UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549

                                   FORM 10-QSB

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

(Mark one)

   [X]   Quarterly Report Under Section 13 or 15(d) of The Securities Exchange
         Act of 1934

                FOR THE QUARTERLY PERIOD ENDED DECEMBER 31, 2003

   [ ]   Transition Report Under Section 13 or 15(d) of The Securities Exchange
         Act of 1934

         For the transition period from ______________ to _____________

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

                         Commission File Number: 0-10999
                                                 -------

                        COMPOSITE TECHNOLOGY CORPORATION
        (Exact name of small business issuer as specified in its charter)

           Nevada                                           59-2025386
  ------------------------                           ------------------------
  (State of incorporation)                           (IRS Employer ID Number)

                  2026 McGaw Avenue, Irvine, California 92614
          -------------------------------------------------------------
               (Address of principal executive offices) (Zip Code)


                                 (949) 428-8500
                                 --------------
                        (Registrant's telephone number)


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

Check  whether the issuer (1) filed all reports  required to be filed by Section
13 or 15(d) of the  Exchange  Act during the past 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 [ ]

State the number of shares outstanding of each of the issuer's classes of common
equity as of the latest practicable date: February 10, 2004: 101,331,049
                                          ---------------------------

Transitional Small Business Disclosure Format (check one):   YES [ ] NO [X]


<PAGE>


                        COMPOSITE TECHNOLOGY CORPORATION

                 Form 10-QSB for the Quarter ended June 30, 2003

                                Table of Contents


                                                                           Page
                                                                           ----
PART I - FINANCIAL INFORMATION

  Item 1   Financial Statements                                              3

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

  Item 3   Controls and Procedures                                          13


PART II - OTHER INFORMATION

  Item 1   Legal Proceedings                                                13

  Item 2   Changes in Securities                                            13

  Item 3   Defaults Upon Senior Securities                                  13

  Item 4   Submission of Matters to a Vote of Security Holders              13

  Item 5   Other Information                                                14

  Item 6   Exhibits and Reports on Form 8-K                                 14

SIGNATURES                                                                  14


                                       2

<PAGE>


ITEM 1

PART 1 - FINANCIAL STATEMENTS


                                                COMPOSITE TECHNOLOGY CORPORATION
                                                                  AND SUBSIDIARY
                                                   (DEVELOPMENT STAGE COMPANIES)
                                           CONDENSED, CONSOLIDATED BALANCE SHEET
                                                   December 31, 2003 (unaudited)
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                     ASSETS

CURRENT ASSETS
<S>                                                                     <C>
     Cash and cash equivalents                                          $  2,935,651
     Prepaid expenses and other current assets                               345,168
                                                                        ------------

         Total current assets                                              3,280,819

PROPERTY AND EQUIPMENT, net                                                  342,904
OTHER ASSETS                                                                   9,000
                                                                        ------------
                TOTAL ASSETS                                            $  3,632,723
                                                                        ============


                      LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES
     Accounts payable - trade                                           $    576,517
     Accrued legal settlement                                                102,935
     Accrued payroll and related expenses                                    141,163
     Accrued dividends payable                                                45,393
     Accrued officer compensation                                            255,619
                                                                        ------------

         Total current liabilities                                         1,121,627
                                                                        ------------

COMMITMENTS AND CONTINGENCIES

SHAREHOLDERS' EQUITY
     Series B Preferred stock, $0.001 par value
         5,000,000 shares authorized
         1,000 shares issued and outstanding                                       1
     Common stock, $0.001 par value
         200,000,000 shares authorized
         101,102,653 shares issued and outstanding                           101,103
     Common stock committed                                                  107,425
     Common stock subscription receivable                                   (148,522)
     Deferred compensation - stock options                                  (557,296)
     Additional paid-in capital                                           16,588,028
     Deficit accumulated during the development stage                    (13,579,643)
                                                                        ------------

            Total shareholders' equity                                     2,511,096
                                                                        ------------

                TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY              $  3,632,723
                                                                        ============
</TABLE>

   The accompanying notes are an integral part of these financial statements.

                                       3

<PAGE>

                                                COMPOSITE TECHNOLOGY CORPORATION
                                                                  AND SUBSIDIARY
                                                   (DEVELOPMENT STAGE COMPANIES)
                                CONDENSED, CONSOLIDATED STATEMENTS OF OPERATIONS
               FOR THE THREE MONTHS ENDED DECEMBER 31, 2003 AND 2002 (UNAUDITED)
         AND FOR THE PERIOD FROM MARCH 28, 2001 (INCEPTION) TO DECEMBER 31, 2003
                                                                     (UNAUDITED)
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                                                                          For the
                                                                                        Period from
                                                                                          March 28,
                                                                                            2001
                                                      For the Three Months Ended      (Inception) to
                                                             December 31,               December 31,
                                                        2003              2002              2003
                                                    ------------      ------------      ------------
                                                     (unaudited)       (unaudited)      (unaudited)
<S>                                                 <C>               <C>               <C>
OPERATING EXPENSES
     Officer compensation                           $     95,000      $         --      $    659,900
     General and administrative                          745,736            82,884         2,382,086
     Legal, professional, and consulting                 572,083           144,903         5,109,926
     Research and development                            251,305           211,703         3,461,594
     Reorganization                                           --                --            30,000
     Depreciation                                          9,192             1,350            32,367
     Compensation expense related to
         issuances of common stock at
         less than fair value                                 --                --           603,500
     Compensation expense related to
         fair value of stock options - legal              64,125            76,850           499,775
     Compensation expense related to
         fair value of stock options - research
         and development                                  40,325           111,569           607,204
                                                    ------------      ------------      ------------

            Total operating expenses                   1,777,766           629,259        13,386,352
                                                    ------------      ------------      ------------

LOSS FROM OPERATIONS                                  (1,777,766)         (629,259)      (13,386,352)
                                                    ------------      ------------      ------------

OTHER EXPENSE
     Interest expense                                         --            (3,250)          (16,968)
     Carrying value impairment adjustment
         on investments in other companies                    --                --          (137,230)
                                                    ------------      ------------      ------------

            Total other expense                               --            (3,250)         (154,198)
                                                    ------------      ------------      ------------

NET LOSS                                            $ (1,777,766)     $   (632,509)     $(13,540,550)

PREFERRED STOCK DIVIDENDS                                  5,000             3,300            39,093
                                                    ------------      ------------      ------------

NET LOSS AVAILABLE TO COMMON
     SHAREHOLDERS                                   $ (1,782,766)     $   (635,809)     $(13,579,643)
                                                    ============      ============      ============

BASIC AND DILUTED
     LOSS PER SHARE                                 $      (0.02)     $      (0.01)
     Loss per share                                           --                --
                                                    ============      ============

TOTAL BASIC AND DILUTED LOSS PER SHARE
     AVAILABLE TO COMMON SHAREHOLDERS               $      (0.02)     $      (0.01)
                                                    ============      ============

WEIGHTED-AVERAGE COMMON SHARES
     OUTSTANDING                                      99,398,246        75,303,297
                                                    ============      ============
</TABLE>

   The accompanying notes are an integral part of these financial statements.

                                       4
<PAGE>

                                                COMPOSITE TECHNOLOGY CORPORATION
                                                                  AND SUBSIDIARY
                                                   (DEVELOPMENT STAGE COMPANIES)
                                CONDENSED, CONSOLIDATED STATEMENTS OF CASH FLOWS
               FOR THE THREE MONTHS ENDED DECEMBER 31, 2003 AND 2002 (UNAUDITED)
         AND FOR THE PERIOD FROM MARCH 28, 2001 (INCEPTION) TO DECEMBER 31, 2003
                                                                     (UNAUDITED)
--------------------------------------------------------------------------------

<TABLE>
 <CAPTION>
                                                                                         For the
                                                                                        Period from
                                                                                         March 28,
                                                                                           2001
                                                      For the Three Months Ended      (Inception) to
                                                              December 31,              December 31,
                                                        2003              2002             2003
                                                     (unaudited)       (unaudited)      (unaudited)
                                                    ------------      ------------      ------------
<S>                                                 <C>               <C>               <C>
CASH FLOWS FROM OPERATING ACTIVITIES
    Net loss                                        $ (1,777,766)     $   (632,509)     $(13,540,550)
    Adjustments to reconcile net loss
      to net cash used in operating activities
        Depreciation                                       9,192             1,350            32,367
        Amortization of prepaid expenses
             originally paid with common stock           190,000            29,318           276,148
        Issuance of common stock for
          consulting, legal, and other expenses           28,050                --         5,694,527
        Issuance of common stock for legal
          settlement                                          --                --            93,750
        Issuance of warrants for services
          rendered for research and
          development                                         --                --            61,250
        Issuance of warrants for legal
          settlement                                          --                --            11,750
        Compensation expense related to
          issuances of common stock at
          less than fair value                                --                --           603,500
        Compensation expense related to
          fair value of stock options                    104,451           188,419         1,106,980
        Carrying value impairment adjustment
          on investments in other companies                   --                --           137,230
        (Increase) decrease in Prepaid expenses
             and other current assets                     74,036                --           230,421
        Increase (decrease) in
          Accounts payable - trade                  $    110,072      $    344,046      $    582,815
          Accrued legal settlement                       (42,665)          102,935           145,600
          Accrued payroll and related
             expenses                                     79,911           141,163            61,252
          Accrued interest payable                        (9,851)           13,101            13,101
          Accrued officer compensation                        --            33,850           225,691
                                                    ------------      ------------      ------------

Net cash used in operating activities                 (1,224,719)          (45,377)       (4,226,922)
                                                    ------------      ------------      ------------

CASH FLOWS FROM INVESTING ACTIVITIES
    Cash advanced by (to) officers, net                       --                --            29,928
    Purchase of property and equipment                  (151,363)         (102,950)         (375,271)
    Investments in other companies                            --                --           (40,000)
                                                    ------------      ------------      ------------

Net cash provided by (used in) investing
  activities                                            (151,363)         (102,950)         (385,343)
                                                    ------------      ------------      ------------

CASH FLOWS FROM FINANCING ACTIVITIES
    Common stock subscription receivable                 (98,522)               --          (148,522)
    Proceeds from sale of committed stock                     --                --           194,375
    Payment for costs associated with
      the sale of common stock                          (220,030)               --          (237,030)
    Proceeds from notes payable                               --                --           253,000
    Proceeds from sale of preferred stock                     --                --           132,000
    Proceeds from exercise of warrants                   153,125                --           153,125
    Proceeds from sale of common stock                 3,346,662           232,270         7,200,968
                                                    ------------      ------------      ------------

Net cash provided by financing activities              3,181,235           232,270         7,547,916
                                                    ------------      ------------      ------------


Net increase in cash and cash equivalents           $  1,805,153      $     83,943      $  2,935,651

CASH AND CASH EQUIVALENTS, BEGINNING
    OF PERIOD                                          1,130,498            13,956                --
                                                    ------------      ------------      ------------

CASH AND CASH EQUIVALENTS, END OF
    PERIOD                                          $  2,935,651      $     97,899      $  2,935,651
                                                    ============      ============      ============

SUPPLEMENTAL DISCLOSURES OF CASH FLOW

INFORMATION
    INTEREST PAID                                   $         --      $      9,851      $        150
                                                    ============      ============      ============
</TABLE>

   The accompanying notes are an integral part of these financial statements.

                                       5
<PAGE>


NOTE 1 - ORGANIZATION AND LINE OF BUSINESS

         We are an Irvine,  CA-based  company  providing  innovative  technology
         solutions for electric power transmission systems using our proprietary
         advanced composite technologies.  Our first product is a family of high
         performance  aluminum  conductor  composite  core  ("ACCC")  cables for
         electric transmission and distribution lines.

         In December 2003, the first  commercial order was received for our ACCC
         cable for a new  transmission  line in Kansas.  This  order  requires a
         small size ACCC cable to replace a "Hawk"  size  designation,  which we
         anticipate  to begin to produce in the second  quarter of 2004. We will
         continue  to  design  and  produce  other  sizes of ACCC  cable to fill
         customer requirements.

         In December 2003, the Company incorporated three inactive  subsidiaries
         as Nevada corporations:  CTC Wind Systems Corporation  ("CTCWSC"),  CTC
         Cable  Corporation  ("CTCCC"),  and  CTC  Towers  &  Poles  Corporation
         ("CTCTPC").

         NOTE 2 - GOING CONCERN

         The Company has received a report from its  independent  auditors  that
         includes an explanatory  paragraph describing the uncertainty as to the
         Company's  ability to continue as a going concern.  These  consolidated
         financial statements contemplate the ability to continue as such and do
         not include any adjustments that might result from this uncertainty.


                                       6
<PAGE>

NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

         Basis of Presentation

         The accompanying  financial statements have been prepared in conformity
         with accounting  principles  generally accepted in the United States of
         America for interim financial  information and with the instructions to
         Form 10-QSB and Regulation S-B. 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  normal,
         recurring adjustments considered necessary for a fair presentation have
         been included.  The financial  statements should be read in conjunction
         with the audited financial statements and notes thereto included in the
         Company's Annual Report on Form 10-KSB for the year ended September 30,
         2003. The results of operations for the three months ended December 31,
         2003 are not necessarily indicative of the results that may be expected
         for the year ended September 30, 2004.

         Development Stage Enterprise

         The Company is a  development  stage company as defined in Statement of
         Financial   Accounting   Standards  ("SFAS")  No.  7,  "Accounting  and
         Reporting by Development  Stage  Enterprises."  The Company is devoting
         substantially  all of its present  efforts to establish a new business,
         and its planned principal operations have not yet commenced. All losses
         accumulated  since  inception  have  been  considered  as  part  of the
         Company's development stage activities.

         Principles of Consolidation

         The consolidated  financial  statements include the accounts of CTC and
         its wholly  owned  subsidiaries,  (collectively,  the  "Company").  All
         significant  inter-company  accounts and transactions are eliminated in
         consolidation.

         Research and Development Expenses

         Research  and  development   expenses  are  charged  to  operations  as
         incurred.

         Loss Per Share

         The Company utilizes SFAS No. 128, "Earnings per Share." Basic loss per
         share is computed by dividing loss available to common  shareholders by
         the weighted-average number of common shares outstanding.  Diluted loss
         per share is computed  similar to basic loss per share  except that the
         denominator  is  increased to include the number of  additional  common
         shares that would have been  outstanding if the potential common shares
         had been issued and if the  additional  common  shares  were  dilutive.
         Common  equivalent  shares are excluded from the  computation  if their
         effect is anti-dilutive.


                                       7
<PAGE>

         The  following   common  stock   equivalents  were  excluded  from  the
         calculation  of diluted  loss per share since their  effect  would have
         been anti-dilutive:

                                                         December 31,
                                                   -------------------------
                                                     2003             2002
                                                   ----------      ---------
          Series B convertible preferred stock         80,000        105,600
          Options for common stock                  7,947,740      5,307,740
          Warrants                                 13,189,569      6,096,290


NOTE 4 - PROPERTY AND EQUIPMENT

         Property and equipment at December 31, 2003 consisted of the following:

          Office furniture and equipment                      $ 75,587
          Manufacturing equipment                              299,684
                                                              --------

                                                               375,271

          Less accumulated depreciation                         30,367
                                                              --------

              TOTAL                                           $342,904
                                                              ========


         Depreciation  expense  was  $9,192,  $1,350 and  $32,367  for the three
         months  ended  December 31, 2003 and 2002 and the period from March 28,
         2001 (inception) to December 31, 2003, respectively.


NOTE 5 - SHAREHOLDERS' EQUITY

         Common Stock

         Services Rendered

         During the three months ended  December  31, 2003,  the Company  issued
         200,000 shares of free trading common stock registered pursuant to Form
         S-8 to one  individual  for legal  services  valued at $383,000,  which
         approximated  the closing price of the Company's common stock as quoted
         on the NASDAQ  Electronic  Bulletin Board on the date of issue. Of this
         amount,  $193,000  remained as prepayment  for those legal  services at
         December 31, 2003.

         During the three months ended December 31, 2003, the Company  committed
         to issue 20,000 shares of the Company's restricted, unregistered common
         stock to one individual for consulting  services.  This transaction was
         valued at $28,050, which approximates the "fair value" of the Company's
         stock on the date of the transaction using the discounted closing price
         of the  Company's  common  stock as  quoted  on the  NASDAQ  Electronic
         Bulletin Board.


                                       8
<PAGE>

         Cash

         During  November 2003,  pursuant to Private  Placement  Memoranda,  the
         Company sold an aggregate  25,000 Units for gross proceeds of $100,000.
         Each Unit  consisted of 10 shares of  restricted,  unregistered  common
         stock and two Series P warrants to purchase one share of  unregistered,
         restricted  common stock.  Each Series P warrant entitles the holder to
         purchase a share of common  stock at $0.80 per share and expires at the
         earlier of July 30, 2005 or three weeks following written  notification
         by the Company that its common stock closed at or above $1.20 per share
         for 10 consecutive trading days. In addition, the Series P warrants can
         be redeemed by the Company for $0.001 each if a Registration  Statement
         covering the shares  underlying the Series P warrants has been declared
         effective and the  Company's  common stock closes at or above $1.20 for
         10 consecutive days.

         During  November 2003,  pursuant to Private  Placement  Memoranda,  the
         Company sold an aggregate of 89,360 shares of  restricted  unregistered
         common stock at $1.40 per share for gross proceeds of $125,104.

         In December 2003, the Company issued  2,400,000 Units for cash proceeds
         of $2,790,000 net of offering costs of $210,000. Each unit consisted of
         one share of the Company's unregistered restricted common stock and 0.5
         warrant to purchase one share of the Company's unregistered  restricted
         common stock at an exercise price of $2.04 per share. The warrants vest
         immediately  and expire in December  2008. The Company has the right to
         call the warrants if the closing price of the Company's common stock is
         greater  than  200%  of  the  exercise  price  of the  warrants  for 20
         consecutive trading days.

         Stock for Lease Agreement

         In December  2003, as part of entering  into a lease  agreement for its
         new  offices  and  warehouse,  the  Company  issued  140,160  shares of
         unregistered  restricted  common stock valued at $147,168 to the lessor
         as payment for the first two month's rent.

         Exchange Offer

         In  November  2003,  the  Company  made an offer to the  holders of the
         Series E and  Series H warrants  that if the  holders  exercised  their
         warrants  before  December 10, 2003, the holder would receive one share
         of  unregistered  common stock and one Series R warrant to purchase 0.2
         share of unregistered  restricted  common stock.  Each Series R warrant
         entitled  the holder to  purchase  one share of common  stock at $2 per
         share and expires on  December  30,  2005.  In  addition,  the Series R
         warrants  can  be  redeemed  by  the  Company  for  $0.001  each  if  a
         Registration  Statement  covering  the shares  underlying  the Series R
         warrants has been declared  effective  and the  Company's  common stock
         closes  at or  above  $3  for 10  consecutive  days  and if the  shares
         underlying  the warrants have been  registered.  In December  2003, the
         Company issued 592,500 shares of unregistered  restricted  common stock
         and 58,500 Series R warrants in exchange for proceeds of $153,125.


                                       9
<PAGE>

         Stock Options

         Stock Plan

         The Company  recorded  deferred  compensation of $1,664,275  related to
         3,200,000 options granted on March 31, 2002 and 750,000 options granted
         on April 1, 2002. The Company recorded compensation expense of $104,450
         and $188,419  during the three months ended December 31, 2003 and 2002,
         respectively,  for the value of the legal, consulting, and research and
         development services rendered during those periods.

         In December 2003, a former employee exercised 50,000 stock options on a
         cashless basis and received 44,318 shares of common stock.

         The following table summarizes all Stock Plan activity through December
         31, 2003.

<TABLE>
<CAPTION>
                                                                   Weighted-Average
                                                         Number        Exercise
                                                       of Shares         Price
                                                      ----------      -----------
<S>                                                   <C>             <C>
          Outstanding, March 18, 2001 (inception)             --      $       --
            Granted                                    1,357,740      $     0.35
                                                      ----------

          Outstanding, September 30, 2001              1,357,740      $     0.35
            Granted                                    5,950,000      $     0.35
            Exercised                                 (2,000,000)     $     0.24
                                                      ----------

          Outstanding, September 30, 2002              5,307,740      $     0.39
            Granted                                    3,950,000      $     0.46
            Exercised                                    (60,000)     $     0.25
            Canceled                                  (1,000,000)     $     0.69
                                                      ----------

          Outstanding, September 30, 2003              8,197,740      $     0.39
            Exercised                                    (50,000)     $     0.25
            Cancelled                                   (200,000)     $     0.25
                                                      ----------

          OUTSTANDING, DECEMBER 30, 2003               7,947,740      $     0.39
                                                      ==========

          EXERCISABLE, DECEMBER 30, 2003               3,183,573      $     0.38
                                                      ==========
</TABLE>


         The Company has adopted the disclosure-only provisions of SFAS No. 123.
         Accordingly,  no  compensation  cost  other  than that  required  to be
         recognized by APB 25 for the  difference  between the fair value of the
         Company's  common stock at the grant date and the exercise price of the
         options has been recognized.  Had  compensation  cost for the Company's
         Stock  Plan been  determined  based on the fair value at the grant date
         for  awards  consistent  with  the  provisions  of SFAS  No.  123,  the
         Company's  net loss  and loss per  share  for the  three  months  ended
         December  31, 2003 and 2002 would have been  increased to the pro forma
         amounts indicated below:

<TABLE>
<CAPTION>
                                                                 2003               2002
                                                             -------------      -------------
<S>                                                          <C>                <C>
          Net loss
          As reported                                        $  (1,777,766)     $    (632,507)
          Add stock based employee compensation
            expense included in net income, net of tax                  --                 --
          Deduct total stock based employee compensation
            expense determined under fair value method
            for all awards, net of tax                             (75,242)                --
                                                             -------------      -------------

                   PRO FORMA                                 $  (1,853,008)     $    (632,507)
                                                             =============      =============

           Earnings per common share
               Basic - as reported                           $       (0.02)     $       (0.01)
               Basic - pro forma                             $       (0.02)     $       (0.01)
               Diluted - as reported                         $       (0.02)     $       (0.01)
               Diluted - pro forma                           $       (0.02)     $       (0.01)
</TABLE>


                                       10
<PAGE>


         Warrants

         The following  table presents  Warrant  activity  through  December 31,
         2003:

<TABLE>
<CAPTION>
                                                                    Weighted-Average
                                                          Number        Exercise
                                                        of Shares         Price
                                                       ----------      -----------
<S>                                                     <C>            <C>
          Outstanding, March 18, 2001 (inception)              --      $        --
            Granted                                     1,905,600      $      1.26
                                                       ----------

          Outstanding, September 30, 2001               1,905,600      $      1.26
            Granted                                       848,630      $      0.50
            Exercised                                      (7,940)     $      1.26
                                                       ----------

          Outstanding, September 30, 2002               2,796,290      $      1.06
            Granted                                    14,568,834      $      0.46
            Exercised                                    (267,500)     $      0.29
                                                       ----------

          Outstanding, September 30, 2003              17,047,624      $      0.55
            Granted                                     1,378,500      $      1.93
            Exercised                                    (785,555)     $      0.32
            Cancelled                                    (267,500)     $      0.50
                                                       ----------

          OUTSTANDING, DECEMBER 31, 2003               13,189,569      $      0.73
                                                       ==========

          EXERCISABLE, DECEMBER 31, 2003               13,189,569      $      0.73
                                                       ==========
</TABLE>


NOTE 6 - SUBSEQUENT EVENTS

         Exercise of Stock options

         In February  2004, a former officer was issued 120,765 shares of common
         stock on the exercise of 200,000 stock options on a cashless basis.

         Preferred Shares

         In January 2004, the Company converted the 1,000 shares of Series B 10%
         preferred stock of its subsidiary  Transmission  Technology Corporation
         into  80,000  shares  of  unregistered,  restricted  common  stock.  In
         addition, the Company issued 27,631 shares of unregistered,  restricted
         common stock in  satisfaction  of the unpaid  preferred stock dividends
         and interest totaling $31,996.


                                       11
<PAGE>

ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

RESULTS OF OPERATIONS

In the Fiscal  Quarter ended December 31, 2003 the Company  commenced  providing
services  under a $2.675  million dollar  contract for design,  production,  and
installation  of a 21 mile  long new ACCC  transmission  line in  Kansas  during
Fiscal Year 2004. Revenue from this contract will be recognized upon completion.

PLAN OF OPERATION

We  completed a  $3,000,000  financing in December of 2003 which we believe will
cover  anticipated  operating  expenses  during Fiscal Year 2004 while we secure
payments  from the present order and other  potential  orders during Fiscal Year
2004. We also  anticipate  calling all or part of the 8.2 million  warrants that
could  yield $3.5  million.  Such  warrants  are  subject to a call by us if the
underlying shares were registered and the stock price remained above 150% of the
exercise price,  for which the highest exercise price is $0.80 per share. We may
also be able to secure direct  financing  through  advance  orders,  deposits to
secure  strategic  partnerships  or  joint  venture  relationships,   or  direct
investment in our new  subsidiaries to provide most financial  requirements  for
the new non-cable  products.  At current and  projected  expenditure  rates,  we
believe  that we  have  sufficient  cash  reserves  to  sustain  operations  for
approximately  one year. If there is  significantly  greater demand for our ACCC
cable  products  then we may seek  additional  financing  to fund  expansion  or
finance raw materials or order inventory.

ACQUISITION OF PLANT AND EQUIPMENT

We do not own any real estate. We have designed, built and successfully operated
two pultrusion lines for ACCC cable.  During January 2004 these lines were moved
into a new leased facility,  along with the materials and machinery necessary to
begin  construction of an additional high speed  production line for development
of other products for the electrical energy marketplace during Fiscal Year 2004.
Additional  fabrication  equipment and  materials  will be necessary to complete
these tasks.

PERSONNEL

We  currently  have 18 full time  employees.  We have 2  officers,  6  corporate
managers,  2 corporate  administrative  assistants,  4 production managers and 4
production  assistants.  We also  utilize  the  services  of three  consultants.
Numerous  technical  skills will be  required  to bring our  products to market.
Recruiting efforts have begun and will continue in the near future.  Independent
consultants,  accountants  and attorneys have been retained in the past and will
continue to be used extensively in the future.

OFF BALANCE SHEET ARRANGEMENTS

There are no off balance sheet arrangements.



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<PAGE>


ITEM 3 - CONTROLS AND PROCEDURES

As required by Rule 13a-15 under the Exchange  Act,  within the 90 days prior to
the filing date of this report,  the Company  carried out an  evaluation  of the
effectiveness of the design and operation of the Company's  disclosure  controls
and  procedures.  This evaluation was carried out under the supervision and with
the participation of the Company's management,  including the Company's Chairman
and Chief Executive  Officer along with the Company's  Chief Financial  Officer.
Based upon that evaluation,  the Company's President and Chief Executive Officer
along with the Company's  Chief Financial  Officer  concluded that the Company's
disclosure controls and procedures are effective. There have been no significant
changes in the  Company's  internal  controls or in other  factors,  which could
significantly  affect  internal  controls  subsequent  to the date  the  Company
carried out its evaluation.

Disclosure  controls and procedures are controls and other  procedures  that are
designed to ensure that information  required to be disclosed in Company reports
filed or submitted under the Exchange Act is recorded, processed, summarized and
reported,  within the time  periods  specified  in the  Securities  and Exchange
Commission's  rules and  forms.  Disclosure  controls  and  procedures  include,
without limitation,  controls and procedures designed to ensure that information
required to be  disclosed  in Company  reports  filed under the Exchange Act are
accumulated  and  communicated  to  management,  including the  Company's  Chief
Executive  Officer and Chief Financial  Officer as appropriate,  to allow timely
decisions regarding required disclosure.


PART II - OTHER INFORMATION

ITEM 1 - LEGAL PROCEEDINGS

From time to time,  the Company is involved in routine  litigation  matters that
are incidental to its business.  At present,  the Company is not involved in any
legal proceedings that require disclosure under Item 103 of Regulation S-B.

ITEM 2 -CHANGES IN SECURITIES

In  December  2003,  the Company  issued  2,400,000  Units for cash  proceeds of
$2,790,000 net of offering  costs of $210,000.  Each unit consisted of one share
of the  Company's  unregistered  restricted  common  stock and 0.5  warrants  to
purchase one share of the Company's  unregistered  restricted common stock at an
exercise price of $2.04 per share.  The warrants vest  immediately and expire in
December  2008.  The Company  has the right to call the  warrants if the closing
price of the Company's  common stock is greater than 200% of the exercise  price
of the warrants for 20 consecutive trading days.

During November 2003, pursuant to Private Placement Memoranda,  the Company sold
an aggregate 25,000 Units for gross proceeds of $100,000. Each Unit consisted of
10 shares of restricted,  unregistered common stock and two Series P warrants to
purchase  one share of  unregistered,  restricted  common  stock.  Each Series P
warrant  entitles  the holder to  purchase a share of common  stock at $0.80 per
share and  expires at the  earlier  of July 30,  2005 or three  weeks  following
written  notification  by the Company  that its common  stock closed at or above
$1.20 per share for 10  consecutive  trading  days.  In  addition,  the Series P
warrants  can be  redeemed  by the  Company  for $0.001  each if a  Registration
Statement covering the shares underlying the Series P warrants has been declared
effective  and the  Company's  common  stock  closes  at or above  $1.20  for 10
consecutive days.

During November 2003, pursuant to Private Placement Memoranda,  the Company sold
an aggregate of 89,360 shares of restricted  unregistered  common stock at $1.40
per share for gross proceeds of $125,104.


ITEM 3 - DEFAULTS ON SENIOR SECURITIES

     None


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

     None




                                       13
<PAGE>


ITEM 5 - OTHER INFORMATION

     None


ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K

EXHIBITS

Number         Description
--------------------------------------------------------------------------------

3.1*           Articles of Incorporation of the Company

3.2*           By-Laws of the Company

4.1**          Securities Purchase Agreement,  Registration Rights Agreement and
               Common Stock Purchase Warrant

31.1           Certification pursuant to Section 302  of Sarbanes-Oxley  Act of
               2002 - Chief Executive Officer

32.1           Certifications pursuant to Section 906  of Sarbanes-Oxley  Act of
               2002.


(*) Incorporated herein by reference to Form 8-K filed with the U. S. Securities
and Exchange Commission on November 20, 2001.

(**)  Incorporated  herein  by  reference  to  Form  8-K  filed  with  the U. S.
Securities and Exchange Commission on December 19, 2003.


Reports on Form 8-K
-------------------

December 19, 2003      Private placement of common stock and warrants

October 27, 2003       Changes in registrants certifying accountant


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


                                   SIGNATURES

In accordance with the  requirements of the Exchange Act, the registrant  caused
this  report to be  signed on its  behalf  by the  undersigned,  thereunto  duly
authorized.

                                       COMPOSITE TECHNOLOGY CORPORATION


Date: February 20, 2004                /s/ Benton H Wilcoxon
      ----------------                 --------------------------------
                                       Benton H Wilcoxon
                                       Chief Executive Officer,
                                       Chief Financial Officer



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