UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                          AMENDMENT NO. 2 TO 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 MARCH 31, 2006

     |_| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
                              EXCHANGE ACT OF 1934.

                         COMMISSION FILE NUMBER 0-10999

                        COMPOSITE TECHNOLOGY CORPORATION

             (Exact Name of Registrant as Specified in Its Charter)

           NEVADA                                        59-2025386
        -------------                                    ----------
(State or Other Jurisdiction of             (I.R.S. Employer Identification No.)
 Incorporation or Organization)


                                2026 McGaw Avenue
                               Irvine, California
                    (Address of Principal Executive Offices)


                                      92614
                                   (Zip Code)

                                 (949) 428-8500
              (Registrant's Telephone Number, Including Area Code)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.

YES |X| NO |_|

Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Exchange Act).

YES |X| NO |_|

Indicate the number of shares outstanding of the issuer's common stock as of May
8, 2006

            CLASS                              NUMBER OF SHARES OUTSTANDING
            -----                              ----------------------------
   Common Stock, par value                          135,329,914 shares
       $0.001 per share


                                       1
<PAGE>

                                EXPLANATORY NOTE

      This Amendment No. 2 to our Quarterly Report on Form 10-Q for the three
months ended March 31, 2006 is being filed in order to correct certain drafting
errors contained in such Report. Part I, Item 4 has been amended in its entirety
as set forth in this Amendment No. 2 to correct such drafting errors. In our
Quarterly Report, as amended, we erroneously disclosed that our disclosure
controls and procedures were effective as of December 31, 2005. We have
corrected such error by disclosing in this amendment that due to the material
weaknesses remaining in existence, our disclosure controls and procedures were
not effective. In addition, we corrected the date reference to March 31, 2006.


                                     Part I

ITEM 4: CONTROLS AND PROCEDURES

Based on an evaluation under the supervision and with the participation of the
Company's management, including the Chief Executive Officer, the acting Chief
Operating Officer, the Company's principal executive officer and principal
financial officer have concluded that the Company's disclosure controls and
procedures (as defined under the Securities Exchange Act of 1934, as amended
(Exchange Act)) were not effective as of March 31, 2006 to ensure that
information required to be disclosed by the Company in reports that it files or
submits under the Exchange Act is recorded, processed, summarized and reported
within the time periods specified in Securities and Exchange Commission rules
and forms.

During management's review of our internal control structure under Sarbanes
Oxley section 404, for the fiscal year ending September 30, 2005, we determined
the following to be material weaknesses:

Entity level Processes and weaknesses . As of September 30, 2005, the following
material weaknesses existed related to general processes and weaknesses for the
entity taken as a whole:

o Proper segregation of duties and inadequate training did not exist due to
inadequate accounting and finance staff at fiscal year end.

o The Company did not have an Audit Committee, a Compensation Committee, and did
not designate a financial expert on the Board of Directors since we only had a
two person non-independent Board of Directors during the year.

o The Company did not have an independent internal audit function due to the
small size of the organization.

These material weaknesses related to the entity as a whole affect all of our
significant accounts and could result in a material misstatement to our annual
or interim consolidated financial statements that would not be prevented or
detected.

During the quarter ended March 31, 2006 the Company added two Directors, one of
whom is considered to be independent, is a financial expert, and who will chair
the Audit and Compensation Committees.

Information Technology Controls (ITCs). ITCs are policies and procedures that
relate to many applications and support the effective functioning of application
controls by helping to ensure the continued proper operation of information
systems. ITGCs include four basic information technology (IT) areas relevant to
internal control over financial reporting: program development, program changes,
computer operations, and access to programs and data. As of September 30, 2005,
a material weakness existed relating to our information technology general
controls, including ineffective controls relating to: o Access to programs and
data including (1) user administration, (2) application and system
configurations, and (3) periodic user access validation.

During the quarter ended March 31, 2006 the Company improved the user
administration and user access validation procedures.

Inventory Processes. As of September 30, 2005, the following material weaknesses
existed related to ineffective controls over our inventory processes:

o Perpetual Inventory records: Ineffective controls to (a) accurately record the
raw materials inventory moved out of inventory stores and into manufacturing
production and later into finished goods, (b) accurately record manufacturing
variances, (c) accurately track inventory movement and manage inventory held in
offsite locations.

As a result of these material weaknesses, management recorded material
adjustments to the inventory, Cost of Sales, and expensed materials accounts
during the fiscal year ended September 30, 2005.

During the quarter ended March 31, 2006 the Company improved the tracking of
inventory movement and implemented additional procedures to properly monitor
manufacturing variances.


                                       2
<PAGE>

There were no significant changes in the Company's internal control over
financial reporting identified in management's evaluation during the first six
months of fiscal 2006 that have materially affected or are reasonably likely to
materially affect the Company's internal control over financial reporting.


                                       3
<PAGE>

                                    SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this Form 10-Q/A to be signed on its behalf by the
undersigned, thereunto duly authorized.

                        COMPOSITE TECHNOLOGY CORPORATION
                                  (Registrant)


                                                      By: /s/ Benton H  Wilcoxon
                                                      -------------------------
                                                      Benton H  Wilcoxon
                                                      Chairman, Chief Executive
                                                      Officer and Acting Chief
                                                      Financial Officer

                   August 14, 2006