<PAGE>   1

                                 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, 1997
                                       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
          NEW YORK, NEW YORK                                 10155
          ------------------                                 -----
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICE)                    (ZIP CODE)


REGISTRANTS TELEPHONE NUMBER, INCLUDING AREA CODE: (212) 308-5800
                                                   --------------

     Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X  No   .
                                             ---   ---
     The number of shares the common stock outstanding at August 11, 1997 was
21,650,000.

<PAGE>   2

                      COMMODORE APPLIED TECHNOLOGIES, INC.

                                   FORM 10-Q

                                     INDEX


<TABLE>
<CAPTION>
                                                                            PAGE NO.
                                                                            --------
<S>                                                                            <C>
PART I .          FINANCIAL INFORMATION.......................................  3


Item 1.           Financial Statements (Unaudited)

                  Condensed Consolidated Balance Sheets -
                           June 30, 1997 and December 31, 1996................  3

                  Condensed Consolidated Statement of Operations -
                           Six months ended June 30, 1997 and
                           June 30, 1996......................................  5

                  Condensed Consolidated Statement of Cash Flows Six months
                           ended June 30, 1997 and
                           June 30, 1996......................................  6

                  Notes to Condensed Consolidated Financial Statements........  7

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

PART II           Other Information........................................... 14

Item 4.           Submission of Matters to a Vote of Security Holders......... 14

SIGNATURES.................................................................... 15
</TABLE>



                                       2

<PAGE>   3







                         PART I - FINANCIAL INFORMATION

ITEM 1:  FINANCIAL STATEMENTS


             COMMODORE APPLIED TECHNOLOGIES, INC. AND SUBSIDIARIES

                     CONDENSED CONSOLIDATED BALANCE SHEETS
                 (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)


<TABLE>
<CAPTION>
                                                          JUNE 30,  DECEMBER 31,
                              ASSETS                        1997       1996
                                                            ----       ----
                                                         (unaudited)
<S>                                                      <C>         <C>    
Current Assets:
        Cash                                             $ 1,434     $ 4,617
        Temporary investments                             13,197       7,459
        Accounts receivable, net                           2,819       7,149
        Notes and advances to related parties              1,511       1,680
        Restricted cash and certificates of deposit          650         670
        Prepaid assets and other current receivables         829         581
                                                         -------     -------
                 Total Current Assets                     20,440      22,156

Other receivables                                            259          63
Other investments                                            551         505
Property and equipment, net                                2,640       2,044
Other assets
        Patents and completed technology, net of
                accumulated amortization of $208 and
                $140, respectively                         1,053       1,004
        Goodwill, net of accumulated amortization
                of $191 and $113, respectively             7,481       7,560
        Other                                                178         124
                                                         -------     -------
                   Total Assets                          $32,602     $33,456
                                                         =======     =======
</TABLE>









           See notes to condensed consolidated financial statements.

                                       3
<PAGE>   4

             COMMODORE APPLIED TECHNOLOGIES, INC. AND SUBSIDIARIES

                     CONDENSED CONSOLIDATED BALANCE SHEETS
                 (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)


<TABLE>
<CAPTION>
                                                        JUNE 30,     DECEMBER 31,
                         LIABILITIES AND                  1997          1996
                       STOCKHOLDERS' EQUITY               ----          ----
                                                       (unaudited)
<S>                                                    <C>           <C>     
Current Liabilities:
        Accounts Payables                              $  2,400      $  3,804
        Notes payable                                        88            --
        Payables to related parties                           3           252
        Current portion of long term debt                    69            89
        Line of credit                                    4,008         7,042
        Other accrued liabilities                         1,703         1,978
                                                       --------      --------
                 Total Current Liabilities                8,271        13,165

Long term debt                                               26            29

Payables to related parties                                 446           186

Minority Interest in Subsidiary                           5,479            --

Commitments and contingencies                                --            --


Stockholders' equity
        Common stock, par value $0.001 per share,
               50,000,000 shares authorized and
               21,650,000 issued and outstanding             22            22
        Additional paid-in capital                       39,512        34,270
        Accumulated deficit                             (21,154)      (14,216)
                                                       --------      --------
                 Total stockholders' equity              18,380        20,076
                                                       --------      --------
        Total Liabilities and Stockholders' Equity     $ 32,602      $ 33,456
                                                       ========      ========
</TABLE>





           See notes to condensed consolidated financial statements.


                                       4
<PAGE>   5
             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,
                                                             1997         1996          1997         1996
                                                            -------      -------      --------      ------- 
<S>                                                         <C>          <C>          <C>           <C>    
Contract revenues                                           $ 4,792      $    14      $  9,819      $    14
Costs and expenses:
        Cost of sales                                         4,010           --         8,019           --
        Research and development                                827          586         1,433          954
        General and administrative                            3,241          326         6,114          691
        Depreciation and Amortization                           239           --           482           --
        Minority Interest                                      (228)          --          (228)            
                                                            -------      -------      --------      ------- 
                 Total costs and expenses                     8,089          912        15,820        1,645
                                                            -------      -------      --------      ------- 
Loss from operations                                         (3,297)        (898)       (6,001)      (1,631)
                                                            -------      -------      --------      ------- 
Other income (expense):
        Interest income                                         215            2           320            4
        Interest expense                                       (126)        (177)         (300)        (369)
                                                            -------      -------      --------      ------- 
                 Net other income (expense)                      89         (175)           20         (365)
                                                            -------      -------      --------      ------- 
Loss before income taxes and affiliate losses                (3,209)      (1,073)       (5,981)      (1,996)
        Income taxes                                              2           --             2           --
                                                            -------      -------      --------      ------- 
Loss before affiliate losses                                 (3,211)      (1,073)       (5,983)      (1,996)
        Equity in losses of unconsolidated subsidiaries        (528)          --          (954)          --
                                                            -------      -------      --------      ------- 
        Net loss                                            $(3,739)     $(1,073)       (6,938)     $(1,996)
                                                            =======      =======        ======      ======= 
        Loss per share                                      $  (.18)     $  (.07)     $   (.33)     $  (.13)
                                                            =======      =======      ========      ======= 
</TABLE>



           See notes to condensed consolidated financial statements.



                                       5
<PAGE>   6


             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,
                                                                        1997         1996
                                                                       -------      -------
<S>                                                                    <C>          <C>     
CASH FLOWS FROM OPERATING ACTIVITIES:
 Net loss                                                              $(6,938)     $(1,996)
 Adjustments to reconcile net loss to net cash used in
 operating activities:
     Depreciation and amortization                                         482           43
     Undistributed losses of unconsolidated subsidiary                     954           --
     Minority interest in net loss of subsidiary                          (228)          --
     Decrease (increase) in:
            Accounts receivable                                          4,330          (14)
            Prepaid assets                                                (248)        (237)
            Other assets                                                   (54)          --
     Increase (decrease) in:
            Accounts payables                                           (1,404)         240
            Payables to related parties                                   (249)          --
            Other liabilities                                             (275)          --
                                                                       -------      -------
             Net cash used in operating activities                      (3,630)      (1,964)

CASH FLOWS FROM INVESTING ACTIVITIES:
 Purchase of equipment                                                    (932)         (68)
 Acquisition of patents                                                   (116)         (36)
 Temporary investments purchased                                        (5,738)          --
 Advances to related parties                                               429           --
 Decrease (increase) in restricted cash                                     20           --
 Other investments                                                      (1,000)          --
 Other receivables                                                        (196)          --
                                                                       -------      -------
             Net cash used in investing activities                      (7,533)        (104)

CASH FLOWS FROM FINANCING ACTIVITIES:
 Borrowing from principal stockholder                                       --          140
 Increase in (repayment of) line of credit                              (3,034)       2,000
 Proceeds from subsidiary's sale of stock                               11,087             
 Increase in notes and loans payable                                        65           --
 Preferred stock dividend paid                                            (138)          --
                                                                       -------      -------
             Net cash provided from financing activities                 7,980        2,140

Increase (decrease) in cash                                             (3,183)          72
Cash, beginning of period                                                4,617            4
                                                                       -------      -------
Cash, end of period                                                    $ 1,434      $    76
                                                                       =======      =======
</TABLE>




           See notes to condensed consolidated financial statements.



                                       6
<PAGE>   7


             COMMODORE APPLIED TECHNOLOGIES, INC. AND SUBSIDIARIES

        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
                 (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

                                 JUNE 30, 1997

Note A - Basis of Presentation

         The accompanying unaudited condensed consolidated financial statements
for Commodore Applied Technologies, Inc. and subsidiaries ("the Company") have
been prepared in accordance with generally accepted accounting principles for
interim financial information and with the instructions to Form 10-Q and
Article 10 of Regulation S-X. The financial statement information was derived
from unaudited financial statements unless indicated otherwise. Accordingly,
they do not include all of the information and footnotes required by 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 six month period ended June 30, 1997 are
not necessarily indicative of the results that may be expected for the year
ending December 31, 1997.

         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, 1996.

         On March 29, 1996, Commodore Environmental Services, Inc.
("Commodore") , the Company's sole shareholder at that date, in exchange for
the issuance of 15,000,000 shares of the Company's common stock, capitalized
the Company, as follows: (1) contributed 90.05 percent of the outstanding
common stock of Commodore Laboratories, Inc. ("Labs") and 100 percent of the
outstanding capital stocks of Commodore Technologies, Inc. ("Technologies"),
Commodore Government Environmental Technologies, Inc. ("Government"), Commodore
Remediation Technologies, Inc.("Remediation"),and Sandpiper Properties, Inc.
("Sandpiper"), (2) assigned all rights, titles, and interest in its contracts,
assets, and properties related to Commodore SET(TM) technology to the Company,
and (3) contributed $3,000 of a promissory note to the Company for the purpose
of funding the development of SET(TM). This exchange (along with the July 1996
transaction described in the second succeeding paragraph) were recorded by the
Company at Commodore historical book value.

         In June of 1996, the Company completed an initial public offering of
5,750,000 shares of its common stock, par value $.001 per share of common
stock, at a price to the public of $6.00 per share. Along with each share was
one detachable warrant valued at $.10, which entitles its owner to one Company
share of stock at the price of $8.40 per share from the period from June 28,
1997 until June 28, 2001. These warrants are redeemable by the Company for $.01
per share if the average trading price of the Company stock for any 20 day
period is greater than or equal to $18.00 per share. Net proceeds from the
offering were $30,551.

         In July 1996, Commodore acquired the remaining 9.95 percent of Labs
and contributed its investment to the Company. The excess of Commodore's
purchase price of $3,000 over the $2,294 fair value of the net assets acquired
has been recorded as completed technology and is being amortized over 7 years.



                                       7
<PAGE>   8

         On October 1, 1996, the Company acquired all of the outstanding voting
common stock of Advanced Sciences, Inc. ("ASI") and A.S. Environmental, Inc.
("ASE"). This transaction also included the purchase of ASI's foreign
subsidiaries, Advanced Sciences Integrada, S.A., ("ASI Argentina") and Advanced
Sciences Integrated Mexico, S.A., ("ASI Mexico"). The acquisition has been
recorded using the purchase method of accounting. Accordingly, the results of
operations of ASI have been included in those of the Company for the period
subsequent to the date of acquisition.

         In consideration for the ASI and ASE stock, the Company issued 900,000
shares of common stock to ASI and ASE shareholders, with a fair value of
$2,250. Assets and liabilities acquired are as follows:


<TABLE>
<CAPTION>
<S>                                                <C>    
Cash                                               $   199
Accounts Receivables                                 4,783
Prepaid expenses                                       286
Restricted cash                                        151
Property and equipment                                 377
Trade Payables                                      (3,234)
Accrued expenses                                    (1,931)
Line of credit                                      (5,681)
Notes payable                                         (200)
Capital leases and other long-term obligations        (173)
                                                   -------
Net liabilities in excess of assets purchased       (5,423)
Issuance of common stock                            (2,250)
                                                   -------
Goodwill                                           $(7,673)
                                                   =======
</TABLE>


         On December 2, 1996 the Company purchased Commodore Separation
Technologies, Inc. ("Separation"), Commodore CFC Technologies, Inc. ("CCFC") and
CFC Technologies, Inc. ("CFC") from Commodore for $5,400, consisting of $3,000
in cash and warrants to purchase 7,500,000 shares of the Company's common stock
at an exercise price of $15.00 per share and with termination date of December
2, 2003. The acquisition has been accounted for as a transaction between
entities under common control. The Company has recorded its investment in
Separation, CFC and CCFC as $753, which is equal to Commodore's historical basis
in these subsidiaries. The difference between this amount and the $5,400 paid to
Commodore has been recorded as a direct reduction in the paid-in capital of the
Company.

         Substantially all of the company's revenues are from ASI, and consist
of engineering and scientific services performed for the U.S. Government and
prime contractors that serve the U.S. 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 incurred to date bear to total estimated costs.



                                       8
<PAGE>   9






         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 $2,306 at December 31,
1996 and $2,444 at June 30, 1997.

         The condensed consolidated financial statements for the majority of the
six month period ended June 30, 1996 only include the accounts for Labs, the
predecessor company and are therefore not comparable to the condensed
consolidated financial statements of the Company for subsequent periods. 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 investment in Teledyne-Commodore, LLC, a
50% owned joint venture with Teledyne Environmental, Inc., has been accounted
for under the equity method as the Company does not have a controlling interest
in the venture.

        In April 1997, Separation completion an initial public offering of its
equity securities from which it received net proceeds of approximately $11.1
million. These funds were recorded as additional paid-in capital by Separation.
This offering reduced the Company's equity ownership in Separation from 100 
percent to 87 percent. On June 30, 1997, Separation paid a preferred stock
dividend of $138 which was charged directly to paid-in capital. This dividend
has been considered in computing the Company's loss per common share.





                                       9
<PAGE>   10

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
         AND RESULTS OF OPERATION

General

         The Company, a majority-owned subsidiary of Commodore Environmental
Services, Inc. ("Commodore"), is engaged in the destruction and neutralization
of hazardous waste and the separation of hazardous waste from other materials.
The Company owns technologies related to the separation and destruction of
polychlorinated biphenyls (PCBs) and chlorofluorocarbons (CFCs).

         The Company is currently working on the commercialization of these
technologies through various acquisitions, licensing agreements and joint
ventures. Through Advanced Sciences, Inc. ("ASI"), a subsidiary acquired on
October 1, 1996, the Company has contracts with various government agencies and
private companies in the United States and abroad. As some government contracts
are funded in one year increments, there is a possibility for cutbacks. As
these contracts constitute a major portion of the subsidiary's revenues, such a
reduction would materially affect the operations. However, management believes
the subsidiary's existing client relationships will allow the Company to obtain
new contracts in the future.

         The Company, since Commodore's acquisition of Labs in December 1993,
has not generated material revenues, except from the acquisition of ASI, or any
profits. Prior to the acquisition of ASI, the Company was considered to be a
developmental stage company.

RESULTS OF OPERATIONS

         Three and Six Months Ended June 30, 1997 Compared to Three and Six 
Months Ended June 30, 1996

         Revenues were $4,792 and $9,819 for the three and six months ended
June 30, 1997, compared to $14 for the three and six months ended June 30,
1996. Such revenues for 1997 were primarily due to the Company's acquisition of
ASI, effective October 1, 1996, and 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-reimbursements contracts is recorded under the percentage of
completion method as costs incurred and include estimated fees in the
proportion that costs to date bear to total estimated costs. Cost of sales
increased to $4,010 and $8,019 from $0 for the same periods in 1996.
Anticipated losses on contracts are provided for by a charge to income during
the period such losses are first identified.

         For the three and six months ended June 30,1997, the Company incurred
research and development costs of $827 and $1,433, as compared to $586 and $954
for the three and six months ended June 30, 1996. 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
that 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. Research and development increased for the three and
six months ended June 30, 1997 as compared to the three and six months ended
June 30, 1996 primarily due to the continued use of independent consultants in
the development of SET(TM). Also, the Company hired additional technical and
operational personnel to develop the SET(TM) and separation processes.




                                      10
<PAGE>   11



         General and administrative expenses for the three and six months ended
June 30, 1997 were $3,241 and $6,114, as compared to $326 and $691 for the
three and six months ended June 30, 1996. The increase was primarily due to
hiring executives and staff to support the increased activities of the Company
caused by its own and its subsidiary's change to "public" status and efforts to
commercialize its technology. Approximately $892 and $1,647 of the increase
relates to expenses incurred at the newly acquired Advanced Sciences
subsidiary.

         In April, Separation completed a sale of stock which reduced the
Company's ownership percent from 100 percent to 87 percent. As a result, the
financial statements report $228 as that portion of the subsidiary's loss
applicable to the minority interest.

         Interest income was $215 and $320 for the three and six months ended
June 30, 1997, as compared to $2 and $4 for the three and six months ended June
30, 1996. The increase resulted from the investment of the proceeds of the
Company and its subsidiary's initial public offerings.

         Interest expense for the three and six months ended June 30, 1997 was
$126 and $300 as compared to $177 and $369 for the three and six months ended
June 30, 1996. Interest charges in 1996 result from indebtedness to Commodore
for advances made to the Company and from indebtedness by a wholly owned
subsidiary. Interest expense in 1997 was due to the debt assumed in connection
with the acquisition of a wholly owned subsidiary.

         Equity in losses of unconsolidated subsidiary for the three and six
months ended June 30,1997 was $528 and $954, as compared to $0 for the three
and six months ended June 30, 1996. The Company's Teledyne-Commodore, LLC joint
venture commenced operations in October 1996.

LIQUIDITY AND CAPITAL RESOURCES

         From its inception through the second quarter of 1996, the Company's
operations were financed principally by loans and investments from its
stockholders. On June 28, 1996, the Company successfully completed an initial
public offering of its Common Stock and warrants from which it received net
proceeds of approximately $30,551. In connection with the initial public
offering, the Company incurred transaction costs of approximately $649. The
Company allocated approximately $12.0 million of the net proceeds for the
funding of proposed collaborative joint ventures, $2.0 million of which was
allocated to Teledyne-Commodore, LLC.

         In July 1996, the Company utilized a portion of the net proceeds from
its initial offering to repay an outstanding line of credit of $2.0 million, as
well as a $5,925 promissory note to its principal stockholder. The Company set
aside $1.0 million cash collateral to support a loan made by a commercial bank
to the Company's principal stockholder in December 1993. In September 1996,
such cash collateral was released by the bank.




                                      11
<PAGE>   12


         At June 30, 1997 and December 31, 1996, the Company had a $4,008 and
$7,042 outstanding balance, respectively on a $9,250 revolving line of credit
due September 30, 1997. This decrease in debt was attributable to repayments on
the line of credit resulting from collections on accounts receivable balances.
The Company anticipates refinancing the revolving line of credit in the third
quarter of 1997. In addition, the Company plans to pursue various options to
finance its anticipated capital expenditures for 1997 and 1998.

         For the three and six months ended June 30, 1997 the Company incurred
net losses of $3,739 and $6,938 respectively. At June 30, 1997 and December 31,
1996, the Company had working capital of $12,265 and $8,991, respectively.

         Effective as of December 1, 1996, the Company transferred certain of
its operating assets related to its SET(TM) technology to Commodore Advanced
Sciences, Inc. ("CAS"), subject to certain liabilities related to such assets,
in exchange for 100 shares of common stock, par value $.01 per share, of CAS,
representing all of the issued and outstanding shares of capital stock of CAS.
CAS agreed to assume all of the net assets of the Company relating to its
SET(TM) technology at December 1, 1996, which assets had an aggregate value of
approximately $4.0 million at such date, and all known or all unknown
contingent or unliquidated liabilities of and claims against the Company and
its subsidiaries to the extent they relate to or arise out of the transferred
assets. The Company retained, among other things, (a) all temporary cash
investments of the Company at December 1,1996, aggregating approximately $14.1
million, and (b) the executive offices and related assets of the Company
located in Virginia.

         Effective as of December 2, 1996, the Company acquired (i) all of the
outstanding capital stock of Separation and (ii) all of the outstanding capital
stock of Refrigerant from Commodore, the owner of 69.3% of the outstanding
Common Stock of the Company, as part of a corporate restructuring of Commodore
to consolidate all of its current environmental technology businesses with the
Company. In addition, Commodore assigned to the Company outstanding Separation
notes aggregating $976 at December 2, 1996, representing advances previously
made by Commodore to Separation, which the Company has contributed to the
equity of Separation. In consideration for the transfer of all of the
outstanding capital stock of Separation and Refrigerant to the Company, the
Company paid Commodore $3.0 million in cash and, issued to Commodore a warrant
expiring December 2, 2003 to purchase 7,500,000 shares of Company Common Stock
at an exercise price of $15.00 per share, valued at $2.4 million.

         In April 1997, Separation successfully completed an initial public
offering of its equity securities, from which it received net proceeds of
approximately $11.1 million. Such funds will be used primarily to finance
Separation's operations through 1997. This offering reduced the Company's
equity ownership in Separation from 100 percent to 87 percent.



                                      12
<PAGE>   13


NET OPERATING LOSSES

         The Company has net operating loss carry forwards which expire in the
years 2000 through 2011. The amount of net operating loss carry forward that
can be used in any one year will limited by the applicable tax laws which are
in effect at the time such carry forward can be utilized. A valuation allowance
has been established to offset any benefit from the net operating loss carry
forwards as it cannot be determined when or if the Company will be able to
utilize the net operating losses.

FORWARD LOOKING STATEMENTS

         This report contains forward-looking statements within the meaning of
Section 21E of the Securities Exchange Act of 1934. These forward-looking
statements are based largely on the Company's expectations and are subject to a
number of risks and uncertainties, certain of which are beyond the Company's
control. Actual results could differ materially from these forward-looking
statements as a result of, among other factors, competitive conditions in the
industries in which the Company operates, failure to commercialize one or more
of the technologies of the Company and general economic conditions that are
less favorable than expected. In light of these risks and uncertainties, there
can be no assurance that the forward-looking information contained in this
respect will in fact occur.




                                      13
<PAGE>   14
                                    PART II
                               OTHER INFORMATION

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

        On June 17, 1997, the Company conducted its 1997 Annual Meeting of
Stockholders (the "Annual Meeting"). As of the record date of May 15, 1997,
there were 21,650,000 shares of Company Common Stock eligible to vote. Of these
shares, 20,517,281, (94.8%) were represented either in person or by proxy at
the Annual Meeting. The following matters were submitted to a vote at the
Annual Meeting with the following results:

(a)  Election of Directors: Each of the following nominees for election to the
     Board of Directors of the Company were elected by an affirmative vote of
     20,396,481 shares, or 94.2% of all eligible shares: Paul E. Hannesson,
     Bentley J. Blum, Edwin L. Harper, Ph.D., Thomas E. Noel, Kenneth L.
     Adelman, Ph.D., Herbert A. Cohen, C. Thomas McMillen, David L. Mitchell, Ed
     L. Romero and Tom J. Fatjo, Jr. 120,800 shares were "withheld" with respect
     to each of the foregoing nominees, and no shares were represented as
     "broker non-votes."

(b)  Amendment of Certificate of Incorporation of the Company: By an affirmative
     vote of 16,588,163 shares, or 76.6% of all eligible shares, the
     stockholder of the Company authorized the amendment of the Certificate of
     Incorporation of the Company to (i) increase the number of authorized
     shares of the Company's Common Stock from 50,000,000 shares to 75,000,000
     shares and (ii) increase the number of authorized shares of preferred
     stock, par value $.001 per share, of the Company from 5,000,000 shares to
     10,000,000 shares. 2,236,200 shares were voted "against" approval of the
     proposal; 10,920 shares "abstained;" and no shares were represented as
     "broker non-votes.''

(c)  Approval of Issuance of Warrant to Commodore: By an affirmative vote of
     18,691,663 shares, or 86.3% of all eligible shares, the stockholders of the
     Company authorized the issuance of a warrant to purchase 7,500,000 shares
     of Common Stock to Commodore. 116,350 shares were voted "against" approval
     of this proposal; 27,070 shares "abstained;" and no shares were represented
     as "broker non-votes.'' 

(d)  Amendment of 1996 Stock Option Plan: By an affirmative vote of 18,420,863
     shares, or 85.1% of all eligible shares, the stockholders of the Company
     authorized the amendment of the Company's 1996 Stock Option Plan to
     increase the number of shares of Common Stock eligible for issuance upon
     exercise of options granted under the plan from 2,000,000 shares to
     4,000,000 shares. 397,150 shares were voted "against" approval of this
     proposal; 17,470 shares "abstained"; and no shares were represented as
     "broker non-votes." 

(e)  Ratification of Independent Auditors: By an affirmative vote of 20,481,281
     shares, 94.6% of all eligible shares, the stockholders of the Company
     ratified the appointment of Price Waterhouse LLP as the Company's
     independent auditors for the fiscal year ending December 31, 1997. 23,810
     shares were voted "against" approval of this proposal; 12,190 shares
     "abstained;" and no shares ere represented as "broker non-votes."



                                       14
<PAGE>   15

                                   SIGNATURES


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







DATE: August 14, 1997         COMMODORE APPLIED TECHNOLOGIES, INC.
                              (REGISTRANT)


                              BY
                                 ----------------------------------------------
                                   MICHAEL D. FULLWOOD - SENIOR VICE PRESIDENT,
                                   CHIEF FINANCIAL AND  ADMINISTRATIVE OFFICER,
                                   SECRETARY, AND GENERAL COUNSEL
                                   (AS BOTH A DULY AUTHORIZED OFFICER OF THE
                                   REGISTRANT AND THE PRINCIPAL FINANCIAL
                                   OFFICER OR CHIEF ACCOUNTING OFFICER OF THE
                                   REGISTRANT)





                                      15
<PAGE>   16




                               INDEX TO EXHIBITS

<TABLE>
<CAPTION>
Exhibit
Number                         Description
------                         -----------
  <S>                          <C>
  27                           Financial Data Schedule
</TABLE>