================================================================================

                     U.S. SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

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

                                   FORM 10-QSB

          (X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

              For the quarterly period ended September 30, 2000

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

    For the transition period from _____________________to___________________

                         Commission File Number 0-20701

                                COMPOSITECH LTD.
             (Exact Name of Registrant as specified in its charter)

          Delaware                                                11-2710467
(State or other jurisdiction of                               (I.R.S. Employer
incorporation or organization)                               Identification No.)

                 710 Koehler Avenue, Ronkonkoma, New York 11779
                    (Address of principal executive offices)

     Registrant's telephone number, including area code: (631) 585-7710

     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 requirement for the past 90 days. Yes |X| No ___

     Indicate the number of shares outstanding of each of the issuer's classes
of common stock as of November 14, 2000:

     Common Stock $.01 par value                                   22,002,345
     ---------------------------                                ----------------
              Class                                             Number of shares

================================================================================


<PAGE>

                                COMPOSITECH LTD.


                                      Index

<TABLE>
<CAPTION>
Part I - Financial Information                                                          Page
                                                                                        ----

<S>                                                                                      <C>
Item 1.  Financial Statements

         Balance Sheets as of September 30, 2000 (unaudited) and December 31, 1999........2

         Statements of Operations (unaudited) for the three-month and nine-month
           periods ended September 30, 2000 and 1999......................................3

         Statements of Cash Flows (unaudited) for the nine months
           ended September 30, 2000 and 1999..............................................4

         Notes to Financial Statements (unaudited)........................................5

Item 2.  Management's Discussion and Analysis of Financial
         Condition and Results of Operations.............................................11

Part II - Other Information


Item 1.  Legal Proceedings...............................................................14

Item 2.  Changes in Securities...........................................................14

Item 6.  Exhibits and Reports on Form 8-K................................................15

Signature................................................................................15
</TABLE>

<PAGE>


                                 COMPOSITCH LTD.
                                 BALANCE SHEETS


<TABLE>
<CAPTION>
                                                                                   September 30     December 31
                                                                                       2000            1999
                                                                                   ------------    ------------
                                                                                   (unaudited)
<S>                                                                                <C>             <C>
ASSETS
Current assets:
  Cash and cash equivalents                                                        $     66,959    $     73,197
  Accounts receivable trade - net                                                                        82,783
  Inventories                                                                                            15,000
  Prepaid expenses and other                                                             94,125          48,412
                                                                                   ------------    ------------
        Total current assets                                                            161,084         219,392

Property and equipment held for sale                                                  1,900,000       2,000,000
Investment in joint venture                                                                             466,000
Deferred debt expense - net of accumulated amortization of $461,078                                      49,163
Other assets and other deferred charges, net of accumulated amortization
       of $1,304,673 (2000) and $658,375 (1999)                                         705,574         401,894
                                                                                   ------------    ------------
Total assets                                                                       $  2,766,658    $  3,136,449
                                                                                   ============    ============

LIABILITIES AND STOCKHOLDERS' (DEFICIENCY)
Current liabilities:
  Accounts payable                                                                 $  1,925,156    $  1,814,421
  Deferred salaries                                                                     141,711         158,362
  Accrued interest - $167,918 (2000) and $44,276 (1999) to stockholders                 315,942         104,423
  Other accrued liabilities                                                             568,323         642,762
  Loans and notes payable                                                             1,672,373       2,976,935
  Notes payable to directors/stockholders                                               158,333         158,333
                                                                                   ------------    ------------
        Total current liabilities                                                     4,781,838       5,855,236

Non-current liabilities:
  Notes payable to directors/stockholders                                             1,420,000       1,420,000
  Deferred salaries - officers / directors                                              963,866         907,135
  Accrued interest - directors/stockholders                                             366,476         366,476
  Deferred licensing income                                                                             643,840
  Advances received                                                                                     500,000
                                                                                   ------------    ------------
        Total non-current liabilities                                                 2,750,342       3,837,451


Commitments

Stockholders' (deficiency) :
  Undesignated  preferred stock;  authorized  3,799,780 shares,  none issued and
  outstanding.
  Series A convertible  preferred stock, par value $3.00 per share;
  authorized shares - 714,161, issued and outstanding shares -
    326,665 (2000) and 393,997 (1999)                                                   979,995       1,181,991
  Series C 8% convertible preferred stock, par value $0.01 per share;
    authorized shares - 200,000 issued and outstanding shares - 54,000                  540,000         540,000
  Series D 8% convertible preferred stock, par value $0.01 per share;
    authorized shares - 500 issued and outstanding shares - 500                         500,000
  Common stock, par value $.01 per share; authorized shares - 50,000,000,
    issued and outstanding shares - 20,983,790 (2000) and 18,023,613 (1999)             228,479         180,236
  Additional paid-in capital                                                         48,192,364      44,449,398
  Deficit                                                                           (52,650,148)    (50,349,052)
                                                                                   ------------    ------------
                                                                                     (2,209,310)     (3,997,427)

  Less treasury shares to be received - 949,585 (2000) and 951,000 (1999)            (1,744,388)     (1,746,987)
  Less non-recourse notes receivable received for issuance of common stock             (811,824)       (811,824)
                                                                                   ------------    ------------
    Total stockholders' (deficiency)                                                 (4,765,522)     (6,556,238)
                                                                                   ------------    ------------
Total liabilities and stockholders' (deficiency)                                   $  2,766,658    $  3,136,449
                                                                                   ============    ============
</TABLE>

See accompanying notes.


                                       2

<PAGE>

                                 COMPOSITCH LTD.
                            STATEMENTS OF OPERATIONS
                                  (unaudited)

<TABLE>
<CAPTION>
                                                                            Three Months Ended             Nine Months Ended
                                                                               September 30                   September 30
                                                                       ----------------------------    ----------------------------
                                                                           2000            1999           2000            1999
                                                                       ------------    ------------    ------------    ------------
<S>                                                                    <C>             <C>             <C>             <C>
Revenues:
  Sales                                                                $       --      $    291,692    $       --      $    507,657
  Licensing                                                                                  14,105            --            42,556
                                                                       ------------    ------------    ------------    ------------
       Total revenues                                                                       305,797            --           550,213

Costs and expenses:
  Manufacturing                                                                --         1,820,349            --         4,393,656
  Selling, general and administrative                                       375,453         409,328       1,385,977       1,197,831
  Research and development                                                     --            74,842            --           222,649
                                                                       ------------    ------------    ------------    ------------
      Total operating expenses                                              375,453       2,304,519       1,385,977       5,814,136

(Loss) from operations                                                     (375,453)     (1,998,722)     (1,385,977)     (5,263,923)

Other income (expenses):
  Interest income                                                            16,236          13,207          49,137          33,786
  Interest expense, net of interest capitalized                            (129,930)        (95,730)       (327,394)       (213,250)
  Amortization of debt discount and expenses                               (373,006)       (461,661)       (632,875)       (698,963)
  Other income (expense)                                                       (337)         (5,587)         (3,987)        (91,465)
                                                                       ------------    ------------    ------------    ------------
                                                                           (487,037)       (549,771)       (915,119)       (969,892)
                                                                       ------------    ------------    ------------    ------------
 (Loss) from operations before equity in operations of joint venture       (862,490)     (2,548,493)     (2,301,096)     (6,233,815)

Equity in operations of joint venture                                                       (53,828)           --          (101,042)
                                                                       ------------    ------------    ------------    ------------
   Net (loss)                                                              (862,490)     (2,602,321)     (2,301,096)     (6,334,857)

Preferred stock dividends                                                   197,598                         197,598          15,692
                                                                       ------------    ------------    ------------    ------------
   (Loss) attributable to common stockholders                          ($ 1,060,088)   ($ 2,602,321)   ($ 2,498,694)   ($ 6,350,549)
                                                                       ============    ============    ============    ============

(Loss) per common share - basic and diluted                            ($      0.05)   ($      0.16)   ($      0.13)   ($      0.40)
                                                                       ============    ============    ============    ============

Shares used in computing (loss) per common share                         20,120,305      16,608,458      19,376,324      15,681,582
                                                                       ============    ============    ============    ============
</TABLE>


See accompanying notes.



                                       3

<PAGE>


                                 COMPOSITCH LTD.
                            STATEMENTS OF CASH FLOWS
                                  (unaudited)

<TABLE>
<CAPTION>
                                                                                         Nine Months Ended
                                                                                            September 30
                                                                                     --------------------------
                                                                                        2000           1999
                                                                                     -----------    -----------
<S>                                                                                  <C>            <C>
Cash Flows from Operating Activities
Net (loss) .......................................................................   ($2,301,096)   ($6,334,857)
Adjustments to reconcile net (loss) to net cash and
  cash equivalents used in operating activities:
    Depreciation and amortization, including capital leases ......................        13,228        856,630
    Amortization of debt discount and expenses ...................................       291,677        698,963
    Amortization of deferred charges .............................................       695,034
    Issuance of common stock as compensation to directors ........................        55,500         24,502
    Issuance of common stock in exchange for consulting services .................        36,000
    Equity in net loss of joint venture ..........................................       101,042
    Changes in operating assets and liabilities:
       Accounts receivable trade - net ...........................................        82,783       (155,256)
       Accounts receivable from joint venture ....................................        50,186
       Inventories ...............................................................        15,000          6,268
       Prepaid expenses and other ................................................       (45,713)        (6,136)
       Other assets and other deferred charges ...................................        12,875         40,568
       Accounts payable ..........................................................       110,735        923,387
       Deferred salaries .........................................................        40,080         49,627
       Accrued interest ..........................................................       308,415        168,295
       Deferred licensing income .................................................      (114,866)
       Other accrued liabilities .................................................        28,160        248,314
                                                                                     -----------    -----------
          Net cash and cash equivalents (used) in operating activities ...........      (657,322)    (3,443,333)

Cash Flows from Investing Activities
Purchase of property and equipment - net .........................................      (331,792)
Patent costs deferred ............................................................         3,409        (18,866)
                                                                                     -----------    -----------
          Net cash and cash equivalents provided by (used in) investing activities         3,409       (350,658)

Cash Flows from Financing Activities
Net proceeds from issuance of common stock .......................................       157,582      2,277,535
Net proceeds from issuance of Series D convertible preferred stock ...............       318,243
Net proceeds from exercise of warrants ...........................................       157,864          1,282
Net proceeds from loans and notes payable ........................................        45,686      1,679,682
Payment of capital lease obligations .............................................       (23,983)
Payment of loans and notes payable ...............................................       (31,700)      (212,500)
                                                                                     -----------    -----------
        Net cash and cash equivalents provided by financing activities ...........       647,675      3,722,016
                                                                                     -----------    -----------
        Increase (decrease) in cash and cash equivalents .........................        (6,238)       (71,975)
        Cash and cash equivalents at beginning of period .........................        73,197        102,286
                                                                                     -----------    -----------
        Cash and cash equivalents at end of period ...............................   $    66,959    $    30,311
                                                                                     ===========    ===========

Supplemental disclosures of cash flow information
Noncash financing activities:
  Dividends on 7% Series B convertible preferred stock ...........................   $    15,692
  Issuance of common stock in repayment of promissory notes
      including accrued interest .................................................   $ 1,174,248
  Issuance of common stock as compensation for bridge financing ..................   $    30,000
  Issuance of common stock as compensation to directors ..........................   $    55,500         24,502

Noncash investing activities:
  Liquidation of liabilities through the sale of property and equipment ..........   $   100,000

Cash paid for:
  Interest .......................................................................   $    18,904    $    60,742
</TABLE>


See accompanying notes.


                                       4
<PAGE>


                                COMPOSITECH LTD.


                          Notes to Financial Statements
                                   (Unaudited)

                               September 30, 2000


Note 1 - Basis of Presentation and Significant Accounting Policies

     The  accompanying  unaudited  financial  statements  have been  prepared in
accordance with generally accepted  accounting  principles for interim financial
information  and  with  the  instructions  to  Form  10-QSB  and  Article  10 of
Regulation  S-X.  Accordingly,  they do not include all of the  information  and
footnotes  required by generally  accepted  accounting  principles  for complete
financial  statements.  These financial statements should be read in conjunction
with the financial statements and notes thereto included in the Annual Report on
Form  10-KSB for the year ended  December  31,  1999 of  Compositech  Ltd.  (the
"Company"). In the opinion of management,  all adjustments (consisting of normal
recurring  accruals)  considered  necessary  for a fair  presentation  have been
included.  Operating  results for the three-month  and nine-month  periods ended
September  30, 2000 are not  necessarily  indicative  of the results that may be
expected for the year ended December 31, 2000.

Valuation of Options,  Warrants and certain Common Stock  issuances for services
rendered

     The valuation of options,  warrants and certain common stock  issuances for
services  rendered  issued  by  the  Company  in  non-capital   transactions  is
calculated  using a Black-Scholes  valuation model and the Company's  historical
stock  price  volatility.  The  gross  calculated  fair  market  value  is  then
discounted if the options or warrants are exercisable  into shares of restricted
common stock  and/or if the quantity  issued  constitutes  a large  "block-size"
issuance.  The discounted  valuation is then amortized over the appropriate life
of the option or warrant, according to each specific agreement.

Note 2 - Common Stock Issuances and Stock Options

     During January 2000,  pursuant to the Company's  Amended and Restated Stock
Award Plan (the "Award Plan"), the Company issued to its non-employee  directors
stock awards of 36,365 shares of its common stock,  vesting on a quarterly basis
over a one-year period, as payment of the annual $10,000 per year, per director,
retainer  for  the  year  2000  and  13,094  shares  of  its  common  stock,  as
compensation  for the 1999  meeting  attendance  of the Board of  Directors  and
related subcommittees.

     During  February  2000,  pursuant  to the Award Plan,  the Company  granted
incentive options to its employees to purchase 600,000 shares of common stock at
$0.01 per share. These options are exercisable only in the event of a successful
transfer of the Company's  technology or financing to restart production,  while
still employed by the Company.

     During February 2000, the Compensation  Committee approved the repricing of
stock  options held by current  employees,  to an exercise  price of $1.4375 per
share,  the market price on

                                       5

<PAGE>

the date approved by the Committee,  for all stock options with exercise  prices
in excess of $1.4375 per share.  The  authorization  covered options to purchase
584,544 shares of common stock,  of which 575,271  shares are  exercisable as of
the current  date.  At  September  30, 2000,  the market price of the  Company's
common stock was lower than the repriced  exercise price and,  therefore,  there
was no charge to earnings. In the event the market price of the Company's common
stock  increases  to a level in excess of $1.4375 per share,  the  Company  will
record a non-cash charge to earnings.

     In the nine months ended September 30, 2000,  67,332 shares of the Series A
convertible  preferred stock were converted at the existing conversion rate into
33,665 shares of common stock,  resulting in a decrease in stockholders'  equity
relating to Series A  convertible  preferred  stock of $201,996,  an increase in
stockholders'  equity  relating  to  common  stock  of $337 and an  increase  in
additional paid-in capital of $201,322, net of expenses of $337.

     During January 2000, in connection  with an agreement to provide  financial
public  relations and investor  relations  services,  the Company issued 500,000
shares of its common  stock to a  non-affiliated  consultant.  The  Company  has
estimated the value of the stock at $323,500,  which is being amortized over the
twelve-month  life of the  agreement.  This issuance  resulted in an increase in
stockholders'  equity  relating  to common  stock of $5,000 and an  increase  in
additional paid-in capital of $313,500, net of expenses of $5,000.

     During  February 2000, in connection  with the settlement  agreement  which
terminated the Taiwan joint venture agreement, the Company issued 587,372 shares
of its  common  stock to its  former  joint  venture  partner,  resulting  in an
increase  in  stockholders'  equity  relating  to common  stock of $5,874 and an
increase in additional  paid-in  capital of $666,092,  net of expenses of $5,874
(see Note 3).

     On March 31, 2000, the Company issued 789,563 shares of its common stock in
connection  with the conversion of the first tranche of a term note series which
totaled  $898,128,  including  accrued  interest,  resulting  in an  increase in
stockholders'  equity  relating  to common  stock of $7,896 and an  increase  in
additional paid-in capital of $882,336, net of expenses of $7,896.

     During the six months ended June 30, 2000,  the Company sold 395,319 shares
of  its  common  stock,  in a  private  placement,  realizing  $172,319,  net of
expenses,  resulting in an increase in  stockholders'  equity relating to common
stock of $3,953 and an increase in additional paid-in capital of $168,366.

     During the six months ended June 30, 2000,  the Company sold 141,583 shares
of its common  stock in  connection  with the  exercise of  warrants,  realizing
$159,280,  resulting in an increase in  stockholders'  equity relating to common
stock of $1,415 and an increase in additional  paid-in capital of $156,449,  net
of expenses of $1,416.

     During the six months  ended June 30,  2000,  the  Company  issued  456,000
shares  of its  common  stock  in  connection  with  the  repayment  of  certain
promissory  notes payable  totaling  $276,120,  including  accrued  interest and
$20,000  which was borrowed  during  January  2000,  resulting in an increase in
stockholders'  equity  relating  to common  stock of $4,560 and an  increase  in
additional paid-in capital of $267,001, net of expenses of $4,559.

                                       6

<PAGE>

     On September  25, 2000,  the Company  issued  353,472  shares of its common
stock in connection  with the conversion of a portion of the second tranche of a
term  note  series  which  totaled  $402,074,  including  accrued  interest  and
registration  penalties,  resulting  in  an  increase  in  stockholders'  equity
relating to common stock of $3,535 and an increase in additional paid-in capital
of $398,539.

     On September 28, 2000, in connection with the cashless  exercise of some of
the repricing warrants which were issued in connection with the first tranche of
a term note  series,  the  Company  issued  1,455,629  shares  of common  stock,
resulting in an increase of $14,556 in  stockholders'  equity relating to common
stock and a decrease in additional paid-in-capital of the same amount.

     During the nine months ended  September 30, 2000,  in  connection  with the
six-month term of an agreement to provide consulting services in connection with
the  Company's  licensing  efforts,  the Company  issued 71,346 shares of common
stock, resulting in an increase in stockholders' equity relating to common stock
of $713 and an  increase  in  additional  paid-in  capital  of  $35,033,  net of
expenses of $254.

Note 3 - Loans and Notes Payable

     The components of loans and notes payable are as follows:

                                                 September 30,    December 31,
                                                     2000             1999
                                                  ----------       ----------
Term note series payable                          $1,215,956       $2,271,351
Loan payable - Credit Bancorp                        456,417          456,417
Short term convertible notes payable                    --            249,167
                                                  ----------       ----------
   Total                                          $1,672,373       $2,976,935
                                                  ==========       ==========

     As of  September  25,  2000,  the holders of certain  terms notes  payable,
totaling  approximately  $1,330,000,  including accrued interest as of September
30,  2000,  agreed to an extension of the due date on such notes to December 25,
2000.

     In  connection  with the term note  series,  during the three  months ended
September  30, 2000,  the Company  recorded an  additional  debt discount in the
amount of  $511,797,  representing  the value of  repricing  warrants  issued in
connection with the October 1999 exchange of the old notes for new notes, with a
credit to  stockholders'  equity  relating to  additional  paid-in-capital.  The
discount is being  amortized over the period from October 1999 to December 2000,
the life of the notes.

                                       7

<PAGE>

Note 4 - Merger Discussions

     As of June 2, 2000,  the  Company  signed a letter of intent  with the Aeon
Group,  Inc.,  regarding a potential merger of the two companies.  On August 14,
2000, the parties terminated their merger discussions.

     On October 23, 2000,  the Company  announced that it had signed a letter of
intent with farmbid.com,  Inc., a privately-owned  e-commerce company devoted to
the needs of the agricultural community, regarding a potential merger of the two
companies.  Definitive  agreements are being drafted and the Company is planning
to close the transaction,  which is subject to stockholder approval,  around the
end of 2000.

Note 5 - Series C 8% Convertible Preferred Stock

     In connection with the Series C 8% Convertible  Preferred Stock, during the
three  months  ended  September  30,  2000,  the  Company  recorded an amount of
$116,884, as an additional discount, due to the beneficial conversion feature of
the Series C 8%  Convertible  Preferred  Stock,  with a credit to  stockholders'
equity relating to additional paid-in-capital.  The Company had earlier recorded
a lower  amount  based  on  guidance  from a SEC  pronouncement  which  has been
modified  by the  release of Emerging  Issues  Task Force 98-5  "Accounting  for
Convertible  Securities  with  Beneficial  Conversion or Continently  Adjustable
Conversion  Ratios".  The additional discount is being amortized over the twelve
months ending November 2, 2000 and has been recorded as a dividend.  (See Note 9
- Subsequent Events.)

Note 6 - Series D 8% Convertible Preferred Stock

     On July 12, 2000,  the Company  sold 500 shares of Series D 8%  Convertible
Preferred   Stock  (the   "Series  D  stock")  in  a  private   placement  to  a
non-affiliated  accredited  investor,  for a  total  of  $500,000,  which  after
expenses netted  approximately  $418,000.  The purchase  agreement  required the
Company to lend $100,000 of the net proceeds to the Aeon Group,  Inc., a company
with which the Company  was having  merger  discussions  since  terminated.  The
$100,000 which is included in Other Assets in the accompanying  Balance Sheet is
held in escrow and will be used to retire 100 shares of the Series D stock.  The
sale of the Series D stock was intended to be a bridge  financing to be redeemed
from future financings to be received in connection with the proposed merger.

     In  connection  with the sale of the  Series D stock,  the  Company  issued
three-year  warrants to the investor,  to purchase  709,849 shares of its common
stock at $0.7326 per share, of which number one-half is exercisable immediately,
three-quarters  is exercisable if the Series D stock is not redeemed  within 120
days of  issuance  and the balance is  exercisable  if the Series D stock is not
redeemed within 180 days of issuance.

     The Series D stock is convertible  into shares of common stock at the lower
of $1.00 per  share or 75% of the  contractual  market  price  ("Market  Price")
commencing on the 120th day  following the date of issuance  (November 9, 2000),
but in any event,  no later than  December 31, 2001.  The  definition of "Market
Price" in this  agreement is the average of the three lowest  closing bid prices
within the thirty trading days preceding a conversion.  In the event the Company
is

                                       8

<PAGE>

delisted from Nasdaq,  the conversion price is reduced to 50% of the contractual
market price. (See Note 9 - Subsequent Events.)

     The Company has recorded the beneficial  conversion  feature  applicable to
the 400  shares  of  Series D stock,  using the  above  Market  Price,  totaling
$133,333,   with  a  credit  to  stockholders'  equity  relating  to  additional
paid-in-capital.  The conversion  feature amount is being amortized over the 120
days ending  November 2, 2000 and is recorded as an  additional  dividend on its
Statement of Operations.

Note 7 - Joint Venture

     As of February 17, 2000,  the Company  reached a settlement  agreement with
its joint venture partner/licensee in Taiwan, which terminated the joint venture
agreement  and the license for use of the  Company's  proprietary  technology in
Taiwan.  Under the terms of the  settlement,  in  exchange  for the  issuance of
587,372 shares of its common stock to the licensee,  the Company retained the $1
million license down payment it received in 1998. Additionally,  in exchange for
returning the equity held by the Company in the  Taiwanese  joint  venture,  the
Company  retained the $500,000  advance it received to make the investment.  The
Company has  recorded  the value of the shares  issued in  connection  with this
settlement  at  $677,840,  representing  the net balance of the  accounts on its
balance sheet as of the agreement date,  relating to the investment in the joint
venture,  the deferred licensing income and the advances received on the sale of
common stock.

     On April 25, 2000, the Board of Directors for the Company's  Canadian joint
venture  approved the  dissolution  and  liquidation  of the joint  venture.  In
accordance with that action, the Company will receive back 949,585 shares of its
common stock,  which is adjusted from the 951,000  shares which were recorded as
treasury  shares to be  received in the  Company's  financial  statements  as of
December 31, 1999.

Note 8 - Restructuring Provision

     As part of the  restructuring  charges  recorded at December 31, 1999,  the
Company set up a  restructuring  provision in the amount of $100,000  related to
future  lease  costs  of  its  idled  manufacturing  facility.  Activity  in the
provision was as follows:

               Description                                              Amount
               -----------                                            ---------
Balance, December 31, 1999                                            $ 100,000
Utilization during the 6 months ended June 30, 2000                     100,000
                                                                      ---------
  Balance, September 30, 2000                                         $     -0-
                                                                      =========

                                       9

<PAGE>

Note 9- Subsequent Events

     On November 1, 2000, the Company's securities were delisted from the Nasdaq
Stock Market,  due to not meeting  Nasdaq's  minimum listing  requirements as to
market price of its stock and net tangible assets. The Company's  securities are
now traded on the OTC Bulletin Board.

     As a result of the  delisting,  the conversion  discount  applicable to the
Series  C 8%  Convertible  Preferred  Stock  increased  from  30% to 50% and the
conversion  discount  applicable to the Series D 8% Convertible  Preferred Stock
increased  from  25% to 50%.  The  Company's  accounting  for  these  additional
discounts will be included in its financial  statement for the fourth quarter of
2000.



                                       10

<PAGE>

Item 2.

                MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                       CONDITION AND RESULTS OF OPERATIONS

     This Quarterly  Report on Form 10-QSB contains  forward-looking  statements
within the meaning of Section 27A of the  Securities Act of 1933 and Section 21E
of the Securities  Exchange Act of 1934.  Actual results could differ materially
from those projected in the  forward-looking  statements as a result of a number
of important  factors.  For a discussion of important  factors that could affect
the Company's results, in addition to the discussions below, please refer to the
Company's  Annual Report on Form 10-KSB for the year ended December 31, 1999 and
the risk factors listed therein.

Overview

     Compositech Ltd. (the "Company"),  a Delaware corporation,  has developed a
proprietary   technology   for  the   manufacture  of  innovative  and  superior
copper-clad fiberglass epoxy laminates used to make printed circuit boards.

     In the last half of 1999,  we  experienced  a demand for  product  that was
greater than our production  capability.  In addition,  we were unable to obtain
adequate  financing  to maintain or expand our  manufacturing  capabilities.  On
December 3, 1999, we suspended our  manufacturing  operations  and refocused our
resources on locating suitable  licensees,  joint venture partners or purchasers
for our technology. As a result, we reduced our staff from 124 employees to six.
We are also exploring  potential  mergers and  acquisitions  or other  strategic
transactions.

     In March  2000,  we  formally  launched  our  licensing  program by sending
proposals  to  a  limited   number  of  select   candidates   supported  by  our
recommendation letters from several original equipment  manufacturers  ("OEM's")
and  printed  circuit  board  customers.  At the  current  date,  we are  having
licensing discussions with five potential licensees.  These include two laminate
manufacturers and two suppliers to the industry.

     On June 30, 2000, the Company moved from its former manufacturing  facility
to  smaller  quarters,  more  suitable  for our  present  licensing  activities,
following an agreement  between the Company and its former landlord to terminate
its lease as of that date. In connection with its former lease, the Company made
the final payment of a stipulation agreement on July 5, 2000.

     The  accompanying  financial  statements  have been  prepared  assuming the
Company will continue as a going concern.  In addition to the matters  discussed
above,  the Company has incurred  recurring  operating  losses and has a working
capital  deficiency.  The Company requires,  and is negotiating for,  additional
funding from financing or other sources to satisfy its existing  liabilities and
cover future operating expenses until sufficient  revenues are generated.  Since
December 31, 1999, the Company has received private  placement  funding from the
sales of its  common  stock and  Series D 8%  Convertible  Preferred  Stock.  In
addition,  the Company has  initiated  discussions  with  certain  creditors  to
provide accommodations with regard to outstanding liabilities.  These conditions
raise  substantial  doubt  about the  Company's  ability to  continue as a going
concern.  The financial statements do not include any adjustments to reflect the
possible future effects on the  recoverability  and  classification of assets or
the amounts and  classification  of liabilities that may result from the outcome
of this uncertainty.

                                       11

<PAGE>

Results of Operations

     In light of the Company's decision to suspend its manufacturing  operations
on December 3, 1999 and refocus its  resources on locating  suitable  licensees,
joint venture  partners or purchasers for its patented  technology and equipment
design,  management's  comparative  analysis is limited to those areas for which
data is available  for both periods.  During the first nine months of 2000,  the
Company  did not record any sales,  manufacturing  or research  and  development
expenses.  Lease  related  obligations  of  the  idled  manufacturing  facility,
totaling  $100,000 were charged to the  restructuring  provision  recorded as of
December 31, 1999.

     Selling,  general and administrative expenses decreased to $375,453 for the
three months ended  September  30, 2000 from $409,328 for the three months ended
September  30,  1999 and  increased  to  $1,385,977  for the nine  months  ended
September 30, 2000 from $1,197,831 for the nine months ended September 30, 1999.
Decreases  in payroll  related,  travel and  promotion  expenses  were more than
offset by an increase  in  non-cash  charges of  approximately  $327,000  due to
amortization  of the value of warrants  and common  stock issued in exchange for
professional  services and $55,000 for directors'  compensation,  paid in common
stock.  For the nine months ended  September 30, 2000,  there was an increase of
approximately  $62,000  in legal  and  professional  fees  related  to  creditor
activities and the pursuit of licensing and  financings.  In addition,  expenses
for the 1999 period reflected a reduction of approximately  $393,000 of expenses
that were charged to the Company's  Canadian joint venture,  in accordance  with
the joint venture agreements.

     Interest expense increased to $129,930 for the three months ended September
30,  2000 from  $95,730 for the three  months  ended  September  30, 1999 and to
$327,394 for the nine months ended September 30, 2000 from $213,250 for the nine
months ended  September 30, 1999.  The increase is related to the borrowing cost
of the term note series,  as well as the  increases in the prime  lending  rate,
which affects the interest  expense of some of the  stockholder  loans and notes
payable.

     The foregoing resulted in the Company having a net loss of $862,490 for the
three months ended  September 30, 2000 compared  with  $2,602,321  for the three
months ended September 30, 1999 and a net loss of $2,301,096 for the nine months
ended  September  30, 2000 compared  with  $6,334,857  for the nine months ended
September 30, 1999. The decreased loss was  attributable  to the lower operating
costs, due to the redirection of the Company's  operations from manufacturing to
licensing activities, offset partially by an increase in the amortization of the
fair market value of common stock and warrants and other non-cash items.

Liquidity and Capital Resources

     The Company has incurred  significant  losses and has substantial  negative
cash flow since its inception.  The Company's independent auditors have included
an  explanatory  paragraph  in their  report  covering  the  December  31,  1999
financial  statements,  which  expresses  substantial  doubt about the Company's
ability to continue as a going concern.  The Company expects operating losses to
continue in 2000.  On July 12,  2000,  the  Company  sold 500 shares of Series D
Stock in a private  placement to a non-affiliated  accredited  investor,  for an
total of $500,000,  which after expenses netted approximately  $418,000, as part
of a bridge  financing.  The  purchase  agreement  required  the Company to lend
$100,000 of the net  proceeds to the Aeon Group,  Inc., a

                                       12

<PAGE>

company with which the Company was having merger  discussions  since terminated.
The  $100,000  is held in escrow  and will be used to retire  100  shares of the
Series D stock.  The sale of the  Series  D stock  was  intended  to be a bridge
financing to be redeemed  from future  financings  to be received in  connection
with  the  proposed   merger.   As  of  September  30,  2000,  the  Company  had
approximately  $67,000 of available cash  resources.  However,  the Company will
require additional funding to cover current operations,  which require less than
$70,000 a month  based on current  levels of  operations,  until  revenues  from
licensing, joint ventures or technology sales are sufficient.

     Current  liabilities include  approximately  $1,216,000 of convertible term
notes, which the Company anticipates will be converted into shares of its common
stock.  Non-current  liabilities  include  approximately  $964,000  in  deferred
salaries  due to officers  and  directors,  accrued  interest  of  approximately
$511,000  due  to   stockholders   and  notes  payable  of  $1,420,000   due  to
officers/directors,  whose due dates have historically been extended because the
Company did not have the available  cash resources to repay on the scheduled due
dates.

     The Company is negotiating for additional funding.  Such additional funding
may be raised  through  sources  including  license fees,  sales of equipment in
connection  with licensing  operations,  joint  ventures or other  collaborative
relationships,  as well as equity or debt  financing.  No assurance can be given
that funding will be sufficient  and  available or, if it is available,  that it
will be available on acceptable  terms. If additional funds are not available to
satisfy our past due accounts  payable and our  short-term or long-term  capital
requirements, we may not be able to continue as a going concern.

Nine months Ended  September 30, 2000 Compared with Nine months Ended  September
30, 1999

     Net cash and cash  equivalents  used in operating  activities  decreased to
$657,322 for the nine months ended  September 30, 2000 from  $3,443,333  for the
nine months ended  September  30, 1999.  The decreased  level of activities  and
continued deferral of salaries,  accrued interest and other accrued  liabilities
contributed to the lower use of cash during the first nine months of 2000.

     Net cash and cash equivalents provided by investing activity totaled $3,409
for the nine months ended  September  30, 2000,  compared with a use of $350,658
for the nine months ended  September  30, 1999.  During the first nine months of
2000,  there were no  expenditures  for property and  equipment,  which  totaled
$331,792 during the nine months ended September 30, 1999.

     Cash flows from  financing  activities  decreased  to $647,675 for the nine
months ended  September  30,  2000,  from  $3,722,016  for the nine months ended
September 30, 1999. The primary sources of the funds, net of expenses,  provided
by  financing  activities  in the first nine months of 2000 were the sale of the
Series D Stock, the private placement of the Company's common stock and the sale
of the  Company's  common stock  through the  exercise of warrants.  The primary
sources of the funds, net of expenses,  provided by financing  activities in the
first nine months of 1999 were the private  placement  of the  Company's  common
stock,  totaling  $2,277,535  and the closing of the  tranches of the term notes
series, totaling approximately $1,680,000, net of expenses.

                                       13

<PAGE>

Part II - Other Information

Item 1. Legal Proceedings

     The Company is a party to the following legal proceedings :

1.   On March 28,  2000,  the  Company  filed a verified  answer in regard to an
     action  commenced on January 11, 2000 in the Supreme  Court of State of New
     York by Yates Foil USA, Inc., which seeks damages of approximately $140,000
     for goods  sold and  delivered.  The  amount of the claim is accrued on the
     books of the Company as at December 31, 1999.

2.   The  Company  is also a party to  several  legal  proceedings  relating  to
     creditors which are not material.

Item 2.  Changes in Securities

     (c) Recent Sales of Unregistered Securities.

     During the three months  ended  September  30,  2000,  the Company sold 500
shares  of  its  Series  D  8%   Convertible   Preferred   Stock  to  a  certain
non-affiliated  accredited  investor in a private  placement,  for an  aggregate
offering of $500,000.

     The sales of the shares of preferred  stock in the private  placement  were
made in reliance upon the exemption from  registration  under the Securities Act
of 1933,  as amended  (the  "Securities  Act"),  provided by Section 4(2) of the
Securities Act.


                                       14

<PAGE>

Item 6.  Exhibits and Reports on Form 8-K

(a)  Exhibits

     Exhibit Number                Description

     10.84     Letter Agreement between  Compositech and SovCap Equity Partners,
               Ltd.,  Sovereign  Capital Advisors LLC, Arab Commerce Bank, Ltd.,
               Correllus  International Ltd. and Bronia GmbH dated September 25,
               2000, to extend the due dates on certain Bridge Financing Notes.

     10.85     Letter Agreement,  dated September 25, 2000, between  Compositech
               and Sovereign Capital Advisors,  LLC, to extend the due date on a
               certain Secured Convertible Bridge Financing Note.

     27        Financial Data Schedules (Edgar version only)


* Previously filed

(b)  Reports on Form 8-K

     NONE

     All other items  required in Part II have been filed  previously or are not
applicable for the quarter ended September 30, 2000.

                                    Signature

     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.

                                            COMPOSITECH LTD.



Dated: November 14, 2000                    /s/ Samuel S. Gross
                                            ------------------------------------
                                            Executive Vice President and
                                            Treasurer (Principal Accounting
                                            Officer and officer duly authorized
                                            to sign this report on behalf of
                                            the registrant)

                                       14