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, 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   .
                                               ----    ----

         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, 2003
was 117,702,134.



<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, 2003 and December 31, 2002................2

              Condensed Consolidated Statement of Operations -
                      Three and Nine months ended September 30,
                      2003 and September 30, 2002.............................4

              Condensed Consolidated Statement of Cash Flows -
                      Nine months ended September 30, 2003 and
                      September 30, 2002......................................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...................................................21

Item 4.       Controls and Procedures........................................21


PART II  OTHER INFORMATION...................................................22

SIGNATURES...................................................................23


                                       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                  2003             2002
                                                       ----             ----
                                                    unaudited)
Current Assets:
         Cash and cash equivalents                 $          2     $        59
         Accounts receivable, net                            82              92
         Prepaid assets and other current
                receivables                                  86             167
                                                   ------------     -----------
                  Total Current Assets                      170             318

Property and equipment, net                                 196             358
Patents and completed technology, net of
       accumulated amortization of
       $70 and $40, respectively                             30              60
                                                   ------------     -----------
       Total Assets                                $        396     $       736
                                                   ============     ===========




            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,
                                                       2003            2002
                          LIABILITIES AND          ------------     ------------
                       STOCKHOLDERS' DEFICIT       (unaudited)

Current Liabilities:
         Accounts payable                          $      1,084     $     1,077
         Related party payable                                -              80
         Notes payable                                    1,595             714
         Other accrued liabilities                        3,699           2,723
                                                   ------------     ------------

                  Total Current Liabilities               6,378           4,594

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

                   Total Liabilities                      6,378           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,
   1,038,200 shares and 1,213,700 shares issued
   and outstanding as of September 30, 2003 and
   December 31, 2002, respectively. The shares
   had an aggregate liquidation value of $4,206
   and $6,716 at September 30, 2003
   and December 31, 2002, respectively.                       1               1
   Common Stock, par value $0.001 per share,
   300,000,000 shares authorized, 115,675,107
   and 59,027,062 issued and outstanding, at
   September 30, 2003 and December 31, 2002,
   respectively.                                            115              59
   Additional paid-in capital                            67,247          67,129
   Accumulated deficit                                  (73,082)        (71,215)
                                                   ------------     ------------
                                                         (5,719)         (4,026)
   Treasury Stock, 3,437,500 shares                        (263)           (263)
                                                   ------------     ------------
                   Total Stockholder's Deficit           (5,982)         (4,289)
                                                   ------------     ------------
                   Total Liabilities and
                   Stockholders' Deficit           $        396     $       736
                                                   ============     ============


            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,
                                                       2003            2002           2003          2002
                                                       ----            ----           ----          ----

<S>                                                <C>              <C>           <C>           <C>
Contract revenues                                  $        166     $      1,104  $       462   $     3,381
Costs and expenses:
         Cost of sales                                      212              728          615         2,359
         Research and development                             4               37           63           150
         General and administrative                         383              373        1,069         1,241
         Depreciation and amortization                       65               97          203           210
                                                   ------------     ------------  -----------   ------------
                  Total costs and expenses                  664            1,235        1,950         3,960
                                                   ------------     ------------  -----------   ------------

Loss from operations                                       (498)            (131)      (1,488)         (579)
                                                   ------------     ------------  -----------   ------------

Other income (expense):
         Interest expense                                  (221)             (15)        (379)          (83)
                                                   ------------     ------------  -----------   ------------
                  Net other income (expense)               (221)             (15)        (379)          (83)
                                                   ------------     ------------  -----------   ------------
Loss before income taxes                                   (719)            (146)      (1,867)          (662)
         Income taxes                                        --               --           --             --
                                                   ------------     ------------  -----------   ------------
Loss from continuing operations                            (719)            (146)      (1,867)          (662)
         Loss from discontinued operations of
         component DRM (including loss on
         disposal of $4,134 during the nine
         months ended September 30, 2002)                    --               --           --         (4,802)
                                                   ------------     ------------  -----------   ------------

         Net loss                                  $       (719)    $       (146) $    (1,867)  $     (5,464)
                                                   ============     ============  ===========   ============
         Loss per share - from continuing
         operations - basic and diluted            $      (0.01)    $      (0.00) $     (0.02)  $      (0.01)

         Loss per share - from discontinued
         operations - basic and diluted            $      (0.00)    $      (0.00) $     (0.00)  $      (0.09)
                                                   ------------     ------------  -----------   ------------
         Loss per share - basic and diluted        $      (0.01)    $      (0.00) $     (0.02)  $      (0.10)
                                                   ============     ============  ===========   ============
Number of weighted average shares outstanding
    (000's)                                              94,834           52,895       83,462         55,197
                                                   ============     ============  ===========   ============
</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,
                                                      2003             2002
                                                      ----             ----

Cash flows from operating activities:
     Net loss                                      $     (1,867)    $    (5,464)
     Add: net loss from discontinued operations              --           4,802
     Adjustments to reconcile net loss to net
     cash provided by operating activities:
         Depreciation and amortization                      203             210
         Amortization of debt discount                       35              18
         Changes in assets and liabilities:
                Accounts receivable, net                     10            (175)
                Prepaid assets                               81             235
                Accounts payable                              7            (119)
                Other liabilities                           614             175
                                                   ------------     ------------
Net cash used in continuing operations                     (917)           (318)
Net cash provided by discontinued operations                 --             184
                                                   ------------     ------------
                   Net cash used in operating
                   activities                              (917)           (134)

Cash flows from investing activities:
         Purchase of equipment                              (11)             (3)
         Advances to related parties                        (80)            (23)
                                                   ------------     ------------
Net cash used in continuing operations                      (91)            (26)
Net cash used in discontinued operations                      -              (4)
                                                   ------------     ------------
                   Net cash used in investing
                   activities                               (91)            (30)

Cash flows from financing activities:
      Increase in (repayment of) line of credit              --             249
      Increase in notes and loans payable                   991              --
      Payments on notes payable and long-term debt          (40)           (183)
                                                   ------------     ------------
                   Net cash provided by financing
                   activities                               951              66

Increase (decrease) in cash                                 (57)            (98)
Cash, beginning of period                                    59              170
                                                   ------------     ------------
Cash, end of period                                $          2     $        72
                                                   ============     ============

            See notes to condensed consolidated financial statements.


                                       5
<PAGE>

              COMMODORE APPLIED TECHNOLOGIES, INC. AND SUBSIDIARIES

        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

                               September 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 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, 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  nine-month  period ended  September 30,
2003, and the years ended  December 31, 2002,  2001 and 2000,  Applied  incurred
losses  of   ($1,867,000),   ($5,972,000),   ($6,554,000)   and   ($11,441,000),
respectively.  For the nine month period ended  September 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 $(917,000),  $(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 $376,000 and $238,000 at
September 30, 2003 and December 31, 2002,  respectively.  These  allowances  are
included in other accrued liabilities in the accompanying financial statements.


                                       6
<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  September  30,  2003,  no expense  has been
recognized for the variable options as the fair market value of Applied's common
stock at September  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.

         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, 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 B - Supplemental Cash Flow Information

         During the three and nine  month  periods  ended  September  30,  2003,
29,500  and  158,000  shares of Series E  Preferred  Stock were  converted  into
14,360,995 and 38,889,128  shares of the Company's  common stock,  respectively.
During the three and nine month  periods ended  September 30, 2003,  the Company
paid dividends on the Series E Preferred  Stock  conversions of $0 and $141,929,
respectively, by converting into 0 shares 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  nine-month  periods  ended  September  30, 2003,  of
$40,721  and  $171,240,   respectively,  which  is  included  in  Other  Accrued
Liabilities.

         During the three and nine month periods ended September 30, 2003, 0 and
17,500  shares of  Preferred  Stock  Series F were  converted  into 0 shares and
2,450,514, shares of the Company's common stock, respectively.  During the three
and nine month periods ended  September 30, 2003,  the Company paid dividends on
the Series E Preferred  Stock  conversions of $0 and $39,387,  respectively,  by
converting  into 0 shares and 551,571,  shares of the  Company's  common  stock,
respectively.  The Company accrued dividends on Preferred Stock Series F for the
three and nine-month  periods ended September 30, 2003, of $36,836 and $105,621,
respectively, which is included in Other Accrued Liabilities.

         During the three and nine month  periods  ended  September 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  nine-month
periods ended September 30, 2003, of $6,000 and $18,000, respectively,  which is
included in Other Accrued Liabilities.

         During  March 2003,  a  shareholder  and officer  agreed to convert his
$250,000 note payable and approximately $37,000 of accrued interest due from the
Company into 13,189,841 shares of the Company's common stock.


                                       7
<PAGE>

Note C - Other Accrued Liabilities

Other accrued liabilities consist of the following:

                                                   September 30,    December 31,
                                                       2003             2002
                                                       ----             ----
        Dividend payable                           $      1,324     $     1,210
        Compensation and employee benefits                1,219             842
        Loss reserve                                        376             238
        Exit and forbearance fees on notes payable          220              --
        Related parties                                     185             185
        Accrued interest                                    286             155
        Other                                                89              93
                                                   ------------     ------------
                                                   $      3,699     $     2,723
                                                   ============     ============


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. ("Advanced
Sciences"),  which primarily provides various engineering,  legal, sampling, and
public  relations  services to  Government  agencies on a cost plus basis;  (ii)
Commodore Solution  Technologies,  Inc.  ("Solution"),  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.

                                       8
<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 September 30, 2003
(Dollars in Thousands)
<TABLE>
<CAPTION>

------------------------------------------------------------------------------------------------------------
                                                                                                  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)
     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>



                                       9
<PAGE>


Nine Months Ended September 30, 2003
(Dollars in Thousands)
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------
                                                                                                  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)
     Income taxes                                            --               --           --            --
                                                   ------------     ------------  -----------   ------------

Income (loss) from continuing operations                 (1,867)            (535)        (358)         (974)
     Loss from discontinued
     Operations                                              --               --           --            --
                                                   ------------     ------------  -----------   ------------

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

Total assets                                       $        396     $        168  $       200   $        28


Expenditures for long-lived assets                 $         11     $         11  $        --   $        --
</TABLE>



                                       10
<PAGE>


Three Months Ended September 30, 2002
(Dollars in Thousands)
<TABLE>
<CAPTION>

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

<S>                                                <C>              <C>           <C>           <C>
Contract revenues                                  $      1,104     $        989  $       115   $        --

Costs and expenses
     Cost of sales                                          728              655           73            --
     Research and development                                37               --           37            --
     General and administrative                             373              160           33           180
     Depreciation and amortization                           97               40           57            --
                                                   ------------     ------------  -----------   ------------
             Total costs and expenses                     1,235              855          200           180
                                                   ------------     ------------  -----------   ------------

Income (loss) from operations                              (131)             134          (85)         (180)

     Interest income                                         --               --           --            --
     Interest expense                                       (15)              (7)          --            (8)
     Income taxes                                            --               --           --            --
                                                   ------------     ------------  -----------   ------------
Loss from continuing operations                            (146)             127          (85)         (188)
     Loss from discontinued                                  --               --           --            --
                                                   ------------     ------------  -----------   ------------
Net income (loss)                                  $       (146)    $        127  $       (85)  $      (188)
                                                   ============     ============  ===========   ============

Total assets                                       $      1,428     $        952  $       356   $       120

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

</TABLE>

                                       11
<PAGE>


Nine Months Ended September 30, 2002
(Dollars in Thousands)
<TABLE>
<CAPTION>

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

<S>                                                <C>              <C>           <C>           <C>
Contract revenues                                  $      3,381     $      3,233  $       148   $        --

Costs and expenses
     Cost of sales                                        2,359            2,106          253            --
     Research and development                               150                -          150            --
     General and administrative                           1,241              555           85           601
     Depreciation and amortization                          210               62          148            --
                                                   ------------     ------------  -----------   ------------

              Total costs and expenses                    3,960            2,723          636           601
                                                   ------------     ------------  -----------   ------------

Income (loss) from operations                              (579)             510         (488)         (601)
     Interest income                                         --               --           --            --
     Interest expense                                       (83)             (59)          --           (24)
     Income taxes                                            --               --           --            --
                                                   ------------     ------------  -----------   ------------

Income (loss) from continuing operations                   (662)             451         (488)         (625)

Loss from discontinued operations                        (4,802)              --           --        (4,802)
                                                   ------------     ------------  -----------   ------------

Net Income (loss)                                  $     (5,464)    $        451  $      (488)  $    (5,427)
                                                   ============     ============  ===========   ============

Total assets                                       $      1,428     $        952  $       356   $       120

Expenditures for long-lived assets                 $          4     $         --  $        --   $         4
</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  34,274,905 and  26,485,113  shares of
common stock as of September 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 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, 2003

         The  Company  issued a total of  2,027,027  shares of its common  stock
during the period from  September  30, 2003 to November 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").


                                       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 is  currently  working on the  commercialization  of these
technologies  through  development  efforts,  licensing  arrangements  and joint
ventures.  Through  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.

         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  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  held its 2002  Annual  Meeting at The  Fitzpatrick  Hotel
located at 687  Lexington  Avenue,  New York,  NY 10015 on September  12, 2003 -
11:00 a.m. EST. The results of the meeting were as follows:

         The stockholders owning a majority of the issued and outstanding shares
of the Company's Common Stock have voted:

         1.   to elect  Bentley J. Blum,  Shelby T.  Brewer,  Frank E.  Coffman,
              James M.  DeAngelis,  Paul E.  Hannesson,  Michael P. Kalleres and
              William A. Wilson as Directors;
         2.   to amend the Certificate of  Incorporation  to increase the number
              of authorized  shares of common stock from  125,000,000  shares to
              300,000,000 shares.
         3.   to approve the Company's  Short Term Incentive  Plan.
         4.   to ratify the Company's 1998 Stock Option Plan, as amended.
         5.   to approve options issued to the Chief  Executive  Officer outside
              the Company's 1998 Stock Option Plan, as amended.
         6.   to approve options issued to the Chief  Financial  Officer outside
              the Company's 1998 Stock Option Plan, as amended.
         7.   to ratify Tanner + Co. as the Company's  independent  auditors for
              the year ended December 31, 2003.

RESULTS OF OPERATIONS

Three and Nine Months Ended September 30, 2003 Compared to Three and Nine Months
Ended September 30, 2002

         Revenues from continuing  operations were $166,000 and $462,000 for the
three and nine months  ended  September  30, 2003  compared  to  $1,104,000  and
$3,381,000 for the three and nine months ended September 30, 2002. Such revenues
were primarily from the Company's subsidiary Advanced Sciences.

         In the case of Advanced  Sciences,  revenues were $149,000 and $445,000
respectively  for the three and nine months ended September 30, 2003 as compared
with $989,000 and $3,233,000  for the three and nine months ended  September 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.  Advanced  Sciences
has two major customers, each of which represent more than 10% of total revenue.

                                       14
<PAGE>

The  combined  revenue  for  these  two  customers  was  $149,000  and  $445,000
respectively  (100% of total  revenues)  for the  three  and nine  months  ended
September 30, 2003. Cost of sales was $195,000 and $598,000 respectively for the
three and nine  months  ended  September  30,  2003  compared  to  $655,000  and
$2,106,000  respectively for the three and nine months ended September 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 nine months
ended September 30, 2003.

         In the case of Solution, revenues were $17,000 and $17,000 respectively
for the three and nine months ended September 30, 2003 as compared with $115,000
and $148,000  respectively  for three and nine months ended  September 30, 2002.
There were marginal  revenues recorded for the three and nine month period ended
September 30, 2003 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 $17,000 and $17,000  respectively  for the three and nine months ended
September  30, 2003 as compared to $73,000  and  $253,000  respectively  for the
three  and nine  months  ended  September  30,  2002.  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,  2003,  the Company
incurred  research and development  costs of $4,000 and $63,000  respectively as
compared  to $37,000  and  $150,000  respectively  for the three and nine months
ended  September 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 nine months ended  September  30, 2003 were  $383,000  and  $1,069,000
respectively as compared to $373,000 and $1,241,000  respectively  for the three
and nine months  ended  September  30,  2002.  There is no  material  difference
between the compared operational periods.

         Interest  expense  for  continuing  operations  for the  three and nine
months  ended  September  30, 2003 was $221,000 and  $379,000,  respectively  as
compared  to $15,000  and  $83,000,  respectively  for the three and nine months
ended September 30, 2002. The increase in interest expense is primarily  related
to  amortization  of interest  costs  associated  with the Blum Demand Note, the
amortization  of  interest  costs  associated  with the Weiss Group Note and the
amortization of interest costs,  forbearance  fees and exit fees associated with
the Milford/Shaar Bridge Loan Note.


                                       15
<PAGE>

LIQUIDITY AND CAPITAL RESOURCES

         At September 30, 2003 and December 31, 2002 Advanced  Sciences had a $0
and $0 outstanding balance, respectively, on its revolving line of credit.

         For the three and nine month  periods  ended  September  30, 2003,  the
Company  incurred a net loss of ($719,000)  and  ($1,867,000),  respectively  as
compared to a net loss of  ($146,000)  and  ($5,464,000),  respectively  for the
three and nine months ended September 30, 2002. For the nine-month  period ended
September 30, 2003, and for the years ended  December 31, 2002,  2001, and 2000,
Applied  incurred  losses  of  ($1,867,000),   ($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 nine month periods ended  September 30, 2003,  the
Company converted 29,500 and 158,000, respectively, shares of Series E Preferred
for   14,360,995  and   40,456,117   shares  of  the  Company's   common  stock,
respectively.  During the three and nine month periods ended September 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 September 30, 2003.

         During the three and nine month periods ended  September 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  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 at September 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 120,000  shares of Series E Preferred  with a face value of
$1,200,000  outstanding  as of September 30, 2003.  There is $802,160 of accrued
dividends payable on the Series E Preferred as of September 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 September 30, 2003.  There is $494,939 of accrued
dividends payable on the Series F Preferred as of September 30, 2003.

                                       16
<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 was converted into  13,189,842  shares of the Company's
common  stock.  The shares of common stock were issued to S. B.  Enterprises  on
September 30, 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.

         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 November 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.

         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

                                       17
<PAGE>

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 9.25% 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 $253,603  and remains  unpaid as of November
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.


                                       18
<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  $1,104,999  as of September  30, 2003 and remains  unpaid as of November 14,
2003.  Additionally,  as of November 14, 2003,  there is $119,073 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 November 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 $232,032 as of September  30, 2003
and remains  unpaid as of November  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.

                                       19
<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  September  30,  2003.  There is $26,762 of accrued
dividends payable on the Series H Preferred as of September 30, 2003.

         The financial information included in the accompanying form 10Q for the
period  ending  September  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

                                       20
<PAGE>

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 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, as of September 30, 2003,  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.


                                       21
<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
                     August 15,  2003,  announcing  its June 30, 2003  Quarterly
                     earnings and the Company's  2002 Annual  Meeting to be held
                     on September 12, 2003.



                                       22
<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, 2003                     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)




                                       23