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, 2002
                                            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.)


               2121 Jamieson Avenue, Suite 1406
                     Alexandria, Virginia                            22314
                     --------------------                            -----
           (Address of principal executive office)                 (Zip Code)


Registrant's telephone number, including area code:   (703) 567-1284
                                                      --------------

         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 19, 2002
was 57,645,290.
<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, 2002 and December 31, 2001..................2

              Condensed Consolidated Statement of Operations -
                      Three and Six months ended June 30, 2002 and
                      June 30, 2001........................................3

              Condensed Consolidated Statement of Cash Flows -
                      Six months ended June 30, 2002 and
                      June 30, 2001........................................4

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

Item 2.       Management's Discussion and Analysis of Financial
                      Condition and Results of Operations.................12

PART II  OTHER INFORMATION................................................17

SIGNATURES................................................................18
<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                                2002                2001
                                                                   ----------       ------------
                                                                  (unaudited)
Current Assets:
<S>                                                                <C>              <C>
         Cash and cash equivalents                                 $      122       $      170
         Accounts receivable, net                                         556              599
         Prepaid assets and other current receivables                     167              327
                                                                   ----------       ----------
                  Total Current Assets                                    845            1,096

Property and equipment, net                                               484              597
Patents and completed technology, net of
       accumulated amortization of                                                                             .
       $1,395 and $1,375, respectively                                     80              100

Assets held for sale - component DRM                                       --           29,407
                                                                   ----------       ----------
       Total Assets                                                $    1,409       $   31,200
                                                                   ==========       ==========


</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                       2002              2001
                               STOCKHOLDERS' (DEFICIT) EQUITY      ----------       ------------
                                                                   (unaudited)

<S>                                                                <C>              <C>
Current Liabilities:
         Accounts payable                                          $    2,072       $    3,916
         Related party payable                                            128              160
         Current portion of long term debt                                 33               90
         Line of credit                                                   144              108
         Notes payable                                                  1,111            1,155
         Other accrued liabilities                                      2,233            2,035
                                                                   ----------       ----------

                  Total Current Liabilities                             5,721            7,464
Liabilities held for sale - component DRM                                  --           22,165
                                                                   ----------       ----------

                   Total Liabilities                                    5,721           29,629

Commitments and contingencies                                              --               --


Stockholders' (Deficit) Equity
         Convertible Preferred Stock, Series E & F
         par value $0.001 per share, 5% to 12%
         cumulative dividends, 601,700 shares authorized,
         390,200 and 410,200 shares issued and outstanding
         as of June 30, 2002 and December 31, 2001
         respectively.
         The shares had an aggregate liquidation
         and $5,403 at value of $5,140
         June 30, 2002 and December 31, 2001
         respectively.                                                     --               --
         Common Stock, par value $0.001 per share,
         125,000,000 shares authorized, 57,645,290
         and 55,417,354 issued and outstanding,
         at June 30, 2002 and December 31, 2001,
         respectively.                                                     58               55
         Additional paid-in capital                                    66,654           66,759
         Shareholder receivable                                           (83)
         Accumulated deficit                                          (70,561)         (65,243)
                                                                   ----------       ----------
                                                                       (3,932)          (1,571)
         Treasury Stock, 4,750,000 shares at June 30, 2002               (380)              --
                                                                   ----------       ----------
              Total Stockholder's (Deficit) Equity                     (4,312)           1,571
                                                                   ----------       ----------
         Total Liabilities and Stockholders'(Deficit) Equity       $    1,409       $   31,200
                                                                   ==========       ==========
</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,
                                                                         2002            2001          2002          2001
                                                                         ----            ----          ----          ----

<S>                                                                   <C>             <C>            <C>            <C>
Contract revenues                                                     $    1,190      $    1,159     $   2,277      $   2,484
Costs and expenses:
         Cost of sales                                                       688           1,122         1,631          1,934
         Research and development                                             36              76           113            196
         General and administrative                                          330             324           868          1,033
         Depreciation and amortization                                        50             174           113            347
                                                                      ----------      ----------     ---------      ---------
                  Total costs and expenses                                 1,104           1,696         2,725          3,510
                                                                      ----------      ----------     ---------      ---------

Income (loss) from operations                                                 86            (537)         (448)        (1,026)
                                                                      ----------      ----------     ---------      ---------
Other income (expense):
         Interest income                                                      --              --            --              3
         Interest expense                                                    (26)            (51)          (68)          (313)
                                                                      ----------      ----------     ---------      ---------

                  Net other income (expense)                                 (26)            (51)          (68)          (310)
                                                                      ----------      ----------     ---------      ---------

Income (loss) before income taxes                                             60            (588)         (516)        (1,336)
         Income taxes                                                         --              --            --             --
                                                                      ----------      ----------     ---------      ---------

Income (loss) from continuing operations                                      60            (588)         (516)        (1,336)
         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)           (224)       (4,802)          (125)
                                                                      ----------      ----------     ---------      ---------

         Net loss                                                     $   (4,692)     $     (812)    $  (5,318)     $  (1,461)
                                                                      ==========      ==========     =========      =========
         Loss per share - basic and diluted                           $    (0.08)     $    (0.02)    $   (0.09)     $  (0.03)
                                                                      ==========      ==========     =========      =========
Number of weighted average shares outstanding (000's)                     57,645          52,807        57,478         51,371
                                                                      ==========      ==========     =========      =========
</TABLE>

            See notes to condensed consolidated financial statements.

                                       3
<PAGE>


              COMMODORE APPLIED TECHNOLOGIES, INC. AND SUBSIDIARIES

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


                                                                                  Six months ended
                                                                         June 30,             June 30,
                                                                           2002                 2001
                                                                         --------             --------

<S>                                                                     <C>                  <C>
Cash flows from operating activities:
     Net loss                                                           $   (5,318)          $   (1,461)
     Add: net loss from discontinued operations                               4,802                 125
     Adjustments to reconcile net loss to net cash provided
     by operating activities:
         Depreciation and amortization                                          133                 347
         Amortization of debt discount                                           18                  29
         Other non-cash charges                                                   -                  53
         Changes in assets and liabilities:
                Accounts receivable, net                                         43               1,790
                Prepaid assets                                                  160                 232
                Accounts payable                                                (47)               (698)
                Other liabilities                                                96                (351)
                                                                        -----------          ----------
Net cash (used in) provided by continuing operations                           (113)                 66
Net cash provided by discontinued operations                                    184                 617
                                                                        -----------          ----------

                         Net cash provided by operating activities               71                 683

Cash flows from investing activities:
         Purchase of equipment                                                   --                 (10)
         Advances to related parties                                            (32)                 --
                                                                        -----------          ----------
Net cash used in continuing operations                                          (32)                (10)
Net cash used in discontinued operations                                         (4)                (47)
                                                                        -----------          ----------

                         Net cash used in investing activities                  (36)                (57)

Cash flows from financing activities:
      Increase in (repayment of) line of credit                                  36              (1,014)
      Increase in notes and loans payable                                        --               1,000
      Payments on notes payable and long-term debt                             (119)               (282)
      Proceeds from sale of common stock                                         --                 200
                                                                        -----------          ----------

                  Net cash used in financing activities                         (83)                (96)

Increase (decrease) in cash                                                     (48)                530
Cash, beginning of period                                                       170                 579
                                                                        -----------          ----------

Cash, end of period                                                     $       122          $    1,109
                                                                        ===========          ==========
</TABLE>

            See notes to condensed consolidated financial statements.

                                       4
<PAGE>


              COMMODORE APPLIED TECHNOLOGIES, INC. AND SUBSIDIARIES

        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

                                  June 30, 2002

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 accounting principles generally
accepted in the United States of America 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 accounting  principles  generally accepted
in the United States of America 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,
2002 are not necessarily  indicative of the results that may be expected for the
year ending December 31, 2002.

         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, 2001.

         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, 2002, and
the years ended December 31, 2001,  2000 and 1999,  Applied  incurred  losses of
$5,318,000,  $6,554,000,  $11,441,000 and $3,985,000,  respectively. For the six
month  period ended June 30,  2002,  and for the years ended  December 31, 2001,
2000 and 1999,  Applied has also  experienced  net cash inflows  (outflows) from
operating activities of $71,000, $1,907,000,  $(2,002,000) and $(2,905,000). 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.  The Company has a
working  capital  deficit  $4,876,000.  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 $200,000 at June 30, 2002
and December 31, 2001.

         On May 16, 2002, a Notice of Default and Right to Pursue  Remedies (the
"Notice")  was issued to the Company by William J. Russell and Tamie B. Speciale
(the  "Pledgees")  claiming  that the  Company  is in  default  under  the Stock

                                       5
<PAGE>

Purchase Agreement (the "Agreement"), between the Company and Dispute Resolution
Management,  Inc.  ("DRM") and the related  Stock Pledge  Agreement  (the "Stock
Pledge").

         Pursuant to the Agreement,  the Company  agreed to repurchase  from the
Pledgees, originally by September 29, 2001, and subsequently extended to January
16,  2002  and May 16,  2002,  that  number  of the 9.5  million  shares  of the
Company's common stock issued in connection with the acquisition as necessary to
provide the Pledgees with cash of $14.5 million. As partial security for payment
of this repurchase obligation, the Company pledged to the Pledgees all shares of
DRM stock owned by the Company.

         The Notice  asserts  that the  Company is in default for its failure to
pay a repurchase of stock  obligation,  failure to perform certain covenants and
its insolvency.  The Pledgees, as CEO and President of DRM, have transferred the
DRM Stock  owned by the  Company  to and into the name of the  Pledgees  and has
tendered  4,750,000  shares of the  Company's  pledged  common stock back to the
Company. As of May 16, 2002, the Company no longer owns an 81% interest in DRM.

         In addition,  the Notice made a demand for the immediate payment of (1)
$1,073,570, for advances to the Company for operating expenses during 2000-2001,
(2) $1,417,833,  for advances to the Company for installment payments due to the
Pledgees under the Agreement, and (3) $1,500,000,  for the Company's obligations
under the  Agreement.  The  Pledgees  intend to make  demands for the  immediate
payment of (4) all deficiency amounts,  plus interest and expenses,  due for the
Company's repurchase  obligation under the Agreement,  and (5) $8,582,167,  plus
interest and expenses, for the accelerated make whole payment due by the Company
upon a sale of control.  The  Pledgees  also  reserved the right to vote the DRM
Stock in all DRM  matters and to apply any funds or other  property  received on
the Company's pledged common stock to the Company's obligations.

         The  Company  believes  that it is not in default  and has  meritorious
defenses  under the  Agreement  and Stock  Pledge to the claims  asserted by the
Pledgees.  The Company plans and desires to reach an amicable resolution of this
matter.  However,  the  Company's  inability  to resolve this matter and pay its
repurchase  obligation  would have a significant  material adverse effect on the
financial condition of the Company,  and the Company may not be able to continue
to operate as a going concern.

         The Company's  estimated 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 $100,000.

         On August 19, 2002,  the Company  entered  into a settlement  agreement
with DRM. Under terms of the  agreement,  the Company  acknowledged  that it had
previously  received back 4,750,000  shares of its common stock from DRM and its
shareholders.  The Company is to receive an additional  1,187,500  shares of its
common  stock  and the  Company  is to issue to DRM  800,000  shares of Series H
Preferred stock for  satisfaction of the remaining  liabilities  relating to the
purchase and working capital of DRM. The financial  information  included in the
accompanying  form 10Q for the periods ending June 30, 2002 reflect the terms of
the settlement agreement.  As of June 30, 2002 the Company recorded an estimated
loss on the disposal of DRM in the amount of $4,134,000.

         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.

                                       6
<PAGE>



Note B - Segment Information

         Using the  guidelines  set forth in SFAS No.  131,  "Disclosures  About
Segments of an Enterprise and Related  Information",  the Company has identified
two continuing  reportable segments in which it operates,  based on the services
it provides.  The  reportable  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; and
(ii) Commodore Solutions,  Inc., which is commercializing  technologies to treat
mixed and hazardous waste.

         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 table.



                                       7
<PAGE>

<TABLE>
<CAPTION>

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

----------------------------------------- --------------- --------------- ----------------- --------------- -----------------
                                                                                                             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                                --             --               --                  --             --
                                          ---------       --------        ---------          ----------     ----------

Income (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>

                                       8
<PAGE>
<TABLE>
<CAPTION>

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

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

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>

                                       9
<PAGE>

<TABLE>
<CAPTION>

Three Months Ended June 30, 2001
(Dollars in Thousands)

---------------------------------------- ---------------- --------------- -------------- ------------------ -----------------
                                                                                                            Corporate
                                                                                                             Overhead
                                            Total            ASI           Solution             DRM          and Other

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

Contract revenues                         $   1,159       $  1,076        $      83          $       --     $       --

Costs and expenses
     Cost of sales                            1,122          1,026               96                  --             --
     Research and development                    76             --               76                  --             --
     General and administrative                 324             59               71                  --            194
     Depreciation and amortization              174             19              114                  --             41
                                          ---------       --------        ---------          ----------     ----------

             Total costs and expenses         1,696          1,104              357                  --            235
                                          ---------       --------        ---------          ----------     ----------

Income (loss) from operations                  (537)           (28)            (274)                 --           (235)

     Interest income                             --             --               --                  --             --
     Interest expense                           (51)           (10)              --                  --            (41)
     Income taxes                                --             --               --                  --             --
                                          ---------       --------        ---------          ----------     ----------

Loss from continuing operations                (588)           (38)            (274)                 --           (276)

     Loss from discontinued                    (224)            --               --                (224)            --
     operations
                                          ---------       --------        ---------          ----------     ----------

Net income (loss)                         $    (812)      $    (38)       $    (274)         $     (224)    $     (276)
                                          =========       ========        =========          ==========     ==========

Total assets                              $  30,548       $  2,478        $   1,604          $    3,477     $   22,989

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


</TABLE>

                                       10
<PAGE>

<TABLE>
<CAPTION>

Six Months Ended June 30, 2001
(Dollars in Thousands)

---------------------------------------- --------------- --------------- ------------------ --------------- -----------------
                                                                                                           Corporate
                                                                                                             Overhead
                                            Total            ASI           Solution             DRM          and Other

<S>                                       <C>             <C>             <C>                <C>            <C>
Contract revenues                         $   2,484       $  2,299        $     185          $       --     $       --

Costs and expenses
     Cost of sales                            1,934          1,735              199                  --             --
     Research and development                   196             --              196                  --             --
     General and administrative               1,033            439              240                  --            354
     Depreciation and amortization              347             39              231                  --             77
                                          ---------       --------        ---------          ----------     ----------

              Total costs and expenses        3,510          2,213              866                  --            431
                                          ---------       --------        ---------          ----------     ----------

Income (loss) from operations                (1,026)            86             (681)                 --           (431)

     Interest income                              3             --               --                  --              3
     Interest expense                          (313)           (36)              --                  --           (277)
     Income taxes                                --             --               --                  --             --
                                          ---------       --------        ---------          ----------     ----------

Income (loss) from continuing                (1,336)            50             (681)                 --           (705)
operations
Loss from discontinued                         (125)            --               --                (125)            --
     operations                                                                                   --
                                          ---------       --------        ---------          ----------     ----------

Net Income (loss)                         $  (1,461)      $     50        $    (681)         $     (125)    $     (705)
                                          =========       ========        =========          ==========     ==========

Total assets                              $  30,548       $  2,478        $   1,604          $    3,477     $   22,989

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

</TABLE>

                                       11
<PAGE>


Note C - 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 D - Subsequent Event

         On August 19, 2002,  the Company  entered  into a settlement  agreement
with DRM. Under terms of the  agreement,  the Company  acknowledged  that it had
previously  received back 4,750,000  shares of its common stock from DRM and its
shareholders.  The Company is to receive an additional  1,187,500  shares of its
common  stock  and the  Company  is to issue to DRM  800,000  shares of Series H
Preferred stock for  satisfaction of the remaining  liabilities  relating to the
purchase and working capital of DRM. The financial  information  included in the
accompanying  form 10Q for the periods ending June 30, 2002 reflect the terms of
the settlement agreement.  As of June 30, 2002 the Company recorded an estimated
loss on the disposal of DRM in the amount of $4,134,000.


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 estimated at $4,134,000 to Applied.

         The  Company is  currently  working on the  commercialization  of these
technologies  through  development  efforts,  licensing  arrangements  and joint
ventures.  Through Commodore Advanced  Sciences,  Inc. ("ASI") 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 ASI's
revenues, and such a reduction would materially affect the operations.  However,
management believes its existing client  relationships will allow the Company to
obtain new contracts in the future.


RESULTS OF OPERATIONS

Three and Six Months Ended June 30, 2002  Compared to Three and Six Months Ended
June 30, 2001

         Revenues from continuing  operations were $1,190,000 and $2,277,000 for
the three and six  months  ended  June 30,  2002,  compared  to  $1,159,000  and
$2,484,000 for the three and six months ended June 30, 2001.  Such revenues were
primarily from the Company's subsidiary ASI.

         In  the  case  of  ASI,   revenues  were   $1,157,000   and  $2,244,000
respectively  for the three and six months ended June 30, 2002 as compared  with
$1,076,000  and  $2,299,000  for the three and six months  ended June 30,  2001.
There are no material  differences in sales.  The revenues from ASI consisted of
engineering and scientific  services  performed for the United States government
under a variety of  contracts.  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. Currently, ASI has two major customers, each of which represent
more than 10% of total revenue. The combined revenue for these two customers was
$1,157,000 and $2,244,000  respectively  (100% of total  revenues) for the three
and six months  ended June 30, 2002.  Cost of sales was $606,000 and  $1,451,000
respectively  for the three and six  months  ended  June 30,  2002  compared  to
$1,026,000 and $1,735,000  respectively  for the three and six months ended June
30,  2001.  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, 2002.

                                       12
<PAGE>

         In the case of Commodore  Solution,  Inc.  ("Solution"),  revenues were
$33,000 and  $33,000  respectively  for the three and six months  ended June 30,
2002 as compared with $83,000 and $185,000 respectively for three and six months
ended  June  30,  2001.  The  decrease  is  primarily  due  to the  decrease  in
feasibility studies and commercial processing during this period.  Revenues were
primarily  from  remediation   services  performed  for  engineering  and  waste
treatment  companies in the U.S. under a variety of contracts.  Solution has two
major  customers,  each of whom  represents more than 10% of the revenue for the
three and six months  ended June 30, 2002.  The  combined  revenue for these two
customers was $33,000 and $33,000  respectively  (100% of the  Solution's  total
revenue)  for the three and six months  ended June 30,  2002.  Cost of sales was
$82,000 and  $180,000  respectively  for the three and six months ended June 30,
2002 as  compared  to $96,000 and  $199,000  respectively  for the three and six
months ended June 30, 2001.  The  decrease in cost of sales is  attributable  to
slightly reduced sales and marketing expenses for the SET technology,  which the
Company  anticipates  will  result in  greater  revenues  from  Solution  in the
remainder of 2002.  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, 2002, the Company  incurred
research and development costs of $36,000 and $113,000  respectively as compared
to $76,000 and $196,000 respectively for the three and six months ended June 30,
2001. 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, 2002 were $330,000 and $868,000 respectively
as compared to $324,000 and $1,033,000 respectively for the three and six months
ended June 30, 2001.  This  difference  is due to the  reduction in staffing and
other expenses.

         Interest expense for continuing operations for the three and six months
ended June 30, 2002 was $26,000 and $68,000, respectively as compared to $51,000
and $313,000, respectively for the three and six months ended June 30, 2001. The
decrease in interest  expense is primarily  related to  amortization of non-cash
interest costs  associated with the Brewer  Promissory Note, the amortization of
non-cash  interest  costs  associated  with  the  Bridge  Loan  Notes,  and  the
amortization of non-cash interest costs associated with the Milford/Shaar Bridge
Loan Notes.

         The  estimated  loss  from  discontinued  operations  is  approximately
$4,752,000 and $4,802,000,  respectively for the three and six months ended June
30, 2002 as compared to $224,000 and  $125,000,  respectively  for the three and
six months  ended June 30,  2001.  The  difference  results  primarily  from the
estimated  loss on disposal of DRM of  approximately  $4,134,000.  The remaining
difference  is the  result  of the  reduced  retainers  paid  by  DRM's  current
customers  and  the  lack of  material  settlements  on  their  existing  client
agreements.



                                       13
<PAGE>


LIQUIDITY AND CAPITAL RESOURCES

         At June 30, 2002 and  December 31, 2001 ASI had a $144,000 and $108,000
outstanding balance, respectively, on its revolving lines of credit.

         For the three and six months ended June 30, 2002, the Company  incurred
a net income  (loss)  from  continuing  operations  of $60,000  and  ($516,000),
respectively  as  compared  to  a  net  loss  of  ($588,000)  and  ($1,336,000),
respectively  for the three and six months ended June 30,  2001.  For the period
ended June 30, 2002, and for the years ended December 31, 2001,  2000, and 1999,
Applied  has  also  experienced  net  cash  inflows  (outflows)  from  operating
activities of $71,000, $1,907,000,  ($2,002,000),  and ($2,905,000). At June 30,
2002 the Company had working  capital  deficit of $4,876,000  and  shareholders'
deficit of $4,312,000.

         During the six-month period ended June 30, 2002, the Company  converted
20,000 shares of Series F Convertible  Preferred  Stock for 1,360,544  shares of
the Company's common stock.  Additionally,  the Company issued 867,392 shares of
the Company's common stock in satisfaction of all accrued  dividends  pertaining
to the Series E and Series F Convertible Preferred Stock conversions to date.

         In March 2000, the Company  completed $2.0 million in financing through
private  placement.  The  Company  issued  226,000  shares  of a  new  Series  F
Convertible Preferred Stock,  convertible into Common Stock at the market price,
after  September  30,  2000 and up  through  April  30,  2003 at  which  time it
automatically converts to Common Stock. The Series F Convertible Preferred Stock
has a variable rate dividend averaging 8.15% over the term of the security.  The
Company  reserved  the right to redeem  all the Series F  Convertible  Preferred
Stock on or before  September  30,  2000 by  payment  of $2.3  million  plus any
accrued dividends.

         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 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 is  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"),  which extended the maturity date
of the note until December 31, 2001. Additionally, the conversion 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 by the previous
5-day  average  of the  closing  price of the  Company's  common  stock  and was
converted into 1,041,667 shares. The remaining  principal balance of $250,000 is
outstanding  as of August 19,  2002.  The Company  has not been  notified of the
holder's intent to declare a default on the Brewer Note.

         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  15% of the Common Stock,  transferred to the investors a total of
1,000,000  shares of common  stock.  All  holders  of the Weiss  Group Note have
granted payment extensions until May 31, 2002. The Company has not been notified
of the holders' intent to declare a default on the Weiss Group Note.


                                       14
<PAGE>

         Effective  April 5, 2001,  the  Company  issued  warrants  to  purchase
500,000  shares of its common stock at an exercise price of $0.22 per share (the
closing price of our common stock on the American  Stock  Exchange on such date)
to all  holders  of the  Weiss  Group  Note in  consideration  of  such  persons
extension of the due date of such loans from February 12, 2001 to June 30, 2001.

         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 American  Stock  Exchange on such date)
to all  holders  of the  Weiss  Group  Note in  consideration  of  such  persons
extension of the due date of such loans from June 30, 2001 to May 31, 2002.

         On May 23, 2001, a private investor purchased $250,000 of the Company's
common  stock at the market  price.  The  Company  issued the  private  investor
1,923,077  shares  of common  stock of the  Company  as a result  of the  equity
purchase.  In connection with the purchase of the shares of the Company's common
stock,  the  Company  issued the private  investor a 2-year  warrant for 500,000
shares of the Company's common stock at an exercise price of $0.22 per share.

         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 333,333 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  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 Company has not been  notified of the  holders'  intent to
declare a default on the Milford/Shaar Bridge Loan Notes.

         The Company had an irrevocable obligation to repurchase from the former
shareholders  of DRM, by May 16, 2002,  that number of 9.5 million shares of the
Company's  common  stock (at a per share  price equal to the greater of $1.50 or
the closing  price of our common  stock 30 days prior to  purchase)  as shall be
necessary  to provide the holders of such shares with a total of $14.5  million.
The original  repurchase  obligation  deadline of August 30, 2001,  subsequently
extended through May 16, 2002 by a series of extensions  (initially  extended to
September 29, 2001,  further  extended to October 29, 2001,  further extended to
January 16, 2002 and was  subsequently  extended until May 16, 2002). As partial
security  for the  payment of such  obligation,  all of the shares of DRM common
stock owned by the Company have been  pledged to Messrs.  William J. Russell and
Tamie P. Speciale,  the former sole  stockholders of DRM. The Company was unable
to make such $14.5 million  payment.  The pledgees  foreclosed on the DRM stock;
which  resulted in the Company  losing its entire  equity  ownership  in the DRM
subsidiary.  The Company  recorded an  estimated  loss on its disposal of DRM of
$4,134,000.

         The Company  currently  requires  additional  cash to sustain  existing
operations and meet current  obligations  (including  those described above) and
the  Company's  ongoing  capital  requirements.  The Company's  current  monthly
operating  expenses  exceed its cash  revenues by  approximately  $100,000.  The
continuation of the Company's operations is dependent in the short term upon its
ability  to obtain  additional  financing  and,  in the long term,  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.

                                       15
<PAGE>

         The Company's auditor's opinion on our fiscal 2001 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
$39,000,000.  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
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.

                                       16
<PAGE>

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

         Not applicable.



                           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 - none

         (b) Reports on Form 8-K.

              1.     The  Company  filed a Current  Report  on Form  8-K,  dated
                     January  12,  2002,  regarding a 120-day  extension  to its
                     Stock   Purchase    Agreement   with   Dispute   Resolution
                     Management, Inc., until May 16, 2002.

              2.     The Company filed a Current  Report on Form 8-K,  dated May
                     21, 2002,  regarding the  termination of its Stock Purchase
                     Agreement  and Notice of Default  with  Dispute  Resolution
                     Management, Inc.


                                       17
<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 19, 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)


                                       18
<PAGE>


                CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,
                             AS ADOPTED PURSUANT TO
                  SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002


In connection with the Quarterly Report of Commodore Applied  Technologies,  Inc
(the  "Company")  on Form 10-Q for the period  ended June 30, 2002 as filed with
the Securities  and Exchange  Commission on the date hereof (the  "Report"),  I,
Shelby T. Brewer, Chief Executive Officer of the Company,  certify,  pursuant to
18 U.S.C. section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley
Act of 2002, that to the best of my knowledge:


         (1) The Report fully complies with the requirements of section 13(a) or
         15(d) of the Securities Exchange Act of 1934; and

         (2) The  information  contained in the Report fairly  presents,  in all
         material respects,  the financial condition and result of operations of
         the Company.


/s/ Shelby T. Brewer
--------------------
Shelby T. Brewer
Chief Executive Officer
August 19, 2002



                CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,
                             AS ADOPTED PURSUANT TO
                  SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002


In connection with the Quarterly Report of Commodore Applied  Technologies,  Inc
(the  "Company")  on Form 10-Q for the period  ended June 30, 2002 as filed with
the Securities  and Exchange  Commission on the date hereof (the  "Report"),  I,
James M. DeAngelis, Chief Financial Officer of the Company, certify, pursuant to
18 U.S.C. section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley
Act of 2002, that to the best of my knowledge:


         (1) The Report fully complies with the requirements of section 13(a) or
         15(d) of the Securities Exchange Act of 1934; and

         (2) The  information  contained in the Report fairly  presents,  in all
         material respects,  the financial condition and result of operations of
         the Company.


/s/ James M. DeAngelis
----------------------
James M. DeAngelis
Chief Financial Officer
August 19, 2002



                                       19
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