##### Table of Contents

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549



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FORM 10-QSB



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QUARTERLY REPORT UNDER SECTION 13 OR
15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934



For the quarterly period ended June 30, 2004



Commission File Number 333-11591



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Atmospheric Glow Technologies, Inc.

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



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|                         |  |                                     
|------------------------ |  | ------------------------------------
|Delaware                 |  | 62-1647888                          
|(State of incorporation) |  | (IRS Employer Identification Number)



924 Corridor Park
Boulevard

Knoxville, Tennessee 37932

(Address of principal executive offices)



(865) 777-3776

(Issuers telephone number)



---



Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such
reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No ̈



The number
of shares outstanding of each of the registrants classes of common stock on August 8, 2004 was 222,402,488 Common Shares, 750,000 Class B Common Shares and 0 Class D Common Shares.



Transitional Small Business Disclosure Format:    Yes ̈No  x



Exhibit Index at page 13.



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##### Table of Contents

PART I - FINANCIAL INFORMATION



|                                                                                                                                                  |  |     
|------------------------------------------------------------------------------------------------------------------------------------------------- |  | ----
|                                                                                                                                                  |  | Page
|Item 1. Financial Statements.                                                                                                                     |  |     
|                                                                                                                                                  | 
|Condensed Consolidated Balance Sheets  As of June 30, 2004 and March 31, 2004                                                                    |  | 3   
|                                                                                                                                                  | 
|Condensed Consolidated Statements of Operations  For the Three Months Ended June 30, 2004 and 2003, and May 1, 2000 (Inception) to June 30, 2004 |  | 4   
|                                                                                                                                                  | 
|Condensed Consolidated Statement of Changes in Stockholders Equity from May 1, 2000 (Inception) to June 30, 2004                                 |  | 5   
|                                                                                                                                                  | 
|Condensed Consolidated Statements of Cash Flows  For the Three Months Ended June 30 and 2003, and May 1, 2000 (Inception) to June 30, 2004       |  | 6   
|                                                                                                                                                  | 
|Notes to Unaudited Condensed Consolidated Financial Statements                                                                                    |  | 7   



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##### Table of Contents

ATMOSPHERIC GLOW TECHNOLOGIES, INC. & SUBSIDIARY

(A DEVELOPMENT STAGE ENTERPRISE)

Condensed Consolidated Balance Sheets



|                                                      |  |               |           |                   |   |          
|----------------------------------------------------- |  | ------------- | --------- | ----------------- | - | ---------
|                                                      |  | June 30, 2004 |           | March 31,2004 (1)
|                                                      |  | (unaudited)   |           |                  
|Assets                                                |  |               |           |                   |   |          
|Cash and cash equivalents                             |  | $             | 167,083   |                   | $ | 301,926  
|Receivables                                           |  |               | 466,174   |                   |   | 260,963  
|Prepaid expenses                                      |  |               | 63,581    |                   |   | 11,314   
|                                                      |  |               |           |                   |   |          
|Total current assets                                  |  |               | 696,838   |                   |   | 574,203  
|                                                      |  |              
|Property and equipment, less accumulated depreciation |  |               | 576,126   |                   |   | 578,699  
|Intangible assets, less accumulated amortization      |  |               | 1,617,079 |                   |   | 1,636,078
|Deposits                                              |  |               | 10,949    |                   |   | 10,949   
|                                                      |  |               |           |                   |   |          
|Total assets                                          |  | $             | 2,900,992 |                   | $ | 2,799,929
|                                                      |  |               |           |                   |   |          
|Liabilities and Stockholders Equity                  |  |               |           |                   |   |          
|Note payable to related parties                       |  | $             | 549,431   |                   | $ | 549,431  
|Note payable                                          |  |               | 57,500    |                   |   | 300,000  
|Current portion of capital leases                     |  |               | 23,422    |                   |   | 22,918   
|Accounts payable                                      |  |               | 411,396   |                   |   | 423,045  
|Accrued expenses                                      |  |               | 282,065   |                   |   | 528,068  
|                                                      |  |               |           |                   |   |          
|Total current liabilities                             |  |               | 1,323,814 |                   |   | 1,823,462
|                                                      |  |              
|Deferred compensation                                 |  |               | 22,500    |                   |   | 30,000   
|Capital leases, less current portion                  |  |               | 15,987    |                   |   | 22,048   
|                                                      |  |               |           |                   |   |          
|Total liabilities                                     |  |               | 1,362,301 |                   |   | 1,875,510
|                                                      |  |              
|Stockholders equity                                  |  |               | 1,538,691 |                   |   | 924,419  
|                                                      |  |               |           |                   |   |          
|Total liabilities and stockholders equity            |  | $             | 2,900,992 |                   | $ | 2,799,929
|                                                      |  |               |           |                   |   |          



See accompanying
Notes to Unaudited Condensed Consolidated Financial Statements

---

|(1) | The March 31, 2001 Condensed Consolidated Balance Sheet was derived from the audited balance sheet for the year then ended.
|--- | ---------------------------------------------------------------------------------------------------------------------------



3



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##### Table of Contents

ATMOSPHERIC GLOW TECHNOLOGIES, INC. & SUBSIDIARY

(A DEVELOPMENT STAGE ENTERPRISE)

Condensed Consolidated Statements of Operations



|                                    |  |                                 |          |   |                                 |   |          |                                        |  |   |            |  
|----------------------------------- |  | ------------------------------- | -------- | - | ------------------------------- | - | -------- | -------------------------------------- |  | - | ---------- | -
|                                    |  | Three MonthsEnded June 30, 2004 |          |   | Three MonthsEnded June 30, 2003 |   |          | May 1, 2000(Inception) toJune 30, 2004 | 
|                                    |  | (unaudited)                     |          |   | (unaudited)                     |   |          | (unaudited)                            | 
|Operating revenues:                 |  |                                 |          |   |                                 |   |          |                                        |  |   |            |  
|Contract revenues earned            |  | $                               | 491,588  |   |                                 | $ | 158,476  |                                        |  | $ | 2,520,273  |  
|Other revenues                      |  |                                 | 3        |   |                                 |   | 73       |                                        |  |   | 73,473     |  
|                                    |  |                                 |          |   |                                 |   |          |                                        |  |   |            |  
|Total operating revenues            |  |                                 | 491,591  |   |                                 |   | 158,549  |                                        |  |   | 2,593,746  |  
|                                    |  |                                 |          |   |                                 |   |          |                                        |  |   |            |  
|Operating expenses:                 |  |                                 |          |   |                                 |   |          |                                        |  |   |            |  
|                                    |  |                                 |         
|Payroll and related costs           |  |                                 | 514,948  |   |                                 |   | 151,340  |                                        |  |   | 2,354,363  |  
|Laboratory expenses                 |  |                                 | 189,465  |   |                                 |   | 58,617   |                                        |  |   | 1,176,833  |  
|General and administrative expenses |  |                                 | 275,802  |   |                                 |   | 118,735  |                                        |  |   | 1,708,454  |  
|                                    |  |                                 |          |   |                                 |   |          |                                        |  |   |            |  
|Total operating expenses            |  |                                 | 988,215  |   |                                 |   | 328,692  |                                        |  |   | 5,239,650  |  
|                                    |  |                                 |          |   |                                 |   |          |                                        |  |   |            |  
|Net loss                            |  | $                               | (488,624 | ) |                                 | $ | (170,143 | )                                      |  | $ | (2,645,904 | )
|                                    |  |                                 |          |   |                                 |   |          |                                        |  |   |            |  
|Loss per share (basic and diluted): |  | $                               | (0.00    | ) |                                 | $ | (0.00    | )                                      |  | $ | (0.01      | )
|                                    |  |                                 |          |   |                                 |   |          |                                        |  |   |            |  



See accompanying
Notes to Unaudited Condensed Consolidated Financial Statements



4



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##### Table of Contents

ATMOSPHERIC GLOW TECHNOLOGIES, INC. & SUBSIDIARY

(A DEVELOPMENT STAGE ENTERPRISE)

Condensed Consolidated Statement of Stockholders Equity

From May 1, 2000 (Inception) to June 30, 2004 (unaudited)



|                                                          |  |                |   |  |                     |          |   |              |             |              |   |                     |  |                     |  |                  |       |                          |   |                    |  |   |                           |  |   |            |   |  |   |            |  
|--------------------------------------------------------- |  | -------------- | - |  | ------------------- | -------- | - | ------------ | ----------- | ------------ | - | ------------------- |  | ------------------- |  | ---------------- | ----- | ------------------------ | - | ------------------ |  | - | ------------------------- |  | - | ---------- | - |  | - | ---------- | -
|                                                          |  | PreviousShares |   |  | PreviousShareAmount |          |   | CommonShares |             | CommonAmount |   | Class BCommonShares |  | Class BCommonAmount |  | StockUnderOption |       | AdditionalPaid inCapital |   | AccumulatedDeficit |  |   | TotalStockholders Equity | 
|Shares issued October 20, 2000                            |  | 101,101        |   |  | $                   | 116,020  |   |              |            |              | $ |                    |  |                    |  | $                |      |                          | $ |                   |  |   |                           |  |   |            |   |  | $ | 116,020    |  
|Non-member contribution                                   |  |                |   |  |                     |          |   |              |             |              |   |                     |  |                     |  |                  |       |                          |   |                    |  | $ | 34,730                    |  |   |            |   |  |   | 34,730     |  
|Net loss                                                  |  |                |   |  |                     |          |   |              |             |              |   |                     |  |                     |  |                  |       |                          |   |                    |  |   |                           |  | $ | (99,937    | ) |  |   | (99,937    | )
|                                                          |  |                |   |  |                     |          |   |              |             |              |   |                     |  |                     |  |                  |       |                          |   |                    |  |   |                           |  |   |            |   |  |   |            |  
|Balance at December 31, 2000                              |  | 101,101        |   |  |                     | 116,020  |   |              |             |              |   |                     |  |                     |  |                  |       |                          |   |                   |  |   | 34,730                    |  |   | (99,937    | ) |  |   | 50,813     |  
|                                                          |  |                |   |  |                     |          |   |              |             |             
|Shares issued                                             |  |                |   |  |                     |          |   |              |             |              |   |                     |  |                     |  |                  |       |                          |   |                    |  |   |                           |  |   |            |   |  |   |            |  
|Additional amounts received for shares previously issued  |  |                |   |  |                     | 4,700    |   |              |             |              |   |                     |  |                     |  |                  |       |                          |   |                    |  |   |                           |  |   |            |   |  |   | 4,700      |  
|Shares redeemed                                           |  | (11,200        | ) |  |                     | (13,000  | ) |              |             |              |   |                     |  |                     |  |                  |       |                          |   |                    |  |   |                           |  |   |            |   |  |   | (13,000    | )
|Net loss                                                  |  |                |   |  |                     |          |   |              |             |              |   |                     |  |                     |  |                  |       |                          |   |                    |  |   |                           |  |   | (89,208    | ) |  |   | (89,208    | )
|                                                          |  |                |   |  |                     |          |   |              |             |              |   |                     |  |                     |  |                  |       |                          |   |                    |  |   |                           |  |   |            |   |  |   |            |  
|Balance at December 31, 2001                              |  | 89,901         |   |  |                     | 107,720  |   |              |            |              |   |                    |  |                    |  |                  |      |                          |   |                   |  |   | 34,730                    |  |   | (189,145   | ) |  |   | (46,695    | )
|                                                          |  |                |   |  |                     |          |   |              |             |             
|Shares issued                                             |  | 9,877          |   |  |                     | 168,235  |   |              |             |              |   |                     |  |                     |  |                  |       |                          |   |                    |  |   |                           |  |   |            |   |  |   | 168,235    |  
|Net loss                                                  |  |                |   |  |                     |          |   |              |             |              |   |                     |  |                     |  |                  |       |                          |   |                    |  |   |                           |  |   | (621,619   | ) |  |   | (621,619   | )
|                                                          |  |                |   |  |                     |          |   |              |             |              |   |                     |  |                     |  |                  |       |                          |   |                    |  |   |                           |  |   |            |   |  |   |            |  
|Balance at December 31, 2002                              |  | 99,778         |   |  |                     | 275,955  |   |              |            |              |   |                    |  |                    |  |                  |      |                          |   |                   |  |   | 34,730                    |  |   | (810,764   | ) |  |   | (500,079   | )
|                                                          |  |                |   |  |                     |          |   |              |             |             
|Net loss                                                  |  |                |   |  |                     |          |   |              |             |              |   |                     |  |                     |  |                  |       |                          |   |                    |  |   |                           |  |   | (1,020,152 | ) |  |   | (1,020,152 | )
|                                                          |  |                |   |  |                     |          |   |              |             |              |   |                     |  |                     |  |                  |       |                          |   |                    |  |   |                           |  |   |            |   |  |   |            |  
|Balance at December 31, 2003                              |  | 99,778         |   |  |                     | 275,955  |   |              |            |              |   |                    |  |                    |  |                  |      |                          |   |                   |  |   | 34,730                    |  |   | (1,830,916 | ) |  |   | (1,520,231 | )
|                                                          |  |                |   |  |                     |          |   |              |             |             
|Recapitalization of company resulting from reverse merger |  | (99,778        | ) |  |                     | (275,955 | ) |              | 210,828,848 |              |   | 2,108,288           |  | 750,000             |  |                  | 7,500 |                          |   |                    |  |   | 705,681                   |  |   |            |   |  |   | 2,545,514  |  
|Common stock issued                                       |  |                |   |  |                     |          |   |              | 2,050,000   |              |   | 20,500              |  |                     |  |                  |       |                          |   |                    |  |   | 205,000                   |  |   |            |   |  |   | 225,500    |  
|Net loss                                                  |  |                |   |  |                     |          |   |              |             |              |   |                     |  |                     |  |                  |       |                          |   |                    |  |   |                           |  |   | (326,364   | ) |  |   | (326,364   | )
|                                                          |  |                |   |  |                     |          |   |              |             |              |   |                     |  |                     |  |                  |       |                          |   |                    |  |   |                           |  |   |            |   |  |   |            |  
|Balance at March 31, 2004                                 |  |               |   |  |                     |         |   |              | 212,878,848 |              |   | 2,128,788           |  | 750,000             |  |                  | 7,500 |                          |   |                   |  |   | 945,411                   |  |   | (2,157,280 | ) |  |   | 924,419    |  
|                                                          |  |                |   |  |                     |          |   |              |             |             
|Common stock issued                                       |  |                |   |  |                     |          |   |              | 9,523,640   |              |   | 95,236              |  |                     |  |                  |       |                          |   |                    |  |   | 889,478                   |  |   |            |   |  |   | 984,714    |  
|Stock based compensation                                  |  |                |   |  |                     |          |   |              |             |              |   |                     |  |                     |  |                  |       |                          |   | 118,182            |  |   |                           |  |   |            |   |  |   | 118,182    |  
|Net loss                                                  |  |                |   |  |                     |          |   |              |             |              |   |                     |  |                     |  |                  |       |                          |   |                    |  |   |                           |  |   | (488,624   | ) |  |   | (488,624   | )
|                                                          |  |                |   |  |                     |          |   |              |             |              |   |                     |  |                     |  |                  |       |                          |   |                    |  |   |                           |  |   |            |   |  |   |            |  
|Balance at June 30, 2004                                  |  |               |   |  | $                   |         |   |              | 222,402,488 |              | $ | 2,224,024           |  | 750,000             |  | $                | 7,500 |                          | $ | 118,182            |  | $ | 1,834,889                 |  | $ | (2,645,904 | ) |  | $ | 1,538,691  |  
|                                                          |  |                |   |  |                     |          |   |              |             |              |   |                     |  |                     |  |                  |       |                          |   |                    |  |   |                           |  |   |            |   |  |   |            |  



See accompanying
Notes to Unaudited Condensed Consolidated Financial Statements



5



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##### Table of Contents

ATMOSPHERIC GLOW TECHNOLOGIES, INC. & SUBSIDIARY

(A DEVELOPMENT STAGE ENTERPRISE)

Condensed Consolidated Statements of Cash Flows



|                                                     |  |                                 |          |   |                                 |   |          |                                        |  |   |            |  
|---------------------------------------------------- |  | ------------------------------- | -------- | - | ------------------------------- | - | -------- | -------------------------------------- |  | - | ---------- | -
|                                                     |  | Three MonthsEnded June 30, 2004 |          |   | Three MonthsEnded June 30, 2003 |   |          | May 1, 2000(Inception) toJune 30, 2004 | 
|                                                     |  | (unaudited)                     |          |   | (unaudited)                     |   |          | (unaudited)                            | 
|Net cash used in operating activities                |  | $                               | (838,758 | ) |                                 | $ | (144,523 | )                                      |  | $ | (2,594,515 | )
|                                                     |  |                                 |          |   |                                 |   |          |                                        |  |   |            |  
|Investing activities                                 |  |                                 |          |   |                                 |   |          |                                        |  |   |            |  
|Additions to intangible assets                       |  |                                 | (9,322   | ) |                                 |   | (11,180  | )                                      |  |   | (1,618,640 | )
|Purchase of property and equipment                   |  |                                 | (23,420  | ) |                                 |   | (21,577  | )                                      |  |   | (670,241   | )
|                                                     |  |                                 |          |   |                                 |   |          |                                        |  |   |            |  
|Net cash used in investing activities                |  |                                 | (32,742  | ) |                                 |   | (32,757  | )                                      |  |   | (2,288,881 | )
|                                                     |  |                                 |          |   |                                 |   |          |                                        |  |   |            |  
|Finance activities                                   |  |                                 |          |   |                                 |   |          |                                        |  |   |            |  
|Proceeds from short term notes                       |  |                                 | 57,500   |   |                                 |   | 170,000  |                                        |  |   | 3,879,000  |  
|Repayments of short term notes                       |  |                                 | (300,000 | ) |                                 |   |         |                                        |  |   | (309,000   | )
|Cash acquired in reverse merger                      |  |                                 |         |   |                                 |   |         |                                        |  |   | 53,017     |  
|Proceeds from issuance of common stock               |  |                                 | 984,714  |   |                                 |   |         |                                        |  |   | 1,210,214  |  
|Proceeds from issuance of members equity            |  |                                 |         |   |                                 |   |         |                                        |  |   | 217,720    |  
|Redemption of members interest                      |  |                                 |         |   |                                 |   |         |                                        |  |   | (13,000    | )
|Increase in minority interest                        |  |                                 |         |   |                                 |   |         |                                        |  |   | 43,058     |  
|Principal payments on capital lease obligations      |  |                                 | (5,557   | ) |                                 |   | (5,167   | )                                      |  |   | (30,530    | )
|                                                     |  |                                 |          |   |                                 |   |          |                                        |  |   |            |  
|Net cash provided by financing activities            |  |                                 | 736,657  |   |                                 |   | 164,833  |                                        |  |   | 5,050,479  |  
|                                                     |  |                                 |          |   |                                 |   |          |                                        |  |   |            |  
|Net (decrease) increase in cash and cash equivalents |  |                                 | (134,843 | ) |                                 |   | (12,447  | )                                      |  |   | 167,083    |  
|                                                     |  |                                 |         
|Cash and cash equivalents at beginning of period     |  |                                 | 301,926  |   |                                 |   | 49,628   |                                        |  |   |           |  
|                                                     |  |                                 |          |   |                                 |   |          |                                        |  |   |            |  
|Cash and cash equivalents at end of period           |  | $                               | 167,083  |   |                                 | $ | 37,181   |                                        |  | $ | 167,083    |  
|                                                     |  |                                 |          |   |                                 |   |          |                                        |  |   |            |  
|Supplemental disclosures of cash flow information:   |  |                                 |          |   |                                 |   |          |                                        |  |   |            |  
|Cash paid for interest                               |  | $                               | 6,482    |   |                                 | $ | 1,888    |                                        |  | $ | 14,410     |  
|Members equity in exchange for rent                 |  |                                 |         |   |                                 |   |         |                                        |  |   | 4,500      |  
|Equipment contributed by non-members                 |  |                                 |         |   |                                 |   |         |                                        |  |   | 34,730     |  
|Equipment acquired with capital lease                |  |                                 |         |   |                                 |   |         |                                        |  |   | 69,939     |  
|Furniture acquired with note payable                 |  |                                 |         |   |                                 |   |         |                                        |  |   | 11,600     |  
|Note payable paid with equity                        |  |                                 |         |   |                                 |   |         |                                        |  |   | 36,600     |  
|Minority interest in subsidiary acquired with equity |  |                                 |         |   |                                 |   |         |                                        |  |   | 27,310     |  
|Debt satisfied with stock                            |  |                                 |          |   |                                 |   |          |                                        |  |   | 2,960,495  |  
|Net assets obtained in reverse merger                |  |                                 |         |   |                                 |   |         |                                        |  |   | 151,749    |  
|Net liabilities assumed in reverse merger            |  |                                 |         |   |                                 |   |         |                                        |  |   | 597,321    |  



See accompanying
Notes to Unaudited Condensed Consolidated Financial Statements



6



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##### Table of Contents

ATMOSPHERIC GLOW TECHNOLOGIES, INC. & SUBSIDIARY

(A DEVELOPMENT STAGE ENTERPRISE)

Notes to Unaudited Condensed Consolidated Financial Statements



|1. | Summary of Significant Accounting Policies and Other Disclosures
|-- | ----------------------------------------------------------------



General Information - Atmospheric Glow Technologies, Inc. and subsidiary conduct research and development activities to develop commercial
applications for the One Atmosphere Uniform Glow Discharge Plasma, a process of non-thermal, atmospheric pressure processing for use in areas such as sterilization, decontamination, surface cleaning and etching.



Condensed Consolidated Financial Statements - The accompanying
condensed consolidated financial statements include the accounts of Atmospheric Glow Technologies, Inc. and its wholly owned subsidiary, Tice Engineering and Sales, Inc. The consolidation of these entities is collectively referred to as the
Company or AGT. All significant intercompany balances and transactions have been eliminated.



These financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim
financial information pursuant to the rules and regulations of the Securities and Exchange Commission. Accordingly, certain information and footnote disclosures normally included in complete financial statements prepared in accordance with
accounting principles generally accepted in the United States of America have been omitted. In the opinion of management, all adjustments considered necessary for a fair presentation have been included. Operating results for the three-month period
ended June 30, 2004 are not necessarily indicative of the results that may be expected for the year ended March 31, 2005.



The balance sheet at March 31, 2004 has been derived from the audited financial statements at that date, but does not include all of the information and
footnotes required by accounting principles generally accepted in the United States of America for complete financial statements.



The unaudited condensed consolidated financial statements should be read in conjunction with the financial statements and notes thereto included in the
audited financial statements of the Company as of and for the period ended March 31, 2004.



Revenue and Cost Recognition - Revenues from research contracts and grants are recognized as costs are incurred under a percentage of completion method. Contract costs include direct materials, labor,
subcontract costs and allocated indirect costs such as indirect labor costs, occupancy costs and other general overhead. General and administrative costs are charged to expense as incurred.



Royalties - The Company recognizes royalty revenue when it is fixed
and determinable.



Accounting for Stock-Based
Compensation - As permitted by SFAS 148 and 123, the Company has chosen to apply the intrinsic value method provided for by APB Opinion 25, Accounting for Stock Issued to Employees, and related interpretations in accounting for
stock-based compensation awarded to employees.



7



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##### Table of Contents

Notes to Unaudited Condensed Consolidated Financial Statements, Continued



|1. | Summary of Significant Accounting Policies and Other Disclosures (continued)
|-- | ----------------------------------------------------------------------------



On April 26, 2004, the Company granted options to purchase 909,091 shares of Common Stock at $0.11 per share to an employee
and recognized $118,182 in compensation expense related to these options.



Had compensation expense for the Companys plan been determined based on the fair value at the grant dates for awards under the plan consistent with the method of SFAS 123, the Companys net loss and loss
per share would have been increased to the pro forma amounts as follows:



|                                     |  |                             |          |   |                                        |   |          |   |  |   |            |  
|------------------------------------ |  | --------------------------- | -------- | - | -------------------------------------- | - | -------- | - |  | - | ---------- | -
|                                     |  | Three months ended June 30, |          |   | May 1, 2000(Inception) toJune 30, 2004 |  
|                                     |  | 2004                        |          |   | 2003                                   |   |         
|Basic and diluted:                   |  |                             |          |   |                                        |   |          |   |  |   |            |  
|                                     |  |                             |         
|Net loss, as reported                |  | $                           | (488,624 | ) |                                        | $ | (170,143 | ) |  | $ | (2,708,790 | )
|Stock based compensation, net of tax |  |                             | 8,182    |   |                                        |   |         |   |  |   | 8,182      |  
|                                     |  |                             |          |   |                                        |   |          |   |  |   |            |  
|Net loss, pro forma                  |  | $                           | (496,806 | ) |                                        | $ | (170,143 | ) |  | $ | (2,716,972 | )
|                                     |  |                             |          |   |                                        |   |          |   |  |   |            |  
|Loss per share:                      |  |                             |          |   |                                        |   |          |   |  |   |            |  
|Basic and diluted, as reported       |  | $                           | (0.00    | ) |                                        | $ | (0.00    | ) |  | $ | (0.01      | )
|                                     |  |                             |          |   |                                        |   |          |   |  |   |            |  
|Basic and diluted, pro forma         |  | $                           | (0.00    | ) |                                        | $ | (0.00    | ) |  | $ | (0.01      | )
|                                     |  |                             |          |   |                                        |   |          |   |  |   |            |  



Subsequent to June 30,
2004, the Company granted options to purchase 909,091 shares of Common Stock at $0.11 per share to an officer of the Company.



|2. | Note Payable
|-- | ------------



During the quarter ended June 30, 2004, the Company retired a $300,000 note payable with proceeds from several stockholders who exercised options to
purchase 2,727,273 Common Shares of the Company at $0.11 per share. The options were originally granted in return for the option holders guarantee of the $300,000 note payable. The Company also financed certain insurance premiums through the
issuance of a $57,500 note payable in nine monthly installments bearing interest at 7.9%.



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Notes to Unaudited Condensed Consolidated Financial Statements, Continued



|3. | Loss Per Share
|-- | --------------



Basic earnings (loss) per share assumes no dilution and is computed by dividing loss available to common stockholders by the weighted average number of
shares of common stock outstanding during each period. Diluted earnings per share reflect, in periods in which they have a dilutive effect, the effect of common shares issuable upon the exercise of stock warrants, using the treasury stock method of
computing such effects and contingent shares, or conversion of convertible debt. As a result of the Companys net losses, the effect of potentially dilutive outstanding stock options of 14,440,584 shares had an antidilutive effect. Basic and
diluted loss per share are the same for all classes of the Companys common stock (thus they are not presented separately) because they have non-cumulative dividend rights under the terms of the Certificate of Incorporation of which none were
available for distribution.



Common stock equivalents not
included in the computation of diluted earnings per share because the options exercise prices were greater than the average market price of the common stock were 690,071 at June 30, 2004.



The following table sets forth the computation of basic loss per share for
the three months ended June 30, 2004:



|                                      |  |                             |             |   |                                        |   |             |   |  |   |             |  
|------------------------------------- |  | --------------------------- | ----------- | - | -------------------------------------- | - | ----------- | - |  | - | ----------- | -
|                                      |  | Three months ended June 30, |             |   | May 1, 2000(Inception) toJune 30, 2004 |  
|                                      |  | 2004                        |             |   | 2003                                   |   |            
|Loss:                                 |  |                             |             |   |                                        |   |             |   |  |   |             |  
|Basic and diluted:                    |  |                             |             |   |                                        |   |             |   |  |   |             |  
|Loss available to common stockholders |  | $                           | (488,624    | ) |                                        | $ | (170,143    | ) |  | $ | (2,708,790  | )
|                                      |  |                             |            
|Shares:                               |  |                             |             |   |                                        |   |             |   |  |   |             |  
|Basic and diluted:                    |  |                             |             |   |                                        |   |             |   |  |   |             |  
|Weighted shares outstanding           |  |                             | 219,277,260 |   |                                        |   | 219,277,260 |   |  |   | 219,277,290 |  
|                                      |  |                             |             |   |                                        |   |             |   |  |   |             |  
|Loss per share                        |  | $                           | (0.00       | ) |                                        | $ | (0.00       | ) |  | $ | (0.01       | )
|                                      |  |                             |             |   |                                        |   |             |   |  |   |             |  



Weighted average
Common Shares outstanding for the three-months ended June 30, 2003 and the period from May 1, 2000 (inception) to June 30, 2004, are retroactively computed to reflect the capital structure of the Company after the reverse merger.



|4. | Continuing Operations
|-- | ---------------------



The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of
liabilities in the normal course of business. As shown in the financial statements, the Company had losses of $488,624, $170,143, and $2,645,904 in the quarters ended June 30, 2004 and 2003 and inception to date, respectively. This factor, among
others, may indicate the Company will be unable to continue as a going concern for a reasonable period of time. Management realizes the Company must reach profitable operations and generate additional funds in order to continue as a going concern.
The Company expects that up to $4,700,000 in additional capital will be raised to fund its operations through its private placement offering which began on July 26, 2004.



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Item 2. Managements Discussion and Analysis or Plan of Operation.



Atmospheric Glow Technologies, Inc. (collectively with subsidiary,
AGT or the Company) acquired substantially all of the assets of Atmospheric Plasma Holdings, LLC (APH), formerly Atmospheric Glow Technologies, LLC in exchange for shares and options of AGT and other consideration
effective February 29, 2004 in a transaction accounted for as a reverse acquisition. As such, AGT became the successor business of APH and reports its financial and business history. AGTs business is as a science and engineering company
focalized on realizing the commercial potential of atmospheric plasma technology.



As the successor business of APH, AGT is considered a development stage enterprise and is currently dependent upon capital raised mainly through private placements. Our net loss was $488,624 for the three months ended
June 30, 2004 and we have had consecutive losses totaling $2,645,904 since inception of the business on May 1, 2000. Current revenues consist substantially of research and development contracts related to possible applications of the patented One
Atmosphere Uniform Glow Discharge Plasma (OAUGDP). Annualized revenues from these contracts have increased an average of 47% each of the last three years. Contract revenues contribute materially toward core development and to the building of infrastructure for the
Company. However, as with other development stage enterprises in our industry, contract revenues do not cover all of our costs, specifically the additional personnel needed to advance the technology further toward the product stage. As such,
annualized expenses have also increased at a rate similar to revenues.



Results of Operations



Three Months Ended June 30, 2004
Compared to Three Months Ended June 30, 2003



We incurred
a net loss of $488,624 for the three months ended June 30, 2004, compared to a net loss of $170,143 for the three months ended June 30, 2003 for an increase in net loss of $318,481 or 187%. We increased revenues by 210% due to new contract awards
and other contracts advancing into the Phase II or Phase III stage as successes had been made at lower contract stage levels. Overall, annualized operating expenses have increased 198% with the most significant increase being a 240% increase in
payroll and related costs due in part to stock based compensation of $118,182 in the current quarter not present in the prior quarter. Other increases in expense are primarily due to the increased contract and development activity.



Inflation



Inflation has not had a significant impact on operations to date.



Liquidity and Capital Resources



Since our inception, we have financed our operations primarily through
equity fundraising. The Company needs substantial additional funding in the near future to develop and bring to a commercialization state the OAUGDP technology. While there is no guarantee we can obtain such future funding, we have been successful in our efforts thus far and expect that
future offerings, along with contract revenues, will provide sufficient capital to continue through our next fiscal year. Failure to obtain new funding could have a material adverse effect on our liquidity.



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We began a private placement offering on July 26, 2004 to raise up to $4,700,000 in additional capital to
fund operations. Expenditures for next year, specifically payroll and related costs, are expected to increase with contract growth and newly implemented marketing efforts.



During the first quarter of fiscal 2005, we also received proceeds of $984,714 through the issuance of Common Shares and we
retired a $300,000 note payable during the quarter. Other principal debt and capital lease payment requirements are less than $80,000. We do not expect any significant unfunded capital expenditures during the next year.



Special Considerations



This section captioned Special Considerations and other parts of
this Quarterly Report on Form 10-QSB include certain forward-looking statements within the meaning of the federal securities laws. Actual results and the occurrence or timing of certain events could differ materially from those described in any of
such forward-looking statements due to a number of factors, including those set forth below and elsewhere in this Form 10-QSB and previous reports of the Company. See Other Factors Relating to Forward-Looking Statements below.



Product Development. The key to future success will be
our ability to develop and commercialize new applications using the OAUGDP technology and gain market acceptance of any products developed. There are no assurances that AGT can successfully develop or commercialize new applications of the OAUGDP technology.



Key Management and Technical Staff. We must be able to identify, recruit and retain key management and technical
staff. There are no assurances such individuals can be identified, hired or retained.



New Capital. Our future operations are dependent on its ability to raise sufficient capital for these needs. There are no assurances that we can raise these funds.



Other Factors Relating to Forward-Looking Statements



Statements contained in this Form 10-QSB that are not historical facts are
forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. In addition, words such as believes, anticipates, expects and similar expressions are
intended to identify forward-looking statements. Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements or events, or timing of events, to
differ materially from any future results, performance or achievements or events, or timing of events, expressed or implied by such forward-looking statements. We cannot assure that we will be able to anticipate or respond timely to the changes that
could adversely affect our operating results in one or more fiscal quarters. Results of operations in any past period should not be considered indicative of results to be expected in future periods. Fluctuations in operating results may result in
fluctuations in the price of our securities.



There can be no
assurance that we will be able to raise any additional funds on acceptable terms. If such financing is not available on satisfactory terms, we may be unable to expand our business or develop new customers as desired and our operating results may be
adversely affected. Debt financing will increase expenses and must be repaid regardless of operating results. Equity financing could result in dilution to existing stockholders.



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Some of the more prominent known risks and uncertainties of our business are set forth below. However,
this section does not discuss all possible risks and uncertainties to which we are subject, nor can it be assumed that there are not other risks and uncertainties which may be more significant. Such other factors include, among others, those
described elsewhere in this Managements Discussion and Analysis and those factors listed below.



| |  | the lack of working capital needed to further develop and apply the OAUGDP technology and managements ability to find acceptable sources for such working capital;
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | the potential failure to successfully negotiate licensing agreements, or find strategic partners to further develop, or potential buyers for, the OAUGDP technology;
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | the shortage of qualified and competent engineers, scientists or biologists and the risk that we will be unable to retain key employees and managers;
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------



| |  | dependence on start-up technologies and applications and the ability to continue to successfully obtain government contracts which are expected to generate most of our revenue for
some time;
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | the unanticipated expense of new product development, the potential failure to complete new products on a timely and cost effective basis, and the failure of any such products to
achieve substantial market acceptance;
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | the dependence on patents and the ability to protect proprietary products, the potential that existing patents or future patents obtained by us will not be enforceable, the risk
that the products will infringe on patents held by others, and the risk that competitors will develop similar or functionally similar products; and
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | the potential adverse effect of competition, the potential failure to provide competitive timely designs of cost-effective solutions, products or services, and the potential adverse
effect of technological change with which we are unable to keep pace.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Item 3. Controls and Procedures.



Evaluation of Disclosure
Controls and Procedures



The Companys Chief
Executive Officer and the Chief Accounting Officer carried out an evaluation of the effectiveness of the design and operations of the Companys disclosure controls and procedures as of June 30, 2004. Disclosure controls and procedures are
designed to ensure that information required to be disclosed by a company in its periodic SEC filings is recorded, processed and reported within the time periods specified in the SECs rules and forms. Based upon that evaluation, the Chief
Executive Officer concluded that the Companys disclosure



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controls and procedures as of June 30, 2004 were effective in timely alerting him to material information relating to the
Company (including its consolidated subsidiaries) required to be included in the Companys periodic SEC filings.



Changes in Internal Controls



There were no significant changes in the Companys internal control over financial reporting or in other factors identified in connection with the
evaluation described above that occurred during the Companys fiscal quarter ended June 30, 2004 that has materially affected, or is reasonably likely to materially affect, the Companys internal control over financial reporting.



PART II - OTHER INFORMATION



Item 2. Changes in Securities



Effective June 30, 2004, AGT issued 2,727,273 Common Shares at a price of
$0.11 per share ($300,000.03) upon the exercise of options to 16 accredited investors. The option holders had received the options in return for their guarantee of a $300,000 loan made by a bank to AGT. The proceeds received upon exercise of the
options were used to pay off the bank loan and release the guarantees. The shares were issued privately under Section 4(2) of the Securities Act of 1933. LandOak Securities, LLC, a company owned by a director and shareholder of AGT, acted as
placement agent, obtained the guarantees and received a 6% commission on the exercise price of the options.



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



|(a) | Exhibits Index
|--- | --------------



|                                                                                                                                                             |  |                     |  |           
|------------------------------------------------------------------------------------------------------------------------------------------------------------ |  | ------------------- |  | ----------
|                                                                                                                                                             |  | ExhibitTable Number |  | PageNumber
|I.       Articles of Incorporation and Bylaws                                                                                                                |  | 3                   |  |           
|                                                                                                                                                             |  |                    
|(i)     Certificate of Incorporation of Tice Technology, Inc.                                                                                                |  |                     |  | ±         
|                                                                                                                                                             |  |                    
|(ii)    Bylaws of Tice Technology, Inc.                                                                                                                      |  |                     |  | ±         
|                                                                                                                                                             |  |                    
|(iii)  Certificate of Amendment to Certificate of Incorporation of Tice Technology, Inc. (now Atmospheric Glow Technologies,
Inc.)                           |  |                     |  | *         
|                                                                                                                                                             |  |                    
|II.     Instruments Defining Rights of Security Holders                                                                                                      |  | 4                   |  |           
|                                                                                                                                                             |  |                    
|(i)     Registration Rights Agreement Giving Purchasers under the Private Placement Closed on June 25, 1999 Certain
Demand and Piggyback Registration Rights |  |                     |  | #         
|                                                                                                                                                             |  |                    
|(ii)    Incentive Stock Option Plan and Agreement Between Charles R. West and Tice Technology, Inc.                                                          |  |                     |  | #         
|                                                                                                                                                             |  |                    
|III.    Certification required by Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934                                                    |  | 31                  |  |           
|                                                                                                                                                             |  |                    
|(i)     Certifications  Chief Executive Officer, Thomas W. Reddoch                                                                                          |  |                     |  | 16        
|                                                                                                                                                             |  |                    
|(ii)    Certifications  Chief Accounting Officer, Sharon L. Draper                                                                                          |  |                     |  | 18        
|                                                                                                                                                             |  |                    
|IV. Certification pursuant to 18 U.S.C. Section 1350                                                                                                         |  | 32                  |  |           
|                                                                                                                                                             |  |                    
|(i)     Certification  Chief Executive Officer, Thomas W. Reddoch and Chief Accounting Officer, Sharon L.
Draper                                            |  |                     |  | 20        

---

|* | Previously filed as an exhibit to Form 10-KSB for the year ended March 31, 2004.
|- | --------------------------------------------------------------------------------



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|± | Previously filed as an exhibit to Pre-Effective Amendment No. 1 to the Registration Statement on Form S-1 of Tice Technology, Inc. that became effective August 1, 1997.
|- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|# | Previously filed as an exhibit to Form 10-K for the year ended March 31, 2000.
|- | ------------------------------------------------------------------------------



|(b) | The registrant filed a Form 8-K/A with the financial statements of APH relating to the acquisition of the assets of APH on May 21, 2004. The related Form 8-K was filed on March 19,
2004.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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SIGNATURES



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



|
|

|
|

|
|

Atmospheric Glow Technologies, Inc.By:

/s/ Thomas W. ReddochThomas W. Reddoch, Chairman and Chief Executive OfficerDate: August 12, 2004By:

/s/ Sharon L. DraperSharon L. Draper, Chief Accounting OfficerDate: August 12, 2004




15