upon that evaluation,  the
                Company's  President,  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 that could  significantly
                affect  these   controls   subsequent   to  the  date  of  their
                evaluation,  including  any  corrective  actions  with regard to
                significant deficiencies and material weaknesses.

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<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.     Exhibit 31.1 -  Certification  Pursuant to Section 302 of
                       the Sarbanes-Oxley Act of 2002

                2.     Exhibit 31.2 -  Certification  Pursuant to Section 302 of
                       the Sarbanes-Oxley Act of 2002

                3.     Exhibit 32 - 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 16, 2003,  announcing  its March 31, 2003 Quarterly
                       earnings.


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<PAGE>

                                   SIGNATURES


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



Date: August 14, 2002                       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)


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