S-3/A

      AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY 19, 2005


                           REGISTRATION NO. 333-122280

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549


                           AMENDMENT NO. 2 TO FORM S-3


             REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933

                        COMPOSITE TECHNOLOGY CORPORATION


             (Exact name of registrant as specified in its charter)



            Nevada                                               59-2025386
  ----------------------------                               ----------------
  (State or other jurisdiction                               (I.R.S. Employer
of incorporation or organization)                          Identification No.)


                                2026 McGaw Avenue
                            Irvine, California 92614
                                 (949) 428-8500

                    (Address,        including zip code, and telephone number,
                                     including area code, of registrant's
                                     principal executive offices)

                               Benton H Wilcoxon,
                             Chief Executive Officer
                        Composite Technology Corporation
                                2026 McGaw Avenue
                            Irvine, California 92614
                                 (949) 428-8500

       (Name, address, including zip code, and telephone number, including
                        area code, of agent for service)

                                   Copies to:
                              Kevin K. Leung, Esq.
                             RICHARDSON & PATEL LLP
                       10900 Wilshire Boulevard, Suite 500
                          Los Angeles, California 90024
                                 (310) 208-1182
                               FAX: (310) 208-1154

  APPROXIMATE DATE OF PROPOSED SALE TO THE PUBLIC: FROM TIME TO TIME AFTER THE
                 EFFECTIVE DATE OF THIS REGISTRATION STATEMENT.

If the only securities being registered on this Form are being offered pursuant
to dividend or interest reinvestment plans, please check the following box. |_|

If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. |X|




If this form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, please check the following box and list
the Securities Act registration statement number of the earlier effective
registration statement for the same offering. |_|

If this form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. |_|

If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. |_|

The Registrant hereby amends this registration statement on such date or dates
as may be necessary to delay its effective date until the registrant shall file
a further amendment which specifically states that this registration statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the registration statement shall become
effective on such date as the Securities and Exchange Commission, acting
pursuant to said Section 8(a), may determine.





                   SUBJECT TO COMPLETION, DATED MAY 19, 2005


                                   PROSPECTUS

                        COMPOSITE TECHNOLOGY CORPORATION

                        25,268,761 SHARES OF COMMON STOCK

This prospectus covers the resale by selling security holders of up to
25,268,761 shares of our common stock, $0.001 par value.

These securities will be offered for sale by the selling security holders
identified in this prospectus in accordance with the terms described in the
section of this prospectus entitled "Plan of Distribution." We will not receive
any of the proceeds from the sale of the common stock by the selling security
holders.


Our securities are not listed on any national securities exchange or the Nasdaq
Stock Market. Our common stock is quoted on the OTC Bulletin Board under the
symbol "CPTC." On May 10, 2005, the closing sale price of our common stock on
the OTC Bulletin Board was $1.70 per share.


AN INVESTMENT IN OUR SECURITIES INVOLVES A HIGH DEGREE OF RISK. YOU SHOULD
PURCHASE OUR SECURITIES ONLY IF YOU CAN AFFORD LOSING YOUR ENTIRE INVESTMENT.
SEE "RISK FACTORS" BEGINNING ON PAGE 3 FOR A DISCUSSION OF THESE AND OTHER
RISKS.

NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED THESE SECURITIES OR DETERMINED IF THIS
PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.

The date of this prospectus is __________, 2005.




                                TABLE OF CONTENTS

                                                                     PAGE
                                                                     ----
SUMMARY                                                               1
RISK FACTORS                                                          3
        BANKRUPTCY RELATED RISKS                                      3
        RISKS RELATED TO OUR BUSINESS                                 4
        RISKS RELATED TO INVESTMENT IN OUR SECURITIES                 9
USE OF PROCEEDS                                                      14
SELLING SECURITY HOLDERS                                             15
PLAN OF DISTRIBUTION                                                 18
EXPERTS                                                              19
LEGAL MATTERS                                                        19
WHERE YOU CAN FIND MORE INFORMATION                                  19

                                     SUMMARY

This summary contains basic information about us and this offering. You should
read the entire prospectus carefully, including the "Risk Factors" section and
the documents incorporated by reference into this prospectus, including our
financial statements and the related notes included in those documents before
making an investment decision. Some of the statements contained in this
prospectus, including statements under "Summary" and "Risk Factors," as well as
those noted in the documents incorporated herein by reference, are
forward-looking statements and may involve a number of risks and uncertainties.
We note that our actual results and future events may differ significantly based
upon a number of factors. You should not put undue reliance on the
forward-looking statements in this document, which speak only as of the date on
the cover of this prospectus.

In this prospectus, we refer to Composite Technology Corporation and its
subsidiaries as "we," "our," or "CTC," or "the Company." We refer to our
subsidiaries collectively as "Subsidiaries."


RECENT DEVELOPMENTS

On May 5, 2005 (Petition Date) Composite Technology Corporation filed a
voluntary petition for relief under the provisions of Title 11 of the Federal
Bankruptcy Code in the United States Bankruptcy Court for the Central District
of California under case number SA 05-13107 JR. Our subsidiaries, including CTC
Cable Corporation, CTC Wind Systems Corporation and CTC Towers and Poles
Corporation, are not party to the Title 11 case. The hearing to consider
approval of our disclosure statement will be held on June 22, 2005.

Our decision to reorganize under Title 11 of the Federal Bankruptcy Code was
motivated solely to resolve several litigation matters relating to claims
demanding certain securities of Composite Technology Corporation for alleged
services and performances under certain subscription agreements. Although we
remain steadfast in opposing these claims, we believe the ongoing cost of
litigation in diverse jurisdictions necessitated the consolidation of these
cases into a single forum. As a result of the Title 11 filing, attempts to
collect, secure or enforce remedies with respect to most prepetition claims
against us are subject to the automatic stay provisions of Section 362(a) of
Title 11. Thus, for example, creditor actions to obtain possession of our
property, or to create, perfect or enforce any lien against our property, or to
collect on or otherwise exercise rights or remedies with respect to a
prepetition claim are enjoined unless and until the Bankruptcy Court lifts the
automatic stay. Pursuant to Title 11, we retain control of our assets and are
authorized to operate our business as a debtor-in-possession, but may not engage
in transactions outside the ordinary course of business without the approval of
the Court, after notice and an opportunity for a hearing.

To successfully exit Title 11, we will need to propose, and obtain confirmation
by the Bankruptcy Court of a plan of reorganization that satisfies the
requirements of the Bankruptcy Code. A plan of reorganization would resolve our
obligations to our creditors. We anticipate that general unsecured claims, other
than unsecured litigation claims and unsecured debenture claims, will be paid
the full amount, without interest, in six monthly installments. We further
anticipate that the holders of the debentures referenced below will be paid
pursuant to the terms of the debenture agreements, as amended. We expect to
issue shares of common stock pursuant to Bankruptcy Code Section 1145 in amounts
equal to the amounts adjudicated for the prepetition litigation claims. We also
anticipate the interests of our equity investors will be modified by our
reorganization plan. For example, although our common stock will remain in
effect, the shares held by our equity investors will be diluted to a smaller
percentage of our outstanding shares of common stock as a result of stock, if
any, to be issued to litigation claims. At this time, we cannot estimate the
percentage by which the outstanding shares of common stock will be diluted,
which depends on the total amount of litigation claims that the Bankruptcy Court
ultimately deems to be allowed claims. Substantially all prepetition liabilities
are subject to settlement under a plan of reorganization to be voted upon by our
prepetition creditors and approved by the Bankruptcy Court. We filed our plan of
reorganization on May 5, 2005. The Bankruptcy Court may not approve our plan of
reorganization, any such plan may not be implemented successfully. We have
incurred, and will continue to incur pending emergence, costs associated with
the reorganization.





OUR COMPANY

We develop and market composite related products for the electric utility
industry, and provide engineering, product design, and other services related to
the installation and design of our products to the global electrical utility
industry that are designed to improve the performance and capacity of
transmission and distribution electrical grids. Our principal product is our
proprietary patent pending composite reinforced conductor known as Aluminum
Conductor Composite Core, or ACCC cable. Our ACCC cable is designed to transmit
more power than conventional cables of the same diameter, create energy savings
through less line losses under comparable operating conditions, and
significantly reduce sag caused by overheating due to power overloads. We
believe that ACCC cable enables utility companies, power producers and
transmission or distribution owners to easily replace transmission lines using
standard installation techniques and equipment without modification to existing
towers and in many cases avoid the deployment of new towers and the
establishment of easements, all of which may be costly, time consuming,
controversial and harmful to the environment.

While we believe that our ACCC conductor technology has the ability to solve
many of the transmission grid's problems, including powerline constraints, our
relatively new ACCC product is being deployed, on a limited basis, in an
industry that is highly conservative. The conservative nature of the electrical
utility industry stems partially from the fact that electrical conductor
technology has remained virtually unchanged for over one hundred years because
new technology was not available and partly from the need to ensure safety when
designing electrical transmission systems. A further difficulty to introducing a
new technology is that many new installations or line re-conductor projects
spend years in the planning stages making the cycle for the ordering new cables
lengthy. These conservative tendencies are offset by the crisis in which
electrical grid transmission and distribution systems find themselves. We
believe that urgent changes are needed and can best be delivered with new
technology. We believe that our ACCC product demonstrates significant full-life
project cost savings in most cases and provides significant performance
advantages that should increase safety and emergency capacity.

Our product and production development strategy is to take initial concepts to
commercially promising prototype, then move to small scale production, making
relevant product modifications to optimize the combination of manufacturability
and performance. Following optimization, pilot production is organized to mimic
factory conditions under close monitoring. During this process, optimal
commercial production parameters and product design are documented so that the
technology will be available for licensing or transfer to third parties or
subsidiaries in a full scale factory launch.

At the beginning of the fiscal year ending September 30, 2004, we completed our
initial product and manufacturing process development and commenced the
manufacture of ACCC cable core and the wrapping of the core with aluminum under
sub-contract with General Cable. During fiscal 2004, we progressed our product
and production development path through product refinement to the commencement
of pilot plant operations with a unit of two lines. This unit has since been
expanded to three lines and is currently operating under factory conditions.

We were incorporated in Florida on February 26, 1980 and reincorporated in
Nevada on June 27, 2001. We maintain our principal offices at 2026 McGaw Avenue,
Irvine, California 92614. Our telephone number at that address is (949)
428-8500. Our Web site address is www.compositetechcorp.com. The information
contained on our Web site is not a part of this prospectus. Further, our
reference to this website is intended to be inactive textual reference only.

DEBT FINANCING

On August 17, 2004, we closed a financing transaction in which we sold 6%
convertible debentures to select institutional accredited investors, in order to
raise a total of $15,000,000. We received $5,000,000 upon closing and
$10,000,000 was deposited into a custodian account to secure repayment of these
debentures. The investors also received warrants to purchase an aggregate of
3,453,947 shares of common stock, 50% of which are at an exercise price of $1.75
per share and the balance of which are at an exercise price of $1.82 per share.
The debentures will mature on August 17, 2007.

The investors may convert the debentures into our common stock for $1.67 per
share. The investors, however, may not voluntarily convert the debentures if
after giving effect to such conversion, an investor would beneficially own in
excess of 9.99% of the number of shares of our common stock outstanding. We may
force conversion of all outstanding debentures if the daily volume weighted
average price of our common stock exceeds the conversion price of $1.67 by 150%,
and if an effective registration statement has occurred for the shares
underlying the conversion. We may not, however, force conversion of the
debentures if after giving effect to such conversion, an investor would
beneficially own in excess of 4.99% of the number of shares of our common stock
outstanding. These conversion rights may be exercised prior to August 17, 2007.

                                        1


On November 23, 2004, we reached an agreement with the four funds that purchased
the debentures to release the $10 million that was held in a custodian account.
The $10 million was to be released periodically after the effectiveness of a
registration statement filed by us on Form SB-2 pursuant to monthly optional
redemptions. In consideration for such early release of the $10 million, each of
the four funds was issued an additional warrant to purchase an aggregate
1,083,592 shares of our common stock with an exercise price of $3.23. The four
funds also agreed to extend the deadlines for the filing of and effectiveness
date of the registration statement, and recently have waived these deadlines.

If, at any time during the 12 month period following registration, we issue
common stock or any type of securities at a price below the $1.67 per share
conversion price, then the conversion price of the debentures and exercise price
of the warrants will be reduced to equal the price per share of the new issue.
After this 12 month period until the debentures are no longer outstanding, the
conversion price then in effect will be lowered as a result of such new issuance
to the weighted average of the purchase price of the previously outstanding and
the newly issued stock. The number of common stock outstanding or deemed
outstanding prior to the new issuance includes shares of common stock issuable
upon conversion of outstanding shares of another class of stock. However, if
from months 31 to 36, we complete such subsequent financing and all of the
amount raised is used to redeem the debentures, then the investors will not be
extended anti-dilution on any outstanding debentures.

The following are all material events of default with respect to the debentures
if not cured within 10 trading days after notice:

(i) default in the payment of principal or interest or liquidated damages;

(ii) we fail to observe or perform any covenant or agreement in the debenture or
the related transaction documents;

(iii) a default in any of the related transaction documents, other material
agreement or lease;

(iv) we commence or any of our subsidiaries commence a case under bankruptcy or
insolvency laws;

(v) our common stock is not eligible for quotation or listed on a trading
market;

(vi) a change of control;

(vii) this registration statement is not declared effective within 150 days
after January 31, 2005 or the effectiveness of this registration statement
lapses;

(viii) we fail to deliver certificates to the investor prior to the 5th trading
day after a conversion date; or

(ix) we fail to have available a sufficient number of authorized and unreserved
shares of common stock to issue to an investor upon a conversion.


The Title 11 filing ostensibly triggered defaults, or termination events, on
substantially all of our debt and lease obligations, and certain contractual
obligations, including the debentures. Subject to certain exceptions under the
Bankruptcy Code, our Title 11 filing automatically enjoined, or stayed, the
continuation of any judicial or administrative proceedings or other actions
against us or our property to recover on, collect or secure a claim arising
prior to the Petition Date.


Lane Capital Markets acted as our exclusive placement agent and financial
advisor in connection with the placement of the debentures. In partial
consideration for Lane Capital's services, a total of $1,025,000 has been paid
to Lane Capital Markets: $717,500 during fiscal 2004 and the remaining $307,500
during the first quarter of fiscal 2005. Lane Capital received 500,000 Series U
warrants, a 4-year warrant to purchase 500,000 shares of our common stock with
an exercise price of $1.82 per share. We may, subject to a 20 day notice, call
the warrants if our common stock is equal to or exceeds 200% of their exercise
price. Lane Capital has assigned these warrants to three of its principal
managers as follows: 265,000 warrants to Ryan M. Lane, 135,000 warrants to John
F. O'Brien and 100,000 warrants to John D. Lane.

RISKS RELATED TO OUR BUSINESS

Our business is subject to a number of risks, which you should be aware of
before making an investment decision. These risks are discussed more fully in
the section of this prospectus entitled "Risk Factors" and the documents
included in this prospectus by reference. Our composite technologies and
manufacturing processes for products used in the global electrical utility
industry are new, and to date they have not been commercially adopted by the
major utility companies.

THE OFFERING

We are registering 25,268,761 shares of our common stock for sale by the selling
security holders identified in the section of this prospectus entitled "Selling
Security Holders." The shares included in the table identifying the selling
security holders include shares of our common stock which may be issued upon
conversion of the debentures and interest thereon, shares of common stock
underlying warrants issued in conjunction with the debentures and pursuant to
the Purchase Agreement, dated as of August 17, 2004, the Letter Agreement, dated
as of November 23, 2004, and shares of common stock underlying warrants that
were issued to our placement agent in conjunction with the placement of the
debentures.

We have agreed to keep this prospectus effective until the earlier of: (i) the
date on which the shares may be resold by the selling security holders without
registration and without regard to any volume limitations by reason of Rule
144(e) under the Securities Act of 1933, as amended, or any other rule of
similar effect, or (ii) all of the shares have been sold pursuant to the
prospectus or Rule 144 under the Securities Act or any other rule of similar
effect.

                                        2



                                  RISK FACTORS

An investment in the common stock offered under this prospectus involves a high
degree of risk. In addition to the other information in this prospectus and the
documents incorporated by reference in this prospectus, the following risk
factors should be considered carefully in evaluating CTC and its business. All
forward-looking statements are inherently uncertain as they are based on current
expectations and assumptions concerning future events or future performance of
CTC. Do not place undue reliance on the forward-looking statements in this
document, which are only predictions and speak only as of the date on the cover
of this prospectus. In evaluating such statements, prospective investors should
review carefully various risks and uncertainties identified in this prospectus,
including the matters set forth below and in our other SEC filings which are
incorporated in this prospectus by reference. These risks and uncertainties
could cause our actual results to differ materially from those indicated in the
forward-looking statements. We undertake no obligation to update or publicly
announce revisions to any forward-looking statements to reflect future events or
developments, except as required by law.


BANKRUPTCY RELATED RISKS

OUR PLAN OF REORGANIZATION MAY NOT BE CONFIRMED BY THE BANKRUPTCY COURT AND MAY
NOT BE SUCCESSFULLY CONSUMMATED.

Our future results are dependent upon successfully obtaining approval,
confirmation and implementation of our plan of reorganization. The Bankruptcy
Court may not approve our plan of reorganization. Section 1129 of Title 11
requires, among other things, a showing that confirmation of the plan will not
be followed by liquidation or the need for further financial reorganization, and
that the value of distributions to dissenting holders of claims and interests
may not be less than the value such holders would receive if the Company were
liquidated under Chapter 7 of the United States Bankruptcy Code. There can be no
assurance that the Bankruptcy Court will conclude the plan satisfies the
requirements of Section 1129. Conversely, the Bankruptcy Court may confirm a
plan even though it was not accepted by one or more impaired classes of
creditors, if certain requirements of Title 11 are met. Currently, we anticipate
that we will operate under the protection of Title 11 and emerge from bankruptcy
proceedings in September 2005.

We filed our plan of reorganization and disclosure statement on May 5, 2005. The
plan of reorganization may be amended prior to confirmation. Even if the
Bankruptcy Court confirms our plan, consummation of the plan will likely be
dependent upon a number of other conditions. There can be no assurance that any
or all of the conditions in the plan will be met (or waived) or that the other
conditions to consummation of the plan, if any, will be satisfied. If a plan is
not timely consummated, it could result in our Title 11 proceedings becoming
protracted, which could substantially erode the value of our enterprise to the
detriment of all stockholders.

OUR TITLE 11 PROCEEDINGS MAY RESULT IN A NEGATIVE PUBLIC PERCEPTION OF US THAT
MAY ADVERSELY AFFECT OUR RELATIONSHIPS WITH CUSTOMERS, AS WELL AS OUR BUSINESS,
RESULTS OF OPERATIONS AND FINANCIAL CONDITION.

Even if we submit a plan of reorganization that is confirmed by the Bankruptcy
Court and consummated by us, our Title 11 filing may hinder our ongoing business
activities and our ability to operate, fund and execute our business plan by (i)
impairing relations with existing and potential customers; (ii) negatively
impacting our ability to attract, retain and compensate key executives and
associates and to retain employees generally; (iii) limiting our ability to
obtain additional funding; and (iv) impairing present and future relationships
with strategic partners.

OUR TITLE 11 FILINGS OSTENSIBLY TRIGGERED DEFAULTS, OR TERMINATION EVENTS, ON
SUBSTANTIALLY ALL OF OUR DEBT AND LEASE OBLIGATIONS, AND CERTAIN CONTRACTUAL
OBLIGATIONS.

At March 31, 2005, we had a shareholders' deficit of $204,479 and had
approximately a total of $11,000,242 in outstanding debt. After failing to
obtain a stay of Writs of Attachment allowing for the attachment of our assets
totaling $2.25 million as previously reported, we filed a petition with the
Bankruptcy Court in order to resolve several litigation matters under Title 11
of the Bankruptcy Code. TitleHowever, under Title 11, actions by creditors to
collect claims on prepetition debt are stayed or deferred unless specifically
ordered by the Bankruptcy Court.

We may, under certain circumstances, file motions with the Bankruptcy Court to
assume or reject our executory contracts. An executory contract is one in which
the parties have mutual obligations to perform (e.g., equipment leases and real
property leases). Unless otherwise agreed, the assumption of a contract will
require that we cure all prior defaults under the related contract, including
all prepetition liabilities. Unless otherwise agreed, the rejection of a
contract is deemed to constitute a breach of the agreement as of the moment
immediately preceding the Title 11 filing, giving the other party to the
contract a right to assert a general unsecured claim for damages arising out of
the breach. Additional liabilities subject to the proceedings may arise in the
future as a result of the rejection of executory contracts, including leases,
and from the determination of the Bankruptcy Court (or agreement by parties in
interest) of allowed claims for contingencies and other disputed amounts.
Conversely, the assumption of executory contracts and unexpired leases may
convert liabilities shown as subject to compromise to postpetition liabilities.
Due to the uncertain nature of many of the potential claims, we are unable to
project the magnitude of such claims with any degree of certainty.


                                       3


RISKS RELATED TO OUR BUSINESS

AS A COMPANY IN THE EARLY STAGE OF COMMERCIALIZATION, OUR LIMITED HISTORY OF
OPERATIONS MAKES EVALUATION OF OUR BUSINESS AND FUTURE GROWTH PROSPECTS
DIFFICULT.

Since our reorganization in 2001, we have had a limited operating history and
are at an early stage of commercialization of a new technology product to a
market unused to using new technologies. We began selling our ACCC cable and
entered into our first commercial agreement in 2003. Our technology is a
relatively new advance for the electrical utility industry technology and has
not yet achieved widespread adoption. We do not have enough experience in
selling our products at a level consistent with broad market acceptance and do
not know whether we can do so and generate a profit. As a result of these
factors, it is difficult to evaluate our prospects, and our future success is
more uncertain than if we had a longer or more proven history of operations.

WE EXPECT FUTURE LOSSES AND OUR FUTURE PROFITABILITY IS UNCERTAIN.

Prior to acquiring Transmission Technology Corporation, or TTC, in November
2001,we were a shell corporation having no operating history, revenues from
operations, or assets since December 31, 1989. We have not had any bookable
revenues from operations subsequent to acquiring TTC through June 30, 2004. We
may experience significant quarterly and annual losses for the foreseeable
future.

We may not ever become profitable. If we do achieve profitability, we may not be
able to sustain or increase profitability on a quarterly or annual basis. We
expect the need to significantly increase our general administrative, product
prototype and equipment prototype production expenses, as necessary. As a
result, we will need to generate significant revenues to achieve and maintain
profitability.

OUR INDEPENDENT AUDITORS HAVE ISSUED A QUALIFIED REPORT WITH RESPECT TO OUR
ABILITY TO CONTINUE AS A GOING CONCERN, AND WE MAY NEVER ACHIEVE PROFITABILITY.

In previous filings, our accountants have issued a report relating to our
audited financial statements which contains a qualification with respect to our
ability to continue as a going concern because, among other things, our ability
to continue as a going concern is dependent upon our ability to generate
profitable operations in the future or to obtain the necessary financing to meet
our obligations and repay our liabilities from normal business operations when
they come due. There is no guarantee that the product will be accepted or
provide a marketable advantage, and therefore, no guarantee that the
commercialization will ever be profitable.


For the six months ended March 31, 2005, we had a net loss of $10,117,459 and
negative cash flows from operations of $3,129,335. For the fiscal year ended
September 30, 2004, we had a net loss of $14,687,874 and negative cash flows
from operations of $18,735,430. For the fiscal years ended September 30, 2003
and 2002, we had net losses of $6,771,252 and $4,523,953, respectively. For the
same periods, we had negative cash flows from operations of $2,022,935 and
$715,923, respectively.

As of March 31, 2005, our accumulated deficit was $36,556,816.


OUR INABILITY TO RAISE ADDITIONAL WORKING CAPITAL AT ALL OR TO RAISE IT IN A
TIMELY MANNER COULD NEGATIVELY IMPACT OUR ABILITY TO FUND OUR OPERATIONS, TO
GENERATE REVENUES, AND TO OTHERWISE EXECUTE OUR BUSINESS PLAN, LEADING TO THE
REDUCTION OR SUSPENSION OF OUR OPERATIONS AND ULTIMATELY OUR GOING OUT OF
BUSINESS. SHOULD THIS OCCUR, THE VALUE OF YOUR INVESTMENT IN OUR COMMON STOCK
COULD BE ADVERSELY AFFECTED, AND YOU COULD EVEN LOSE YOUR ENTIRE INVESTMENT.

While we have raised significant capital through our debenture offering, we
anticipate that the sales of our ACCC cable will not be sufficient enough to
sustain our operations, and further anticipate that we will continue to incur
net losses due to our costs exceeding our revenues for an indefinite period of
time. For these reasons, we believe that we will need to raise additional
capital until such time, if any, as we become cash-flow positive. It is highly
likely that we will continue to seek to raise money through public or private
sales of our securities, debt financing or short-term loans, corporate
collaborations or a combination of the foregoing. Our ability to raise
additional funds in the public or private markets will be adversely affected if
the results of our business operations are not favorable, if any products
developed are not well-received or if our stock price or trading volume is low.
However, additional funding may not be available on favorable terms to us, or at
all. To the extent that money is raised through the sale of our securities, the
issuance of those securities could result in dilution to our existing
stockholders. If we raise money through debt financing, we may be required to
secure the financing with all of our business assets, which could be sold or
retained by the creditor should we default in our payment obligations. Should
the financing we require to sustain our working capital needs be unavailable or
prohibitively expensive when we require it, we may not be able to complete the
commercialization of any products that we may have developed. As a result, we
may be required to discontinue our operations without obtaining any value for
our products under development, which could eliminate stockholder equity, or we
could be forced to relinquish rights to some or all of our products in return
for an amount substantially less than we expended to develop such products.

                                        4


IF OUR PRODUCTIS NOT ACCEPTED BY OUR POTENTIAL CUSTOMERS, IT IS UNLIKELY THAT WE
WILL EVER BECOME PROFITABLE.

The electrical utility industry has historically used a variety of technologies,
including a variety of technologies involving steel cable. Compared to these
conventional technologies, our technology is relatively new, and the number of
companies using our technology is limited. The commercial success of our product
will depend upon the widespread adoption of our technology as a preferred method
by major utility companies to transmit electricity. In order to be successful,
our product must meet the technical and cost requirements for electric
transmission within the electric utility industry. Market acceptance will depend
on many factors, including:

(i) the willingness and ability of customers to adopt new technologies;

(ii) our ability to convince prospective strategic partners and customers that
our technology is an attractive alternative to conventional methods used by the
electric utility industry;

(iii) our ability to change customers' evaluation of the economics of powerline
construction, changing their focus on limiting initial capital costs to
evaluating the cost and benefit of the full life of a line liberating capital
funding to acquire our products that can overall reduce costs in power
transmission; and

(iv) our ability to sell sufficient quantities of our products.

Because of these and other factors, our product may not gain market acceptance
or become the industry standard for the electrical utility industry. The failure
of utility companies to purchase our products would have a material adverse
effect on our business, results of operations and financial condition.

IF WE FAIL TO PROPERLY MANAGE OUR GROWTH EFFECTIVELY, OUR BUSINESS COULD BE
ADVERSELY AFFECTED.

The transition from a small company focused on research and development of our
products to a company with the additional focus on commercial production,
marketing, and sales has placed and will continue to place a significant strain
on our managerial, operational, and financial resources. Although we rely
significantly on the General Cable sales force pursuant to the recent agreements
that we entered into with General Cable, the failure to manage our sales and
growth effectively could have a material adverse effect on our business, results
of operations and financial condition. Significant additional growth will be
necessary for us to achieve our plan of operation.

FAILURE TO ADEQUATELY PROTECT OUR PROPRIETARY RIGHTS COULD ENABLE THIRD
PARTIESTO USE OUR TECHNOLOGY, OR VERY SIMILAR TECHNOLOGY, AND COULD REDUCE OUR
ABILITY TO COMPETE IN THE MARKET, AND ANY PROPRIETARY RIGHTS LITIGATION COULD BE
TIME CONSUMING AND EXPENSIVE TO PROSECUTE AND DEFEND.

Due to the importance of proprietary technology in the electrical utility
industry, establishment of patents and other proprietary rights is important to
our success and our competitive position. Performance in the electrical utility
industry can depend, among other factors, on patent protection. Accordingly, we
have filed patent applications in the U.S. and internationally for all aspects
of our composite materials, products and processes, including aspects of our
product other than the core, and intend to devote substantial resources to the
establishment and protection of patents and other proprietary rights. Despite
our efforts to establish and protect our patents or other proprietary rights,
unauthorized parties may attempt to copy aspects of our technology or to obtain
and use information that we regard as proprietary. In addition, the laws of some
foreign countries do not protect our proprietary rights to as great an extent as
do the laws of the United States. Our means of establishing and protecting our
proprietary rights may not be adequate and our competitors may independently
develop similar technology, duplicate our products or design around our patents
or our other proprietary rights.

As a result, our business involves a risk of overlap with third party patents
and subsequent litigation with competitors or patent-holders. Any claims, with
or without merit, could be time-consuming, result in costly litigation, or cause
us to enter into licensing agreements.


OUR SUCCESS WILL DEPEND PARTLY ON OUR ABILITY TO OPERATE WITHOUT INFRINGING OR
MISAPPROPRIATING THE PROPRIETARY RIGHTS OF OTHERS.

We may be exposed to future litigation by third parties based on claims that our
products infringe the intellectual property rights of others. Our competitors
may assert that their U.S. or foreign patents may cover our products and the
methods we employ. In addition, because patent applications can take many years
to issue, there may be currently pending applications of which we are unaware,
which may later result in issued patents that our products may infringe. There
could also be existing patents of which we are not aware that one or more of our
products may inadvertently infringe. Infringement and other intellectual
property claims, with or without merit, can be expensive and time-consuming to
litigate and can divert management's attention from our core business.

If we lose a patent infringement lawsuit, we could be prevented from selling our
products unless we can obtain a license to use technology or ideas covered by
such patent or are able to redesign the products to avoid infringement. A
license may not be available at all or on terms acceptable to us, or we may not
be able to redesign our products to avoid any infringement. If we are not
successful in obtaining a license or redesigning our products, we may be unable
to sell our products and our business could suffer.


                                       5


WE OCCASIONALLY MAY BECOME SUBJECT TO LEGAL DISPUTES THAT COULD HARM OUR
BUSINESS.

We are currently the subject of, and may from time to time become engaged in,
legal disputes such as claims by consultants or other third parties. These
disputes could result in monetary damages or other remedies that could adversely
impact our financial position or operations. We believe these claims are without
merit and intend to vigorously defend against them. However, even if we prevail
in disputes such as this, the defense of these disputes will be expensive and
time-consuming and may distract our management from operating our business.

WE DEPEND ON KEY PERSONNEL IN A COMPETITIVE MARKET FOR SKILLED EMPLOYEES AND
FAILURE TO ATTRACT AND RETAIN QUALIFIED EMPLOYEES COULD SUBSTANTIALLY HARM OUR
BUSINESS.

We rely to a substantial extent on the management, marketing and product
development skills of our key employees, particularly Benton H Wilcoxon, our
Chief Executive Officer, and Brian Brittsan, our acting Chief Operating Officer.
If Mr. Wilcoxon or Mr. Brittsan were unable to provide services to us for
whatever reason, our business would be adversely affected. Mr. Wilcoxon has not
entered into an employment agreement with the Company. Mr. Brittsan has entered
into a consulting agreement. The term of such consulting agreement is from
January 3, 2005 through June 30, 2005.

                                       6


In addition, our ability to develop and market our products and to achieve
profitability will depend on our ability to attract and retain highly talented
personnel. We face intense competition for personnel from other companies in the
electrical utility industry. The loss of the services of our key personnel or
the inability to attract and retain the additional, highly-talented employees
required for the development and commercialization of our products may
significantly delay or prevent the achievement of product development and could
have a material adverse effect on us.

A FAILURE TO ESTABLISH AND MAINTAIN RELATIONSHIPS WITH STRATEGIC PARTNERS MAY
HARM OUR BUSINESS.

We have entered into purchase and distribution agreements with General Cable to
manufacture and distribute our ACCC product in the United States and Canada. Our
success is dependent upon establishing and maintaining relationships with
strategic partners, such as our relationship with General Cable. We face
numerous risks in successfully obtaining suitable partners on terms consistent
with our business model, including, among others:

(i) we must typically undergo a lengthy and expensive process of building a
relationship with a potential partner before there is any assurance of an
agreement with such party;

(ii) we must persuade cable manufacturers with significant resources to rely on
us for critical technology on an ongoing basis rather than trying to develop
similar technology internally;

(iii) we must persuade potential partners to bear retooling costs associated
with producing our products; and

(iv) we must successfully transfer technical know-how to our partners.

Moreover, the success of our business model also depends on the acceptance of
our products by the utility companies who have historically been conservative in
their adoption of new products and technologies into their infrastructure.
Further, our partners will be selling our products that may compete with their
existing or future cable products. Our partners are not required to sell our
products and they are not prohibited from discounting the prices of their
products below our prices.

Our business could be seriously harmed if:

(i) we cannot obtain suitable partners;

(ii) our partners fail to achieve significant sales of ACCC cable or products
incorporating our technology; or

(iii) we otherwise fail to implement our business strategy successfully.

WE CANNOT CONTROL THE COST OF OUR RAW MATERIALS, WHICH MAY ADVERSELY AFFECT OUR
BUSINESS.

Our principal raw materials are glass and carbon fibers, plus various polymer
resins and aluminum. The prices for these raw materials are subject to market
forces largely beyond our control, including energy costs, organic chemical feed
stocks, market demand, and freight costs. The prices for these raw materials
have varied significantly and may vary significantly in the future. We may not
be able to adjust our product prices, especially in the short-term, to recover
the costs of increases in these raw materials. Our future profitability may be
adversely affected to the extent we are unable to pass on higher raw material
and energy costs to our customers.

INTERRUPTIONS OF SUPPLIES FROM OUR KEY SUPPLIERS MAY AFFECT OUR RESULTS OF
OPERATIONS AND FINANCIAL PERFORMANCE.

Interruptions or shortages of supplies from our key suppliers of raw materials
could disrupt production or impact our ability to increase production and sales.
We use a limited number of sources for most of the other raw materials that we
use. We do not have long-term or volume purchase agreements with most of our
suppliers, and may have limited options in the short-term for alternative supply
if these suppliers fail, for any reason, including their business failure or
financial difficulties, to continue the supply of materials or components.
Moreover, identifying and accessing alternative sources may increase our costs.

WE ARE CONTROLLED BY A SMALL NUMBER OF STOCKHOLDERS, WHOSE INTERESTS MAY DIFFER
FROM OTHER STOCKHOLDERS.


As of May 10, 2005, Benton H Wilcoxon, our Chairman of the Board, Chief
Executive Officer and Acting Chief Financial Officer, and C. William Arrington,
our director, in the aggregate beneficially own or control approximately 35% of
the outstanding common stock. As a result, these persons have controlling
influence in determining the outcome of any corporate matters submitted to our
stockholders for approval, including mergers, consolidations and the sale of all
or substantially all of our assets, election of directors and other significant
corporate actions. They also have the power to prevent or cause a change in
control. For example, a vote by more than 70% of our stockholders would be
required to overcome a vote made by these two stockholders that hold
approximately 35% of our outstanding shares. Given the large number of our
outstanding shares held in street form, it is often difficult to obtain such a
level of participation on non-routine matters. As a result, the interests of
these stockholders may differ from the interests of the other stockholders, and
may limit the ability of other stockholders to affect our management and
affairs.


                                       7


WE WILL LIKELY EXPERIENCE CUSTOMER CONCENTRATION, WHICH MAY EXPOSE US TO ALL OF
THE RISKS FACED BY OUR POTENTIAL MATERIAL CUSTOMERS.

Until and unless we secure multiple customer relationships, it is likely that we
will experience periods during which we will be highly dependent on one or a
limited number of customers. Dependence on a single or a few customers will make
it difficult to satisfactorily negotiate attractive prices for our products and
will expose us to the risk of substantial losses if a single dominant customer
stops conducting business with us. Moreover, to the extent that we may be
dependent on any single customer, we could be subject to the risks faced by that
customer to the extent that such risks impede the customer's ability to stay in
business and make timely payments to us.

OUR BUSINESS MAY BE SUBJECT TO INTERNATIONAL RISKS.

We are pursuing international business opportunities, including in China,
Mexico, Brazil, Europe, the Middle East, certain far eastern countries and
Africa. As to international business in the Middle East, our current target
markets include Saudi Arabia, Qatar, United Arab Emirates, Oman, Iraq,
Afghanistan and Jordan. Of these the only countries that we believe pose a
particular problem are Iraq and Afghanistan as a result of additional
instability. In Africa we are actively pursuing South Africa and Kenya as well
as engaging in discussions with engineering companies that bid on trans-African
projects. There are no special additional risks related to these countries that
are not disclosed in the list of risks affecting most international business. To
date, we have not engaged in any transactions on these countries. Our business
model has been implemented only in the United States and Canada where we produce
the ACCC core for delivery to General Cable under a manufacturing agreement.
Expansion internationally will depend on our adaptation of this model to
international markets and may be costly and time consuming. Risks inherent in
international operations in general include:

(i) unexpected changes in regulatory requirements, export restrictions, tariffs
and other trade barriers;

(ii) challenges in staffing and managing foreign operations;

(iii) differences in technology standards, employment laws and business
practices;

(iv) longer payment cycles and problems in collecting accounts receivable;

(v) political instability;

(vi) changes in currency exchange rates;

(vii) currency exchange controls; and

(viii) potentially adverse tax consequences.

In particular, certain of our target markets in the Middle East include Iraq and
Afghanistan in which there is considerable violent instability that may affect
our ability to operate in those markets.

                                       8


COMPLIANCE WITH ENVIRONMENTAL REGULATIONS COULD INCREASE OUR OPERATING COSTS,
WHICH WOULD ADVERSELY AFFECT THE COMMERCIALIZATION OF OUR TECHNOLOGY.


Our intended operations are subject to various federal, state, and local laws
and regulations relating to the protection of the environment. These
environmental laws and regulations, which have become increasingly stringent,
are implemented principally by the Environmental Protection Agency and
comparable state agencies, and govern the management of hazardous wastes, the
discharge of pollutants into the air and into surface and underground waters,
and the manufacture and disposal of certain substances. There are no material
environmental claims currently pending or, to our knowledge, threatened against
us. In addition, we believe our planned operations will be implemented in
compliance with the current laws and regulations. We estimate that any expenses
incurred in maintaining compliance with current laws and regulations will not
have a material effect on our earnings or capital expenditures. However, current
regulatory requirements maychange, currently unforeseen environmental incidents
may occur, or past non-compliance with environmental laws may be discovered.


CHANGES IN INDUSTRY STANDARDS AND REGULATORY REQUIREMENTS MAY ADVERSELY AFFECT
OUR BUSINESS.

As a manufacturer and distributor of wire and cable products we are subject to a
number of industry standard-setting authorities, such as the Institute of
Electrical and Electronic Engineers, the European based International Council on
Large Electric Systems, the American Society of Testing and Materials and the
Canadian Standards Association. In addition, many of our products may become
subject to the requirements of federal, state and local or foreign regulatory
authorities. Changes in the standards and requirements imposed by such
authorities could have an adverse effect on us. In the event we are unable to
meet any such standards when adopted, our business could be adversely affected.
In addition, changes in the legislative environment could affect the growth and
other aspects of important markets served by us. While certain legislative bills
and regulatory rulings are pending in the energy and telecommunications sectors
which could improve our markets, including energy bill H.R. 6 that passed both
the House and Senate in 2003 and the House Conference Committee, any delay or
failure to pass such legislation and regulatory rulings could adversely affect
our opportunities and anticipated prospects may not arise. Energy bill H.R. 6 is
a federal bill, that, if enacted, would cover energy conservation, research and
development and improvement of the energy infrastructure pursuant to a national
energy policy. We believe that this bill could improve our market opportunities
if, as a result, it enhances the willingness and ability of potential customers
to adopt new technologies in the electrical utility industry. This comprehensive
bill currently remains in conference committee in the Senate. It is not possible
at this time to predict the impact that any such legislation or regulation or
failure to enact any such legislation or regulation, or other changes in laws or
industry standards that may be adopted in the future, could have on our
financial results, cash flows or financial position.

WE EXPERIENCE COMPETITION FROM OTHER COMPANIES IN THE ELECTRICAL UTILITY
INDUSTRY, WHICH COULD RENDER OUR PRODUCTS OBSOLETE OR SUBSTANTIALLY LIMIT THE
VOLUME OF PRODUCTS THAT WE SELL. THIS WOULD LIMIT OUR ABILITY TO COMPETE AND
ACHIEVE PROFITABILITY.


The market in which we compete is intensely competitive. Our competitors include
makers of traditional bare overhead wire and other companies with
developmental-stage products that may be marketing or developing products that
compete with our products or would compete with them if developed. Unique
technological advances may be achieved by our competition, with better capital
resources, in the future or that would render our technologies and products
obsolete. We believe our competitors will continue to improve the design and
performance of their products and to introduce new products with competitive
price and performance characteristics. We expect that we will be required to
continue to invest in product development, productivity improvements and
customer service and support in order to compete in our markets. Such
competitors could develop a more efficient product or undertake more aggressive
and costly marketing campaigns than us, which may adversely affect our marketing
strategies and could have a material adverse effect on our business, results of
operations or financial condition. In addition, as we introduce new products, we
will compete directly with a greater number of companies. If we fail to compete
successfully, our ability to achieve sustained profitability will be limited and
sustained profitability, or profitability at all, may not be possible.


RISKS RELATED TO INVESTMENT IN OUR SECURITIES

THERE IS CURRENTLY A LIMITED TRADING MARKET FOR OUR COMMON STOCK, SO YOU MAY BE
UNABLE TO LIQUIDATE YOUR SHARES IF YOU NEED MONEY.


Our common stock is traded in the OTC market through the OTC Bulletin Board.
There is currently a limited trading market for the common stock. Trading of
securities on the OTC Bulletin Board is generally limited and is effected on a
less regular basis than that effected on other exchanges or quotation systems,
such as the NASDAQ Stock Market, and accordingly investors who own or purchase
common stock will find that the liquidity or transferability of the common stock
and their ability to sell our securities in the secondary market is limited.
Additionally, a stockholder may find it more difficult to dispose of, or obtain
accurate quotations as to the market value, of common stock. This lack of
liquidity may also make it more difficult for us to raise capital in the future


                                       9


THE APPLICATION OF THE PENNY STOCK RULES COULD ADVERSELY EFFECT THE MARKET PRICE
OF OUR COMMON STOCK.

As long as the trading price of our common stock is below $5.00 per share, the
open-market trading of our common stock will be subject to the penny stock
rules. The penny stock rules impose additional sales practice requirements on
broker-dealers who sell securities to persons other than established customers
and accredited investors, generally those with assets in excess of $1,000,000 or
annual income exceeding $200,000 or $300,000 together with their spouse. For
transactions covered by these rules, the broker-dealer must make a special
suitability determination for the purchase of securities and have received the
purchaser's written consent to the transaction before the purchase.
Additionally, for any transaction involving a penny stock, unless exempt, the
broker-dealer must deliver, before the transaction, a disclosure schedule
prescribed by the Securities and Exchange Commission relating to the penny stock
market. The broker-dealer also must disclose the commissions payable to both the
broker-dealer and the registered representative and current quotations for the
securities. Finally, monthly statements must be sent disclosing recent price
information on the limited market in penny stocks. These additional burdens
imposed on broker-dealers may restrict the ability of broker-dealers to sell the
common stock and may affect a stockholder's ability to resell the common stock.

Stockholders should be aware that, according to Securities and Exchange
Commission Release No. 34-29093, dated April 17, 1991, the market for penny
stocks has suffered in recent years from patterns of fraud and abuse. Such
patterns include:

(i) control of the market for the security by one or a few broker-dealers that
are often related to the promoter or issuer;

(ii) manipulation of prices through prearranged matching of purchases and sales
and false and misleading press releases;

(iii) boiler room practices involving high-pressure sales tactics and
unrealistic price projections by inexperienced sales persons;

(iv) excessive and undisclosed bid-ask differential and markups by selling
broker-dealers; and

(v) the wholesale dumping of the same securities by promoters and broker-dealers
after prices have been manipulated to a desired level, along with the resulting
inevitable collapse of those prices, and with consequent investor losses.

THE PRICE OF OUR COMMON STOCK IS VOLATILE, WHICH MAY INCREASE IN THE FUTURE, AND
WHICH COULD AFFECT OUR ABILITY TO RAISE CAPITAL IN THE FUTURE OR MAKE IT
DIFFICULT FOR INVESTORS TO SELL THEIR SHARES.

The market price of our common stock may be subject to significant fluctuations
in response to our operating results, announcements of new products or market
expansions by us or our competitors, changes in general conditions in the
economy, the financial markets, the electrical power transmission and
distribution industry, or other developments and activities affecting us, our
customers, or our competitors, some of which may be unrelated to our
performance. The sale or attempted sale of a large amount of common stock into
the market may also have a significant impact on the trading price of common
stock. During the last 12 months, the closing bid prices for our common stock
have fluctuated from a high of $6.24 to a low of $0.87.Fluctuations in the
trading price or liquidity of our common stock may adversely affect our ability
to raise capital through future equity financings.

WE DO NOT ANTICIPATE PAYING DIVIDENDS IN THE FORESEEABLE FUTURE, WHICH MAY
REDUCE YOUR RETURN ON AN INVESTMENT IN OUR COMMON STOCK.

We plan to use all of our earnings, to the extent we have earnings, to fund our
operations. We have not paid dividends on the common stock and do not anticipate
paying such dividends in the foreseeable future. We cannot guarantee that we
will, at any time, generate sufficient surplus cash that would be available for
distribution as a dividend to the holders of our common stock. Therefore, any
return on your investment would derive from an increase in the price of our
stock, which may or may not occur.

In the past, following periods of volatility in the market price of a company's
securities, securities class action litigation has often been instituted. If a
securities class action suit is filed against us, we would incur substantial
legal fees and our management's attention and resources would be diverted from
operating our business in order to respond to the litigation.

WE ISSUED DULY AUTHORIZED SHARES TO EMPLOYEES AND CONSULTANTS UNDER OUR 2002
NON-QUALIFIED STOCK COMPENSATION PLAN UNDER THE INCORRECT ASSUMPTION THAT WE HAD
REGISTERED THE SHARES PURSUANT TO FEDERAL SECURITIES LAWS. HOWEVER, WE
SUBSEQUENTLY REALIZED THAT THESE SHARES HAD NOT BEEN REGISTERED PRIOR TO
ISSUANCE. AS A RESULT, OUR ISSUANCE MAY HAVE VIOLATED FEDERAL AND STATE
SECURITIES LAWS, AND MAY RESULT IN OUR LIABILITY TO CERTAIN SUBSEQUENT
PURCHASERS OF THESE SHARES.

Between March 18, 2003 and February 4, 2004 we issued common stock and options
representing 1,504,780 shares of common stock to nine employees and consultants
pursuant to our 2002 Non-Qualified Stock Compensation Plan. Although we believed
that we and our counsel had filed the appropriate registration statement on Form
S-8, it came to our attention in February, 2004 in connection with the
preparation of a registration statement that an appropriate Form S-8 had not
been filed. It may be determined that such issuances were not exempt from
registration or qualification under federal and state securities laws, and we
did not obtain the required registrations or qualifications. As a result, we may
be subject to contingent liabilities from these investors, as well as subsequent
purchasers of the shares directly and indirectly issued. These liabilities may
include an obligation to make a rescission offer to the holders of these shares
and options. If rescission is required and accepted, we could be required to
make payments to the holders of these shares and options. In addition, federal
securities laws do not expressly provide that a rescission offer will terminate
a purchaser's right to rescind a sale of stock that was not registered as
required. If rescission is required, and any or all of the offerees reject the
rescission offer, we may continue to be liable under federal and state
securities laws.

                                       10



AS OF MAY 16, 2005, 25,046,896 COMMON SHARES ARE ISSUABLE UPON EXERCISE OF ALL
OUTSTANDING OPTIONS, WARRANTS AND CONVERSION OF CONVERTIBLE DEBENTURES FOR LESS
THAN THE MARKET PRICE OF $1.97 PER SHARE. CASH PROCEEDS RESULTING FROM THE FULL
EXERCISE AND CONVERSION OF THESE SECURITIES WOULD BE APPROXIMATELY $6,447,983.
THE EXERCISE OR CONVERSION OF THESE SECURITIES COULD RESULT IN THE SUBSTANTIAL
DILUTION OF THE COMPANY IN TERMS OF A PARTICULAR PERCENTAGE OWNERSHIP IN THE
COMPANY AS WELL AS THE BOOK VALUE OF THE COMMON SHARES. THE SALE OF A LARGE
AMOUNT OF COMMON SHARES RECEIVED UPON EXERCISE OF THESE OPTIONS OR WARRANTS ON
THE PUBLIC MARKET TO FINANCE THE EXERCISE PRICE OR TO PAY ASSOCIATED INCOME
TAXES, OR THE PERCEPTION THAT SUCH SALES COULD OCCUR, COULD SUBSTANTIALLY
DEPRESS THE PREVAILING MARKET PRICES FOR OUR SHARES. FULL CONVERSION OF SUCH
SHARES WOULD INCREASE THE OUTSTANDING COMMON SHARES BY 21.8% TO APPROXIMATELY
139,588,300 SHARES.

The exercise price or conversion price of outstanding options, warrants and
convertible debentures may be less than the current market price for our common
shares. In the event of the exercise of these securities, a shareholder could
suffer substantial dilution of his or her investment in terms of the percentage
ownership in the Company as well as the book value of the common shares held. At
the May 16, 2005 market price of $1.97 per share, 25,046,896 shares would be
exercisable or convertible for less than the market prices. Full exercise and
conversion of these below market shares would result in us receiving cash
proceeds of $16,447,983 and would increase the outstanding common shares by
21.8% to approximately 139,588,300 shares.


OUR FUTURE REVENUE IS UNPREDICTABLE AND COULD CAUSE OUR OPERATING RESULTS TO
FLUCTUATE SIGNIFICANTLY FROM QUARTER TO QUARTER.


Our quarterly revenue and operating results are difficult to predict and may
fluctuate significantly from quarter to quarter. Because we have not had any
substantial ACCC product revenues to date, our revenues may not materialize.
Since our revenues may fluctuate and are difficult to predict, and our expenses
are largely independent of revenues in any particular period, it is difficult
for us to accurately forecast revenues and profitability.


                                       11


Our business is subject to a variety of additional risks, which could materially
adversely affect quarterly and annual operating results, including:

(i) market acceptance of our composite technologies by utility companies;

(ii) due to potential lengthy lead time for the implementation of new lines or
the reconductoring of existing lines, the extent and timing of these new cable
transactions with utility companies may lead to significant delays in sales that
could adversely impact our cashflow;


(iii) the loss of a strategic relationship or termination of a relationship with
a cable partner, specifically General Cable;

(iv) announcements or introductions of new technologies or products by us or our
competitors;


(v) delays or problems in the introduction or performance of enhancements or of
future generations of our technology;


(vi) failures or problems in our utility cable product, particularly during the
early stages of the introduction of the product when problems or failures
identified during trials carried out with the product or during its installation
or operation can have an adverse effect;

(vii) delays in the adoption of new industry standards or changes in market
perception of the value of new or existing standards;

(viii) competitive pressures resulting in lower revenues;

(ix) personnel changes, particularly those involving engineering and technical
personnel;


(x) costs associated with protecting our intellectual property;


(xi) the potential that customers could fail to make payments under the terms of
their contracts, including Global American Energy and City of Kingman, Kansas;

(xii) market-related issues, including lower ACCC Cable demand brought on by
excess cable inventory and lower average selling prices for ACCC cable as a
result of market surpluses;


                                       12



(xiii) increased costs or shortages of key raw materials including carbon fiber
and glass fiber;

(xiv) regulatory developments; and


(xv) general economic trends and other factors.

                                       13


                                 USE OF PROCEEDS

We will not receive any proceeds from the sale of the shares by the selling
security holders. All proceeds from the sale of the shares offered under this
prospectus will be for the account of the selling security holders, as described
below in the sections entitled "Selling Security Holders" and "Plan of
Distribution." With the exception of any brokerage fees and commission which are
the obligation of the selling stockholders, we are responsible for the fees,
costs and expenses of this offering which are estimated to be $37,843.32,
inclusive of our legal and accounting fees, printing costs and filing and other
miscellaneous fees and expenses.

                                       14


                            SELLING SECURITY HOLDERS


The following table provides certain information with respect to the selling
security holders' beneficial ownership of our securities as of the date of this
prospectus. The number and percentage of shares beneficially owned by each
selling security holder that may be offered using this prosectus is based on
114,541,414 shares of common stock outstanding as of May 10, 2005 and determined
in accordance with Rule 13d-3 of the Exchange Act. The information contained in
the table below is not necessarily indicative of beneficial ownership for any
other purpose. We believe that each individual or entity named has sole
investment and voting power with respect to the securities indicated as
beneficially owned by them, subject to community property laws, where
applicable, except where otherwise noted. The selling security holders listed in
the table below may have transferred, in transactions exempt from the
registration requirements of the Securities Act of 1933, some or all of their
shares since the date on which the information in the table below is presented.
Information about the selling security holders may change from time to time. Any
changed information will be set forth in prospectus supplements or
post-effective amendments, as required.

The selling security holders can offer all, some or none of their shares of our
common stock, thus we have no way of determining the number they will hold after
this offering. Therefore, we have prepared the table below on the assumption
that the selling security holders will sell all shares covered by this
prospectus. None of the selling security holders are affiliates of CTC, nor have
any of them had a material relationship with CTC during the past three years,
except for Brad Wheatley, a financial consultant retained to assist our Acting
Chief Financial Officer between December 2004 and February 2005, and Doug Metz
and Mike McClendon who are employed as consultants assisting our sales,
marketing, and business development efforts. For the share amounts registered,
each of the three individuals performed services related to our obtaining a $3.0
million capital lease line of credit and each performed these services between
February, 2004 and August, 2004. All three individuals have, or currently
perform services on an at-will contract basis. From December 7, 2004 to February
16, 2005, Mr. Wheatley was retained at a rate of $500 per day plus reimbursable
expenses as a consultant to provide financial consulting services to assist the
acting CFO. We paid him a total of $31,269, and as of March 31, 2005 we owned
him $0. From December 1, 2004 until April 15, 2005, Mr. McClendon was retained
to provide financial consulting and business development services at a rate of
$10,000 per month plus reimbursable expenses. As of March 31, 2005, we paid him
$35,917, and owe him an additional $13,757. From December 1, 2004 until May
16,2005, Mr. Metz provided business development, sales, and marketing services
at a rate of $12,000 per month plus reimbursable expenses. As of March 31, 2005,
we paid Mr. Metz a total $69,386, and owed him $6,000. Each of these three
individuals had substantive access to inside information during the course of
fulfillment of their duties. None of the selling security holders are or were
affiliated with registered broker-dealers. See "Plan of Distribution."






                                                                                      PERCENTAGE OF
                                                                                   OUTSTANDING SHARES
                                  SHARES BENEFICIALLY OWNED  SHARES TO BE SOLD IN  BENEFICIALLY OWNED
     SELLING SECURITY HOLDER           BEFORE OFFERING           THE OFFERING        AFTER OFFERING
- -------------------------------------------------------------------------------------------------------
                                                                               
John F. O'Brien                           135,000 (1)               135,000                *
Bristol Investment Fund, Ltd.           3,085,909 (2)             3,085,909                *
Fred Debs                                  30,000 (3)                30,000                *
Alan Davis                                250,000 (4)               250,000                *
Rocci Howe                                414,373 (5)               414,373                *
IFC Credit Corporation                    104,000 (6)               104,000                *
Islandia L.P.                           4,505,450 (7)             4,505,450                *
John D. Lane                              100,000 (8)               100,000                *
Ryan M. Lane                              265,000 (9)               265,000                *
Long Term Capital Company                120,000 (10)               120,000                *
Media Relations Strategy,Inc.            500,000 (11)               250,000                *
Midsummer Investment, Ltd.            11,572,195 (12)            11,572,195                *
Omicron Master Trust                   3,980,834 (13)             3,980,834                *
Mike McClendon                            16,000 (14)                16,000                *
Stephen Meldrum                          115,000 (15)               115,000                *
Doug Metz                                 16,000 (16)                16,000                *
Prima Capital Inc.                       150,000 (17)               150,000                *
Barry Sedlik                              20,000 (18)                20,000                *
The Taxin Network, Inc.                  115,000 (19)               115,000                *
Rudy Trebels                              16,000 (20)                16,000                *
Bradford M. Wheatley                       8,000 (21)                 8,000                *

                      Total           25,518,761                 25,268,761


*Less than 1%.


(1) Includes up to 135,000 shares of common stock underlying warrants. Lane
Capital Markets received these Series U warrants as a partial fee in connection
with the placement of the Debentures and subsequently assigned them to John F.
O'Brien. The value of the 135,000 warrants was $166,053.

                                       15


(2) Shares being registered include up to 2,178,401 shares of common stock
underlying the Debenture and interest thereon at maturity, and up to 907,508
shares of common stock underlying warrants. Bristol Capital Advisors, LLC is the
investment manager to Bristol Investment Fund, Ltd. Paul Kessler is the manager
of Bristol Capital Advisors, LLC and as such has voting and investment control
over these securities. Cash received from the debentures issuance was $2,000,000
and the value of the warrants issued was $2,091,522.

(3) Includes up to 30,000 shares of common stock underlying Series S warrants.
Warrants were issued for settlement of an outstanding dispute related to
activities prior to the reverse merger with Transmission Technology Corporation
in 2001. The value of the warrants was $19,307. The warrants were granted on
July 17, 2004 and issued on September 13, 2004 with an exercise price of $1.00
per share.

(4) Includes up to 250,000 shares of common stock underlying Series S warrants.
Warrants were issued in payment of services rendered for international sales and
marketing related activities and the value of the warrants issued was $160,893.
The warrants were granted on July 17, 2004 and issued on September 13, 2004 with
an exercise price of $1.00 per share.

(5) Includes up to 114,373 shares of common stock and includes up to 300,000
shares of common stock underlying Series S warrants. The common stock was valued
at $254,881 and the warrants were valued at $193,071. Both issuances were for
strategic business consulting services provided. The warrants were granted on
July 17, 2004 and issued on September 13, 2004 with an exercise price of $1.00
per share.

(6) Includes up to 104,000 shares of common stock underlying Series T warrants
issued for services rendered in conjunction with obtaining capital lease
financing. Rudy Trebels is the controlling person of IFC Credit Corporation. The
warrants were valued at $68,843. The warrants were granted on July 17, 2004 and
issued on September 13, 2004 with an exercise price of $1.00 per share.

(7) Includes up to 3,180,489 shares of common stock underlying the Debenture and
interest thereon at maturity and up to 1,324,961 shares of common stock
underlying warrants. Richard O. Berner, Thomas R. Berner and Edgar R. Berner are
the controlling persons of Islandia L.P. Cash received from the debentures
issuance was $2,920,000 and the value of the warrants issued was $1,581,806.



(8) Includes up to 100,000 shares of common stock underlying Series U warrants.
Lane Capital Markets received these warrants as a partial fee in connection with
the placement of the Debentures and subsequently assigned them to John Lane. The
value of the 100,000 warrants was $123,002. The warrants were granted on August
18, 2004 and issued on September 13, 2004 with an exercise price of $1.82 per
share.

(9) Includes up to 265,000 shares of common stock underlying Series U warrants.
Lane Capital Markets received these warrants as a partial fee in connection with
the placement of the Debentures and subsequently assigned them to Ryan Lane. The
value of the 265,000 warrants was $325,957. The warrants were granted on August
18, 2004 and issued on September 13, 2004 with an exercise price of $1.82 per
share.

(10) Includes up to 120,000 shares of common stock underlying warrants issued
for offering costs related to the a private placement in December, 2003 and
valued at $153,207. John Vornle is the controlling person of Long Term Capital
Company. The warrants were granted and issued on July 14, 2004 with an exercise
price of $2.04 per share.

(11) Includes up to 500,000 shares of common stock, of which 250,000 are being
registered in the registration statement that contains this prospectus. Martin
L. Goldberg is the controlling person of Media Relations Strategy, Inc. The
value received for the 250,000 shares was $205,000. The shares were issued on
July 16, 2004.

(12) Includes up to 8,169,040 shares of common stock underlying the Debenture
and interest thereon at maturity and up to 3,403,155 shares of common stock
underlying warrants. The cash received for the debenture issuance was $7,500,000
and the value assigned to the warrants was $3,447,874. Midsummer Capital, LLC is
the investment manager to Midsummer Investment Ltd. By virtue of such
relationship, Midsummer Capital, LLC may be deemed to have dispositive power
over the shares owned by Midsummer Investment Ltd. Midsummer Capital, LLC
disclaims beneficial ownership of such shares. Mr. Michel Amsalem and Mr. Scott
Kaufman have delegated authority from the members of Midsummer Capital, LLC with
respect to the shares of common stock owned by Midsummer Investment Ltd. Messrs.
Amsalem and Kaufman may be deemed to share dispositive power over the shares of
our common stock owned by Midsummer Investment Ltd. Messrs. Amsalem and Kaufman
disclaim beneficial ownership of such shares of our common stock and neither
person has any legal right to maintain such delegated authority.

                                       16


(13) Includes up to 2,810,150 shares of common stock underlying the Debenture
and interest thereon at maturity and up to 1,170,685 shares of common stock
underlying warrants. The cash received for the debenture issuance was $2,580,000
and the value assigned to the warrants was $1,236,669. Omicron Capital, L.P., a
Delaware limited partnership ("Omicron Capital"), serves as investment manager
to Omicron Master Trust, a trust formed under the laws of Bermuda ("Omicron"),
Omicron Capital, Inc., a Delaware corporation ("OCI"), serves as general partner
of Omicron Capital, and Winchester Global Trust Company Limited ("Winchester")
serves as the trustee of Omicron. By reason of such relationships, Omicron
Capital and OCI may be deemed to share dispositive power over the shares of our
common stock owned by Omicron, and Winchester may be deemed to share voting and
dispositive power over the shares of our common stock owned by Omicron. Omicron
Capital, OCI and Winchester disclaim beneficial ownership of such shares of our
common stock. Omicron Capital has delegated authority from the board of
directors of Winchester regarding the portfolio management decisions with
respect to the shares of common stock owned by Omicron and, as of September 10,
2004, Mr. Olivier H. Morali and Mr. Bruce T. Bernstein, officers of OCI, have
delegated authority from the board of directors of OCI regarding the portfolio
management decisions of Omicron Capital with respect to the shares of common
stock owned by Omicron. By reason of such delegated authority, Messrs. Morali
and Bernstein may be deemed to share dispositive power over the shares of our
common stock owned by Omicron. Messrs. Morali and Bernstein disclaim beneficial
ownership of such shares of our common stock and neither of such persons has any
legal right to maintain such delegated authority. No other person has sole or
shared voting or dispositive power with respect to the shares of our common
stock being offered by Omicron, as those terms are used for purposes under
Regulation 13D-G of the Securities Exchange Act of 1934, as amended.

(14) Includes up to 16,000 shares of common stock underlying Series T warrants
issued for services rendered in conjunction with obtaining capital lease
financing. The value of the Series T warrants issued was $10,592. The warrants
were granted on July 17, 2004 and issued on September 13, 2004 with an exercise
price of $1.00 per share.

(15) Includes up to 115,000 shares of common stock underlying Series S warrants
issued for services for public relations consulting. The value of the Series S
warrants issued was $74,011. The warrants were granted on July 17, 2004 and
issued on September 13, 2004 with an exercise price of $1.00 per share.

(16) Includes up to 16,000 shares of common stock underlying Series T warrants
issued for services rendered in conjunction with obtaining capital lease
financing. The value of the Series T warrants issued was $10,592. The warrants
were granted on July 17, 2004 and issued on September 13, 2004 with an exercise
price of $1.00 per share.

(17) Includes up to 150,000 shares of common stock underlying Series S warrants
issued for marketing and business advisory services. The value of the Series S
warrants issued was $74,011. Elias Argyropoulos is the controlling person of
Prima Capital Inc. The warrants were granted on July 17, 2004 and issued on
September 13, 2004 with an exercise price of $1.00 per share.

(18) Includes up to 20,000 shares of common stock issued for legal services
rendered valued at $20,000. The shares were issued on July 16, 2004.

(19) Includes up to 115,000 shares of common stock underlying Series S warrants
issued for advertising services. The value of the Series S warrants issued was
$74,011. Ed Taxin is the controlling person of The Taxin Network, Inc. The
warrants were granted on July 17, 2004 and issued on September 13, 2004 with an
exercise price of $1.00 per share.

(20) Includes up to 16,000 shares of common stock underlying Series T warrants
issued for services rendered in conjunction with obtaining capital lease
financing. The value of the Series T warrants issued was $10,592. The warrants
were granted on July 17, 2004 and issued on September 13, 2004 with an exercise
price of $1.00 per share.

(21) Shares being registered include up to 8,000 shares of common stock
underlying Series T warrants issued for services rendered in conjunction with
obtaining capital lease financing. The value of the Series T warrants issued was
$5,296. The warrants were granted on July 17, 2004 and issued on September 13,
2004 with an exercise price of $1.00 per share.


                                       17


                              PLAN OF DISTRIBUTION

Each selling security holder of our common stock, and any of their pledgees,
assignees and successors-in-interest may, from time to time, sell any or all of
their shares of common stock on the trading market or any other stock exchange,
market or trading facility on which the shares are traded or in private
transactions. These sales may be at fixed or negotiated prices. A selling
security holder may use any one or more of the following methods when selling
shares:

o ordinary brokerage transactions and transactions in which the broker-dealer
solicits purchasers;

o block trades in which the broker-dealer will attempt to sell the shares as
agent but may position and resell a portion of the block as principal to
facilitate the transaction;

o purchases by a broker-dealer as principal and resale by the broker-dealer for
its account;

o an exchange distribution in accordance with the rules of the applicable
exchange;

o privately negotiated transactions;

o settlement of short sales entered into after the date of this prospectus;

o broker-dealers may agree with the selling security holders to sell a specified
number of such shares at a stipulated price per share;

o a combination of any such methods of sale;

o through the writing or settlement of options or other hedging transactions,
whether through an options exchange or otherwise; or

o any other method permitted pursuant to applicable law.

The selling security holders may also sell shares under Rule 144 under the
Securities Act of 1933, as amended (the "Securities Act"), if available, rather
than under this prospectus.

Broker-dealers engaged by the selling security holders may arrange for other
brokers-dealers to participate in sales. Broker-dealers may receive commissions
or discounts from the selling security holders (or, if any broker-dealer acts as
agent for the purchaser of shares, from the purchaser) in amounts to be
negotiated. Each selling security holder does not expect these commissions and
discounts relating to its sales of shares to exceed what is customary in the
types of transactions involved.

In connection with the sale of our common stock pursuant to this prospectus, the
selling security holders may enter into hedging transactions with broker-dealers
or other financial institutions, which may in turn engage in short sales of the
common stock in the course of hedging the positions they assume. The selling
security holders may also sell shares of our common stock short and deliver
these securities to close out their short positions, or loan or pledge the
common stock to broker-dealers that in turn may sell these securities. The
selling security holders may also enter into option or other transactions with
broker-dealers or other financial institutions or the creation of one or more
derivative securities which require the delivery to such broker-dealer or other
financial institution of shares offered by this prospectus, which shares such
broker-dealer or other financial institution may resell pursuant to this
prospectus (as supplemented or amended to reflect such transaction).

The selling security holders and any broker-dealers or agents that are involved
in selling the shares may be deemed to be "underwriters" within the meaning of
the Securities Act in connection with such sales. In such event, any commissions
received by such broker-dealers or agents and any profit on the resale of the
shares purchased by them may be deemed to be underwriting commissions or
discounts under the Securities Act. Each selling security holder has informed
CTC that it does not have any agreement or understanding, directly or
indirectly, with any person to distribute the Common Stock.

We are required to pay certain fees and expenses incurred by us incident to the
registration of the shares. We have agreed to indemnify the selling security
holders against certain losses, claims, damages and liabilities, including
liabilities under the Securities Act.

Because selling security holders may be deemed to be "underwriters" within the
meaning of the Securities Act, they will be subject to the prospectus delivery
requirements of the Securities Act. In addition, any securities covered by this
prospectus which qualify for sale pursuant to Rule 144 under the Securities Act
may be sold under Rule 144 rather than under this prospectus. Each selling
security holder has advised us that they have not entered into any agreements,
understandings or arrangements with any underwriter or broker-dealer regarding
the sale of the resale shares. There is no underwriter or coordinating broker
acting in connection with the proposed sale of the resale shares by the selling
security holders.

                                       18


We agreed to keep this prospectus effective until the earlier of: (i) the date
on which the shares may be resold by the selling security holders without
registration and without regard to any volume limitations by reason of Rule
144(e) under the Securities Act or any other rule of similar effect; or (ii) all
of the shares have been sold pursuant to the prospectus or Rule 144 under the
Securities Act or any other rule of similar effect. The resale shares will be
sold only through registered or licensed brokers or dealers if required under
applicable state securities laws. In addition, in certain states, the resale
shares may not be sold unless they have been registered or qualified for sale in
the applicable state or an exemption from the registration or qualification
requirement is available and is complied with.

Under applicable rules and regulations under the Exchange Act, any person
engaged in the distribution of the resale shares may not simultaneously engage
in market making activities with respect to our common stock for a period of two
business days prior to the commencement of the distribution. In addition, the
selling security holders will be subject to applicable provisions of the
Exchange Act and the rules and regulations thereunder, including Regulation M,
which may limit the timing of purchases and sales of shares of our common stock
by the selling security holders or any other person. Further, to the extent
applicable, the selling security holders or any other person must comply with
Rule 105 of Regulation M, as amended, which provides that it is unlawful for any
person to cover a short sale with securities purchased from an underwriter or
broker or dealer if such short sale occurred during the shorter of the period
beginning five business days before the pricing of the offered securities and
ending with such pricing period. We will make copies of this prospectus
available to the selling security holders and have informed them of the need to
deliver a copy of this prospectus to each purchaser at or prior to the time of
the sale.

                                     EXPERTS

The consolidated financial statements of Composite Technology Corporation, a
Nevada corporation, incorporated by reference into this prospectus, to the
extent and for the periods indicated in their report, have been audited by
Singer Lewak Greenbaum & Goldstein LLP, independent registered public
accountants, as indicated in their report with respect thereto, and are
incorporated by reference in this prospectus in reliance upon the authority of
said firm as experts in giving said report.

                                  LEGAL MATTERS

Richardson & Patel LLP has given us an opinion relating to the due issuance of
the common stock being registered in this prospectus.

                       WHERE YOU CAN FIND MORE INFORMATION

We file annual, quarterly and current reports, proxy statements and other
information with the Securities and Exchange Commission. You may read and copy
materials that we have filed with the SEC at the following SEC public reference
room:

                             450 Fifth Street, N.W.
                                    Room 1024
                             Washington, D.C. 20549

Please call the SEC at 1-800-SEC-0330 for further information on the public
reference room. Our SEC filings are also available to the public on the SEC's
Internet Web site at http://www.sec.gov.

We incorporate by reference into this prospectus the documents listed below and
any future filings we make with the SEC under Sections 13(a), 13(c), 14 or 15(d)
of the Securities Exchange Act of 1934, as amended (the Exchange Act), including
any filings after the date of this prospectus, until the offering is completed.
The information incorporated by reference is an important part of this
prospectus. Any statement in a document incorporated by reference into this
prospectus will be deemed to be modified or superseded to the extent a statement
contained in (1) this prospectus or (2) any other subsequently filed document
that is incorporated by reference into this prospectus modifies or supersedes
such statement.

o Our Annual Report on Form 10-KSB for our fiscal year ended September 30, 2004.


o Our Quarterly Reports on Form 10-Q for our fiscal quarters ended December 31,
2004 and March 31, 2005.

o Our Current Reports on Form 8-K, dated October 7, 2004, November 24, 2004,
January 11, 2005, January 18, 2005, April 20, 2005 and May 5, 2005.


o The description of our Common Stock, contained in our Registration Statement
on Form 10-SB12-G filed on June 9, 2000, under Section 12(g) of the Exchange
Act, and any further amendment or report filed hereafter for the purpose of
updating any such information.

You may request a copy of these filings, at no cost, by writing to us at the
following address or calling us at:

Composite Technology Corporation 2026 McGaw Avenue Irvine, California 92614
(949) 428-8500

                                       19



                        COMPOSITE TECHNOLOGY CORPORATION

                                   PROSPECTUS

                        25,268,761 SHARES OF COMMON STOCK

                                  _______, 2005

YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED OR INCORPORATED BY REFERENCE
IN THIS PROSPECTUS OR THE PROSPECTUS SUPPLEMENT TO MAKE YOUR INVESTMENT
DECISION. NO PERSON IS AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATION OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS, AND IF MADE, SUCH
INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN GIVEN OR
AUTHORIZED. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A
SOLICITATION OF AN OFFER TO BUY ANY SECURITIES OTHER THAN THE SECURITIES OFFERED
BY THIS PROSPECTUS OR AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY THE
SECURITIES IN ANY JURISDICTION TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH
OFFER OR SOLICITATION IN SUCH JURISDICTION. YOU SHOULD NOT ASSUME THAT THE
INFORMATION IN THIS PROSPECTUS OR THE PROSPECTUS SUPPLEMENT IS ACCURATE AS OF
ANY DATE OTHER THAN THE DATE ON THE FRONT OF THE DOCUMENT, REGARDLESS OF THE
TIME OF DELIVERY OF PROSPECTUS OR ANY SALE OF THE SHARES.

                                       20


                                     PART II

                   OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION

The following is an itemized statement of all expenses, all of which we will
pay, in connection with the registration of the common stock offered under this
prospectus:

                                     AMOUNT



SEC Filing Fee                              $11,843.32
Blue Sky Fees and Expenses                    1,000.00*
Legal Fees                                   15,000.00*
Accounting Fees and Expenses                  5,000.00*
Miscellaneous                                 5,000.00*
                                            -----------
                    Total                   $37,843.32*



                                    *ESTIMATE

                    INDEMNIFICATION OF DIRECTORS AND OFFICERS

Our Articles of Incorporation limit the liability of our directors to the
fullest extent permitted under Section 78.037 of the Nevada General Corporation
Law. As permitted by Section 78.037 of the Nevada General Corporation Law, our
Bylaws and Articles of Incorporation also include provisions that eliminates the
personal liability of each of its officers and directors for any obligations
arising out of any acts or conduct of such officer or director performed for or
on behalf of CTC. To the fullest extent allowed by Section 78.751 of the Nevada
General Corporation Law, we will defend, indemnify and hold harmless its
directors or officers from and against any and all claims, judgments and
liabilities to which each director or officer becomes subject to in connection
with the performance of his or her duties and will reimburse each such director
or officer for all legal and other expenses reasonably incurred in connection
with any such claim of liability. However, we will not indemnify any officer or
director against, or reimburse for, any expense incurred in connection with any
claim or liability arising out of the officer's or director's own gross
negligence or willful misconduct.

The provisions of our Bylaws and Articles of Incorporation regarding
indemnification are not exclusive of any other right of CTC to indemnify or
reimburse our officers or directors in any proper case, even if not specifically
provided for in our charter or Bylaws.

                                      II-1


                                    EXHIBITS

The following exhibits are filed herewith or incorporated by reference herein:



Exhibit
Number        Description
- ------------- ------------------------------------------------------------------

2.1           Plan of Reorganization of Composite Technology Corporation


4.1(1) Form of Debenture (included in Exhibit 10.1).
- ------------- ------------------------------------------------------------------
5.1(4)        Opinion re legality from Richardson & Patel LLP, filed herewith.
- ------------- ------------------------------------------------------------------
10.1(1)       Form of Securities Purchase Agreement including form of the
              Debenture attached as Exhibit A, form of the Registration
              Rights Agreement attached as Exhibit B thereto, form of the
              Common Stock Purchase Warrant attached as Exhibit C thereto,
              form of legal opinion attached as Exhibit D, form of Custodial
              and Security Agreement attached as Exhibit E, dated August 17,
              2004.
- ------------- ------------------------------------------------------------------
10.2(2)       Letter agreement between Composite Technology Corporation and
              Feldman Weinstein LLP, dated November 23, 2004.
- ------------- ------------------------------------------------------------------
10.3(3)       Letter Agreement between Composite Technology Corporation and
              Midsummer Investment, Ltd., Bristol Investment Fund, Ltd.,
              Islandia, L.P. and Omicron Trust dated January 21, 2005.
- ------------- ------------------------------------------------------------------
23.1(4)       Consent of Singer Lewak Greenbaum & Goldstein LLP
- ------------- ------------------------------------------------------------------
23.2(4)       Consent of Richardson & Patel LLP (included in Exhibit 5.1)
- ------------- ------------------------------------------------------------------
24.1(4)       Power of Attorney of certain director and officer of the
              Registrant.
- ------------- ------------------------------------------------------------------



(1) Incorporated by reference to the Registrant's Current Report on Form 8-K
filed with the SEC on August 25, 2004.
(2) Incorporated by reference to the Registrant's Current Report on Form 8-K
filed with the SEC on November 24, 2004.
(3) Incorporated by reference to the Registrant's Registration Statement on Form
SB-2 filed with the SEC on January 25, 2005.
(4) Incorporated by reference to the Registrant's Registration Statement on Form
S-3 (Amendment No. 1 to SB-2) filed with the SEC on March 1, 2005, as amended.

                                  UNDERTAKINGS

A. The undersigned registrant hereby undertakes:

(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:

(a) To include any prospectus required by Section 10(a)(3) of the Securities Act
of 1933;

(b) To reflect in the prospectus any facts or events arising after the effective
date of the registration statement (or the most recent post-effective amendment
thereof) which, individually or in the aggregate, represent a fundamental change
in the information set forth in the registration statement. Notwithstanding the
foregoing, any increase or decrease in volume of securities offered (if the
total dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the estimated maximum
offering range may be reflected in the form of prospectus filed with the
Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume
and price represent no more than a 20% change in the maximum aggregate offering
price set forth in the "Calculation of Registration Fee" table in the effective
registration statement;

(c) To include any material information with respect to the plan of distribution
not previously disclosed in the registration statement or any material change to
such information in the registration statement;

                                      II-2


Provided, however, that clauses (a) and (b) do not apply if the information
required to be included in a post-effective amendment by such clauses is
contained in periodic reports filed with or furnished to the Commission by the
registrant pursuant to Section 13 or Section 15(d) of the Securities Exchange
Act of 1934 that are incorporated by reference in the registration statement.

(2) That, for the purpose of determining any liability under the Securities Act
of 1933, each such post-effective amendment shall be deemed a new registration
statement relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.

(3) To remove from registration by means of a post-effective amendment any of
the securities being registered which remain unsold at the termination of the
offering.

B. That, for purposes of determining any liability under the Securities Act of
1933, each filing of the registrant's annual report pursuant to Section 13(a) or
Section 15(d) of the Securities Exchange Act of 1934 (and, where applicable,
each filing of an employee benefit plan's annual report pursuant to Section
15(d) of the Securities Exchange Act of 1934) that is incorporated by reference
in this registration statement shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.

C. Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the provisions described under Item 15 above, or
otherwise, the registrant has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as
expressed in the Securities Act of 1933 and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities, other than the
payment by the registrant of expenses incurred or paid by a director, officer or
controlling person of the registrant in the successful defense of any action,
suit or proceeding, is asserted by such director, officer or controlling person
in connection with the securities being registered, the registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act of 1933 and will be governed by the final adjudication of such
issue.

D. The Registrant hereby undertakes that:

(1) For purposes of determining any liability under the Securities Act of 1933,
the information omitted from the form of prospectus filed as part of this
registration statement in reliance upon Rule 430A and contained in a form of
prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h)
under the Securities Act shall be deemed to be part of this registration
statement as of the time it was declared effective.

(2) For the purpose of determining any liability under the Securities Act of
1933, each post-effective amendment that contains a form of prospectus shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.

                                      II-3


                                   SIGNATURES


Pursuant to the requirements of the Securities Act, the registrant certifies
that it has reasonable grounds to believe that it meets all of the requirements
for filing on Form S-3 and has duly caused this Amendment No. 2 to Registration
Statement on Form S-3 to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City Irvine, State of California, on May 19, 2005.


                        COMPOSITE TECHNOLOGY CORPORATION


By: /s/ BENTON H WILCOXON
    ------------------------------------------
    Benton H Wilcoxon, Chief Executive Officer



In accordance with the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates stated:





Name                           Title                                Date
- ----                           -----                                ----




/s/ BENTON H WILCOXON          Chief Executive Officer,           May 19, 2005
- ---------------------------    Chairman of the Board and
Benton H Wilcoxon              Acting Chief Financial Officer

                               (Principal Executive Officer
                               and Principal Financial and
                               Accounting Officer)



/s/ C. WILLIAM ARRINGTON       Director                           May 19, 2005

- ---------------------------
C. William Arrington



                                      II-3

EX-2.1

CORRESP

                             RICHARDSON & PATEL LLP
                            10900 Wilshire Boulevard
                                    Suite 500
                              Los Angeles, CA 90024
                            Telephone (310) 208-1182
                            Facsimile (310) 208-1154

                                  May 19, 2005

VIA EDGAR AND OVERNIGHT COURIER

Securities and Exchange Commission
Division of Corporation Finance
450 Fifth Street, N.W.
Washington D.C., 20549
Attn.:   Daniel F. Duchovny, Esq.
         Russel Mancuso, Esq.

         Re:      Composite Technology Corporation
                  Amended Registration Statement on Form S-3
                  File No. 333-122280
                  Filed on April 12, 2005

Messrs. Duchovny and Mancuso:

         On behalf of Composite Technology Corporation (the "Company"), we
enclose for filing under the Securities Act of 1933, as amended, Amendment No. 2
to the above-referenced registration statement (the "Registration Statement"),
together with exhibits thereto. Amendment No. 2 to the Registration Statement
contains revisions that have been made in response to the comments received from
the staff ("Staff") of the Securities and Exchange Commission in their letter
dated May 5, 2005. Set forth below are the Company's responses to the Staff's
comments. We have reproduced the Staff's comments in bold type and have followed
each comment with our response. References in this letter to "we," "our" or "us"
mean the Company or its advisors, as the context may require. Two marked copies
of Amendment No. 2 to the Registration Statement and two marked copies of draft
amendments to the Company's Form 10-KSB for the fiscal year ended September 30,
2004 and Form 10-Q for the quarter ended December 31, 2004 are being provided
supplementally with a copy of this letter for the convenience of the Staff.

Form S-3

Risk Factors

1.       Tell us why you deleted the risk mentioned in previous comment 17. Also
         tell us why you deleted the risk regarding price competition.



Securities and Exchange Commission
May 19, 2005
Page 2

         To date, we have not received any correspondence alleging infringement
         from parties that believe we may be using their technology.
         Nonetheless, in response to the Staff's comment, we have added a risk
         factor regarding potential future infringement of proprietary rights of
         others. With respect to the risk factor regarding price competition, we
         deleted this risk factor because it was covered, in part, by the
         competition risk under the heading "We experience competition from
         other companies in the electrical utility industry,..." In addition, as
         noted in the fifth paragraph of the Prospectus Summary on page 1, we
         believe that the main obstacles to commercialization of our relatively
         new technology include the conservative nature of the electrical
         utility industry which has remained virtually unchanged for over one
         hundred years and the lengthy ordering cycles for new cables.

Our future revenue is unpredictable - Page 8

2.       We reissue comment 9 in part. Cite with greater specificity the current
         customer contracts mentioned in this risk factor. Also, please tell us
         why you deleted disclosure in response to the third bullet point of
         previous comment 9.

         In response to the Staff's comment, we have added the third bullet
         point of previous comment 9 to the prospectus and have added additional
         disclosure to specify the current customer contracts. With respect to
         current vendor agreements, we have deleted this referenced language
         from page 9 to avoid duplicative disclosure. We have referenced our
         current vendor agreement, specifically our agreement with General
         Cable, under the risk factor entitled "A failure to establish and
         maintain relationships with strategic partners..." on page 5 of the
         prospectus.

We are controlled by a small number - Page 5

3.       Please disclose the substance of the second sentence of your response
         to comment 11.

         We have added disclosure as requested to this risk factor on page 5.

We issued duly authorized shares to employees - Page 7

4.       Clarify your response to comment 14. It is unclear why you address Rule
         144 in your analysis. If shareholders cannot resell their securities
         for an amount that exceeds their purchase price due to market
         conditions or otherwise, wouldn't they potentially have a right to put
         the shares to you due to the potential violation you cite? Isn't the
         potential size of your obligation material?

         While we agree that if shareholders cannot resell their securities for
         an amount that exceeds their purchase price due to market conditions or
         otherwise, they would potentially have a right to put the shares to the
         Company but only if they would be able to trace those shares back to
         the original 1,504,780 shares that were inadvertently issued by the
         Company. Since the average trading volume of the Company's stock is
         currently over 500,000 shares a day, it would be exceedingly difficult
         to trace shares purchased in the open market to those original



Securities and Exchange Commission
May 19, 2005
Page 3

         1,504,780 shares. We supplementally note that this issue was
         extensively commented on by the Commission with respect to the
         Registration Statement on Form SB-2 originally filed by the Company on
         February 13, 2004 which became effective on July 9, 2004. We had
         discussed the difficulty of quantifying the risk of recission with the
         examiner at the time and the result of our discussions with that
         examiner is the same risk factor that now appears in the Company's
         current Form S-3. Thus, we again respectfully submit that due to the
         difficulty of tracing the shares back to the original 1,504,780
         issuance, the remoteness of this risk and the difficulty of accurately
         quantifying the risk, the current version of the risk factor adequately
         discloses of the risk of recission with respect to the inadvertent
         issuance of the 1,504,780 shares of the Company's stock.

Selling Security Holders - Page 12

5.       We reissue comment 20. Describe the material terms of the relationships
         mentioned at the end of the second paragraph. For example, disclose the
         term of any agreement, and the compensation to be paid and already
         paid.

         We have added disclosure regarding the material terms of the referenced
         relationships, including the term of the agreement, compensation
         already paid and compensation to be paid.

6.       We note your response to comment 21 and we reissue it in part. With
         respect to consideration the selling shareholder's paid in the past
         three years, describe the transaction and disclose the consideration in
         the registration statement.

         We have added disclosure describing the transaction and consideration
         to the footnotes of the selling security holders table.

7.       Please reconcile the information from Exhibit A supplementally
         submitted with your prior amendment to the number of shares
         beneficially owned and registered for resale by the selling security
         holders.

         We have revised Exhibit A as requested.

Where You can Find More Information - Page 15

8.       The financial statements should be updated if required by Item 310 of
         Regulation S-B.

         We have revised our documents incorporated by reference to update the
         financial statements and current reports.

Exhibits - Page II-2

9.       Please revise the filing to include an updated accountants' consent.

         Noted. We intend to include an updated accountants' consent.



Securities and Exchange Commission
May 19, 2005
Page 4

Form 10-KSB for the year ended September 30, 2004

Description of Business

Corporate History - Page 4

10.      Please expand your response to comment 29 to tell us:

         -        whether you distributed information statements for the
                  transactions, even though you did not file them; and

         -        how you have insured that you will comply with your future
                  filing obligations under Section 14 of the Exchange Act.

         In response to the Staff's comment, we did not distribute information
         statements for the referenced transactions in our prior response to
         comment 29. With respect to future filing obligations under Section 14
         of the Exchange Act, we have enhanced our process of preparing for,
         documenting, and testing our internal control structure including our
         controls for external reporting and disclosure. To this extent, we
         recently hired Domonic Carney as our VP of Finance to assist Mr. Benton
         H Wilcoxon, the acting CFO. Mr. Carney is a CPA with 15 years of
         extensive public company financial and business systems experience, is
         a CPA, and has over three years of Sarbanes-Oxley 302 and 404 testing
         and compliance experience.

         In March 2005, the Company established an executive disclosure
         committee consisting of the CEO, the VP of Finance, and the acting COO
         which meets at least monthly to discuss business issues and to identify
         potential disclosures for our routine filings as well as any other
         events that may require the filing of a Form 8K. The Company currently
         uses financial and SEC disclosure checklists to ensure full and
         complete disclosure.

         The Company requires all persons with inside information, defined by
         the Company as all Directors, Officers, employees, and consultants, to
         provide details of all transactions related to Company stock sold,
         owned, or purchased so that we may file the appropriate securities
         forms. The Company also routinely communicates its insider trading
         policy to our employees.

Intellectual Property - Page 11

11.      We reissue comment 35 in part. Please clarify how you have rights to
         the inventions of Dr. Bryant.

         We respectfully advise the Staff that our rights to Dr. Bryant's
         inventions are based on the assignment provision, or Section 5(d) of
         the consulting agreement with Dr. Byrant, a copy of which was provided
         to the Staff in connection with our letter dated April 12, 2005.

Marketability - Page 12



Securities and Exchange Commission
May 19, 2005
Page 5

12.      Please tell us whether the entities named in this section and in the
         section entitled "Summary of Events" have consented to your use of
         their data and whether any of the reports were prepared specifically
         for your use. If any of the reports mentioned in your filing are not
         public of were prepared specifically for your use, as it appears to be
         the case for the Kinectrics report, please file a consent as an exhibit
         to your registration statement as required by Rule 436 of the
         Securities Act.

         We have reviewed Rule 436 of the Securities Act and respectfully submit
         that it does not apply with respect to the use of data from reports
         cited in the section entitled "Summary of Events" because these
         entities did not issue reports or opinions as "experts." We
         supplementally note that the need for consent is derived from civil
         liabilities on experts imposed by Section 11 of the Securities Act of
         1933, as amended (the "Securities Act"). We also supplementally note
         that the Securities Act does not define the term "expert" but sets
         forth a list of professions subject to Section 11 of the Securities Act
         such as attorney, engineer, appraiser or any person whose profession
         gives authority to statements made by him. We believe that none of the
         entities whose reports the Company cites practice any "profession" that
         would make them "experts" and that their statements should be afforded
         such weight. They were mere companies that were asked to perform tests
         for the Company and the Company is citing the results of such tests.
         Thus, we do not believe that consents from such entities are required
         under Rule 436.

Competition - Page 13

13.      We reissue comment 38. We note that you did not include a definition of
         the term "unreserved acceptance."

         We supplementally advise the Staff that "unreserved acceptance" is
         defined here as meaning the GAP cable design has not been accepted
         throughout the utility industry as a standard, cost effective
         replacement for existing cables. This is confirmed by our ongoing
         discussions with EVE Transmission to develop a replacement composite
         core conductor design for acceptance in the U.K. grid. Our cable could
         replace the GAP design which EVE also developed for the U.K. and have
         been unable to get market acceptance beyond a demonstration site.

14.      It appears that no revisions were made in response to comment 39. We
         reissue the comment.

         In response to the Staff's comment, we have deleted references to
         ACCC's superiority in comparison to competitors' products.

Equity Compensation Table - Page 31

15.      Please expand your disclosure in response to comment 41 to provide the
         information required by Regulation S-B Item 201 (d)(3).

         We have changed the number of "not approved by shareholders" to
         2,145,500 (the difference were issued in 2005) and have added the
         following language:


Securities and Exchange Commission
May 19, 2005
Page 6

         (1) Securities represent common shares issuable upon the exercise of
         the Company's 2002 Non-Qualified Stock Compensation Plan. At the
         shareholders meeting...

         (2) Securities represent common shares issuable upon the exercise of
         Series' R, S, T, and U warrant series issued for services rendered
         prior to September 30, 2004. See Note 8 - Shareholders Equity, Warrants
         for additional disclosure.

Sale of Unregistered Securities - Page 32

16.      We note your response to comment 42. White we may not necessarily agree
         with your analysis with respect to the November 2003 offer, please
         confirm that you will contact our Office of Mergers and Acquisitions
         before you conduct any similar transactions in the future. With respect
         to the December 2003 offering and related June 2004 reduction in
         warrant exercise price, please tell us the number of days during which
         your offer was outstanding and whether you would have accepted the
         exercise of less than all of the warrants.

         The Company confirms that it will contact the Office of Mergers and
         Acquisitions before it conducts any similar transactions in the future.
         With respect to the December 2003 offering and related June, 2004 price
         reduction in warrant exercise price, the offer was outstanding for 1
         business day. The Company required for each individual investor, but
         not all investors as a whole, that all outstanding warrants issued to
         each investor were required to be exercised at the reduced exercise
         price as a condition of the offer.

17.      We reissue comment 43. For example, we note your reference to the
         November 2001 issuance of common stock for "legal services" does not
         mention the amount of services you received.

         We have updated our disclosures throughout the document to provide more
         clarity as to the types and dollar value of services received for the
         equity compensation issued at page F-11.

18.      We note your response to comment 44. Please tell us why you deleted the
         disclosure referenced in our comment. Did the transaction deleted not
         occur?

         The 100,000 warrants in question were not issued for the period of
         inception to September 30, 2004.

19.      We reissue the last sentence of comment 45. It does not appear you
         responded to that part of our comment.

         We have updated our disclosures throughout the document to provide more
         clarity as to the types and dollar value of services received for the
         equity compensation issued. See page F-11.

20.      It is unclear how you addressed the concern raised in previous comment
         46.


Securities and Exchange Commission
May 19, 2005
Page 7

         The warrants in question (the "Red Guard" warrants) were warrants to
         purchase shares of Transmission Technology Corporation (TTC) stock. TTC
         was the original, privately traded company that had the "Red Guard"
         warrants outstanding prior to the reverse merger with El Dorado
         Financial and prior to the merged company being renamed Composite
         Technology Corporation. The timeline of the original "Red Guard" TTC
         warrants was as follows: On July 12, 2001, prior to the reverse merger
         on November 3, 2001, the TTC "Red Guard" warrants were issued as an
         inducement to modify the conversion price of the TTC Series A
         Preferred. Correctly or incorrectly, TTC did not record any
         compensation expense due to the lack of a public market for TTC stock
         at the date of issuance. Regardless, any expense related to the initial
         issuance of the warrants would have been captured in the pre-merger
         private company and would have been, in effect, rendered
         inconsequential by the reverse merger recapitalization accounting.
         Subsequent to November 3, 2001, as a condition of the merger, the "Red
         Guard" warrants were converted to warrants to purchase common shares of
         Composite Technology Corporation.

21.      Expand the table provided in response to comment 47 to include all
         unregistered sales of equity securities, including option and warrant
         exercises. Also expand the table to indicate in which filing each sate
         was disclosed.

         We have revised the table provided in response to comment 47, which is
         enclosed herewith as Exhibit B.

Managements' Discussion and Analysis of Plan of Operation - Page 39

Results of Operations - Page 39

22.      Refer to previous comment 49. Please revise the discussion of the $2.65
         million contract to clarify that revenue will be recorded upon
         completion of the contract in accordance with the completed contract
         method of revenue recognition.

         The following sentence has been added: "The deferred balance represents
         cash received to date." : Upon completion of the contract, the $564,750
         received through September 30, 2004 in addition to all future
         anticipated billings on this contract, will be recorded as revenues.
         See also MD&A page 39.

23.      Tell us more details of the $2.5 million service revenues recorded in
         fiscal 2004, including when the services were completed and if there
         are any additional obligations related to this agreement. Are any of
         the amounts refundable? In addition, indicated when the remaining
         amounts will be collected and if any problems are anticipated with the
         collection of this receivable.

         We have added the following disclosure at page 39: The services
         provided to Global American Services were provided over the time period
         from March, 2004 through August, 2004. There are no additional
         obligations related to this agreement and there are no amounts
         refundable on the contract. In March, 2005, the Company agreed to an
         extended payment plan whereby the customer would pay $500,000 by May
         31, 2005 $500,000 by June 30, 2005 and the remaining $1,500,000 by July
         31, 2005. The Company received $100,000 and expects to collect the
         balances due according to the written payment schedule. See also MD&A
         page 39.



Securities and Exchange Commission
May 19, 2005
Page 8

Summary Compensation Table - Page 50

24.      Disclose your response to comment 64.

         In response to the Staff's comment, we have disclosed our response to
         comment 64.

Option Grants Table - Page 50

25.      Reconcile your statement that there were no option grants during the
         year with the 2004 option grants made to Mr. Robbins as reflected in
         your Summary Compensation Table.

         No options were granted to Mr. Robbins in Fiscal Year 2004. His options
         were granted in Fiscal Year 2003.

Consolidated Financial Statements - Page F-1

Report of Independent Registered Public Accounting Firm - Page F-2

26.      Refer to previous comment 71. We not that your auditors did not audit
         the following:

         o        The cumulative balance from the period from March 28, 2001
                  (inception) to September 30, 2004. An auditor's association
                  with the cumulative data is required on an annual basis as
                  long as you are in the development stage.

         o        The consolidated statements of operations, shareholders'
                  equity and case flows for the year ended September 30, 2003.

         The auditors have revised their report as requested.

27.      The audit report should be revised to identify these periods as audited
         as required by Item 310(a) of Regulation S-B.

         The auditors have revised their report as requested.

28.      If you restated the financial statements these must be labeled
         "restated." The financial statements must also include the disclosures
         required by APB 20. Note that the auditor's report must include an
         explanatory paragraph describing any restatement as required by AU
         section 508. Supplementally, please tell us in detail what balances
         were restated and the accounting basis for the changes. Please ensure
         this comment is applied to all your future Form 10-Q's as well.

         The auditors have revised their report as requested and the financial
         statements have been marked "restated as applicable."



Securities and Exchange Commission
May 19, 2005
Page 9

29.      We noted that the auditors' report is not dated. Please revise to
         include the date of your auditors' opinion.

         The auditors have revised their report as requested.

Consolidated Balance Sheet - Page F-3

30.      Please revise the heading to say "and Subsidiaries" consistent with the
         rest of the financial statements.

         We have revised the heading as requested.

Consolidated Statements of Operations - Page F-4

31.      Refer to previous comment 72. Please revise your footnotes to disclose
         the extent of your reliance on sales to one customer as required by
         paragraph 39 of SFAS 131. If this information has already been included
         in the amendment as indicated in your response, tell us where it is
         disclosed.

         We have revised the disclosure in the section entitled Concentrations
         of Credit Risk in Note 3:

         Major Customer

         Revenues from one customer of Composite Technology Corporation
         represented all of the company's revenues for the fiscal year ended
         September 30, 2004.

Consolidated Statements of Shareholders' Equity - Page F-5

32.      Refer to previous comment 72. Revise to present each cash equity
         instrument issuance separately and indicate the date of such issuance.
         As previously requested, the footnotes should clearly disclose the
         basis for the values assigned for each issuance involving non-cash
         consideration and the expense recorded in the financial statements.
         Refer to paragraph 11 of SFAS 7.

         We have updated our disclosures throughout the document to provide more
         clarity as to the types and dollar value of services received for the
         equity compensation issued. See page F-4.

33.      Refer to previous comment 76. Please tell us specifically how you
         modified your prior disclosure for the "cancellation of previously
         issued shares preferred stock exchange" as the subtitle no longer
         appears on your shareholders' equity statement or in the footnotes to
         the financial statements.

         The originally filed 10K SB had a poorly formatted statement of equity
         that was difficult to read and understand. There were two numerical
         figures under the original heading "CANCELLATION OF PREVIOUSLY ISSUED
         SHARES." One entitled CANCELLATION OF PREVIOUSLY ISSUED SHARES totaling
         (6,120) and one entitled "Preferred stock exchange" totaling 45,393.



Securities and Exchange Commission
May 19, 2005
Page 10

         The proposed revised filing statement of equity beginning on page F-4
         is formatted in a more tabular format that is much more user friendly.
         The two entries listed above are included in fiscal year 2004 under the
         headings "Cancellation of shares previously issued" and "Common shares
         issued in exchange for Preferred B Stock." These titles are also
         updated for the requested changes in comment question 32 above.

Supplemental Schedule of Non-Cash Financing Activities - Page F-13

34.      Please revise the value of the 1,213,254 shares of restricted,
         unregistered common stock in the appropriate amount. It currently
         states that value as $1,520,0471,471,308.

         We have changed the number to $1,520,047.

Note 2 - Going Concern - Page F-15

35.      Refer to previous comment 78. Revise the filing to provide details of
         and the justification for managements' assertion that it "is
         anticipated that the Company will begin generating sales in the Fiscal
         year ended September 30, 2005."

         Management expects these revenues to come from contracts underway which
         have been disclosed and are not yet recognized as revenue until the
         completion of the contracts which are anticipated to finish in late
         FY-2005, and revenues from cable sales potentials that are presently
         well down the pipeline leading toward purchase orders for our ACCC
         product and hardware. On May 12, 2005 we announced a $1.24 million
         order placed by American Electric Power through our partner General
         Cable with expected delivery in late June 2005.

Note 3 - Summary of Significant Accounting Policies - Page F-15

Stock-Based Compensation - Page F-16

36.      Refer to previous comment 80. Please supplementally clarify your
         accounting for stock-based compensation and warrants issued to
         non-employees. Specifically, tell us why you are recognizing the
         changes in fair value over the vesting period; cite the specific
         accounting literature you relied upon.

         The Company accounts for equity instruments issued to non-employees
         under the guidance of SFAS 123 as supplemented by EITF 96-18, as
         disclosed in the footnotes on page F-16 entitled "Stock-Based
         Compensation"

         Due to the disparate nature of the services rendered, which are
         typically related to consulting services, the Company believes that the
         fair value of the equity instruments delivered is more objectively
         ascertainable than the value of the services received and as such
         relies upon guidance under EITF 96-18. For option and warrant grants,
         the modified Black-Scholes-Merton pricing model is used to determine
         the fair value.



Securities and Exchange Commission
May 19, 2005
Page 11

         The Company grants options or warrants in conjunction with other
         written agreements with the service providers including consulting
         agreements and other legal contracts evidencing a commitment for
         performance. In accordance with the consensus on Discussion Issue 1 of
         EITF 96-18, the Company has determined that the date of grant of the
         warrant or option is therefore considered to be the measurement date.

         Discussion Issue 2 of EITF 96-18 "does not address the period(s) or the
         manner in which an enterprise should recognize the fair value of the
         equity instruments that will be issued, other than to reach a consensus
         that an...expense...would be recognized...as if the enterprise had paid
         cash for the goods or services...instead of paying with or using the
         equity instruments."

         The Company therefore accounts for warrants and options issued to
         non-employees as follows:

         Warrants or options granted without vesting provisions are recorded as
         expense on the measurement date, as described above.

         Options granted with vesting provisions are recorded as deferred
         compensation on the measurement date with compensation expense recorded
         ratably as the underlying options vest. Note the vesting period of the
         underlying options approximates the period of the services being
         provided. In the event of options expiration, the Company does NOT
         reverse any previously recorded compensation expense. The Company has
         not issued any warrants with vesting provisions since inception.

37.      We see that you are utilizing the Modified Black-Scholes-Merton pricing
         model to value equity transactions. Please revise the filing to provide
         specific details of the assumptions utilized in those calculations.

         Assumptions used to calculate the fair value of options and warrants
         granted are included in the following table:

         ----------------------------- -------------------------- --------------
         Fiscal period ending          Risk free rate             Volatility
         September 30
         ----------------------------- -------------------------- --------------
         2001                          n/a                        n/a
         ----------------------------- -------------------------- --------------
         2002                          4.73%                      207.5
         ----------------------------- -------------------------- --------------
         2003                          3.87%                      103.5
         ----------------------------- -------------------------- --------------
         2004                          4.14%                      80.3
         ----------------------------- -------------------------- --------------

         The filing was updated for this table in Note 1.

         No options or warrants were granted for the fiscal period ending
         September 30, 2001 that requires the use of an option pricing model.



Securities and Exchange Commission
May 19, 2005
Page 12

Revenue Recognition - Page F-17

38.      Refer to previous comment 79. Supplementally, please address the
         following:

         o        We see that you sell your product through distributors.
                  Supplementally describe the significant terms of your
                  agreements with distributors, including payment, return,
                  exchanges, and other significant matters. Supplementally
                  explain and support when you recognize revenue to
                  distributors. Revise the filing to clarify. Refer to SAB 104
                  and SFAS 48 as necessary in your response.

         o        Please tell us more about your sales to your cable-wrapping
                  partner. What are the significant terms and conditions of the
                  distributor agreement with your partner? What obligation do
                  you have to repurchase the inventory when the sales are not
                  governed by the distributor agreement? Tell us why it is
                  appropriate in recognize from transactions with your inventory
                  manufacturing partner.

         o        We see that for multiple element contracts you do not allocate
                  the arrangement consideration to the elements due to lack of
                  vendor specific objective evidence of fair value (VSOE).
                  However, according to paragraph 16 of EITF 00-21, VSOE is the
                  preferable method of allocation of arrangement consideration
                  for your multiple element contracts. Clarify how you comply
                  with EITF 00-21.

         In response to the Staff's comment, we have revised the revenue
         recognition accounting policy on page F-17.

         We currently have only one distributor under written contract, General
         Cable Industries (GCI). We have two agreements with General Cable
         Industries, Inc. including a Distributor agreement and a purchase
         agreement. The Distributor agreement governs the purchases of Composite
         Technology products by General Cable. The purchase agreement governs
         the purchases of General Cable products by Composite Technology
         Corporation.

         The distributor agreement is a non-exclusive agreement to distribute
         the Company's (CTC) composite core products as "wrapped core" products.
         The wrapped core products involve an additional manufacturing step
         conducted by GCI whereupon GCI wraps our composite core product with
         annealed aluminum to produce an aluminum wrapped cable that is then
         usable as utility power cable. GCI has the right but not the obligation
         to sell the wrapped core products back to CTC under the purchase
         agreement, or to a third party end user under the distributor
         agreement. Core inventory held in possession of GCI, whether wrapped or
         unwrapped is owned by CTC. For products sold to third parties by GCI,
         GCI shall provide the Company with a purchase order evidencing the
         terms of the sell-through arrangement. Based on the details of these
         purchase orders, the company recognizes revenues upon shipment and
         acceptance of wrapped core product to the third party end users,
         typically electric utilities. The value of the core inventory held by
         GCI is recorded on CTC's books as finished goods inventory - core until
         sold. Other terms of the distributor agreement include:



Securities and Exchange Commission
May 19, 2005
Page 13

         i.       Cooperative marketing and promotions efforts

         ii.      Sales coordination efforts

         iii.     Record keeping and inspection rights

         iv.      Risk of loss is with the party in possession of the core
                  product

         v.       Net 30 day payment terms upon invoice presentation

         vi.      Twelve month limited warranty by CTC of core products produced

         vii.     Right to exchange or reject by GCI for faulty materials

         viii.    Three year initial term with year to year extension
                  thereafter.

         The purchase agreement represents the purchase of wrapped core products
         from GCI by CTC. The additional purchase cost related to these
         purchases is capitalized as additional inventory cost and is recorded
         as finished goods inventory - wrapped core until sold. Revenues are not
         recorded on any core products remanufactured by GCI as wrapped core
         until CTC sells the wrapped core to a third party end user or, in the
         event such an agreement is signed in the future, to a third party
         reseller without the right of return. Terms and conditions of the
         purchase agreement are similar to the distributor agreement and
         include:

         i.       Record keeping and inspection rights

         ii.      Net 30 day payment terms upon invoice presentation

         iii.     Twelve month limited warranty by GCI of wrapped core products
                  produced

         iv.      Three year initial term

         Regarding the multiple element contract, VSOE, and EITF 00-21: We
         respectfully reply that the Company did consider both VSOE and third
         party evidence in order to allocate a portion of the cash received
         under contract but determined that, for the contract in question there
         is neither sufficient VSOE nor third party evidence for the value of
         the work performed vis a vis the contract delivery provisions. To a
         large extent, the contract stipulates delivery of products that involve
         the modification of existing composite technology. As of September 30,
         2004, those products were not delivered. Since substantially all of the
         work performed involves consulting services relating to the undelivered
         products and which are not considered to have value distinct from the
         undelivered products, under Issue 9.a of EITF 00-21 the consulting
         services are not considered to be a separate unit of accounting and
         therefore the deferral of the revenue is appropriate under issue 10 of
         EITF 00-21.



Securities and Exchange Commission
May 19, 2005
Page 14

Note 6 - Investement in Other Companies - Page F-19

39.      Refer to previous comment 81. Your supplemental response noted that the
         original disclosure was in error and that the proper value of the
         transaction was $90,356. We noted that the footnote currently has the
         transaction valued at $191,450. Please supplementally reconcile these
         balances for us or revise the discloser.

         In response to the Staff's comment, we have added additional language
         on page F-20. Our previous response to comment 81 is hereby updated as
         follows:

         "We supplementally advise the Staff of the Red Guard transaction as
         follows:

         Red Guard gave up $154,376 in consideration consisting of:

         a) 165 Shares of Preferred A stock - which was convertible at the time
         of the transaction into 349,360 shares of common stock. The market
         price of the common stock at the time of conversion was $.19 per share
         for a value of $66,378.

         b) $21,440 in dividends payable to Red Guard as accrued dividends
         payable

         c) $62,000 in Notes Payable to Red Guard

         d) $4,558 in Accrued Interest Payable to Red Guard under the terms of
         the Notes referenced in c) above.

         Red Guard received in exchange, all of the shares of:

         -All of the April 12, 2001 investments, except for the publicly traded
         IPS stock.

         The carrying value to the company for the investments given up was
         $154,376, resulting in no gain or loss recorded in the Statement of
         Operations, reconciled as follows:

         1) Initial Carrying Value of the April 12, 2001 investments - $137,750

         2) Less Carrying value of IPS (recorded in CTC-Oth Assets)   ($  1,000)

         (Included in April 12, 2001 investments)

         3) August ,2001 purchases of 72,665 shares of AMJ             $ 14,500

         ($10,000 cash and $4,500 in CTC stock)

         3a) Reduction in CV - merger revaluation eff 9/30/01         ($101,094)

         4) Cash advances converted to 3,125 shares, AMJ on 10/13/01   $ 50,000

         5) Dec., 2001 CTC stock exchanged for 37,335 shares AMJ       $191,450

         6) Less Carrying Value Allowance recorded through FY02       ($137,230)

         (Relating to the CV of the Private Investments)

         Total consideration given                                     $154,376"



Securities and Exchange Commission
May 19, 2005
Page 15

Note 7 - Commitments and Contingencies - Page F-21

40.      Refer to previous comment 83. Please revise the filing to consistently
         disclose for each case the details of the amounts accrued and provide a
         discussion of the expected impact of this litigation on financial
         condition, results of operations and liquidity or indicate the reason
         that this assessment cannot be made. For each case that has been
         settled, please provide a detailed discussion of the terms of that
         settlement and how this was recorded in the financial statements and
         for cases that have been dismissed, please clearly state that fact.
         Refer SAB Topic 5Y.

         We have updated our disclosure as requested on page F-21.

Note 8 - Shareholders' Equity - Page F-27

Services Rendered - Page F-28

41.      Refer to previous comment 85. For issuances of stock for services
         rendered, please revise the filing to clearly identify whether the
         issuances were based on the fair market value of the stock issued or
         the fair value of services provided. For example, in numerous instances
         you state "services valued at", "services provided valued at" or
         "common shares valued at" which may be confusing to investors; please
         revise to clarify your valuation technique.

         In response to the Staff's comment, we have revised the filing
         throughout, including Note 8, the Statement of Equity, and the MD&A
         sections regarding equity which reflect the following:

         The Company has historically used common shares to compensate vendors
         and consultants. The valuation of these shares is by one of three
         methods:

         a. Registered shares are issued and valued at the market value on the
         date of issuance. Registered shares are typically issued to individuals
         in partial payment of balances due and as such, the market value of the
         shares issued and the fair value of the services provided are typically
         identical.

         b. Unregistered shares are valued at the value of the services provided
         or assets received when the value of the services are readily
         ascertainable or at the Company's Common Share closing price as listed
         on the OTC bulletin board. For special circumstances (see below) a
         discount to the closing share price was used.

         c. Special circumstances requiring valuation discounts of unregistered
         shares have occurred in certain instances falling under one (or both)
         of the following categories:



Securities and Exchange Commission
May 19, 2005
Page 16

         -There is not a liquid market for the Company's stock due to very low
         trading volumes,

         -The stock granted is well in excess of the average trading volume (for
         example, a large stock grant for litigation settlement).

         - The stock grants issued have restrictions stretching out in excess of
         one year.

42.      Provide details of how the amounts recorded to expenses related to the
         issuances of stock, warrants and options for services in the statements
         of cash flows agree with the amounts discussed in Note 8.

         Please see the supplemental schedule quantifying and reconciling the
         amounts of issuances in the cash flows to Note 8.

43.      In this regard, please tell us the basis for utilizing the common stock
         price of your registered common shares to value your transactions
         involving restricted, unregistered common stock. Please also tell us
         the specific details of the discounts assigned to the quoted market
         prices and the accounting basis for this discount in all instances. We
         would expect that any discounts assigned to traded or quoted prices
         would be rare and only in unusual circumstances. If there are any such
         discounts there should be clear disclosure that quantifies the amount
         of the discount and the basis for using a price other than your quoted
         market price.

         See answer to comment 41 above as background. The company has used
         discounts to stock grants or issuances in two cases. See answers to
         questions 44 and 45 below for explanation of these events.

Investments in Other Companies - Page F-30

44.      Supplementally, please tell us why using a 50% discount to the closing
         price of the Company's common stock was a more reliable measure of fair
         value than utilizing the fair value of $37,335 shares of AMJ common
         stock.

         The appropriate fair value of the transaction was difficult to quantify
         for the following reasons:

         a. The transaction was an exchange of the Company's stock which was
         publicly traded and AMJ stock which was privately traded. Since the
         Company's stock was publicly traded, the Company stock was better used
         as an appropriate benchmark since there was not an accurate or
         applicable valuation for AMJ.

         b. When the transaction was initiated in November, 2001 and settled in
         December, 2001, the Company's stock was highly volatile and very thinly
         traded with an average daily volume of 4,100 shares and a trading range
         of $0.9 to $9.50 per share for the 28 days the stock traded in November
         and December, 2001. The unregistered, restricted CTC shares for the
         transaction were issued on December 4, 2001 when the closing price was
         $9.00/share.



Securities and Exchange Commission
May 19, 2005
Page 17

         Had the shares been issued for services rendered or for another expense
         related item, the Company would have recorded the transaction at the
         closing market price. However, this transaction was for an investment
         (asset) which is required to be recorded at fair value. As such, and
         due to the restrictive nature of the stock, the existing volatility and
         lack of efficient market, the limited trading history of the Company,
         and since there was no readily ascertainable FMV of AMJ, it was
         determined that a discount of 50% was applicable and estimated the fair
         value of the transaction. Please also note that this investment was
         exchanged, in it's entirety as described in comment 39 above and on
         page F-20, which resulted in a write-down of the investment for
         $137,230 as part of that transaction consummated on September 30, 2002.

Legal Settlements - Page F-30

45.      We noted on page 24 that the April 2003 settlement of Jarblum v. TTC,
         et. al. resulted in the issuance of 50,000 Series K warrants and cash
         payments of $210,000. However, we see here that in February 2003 you
         issued 1,500,000 shares of restricted, unregistered common stock as
         part of the settlement. Supplementally and in detail, please tell us
         the settlement agreement that was reached with Jarblum, the basis for
         your discounting technique and your assumptions utilized to discount
         the shares. Please revise the filling to also disclose this
         information.

         The disclosure on page F-30 was incorrect on the red-lined submission
         of April, 2005 and has been corrected in the filing to read:
         Transmission Technology Corporation, et al. v. Tom Sawyer and Dr. Clem
         Hiel Et. al. V. W. Brandt Goldsworthy and Associates, Inc., et al.
         ("Goldsworthy")

         The Jarblum settlement consisted of 50,000 Series K warrants and cash
         payments of $210,000 that has been paid in its entirety as of September
         30, 2004. The current disclosures, as corrected for the name error
         listed above, are correct for this settlement. The cash plus the fair
         value of the warrants were recorded as legal settlement expense.

         The "Goldsworthy" settlement resulted in the issuance of 1,500,000
         shares of restricted common stock issued on February 11, 2003 when the
         closing market price was $0.25 per share. The value assigned to the
         settlement of $93,750 representing a 75% discount to the closing market
         price.

         The discount of 75% was used for the following reasons:

         a. For the month immediately prior to the settlement date, the weighted
         average closing price was $0.193 based on an average volume of
         approximately 161,000 shares traded, approximately 10.7% of the stock
         granted in the settlement. Over the same time frame, there was a
         relatively narrow trading range with a high of $0.23 and a low of $0.16
         per share. $0.193 represents a 22.8% discount to the market value.

         b. The financial condition of the Company at the date of issuance was
         extremely perilous. The most recent balance sheet date of December 31,
         2002 showed $97,899 in cash on hand, total assets of $453,360, and
         total current liabilities, primarily trade payables, of $1,641,053 and
         which represented a significant risk that the company may not continue
         as a going concern.



Securities and Exchange Commission
May 19, 2005
Page 18

         c. The shares issued were issued under Rule 144 as restricted from
         trading for between 12 and 24 months.

         As a result, and with the agreement of external auditors, the Company
         recorded the issuance of these shares at a value of $0.0625 per share
         or a 75% discount to the then market price per share. Our external
         auditors concurred with this valuation.

Stock Options - Page F-34

46.      Refer to previous comment 88. We see you recorded $364,277 of
         compensation related to the cashless exercise provisions.
         Supplementally please tell us how you calculated the compensation
         charge. Please also revise the filing to include the assumptions and
         share prices utilized in your compensation expense calculation.

         Please note the addition of a restatement footnote (Note 2 in the
         revised filing)

         The compensation charge was calculated as follows:

         a. Each option settlement was valued as of the date the intent to
         exercise the option under cashless provision (settlement value date)

         b. The fair value of each settlement was determined at its intrinsic
         value using the number of shares issued in settlement multiplied by the
         market value at the settlement value date. The Company used guidance
         issued under FIN 44, paragraphs 60-70 and accounted for these
         transactions as a modification of option terms. They are at their
         intrinsic value as of the settlement date.

         c. Any previously recorded expense recorded prior to accounting for the
         transactions as options modifications was subtracted from the total
         intrinsic value calculated for all cashless exercises.

47.      We see that you amended your disclosure to say, "the company does not
         intend to allow for future cashless exercise of stock options."
         However, we see in your Form 10-Q for the quarter ended December 31,
         2004 you allowed additional cashless exercise of stock options. Please
         revise the filing to clarify this statement. Additionally, please tell
         us whether your stock option plan contains cashless exercise
         provisions.

         The company does not intend to allow for future cashless exercises of
         any employee or non-employee stock options, except possibly for the
         employee withholding tax portion of option exercises as specifically
         allowed under FIN 44 paragraph 68 and question 15 (c ). For the quarter
         ended December 31, 2004 and from January 1, 2005 to the date of this
         letter, the Company did not have any cashless exercises of stock



Securities and Exchange Commission
May 19, 2005
Page 19

         options. The company did have cashless exercises of stock warrants as
         listed on page 6 of the proposed amended 10Q for the quarter ended
         December 31, 2004 and that were issued with cashless provisions
         included in the warrant agreements and that were issued pursuant to
         legal settlement grantees. No additional expense was recorded on the
         cashless exercise of the warrants, the warrants were not issued to
         employees, and therefore no modification of terms existed for the
         cashless provision.

Warrants - Page F-38

48.      We see that you issued Red Guard a warrant to purchase approximately
         1.9 million shares of stock as an inducement to modify the conversion
         price and subsequently you modified the warrant in October 2001.
         Supplementally, please tell us the accounting basis for not recording
         any expense related to either the issuance of the original warrant or
         the modification. Cite the accounting guidance upon which you relied.

         The original warrants in question (the "Red Guard" warrants) were
         warrants to purchase shares of Transmission Technology Corporation
         (TTC) stock. TTC was the original, privately traded company that had
         the "Red Guard" warrants outstanding prior to the reverse merger with
         El Dorado Financial and prior to the merged company being renamed
         Composite Technology Corporation. The timeline of the original "Red
         Guard" TTC warrants was as follows: On July 12, 2001, prior to the
         reverse merger on November 3, 2001, the TTC "Red Guard" warrants were
         issued as an inducement to modify the conversion price of the TTC
         Series A Preferred. TTC did not record any compensation expense due to
         the lack of a public market for TTC stock at the date of issuance.
         Whether this accounting treatment is correct or incorrect is
         meaningless since any expense related to the initial issuance of the
         warrants would have been captured in the pre-merger private company and
         would have been, in effect, rendered inconsequential by the reverse
         merger recapitalization accounting. On October 18, 2001 one individual
         exercised 7,940 warrants for TTC common stock that was later swept into
         the reverse merger and converted to the Company's common stock.
         Subsequent to the November 3, 2001 merger and as a condition of the
         merger, the "Red Guard" warrants were converted to warrants to purchase
         common shares of Composite Technology Corporation at a converted
         exercise price as stipulated in the merger. This merger related
         conversion was not an induced conversion and accordingly no expense was
         recorded at the merger date.

49.      Supplementally, please tell us the accounting basis for not recognizing
         the Series I warrants at the time of their issuance between March and
         September 2003. Additionally, you indicated that since the warrants are
         subject to litigation "no reduction of expenses was recorded." However,
         when the warrants were issued you recorded no expense. Please revise
         your disclosure to reconcile these statements.

         Please see the updated disclosures in the filing in Note 8 and the
         statement of equity which reflect the following:

         The Series I private placement is subject to litigation under the
         Acquvest case. The share issuances transpired as follows:



Securities and Exchange Commission
May 19, 2005
Page 20

         1,500,000 Common Shares and 1,500,000 warrants were issued for cash.
         100,000 shares and 100,000 warrants were issued for offering costs. The
         value of the warrants were allocated to Paid in Capital series I
         warrants and no expense was recorded.

         4,400,000 common shares and 4,400,000 warrants were subscribed to and
         the Company recorded a subscription receivable for $1,100,000 and Paid
         in Capital for $1,100,000 as of September 30, 2003 of which the value
         of 4,400,000 warrants totaled 890,400. In October, 2004 (fiscal 2004),
         both the shares and the warrants were cancelled due to non-performance
         by the subscribers. The subscription receivable and the PIC were
         reversed. No expense was recorded for the warrants for either the
         issuance or the cancellation.

50.      In November 2003, you offered the holders of Series E and H warrants
         the opportunity to exercise their warrants before December 10, 2003 and
         receive a Series R warrant to purchase one share of restricted,
         unregistered stock for each 5 shares purchased using the Series E and H
         warrants. Please tell us how you accounted for this modification which
         resulted in the exercising of the entire Series H warrant.

         Please see page F-38. The Series R warrants are disclosed and $106,120
         was recorded as expense which represents the Black Scholes fair value
         of the warrants issued.

         Note that there were no modifications of terms to the language of the
         Series E or H warrants. All Series E and H warrants were exercised
         according to the terms of the respective agreements. Each warrant
         exercise was recorded with the appropriate debit to cash and credit to
         Common Stock and CS Paid in Capital. Compensation expense was recorded
         for each Series R warrant issued as disclosed on page F-38

Form 10-Q for the Quarterly Period Ended December 31, 2004

Financial Statements

Note 6 - Shareholders' Equity - Page 11

Warrants - Page 12

51.      Refer to previous comment 96. Please revise the filing to include the
         assumptions inherent in the valuation model you utilized for the
         issuance of the warrants.

         We have revised our disclosure to include the assumptions inherent in
         our valuation model for the issuance of warrants on page of the 10-Q.

Legal Proceedings - Page 32

52.      We reissue comment 40 with respect to the action brought by Mr.
         O'Keefe.

         We have added the following disclosure concerning the action brought by
         Mr. O'Keefe: "Plaintiff seeks compensatory damages, including the
         transfer 5,500,000 shares of common stock, $22,880,000 in monetary
         damages, attorneys' fees, interest and costs."



Securities and Exchange Commission
May 19, 2005
Page 21

Post-Effective Amendment to Registration Statement on Form S-3 (333-112798)

53.      With respect to your pending post-effective amendment to the
         registration statement on Form S-3, please comply with the previously
         issued comments and the foregoing comments as applicable. We anticipate
         at this time that no further review of the above registration statement
         will be made other than a review of your responses to the previously
         issued comment and the foregoing comments.

         Noted. We will comply with the previously issued comments and the
         foregoing comments, as applicable, with respect to the pending
         post-effective amendment.

         We hope that the information contained in this letter satisfactorily
addresses the comments by the Staff. Please do not hesitate to contact the
undersigned by telephone at (310) 208-1182, or by facsimile at (310) 208-1154.

                                                     Very truly yours,
                                                     RICHARDSON & PATEL, LLP.

                                                     /s/  Kevin K. Leung
                                                     Kevin K. Leung, Esq.

cc:      Mr. Benton H. Wilcoxon,
         Composite Technology Corporation
         2026 McGaw Avenue
         Irvine, CA 92614

         Dorothy B. Vinski, Esq., Richardson & Patel
         10900 Wilshire Boulevard, Suite 500
         Los Angeles, CA 90024