##### 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 September 30, 2005



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)



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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 ̈



Indicate
by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes ̈No  x



The number of shares outstanding of each of the registrants classes of common stock on November 7, 2005 was 224,987,056 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 15.



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##### Table of Contents

PART I - FINANCIAL INFORMATION



Item 1. Financial
Statements.



|                                                                                                                                                                    |  |     
|------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ----
|                                                                                                                                                                    |  | Page
|Condensed Consolidated Balance Sheets  As of September 30, 2005 and March 31, 2005                                                                                 |  | 3   
|                                                                                                                                                                    | 
|Condensed Consolidated Statements of Operations  For the Three and Six Months Ended September 30, 2005 and 2004, and May 1, 2000 (Inception) to September 30, 2005 |  | 4   
|                                                                                                                                                                    | 
|Condensed Consolidated Statement of Changes in Stockholders Equity from May 1, 2000 (Inception) to September 30, 2005                                              |  | 5   
|                                                                                                                                                                    | 
|Condensed Consolidated Statements of Cash Flows  For the Six Months Ended September 30, 2005 and 2004, and May 1, 2000 (Inception) to September 30, 2005           |  | 6   
|                                                                                                                                                                    | 
|Notes to 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



|                                                      |  |                   |           |   |                   |   |          
|----------------------------------------------------- |  | ----------------- | --------- | - | ----------------- | - | ---------
|                                                      |  | September 30,2005 |           |   | March 31,2005 (1)
|                                                      |  | (unaudited)       |           |   |                  
|Assets                                                |  |                   |           |   |                   |   |          
|Cash and cash equivalents                             |  | $                 | 75,249    |   |                   | $ | 153,655  
|Receivables                                           |  |                   | 241,165   |   |                   |   | 301,145  
|Prepaid expenses                                      |  |                   | 49,017    |   |                   |   | 13,879   
|                                                      |  |                   |           |   |                   |   |          
|Total current assets                                  |  |                   | 365,431   |   |                   |   | 468,679  
|Property and equipment, less accumulated depreciation |  |                   | 613,045   |   |                   |   | 576,091  
|Intangible assets, less accumulated amortization      |  |                   | 1,488,838 |   |                   |   | 1,539,688
|Deposits                                              |  |                   | 12,003    |   |                   |   | 10,949   
|                                                      |  |                   |           |   |                   |   |          
|Total assets                                          |  | $                 | 2,479,317 |   |                   | $ | 2,595,407
|                                                      |  |                   |           |   |                   |   |          
|Liabilities and Stockholders (Deficit) Equity        |  |                   |           |   |                   |   |          
|Notes payable to related parties                      |  | $                 | 1,174,431 |   |                   | $ | 549,431  
|Notes payable                                         |  |                   | 585,637   |   |                   |   | 500,000  
|Current portion of capital leases                     |  |                   | 13,598    |   |                   |   | 21,993   
|Accounts payable                                      |  |                   | 544,164   |   |                   |   | 403,609  
|Accrued expenses                                      |  |                   | 457,569   |   |                   |   | 363,190  
|                                                      |  |                   |           |   |                   |   |          
|Total current liabilities                             |  |                   | 2,775,399 |   |                   |   | 1,838,223
|Capital leases, less current portion                  |  |                   | 11,730    |   |                   |   |         
|                                                      |  |                   |           |   |                   |   |          
|Total liabilities                                     |  |                   | 2,787,129 |   |                   |   | 1,838,223
|Stockholders (deficit) equity                        |  |                   | (307,812  | ) |                   |   | 757,184  
|                                                      |  |                   |           |   |                   |   |          
|Total liabilities and stockholders (deficit) equity  |  | $                 | 2,479,317 |   |                   | $ | 2,595,407
|                                                      |  |                   |           |   |                   |   |          



See accompanying
Notes to Condensed Consolidated Financial Statements.



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|(1) | The March 31, 2005 Condensed Consolidated Balance Sheet was derived from the audited balance sheet for the year then ended.
|--- | ---------------------------------------------------------------------------------------------------------------------------



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##### Table of Contents

ATMOSPHERIC GLOW TECHNOLOGIES, INC. & SUBSIDIARY

(A DEVELOPMENT STAGE ENTERPRISE)

Condensed Consolidated Statements of Operations



|                                    |  |                                 |           |   |                               |   |           |                                             |  |   |             |   |  |             |            |   |  |   |            |  
|----------------------------------- |  | ------------------------------- | --------- | - | ----------------------------- | - | --------- | ------------------------------------------- |  | - | ----------- | - |  | ----------- | ---------- | - |  | - | ---------- | -
|                                    |  | Three Months EndedSeptember 30, |           |   | Six Months EndedSeptember 30, |   |           | May 1, 2000(Inception) toSeptember 30, 2005 | 
|                                    |  | 2005                            |           |   | 2004                          |   |           | 2005                                        |  |   | 2004        |   | 
|                                    |  | (unaudited)                     |           |   | (unaudited)                   |   |           | (unaudited)                                 |  |   | (unaudited) |   |  | (unaudited) |           
|Operating revenues:                 |  |                                 |           |   |                               |   |           |                                             |  |   |             |   |  |             |            |   |  |   |            |  
|Contract revenues earned            |  | $                               | 583,052   |   |                               | $ | 477,716   |                                             |  | $ | 868,493     |   |  | $           | 969,304    |   |  | $ | 4,781,797  |  
|Other revenues                      |  |                                 | 30        |   |                               |   | 2         |                                             |  |   | 30          |   |  |             | 5          |   |  |   | 73,508     |  
|                                    |  |                                 |           |   |                               |   |           |                                             |  |   |             |   |  |             |            |   |  |   |            |  
|Total operating revenues            |  |                                 | 583,082   |   |                               |   | 477,718   |                                             |  |   | 868,523     |   |  |             | 969,309    |   |  |   | 4,855,305  |  
|                                    |  |                                 |           |   |                               |   |           |                                             |  |   |             |   |  |             |            |   |  |   |            |  
|Operating expenses:                 |  |                                 |           |   |                               |   |           |                                             |  |   |             |   |  |             |            |   |  |   |            |  
|Payroll and related costs           |  |                                 | 602,016   |   |                               |   | 652,212   |                                             |  |   | 1,184,167   |   |  |             | 1,167,160  |   |  |   | 5,133,697  |  
|Laboratory expenses                 |  |                                 | 212,728   |   |                               |   | 163,184   |                                             |  |   | 367,116     |   |  |             | 352,649    |   |  |   | 1,993,910  |  
|General and administrative expenses |  |                                 | 260,159   |   |                               |   | 283,197   |                                             |  |   | 468,789     |   |  |             | 558,999    |   |  |   | 2,885,935  |  
|                                    |  |                                 |           |   |                               |   |           |                                             |  |   |             |   |  |             |            |   |  |   |            |  
|Total operating expenses            |  |                                 | 1,074,903 |   |                               |   | 1,098,593 |                                             |  |   | 2,020,072   |   |  |             | 2,078,808  |   |  |   | 10,013,542 |  
|                                    |  |                                 |           |   |                               |   |           |                                             |  |   |             |   |  |             |            |   |  |   |            |  
|Net loss                            |  | $                               | (491,821  | ) |                               | $ | (620,875  | )                                           |  | $ | (1,151,549  | ) |  | $           | (1,109,499 | ) |  | $ | (5,158,237 | )
|                                    |  |                                 |           |   |                               |   |           |                                             |  |   |             |   |  |             |            |   |  |   |            |  
|Loss per share (basic and diluted): |  | $                               | (0.00     | ) |                               | $ | (0.00     | )                                           |  | $ | (0.01       | ) |  | $           | (0.01      | ) |  | $ | (0.02      | )
|                                    |  |                                 |           |   |                               |   |           |                                             |  |   |             |   |  |             |            |   |  |   |            |  



See accompanying
Notes to 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 Changes in Stockholders Equity

From May 1, 2000 (Inception) to September 30, 2005 (unaudited)



|                                                                               |  |                |   |  |                       |          |   |              |             |               |   |                     |  |                     |  |                          |       |                    |   |           |                          |   |            |   |  |   |            |  
|------------------------------------------------------------------------------ |  | -------------- | - |  | --------------------- | -------- | - | ------------ | ----------- | ------------- | - | ------------------- |  | ------------------- |  | ------------------------ | ----- | ------------------ | - | --------- | ------------------------ | - | ---------- | - |  | - | ---------- | -
|                                                                               |  | PreviousShares |   |  | Previous Share Amount |          |   | CommonShares |             | Common Amount |   | Class BCommonShares |  | Class BCommonAmount |  | AdditionalPaid inCapital |       | AccumulatedDeficit |   |           | TotalStockholdersEquity |  
|Shares issued October 20, 2000                                                 |  | 101,101        |   |  | $                     | 116,020  |   |              |            |               | $ |                    |  |                    |  | $                        |      |                    | $ |          |                          | $ |           |   |  | $ | 116,020    |  
|Non-member contribution in 2000                                                |  |                |   |  |                       |          |   |              |             |               |   |                     |  |                     |  |                          |       |                    |   | 34,730    |                          |   |            |   |  |   | 34,730     |  
|Additional amounts received in 2001 for shares previously issued               |  |                |   |  |                       | 4,700    |   |              |             |               |   |                     |  |                     |  |                          |       |                    |   |           |                          |   |            |   |  |   | 4,700      |  
|Shares redeemed in 2001                                                        |  | (11,200        | ) |  |                       | (13,000  | ) |              |             |               |   |                     |  |                     |  |                          |       |                    |   |           |                          |   |            |   |  |   | (13,000    | )
|Shares issued in 2002                                                          |  | 9,877          |   |  |                       | 168,235  |   |              |             |               |   |                     |  |                     |  |                          |       |                    |   |           |                          |   |            |   |  |   | 168,235    |  
|Recapitalization of company resulting from reverse merger on February 29, 2004 |  | (99,778        | ) |  |                       | (275,955 | ) |              | 210,828,848 |               |   | 2,108,288           |  | 750,000             |  |                          | 7,500 |                    |   | 705,681   |                          |   |            |   |  |   | 2,545,514  |  
|Common stock issued in 2004                                                    |  |                |   |  |                       |          |   |              | 2,050,000   |               |   | 20,500              |  |                     |  |                          |       |                    |   | 205,000   |                          |   |            |   |  |   | 225,500    |  
|Net loss through March 31, 2004                                                |  |                |   |  |                       |          |   |              |             |               |   |                     |  |                     |  |                          |       |                    |   |           |                          |   | (2,157,280 | ) |  |   | (2,157,280 | )
|                                                                               |  |                |   |  |                       |          |   |              |             |               |   |                     |  |                     |  |                          |       |                    |   |           |                          |   |            |   |  |   |            |  
|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 in 2005                                                    |  |                |   |  |                       |          |   |              | 11,253,640  |               |   | 112,536             |  |                     |  |                          |       |                    |   | 1,278,728 |                          |   |            |   |  |   | 1,391,264  |  
|Stock based compensation                                                       |  |                |   |  |                       |          |   |              |             |               |   |                     |  |                     |  |                          |       |                    |   | 290,909   |                          |   |            |   |  |   | 290,909    |  
|Net loss                                                                       |  |                |   |  |                       |          |   |              |             |               |   |                     |  |                     |  |                          |       |                    |   |           |                          |   | (1,849,408 | ) |  |   | (1,849,408 | )
|                                                                               |  |                |   |  |                       |          |   |              |             |               |   |                     |  |                     |  |                          |       |                    |   |           |                          |   |            |   |  |   |            |  
|Balance at March 31, 2005                                                      |  |               |   |  |                       |         |   |              | 224,132,488 |               |   | 2,241,324           |  | 750,000             |  |                          | 7,500 |                    |   | 2,515,048 |                          |   | (4,006,688 | ) |  |   | 757,184    |  
|Common stock issued                                                            |  |                |   |  |                       |          |   |              | 189,000     |               |   | 1,890               |  |                     |  |                          |       |                    |   | 28,600    |                          |   |            |   |  |   | 30,490     |  
|Liabilities satisfied with common stock                                        |  |                |   |  |                       |          |   |              | 280,568     |               |   | 2,806               |  |                     |  |                          |       |                    |   | 53,257    |                          |   |            |   |  |   | 56,063     |  
|Net loss                                                                       |  |                |   |  |                       |          |   |              |             |               |   |                     |  |                     |  |                          |       |                    |   |           |                          |   | (1,151,549 | ) |  |   | (1,151,549 | )
|                                                                               |  |                |   |  |                       |          |   |              |             |               |   |                     |  |                     |  |                          |       |                    |   |           |                          |   |            |   |  |   |            |  
|Balance at September 30, 2005                                                  |  |               |   |  | $                     |         |   |              | 224,602,056 |               | $ | 2,246,020           |  | 750,000             |  | $                        | 7,500 |                    | $ | 2,596,905 |                          | $ | (5,158,237 | ) |  | $ | (307,812   | )
|                                                                               |  |                |   |  |                       |          |   |              |             |               |   |                     |  |                     |  |                          |       |                    |   |           |                          |   |            |   |  |   |            |  



See accompanying
Notes to 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



|                                                     |  |                                    |          |   |                                   |   |            |                                            |  |   |            |  
|---------------------------------------------------- |  | ---------------------------------- | -------- | - | --------------------------------- | - | ---------- | ------------------------------------------ |  | - | ---------- | -
|                                                     |  | Six Months Ended September 30,2005 |          |   | Six Months EndedSeptember 30,2004 |   |            | May 1, 2000(Inception) toSeptember 30,2005 | 
|                                                     |  | (unaudited)                        |          |   | (unaudited)                       |   |            | (unaudited)                                | 
|Net cash used in operating activities                |  | $                                  | (715,148 | ) |                                   | $ | (1,354,676 | )                                          |  | $ | (4,061,557 | )
|                                                     |  |                                    |          |   |                                   |   |            |                                            |  |   |            |  
|Investing activities                                 |  |                                    |          |   |                                   |   |            |                                            |  |   |            |  
|Additions to intangible assets                       |  |                                    | (5,792   | ) |                                   |   | (12,645    | )                                          |  |   | (1,632,003 | )
|Purchase of property and equipment                   |  |                                    | (83,856  | ) |                                   |   | (44,164    | )                                          |  |   | (839,694   | )
|                                                     |  |                                    |          |   |                                   |   |            |                                            |  |   |            |  
|Net cash used in investing activities                |  |                                    | (89,648  | ) |                                   |   | (56,809    | )                                          |  |   | (2,471,697 | )
|                                                     |  |                                    |          |   |                                   |   |            |                                            |  |   |            |  
|Finance activities                                   |  |                                    |          |   |                                   |   |            |                                            |  |   |            |  
|Proceeds from short term notes                       |  |                                    | 817,500  |   |                                   |   | 357,500    |                                            |  |   | 5,196,500  |  
|Repayments of short term notes                       |  |                                    | (106,863 | ) |                                   |   | (326,532   | )                                          |  |   | (473,363   | )
|Cash acquired in reverse merger                      |  |                                    |         |   |                                   |   |           |                                            |  |   | 53,017     |  
|Proceeds from issuance of common stock               |  |                                    | 30,490   |   |                                   |   | 1,393,123  |                                            |  |   | 1,647,254  |  
|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      |  |                                    | (14,737  | ) |                                   |   | (11,236    | )                                          |  |   | (62,683    | )
|                                                     |  |                                    |          |   |                                   |   |            |                                            |  |   |            |  
|Net cash provided by financing activities            |  |                                    | 726,390  |   |                                   |   | 1,412,855  |                                            |  |   | 6,608,503  |  
|                                                     |  |                                    |          |   |                                   |   |            |                                            |  |   |            |  
|Net (decrease) increase in cash and cash equivalents |  |                                    | (78,406  | ) |                                   |   | 1,370      |                                            |  |   | 75,249     |  
|Cash and cash equivalents at beginning of period     |  |                                    | 153,655  |   |                                   |   | 301,926    |                                            |  |   |           |  
|                                                     |  |                                    |          |   |                                   |   |            |                                            |  |   |            |  
|Cash and cash equivalents at end of period           |  | $                                  | 75,249   |   |                                   | $ | 303,296    |                                            |  | $ | 75,249     |  
|                                                     |  |                                    |          |   |                                   |   |            |                                            |  |   |            |  
|Supplemental disclosures of cash flow information:   |  |                                    |          |   |                                   |   |            |                                            |  |   |            |  
|Cash paid for interest                               |  | $                                  | 28,842   |   |                                   | $ | 8,547      |                                            |  | $ | 124,732    |  
|Members equity in exchange for rent                 |  |                                    |         |   |                                   |   |           |                                            |  |   | 4,500      |  
|Equipment contributed by non-members                 |  |                                    |         |   |                                   |   |           |                                            |  |   | 34,730     |  
|Equipment acquired with capital lease                |  |                                    | 18,072   |   |                                   |   |           |                                            |  |   | 88,011     |  
|Furniture acquired with note payable                 |  |                                    |         |   |                                   |   |           |                                            |  |   | 11,600     |  
|Note payable paid with equity                        |  |                                    |         |   |                                   |   |           |                                            |  |   | 36,600     |  
|Minority interest in subsidiary acquired with equity |  |                                    |         |   |                                   |   |           |                                            |  |   | 27,310     |  
|Liabilities satisfied with stock                     |  |                                    | 56,063   |   |                                   |   |            |                                            |  |   | 3,016,558  |  
|Net assets obtained in reverse merger                |  |                                    |         |   |                                   |   |           |                                            |  |   | 151,749    |  
|Net liabilities assumed in reverse merger            |  |                                    |         |   |                                   |   |           |                                            |  |   | 597,321    |  



See accompanying
Notes to Condensed Consolidated Financial Statements.



6



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##### Table of Contents

ATMOSPHERIC GLOW TECHNOLOGIES, INC. & SUBSIDIARY

(A DEVELOPMENT STAGE ENTERPRISE)

Notes to 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 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. All adjustments made are of a normal recurring nature.
Operating results for the three-month and six-month periods ended September 30, 2005 are not necessarily indicative of the results that may be expected for the year ending March 31, 2006.



The balance sheet at March 31, 2005 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 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, 2005.



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.



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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)
|-- | ----------------------------------------------------------------------------



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 endedSeptember 30, |          |   | Six months endedSeptember 30, |   |          | May 1, 2000(Inception) toSeptember 30, 2005 | 
|                                     |  | 2005                            |          |   | 2004                          |   |          | 2005                                        |  |   | 2004       |   | 
|Basic and diluted:                   |  |                                 |          |   |                               |   |          |                                             |  |   |            |   |  |   |            |   |  |   |            |  
|Net loss, as reported                |  | $                               | (491,821 | ) |                               | $ | (620,875 | )                                           |  | $ | (1,151,549 | ) |  | $ | (1,109,499 | ) |  | $ | (5,158,237 | )
|Stock based compensation, net of tax |  |                                 |         |   |                               |   | 14,545   |                                             |  |   |           |   |  |   | 22,727     |   |  |   | 22,727     |  
|                                     |  |                                 |          |   |                               |   |          |                                             |  |   |            |   |  |   |            |   |  |   |            |  
|Net loss, pro forma                  |  | $                               | (491,821 | ) |                               | $ | (635,420 | )                                           |  | $ | (1,151,549 | ) |  | $ | (1,132,226 | ) |  | $ | (5,180,964 | )
|                                     |  |                                 |          |   |                               |   |          |                                             |  |   |            |   |  |   |            |   |  |   |            |  
|Loss per share:                      |  |                                 |          |   |                               |   |          |                                             |  |   |            |   |  |   |            |   |  |   |            |  
|Basic and diluted, as reported       |  | $                               | (0.00    | ) |                               | $ | (0.00    | )                                           |  | $ | (0.01      | ) |  | $ | (0.01      | ) |  | $ | (0.02      | )
|                                     |  |                                 |          |   |                               |   |          |                                             |  |   |            |   |  |   |            |   |  |   |            |  
|Basic and diluted, pro forma         |  | $                               | (0.00    | ) |                               | $ | (0.00    | )                                           |  | $ | (0.01      | ) |  | $ | (0.01      | ) |  | $ | (0.02      | )
|                                     |  |                                 |          |   |                               |   |          |                                             |  |   |            |   |  |   |            |   |  |   |            |  



New Accounting
Standards -In December 2004, the FASB issued SFAS No. 123 (revised 2004), Share-Based Payment. SFAS No. 123(R) will require the Company to recognize compensation expense for all stock-based compensation in our consolidated
statements of earnings. Pro forma disclosure will no longer be an alternative. The Summary of Significant Accounting Policies Accounting for Stock-Based Compensation, above, contains pro forma disclosures regarding the effect on
net earnings and earnings per share as if the Company had applied the fair value method of accounting for stock-based compensation. SFAS No. 123(R) will also require the benefits of tax deductions in excess of recognized compensation cost to be
reported as a financing cash flow, rather than as an operating cash flow, as required under current guidance. The new requirement will reduce net operating cash flows and increase net financing cash flows in periods after adoption. SFAS
No. 123(R) is effective for fiscal years beginning after December 15, 2005, with early adoption permitted. The Company is currently evaluating the effect of this pronouncement on its options.



|2. | Notes Payable
|-- | -------------



During the quarter ended September 30, 2005, the Company obtained loans totaling $450,000 from officers, directors and shareholders of the Company of
which $75,000 was repaid during the quarter. Of the loans which have not been repaid, $225,000 in principal amount are payable upon demand and bear interest at a rate of 10% per annum. Of the two outstanding loans which are not payable upon
demand, $100,000 in principal bears interest at 10% per annum and is payable by February 22, 2006 with an interest payment due on November 22, 2005. The other



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Notes to Unaudited Condensed Consolidated Financial Statements, Continued



|2 | Notes Payable (continued)
|- | -------------------------



loan for $50,000 bears interest at 10% per annum and is payable by March 1, 2006 with an interest payment due on November 30, 2005. These
two loans are secured by a piece of equipment which has a carrying value of $140,618. Subsequent to September 30, 2005, the Company obtained an additional loan totaling $75,000 from an individual. The principal is payable on or before
November 7, 2006 and bears interest at a rate of 10% per annum. At the option of the lender, the principal may be converted into Common Shares of the Company at the same price as shares are being sold in any private placement active at the
time of conversion, but in no event at a price greater than $0.15 per share. The lender also is entitled to receive 75,000 Common Shares of the Company as an inducement to make the loan.



During the quarter ended September 30, 2005, the Company obtained a $50,000 loan from a financial institution payable
in eighty-four monthly installments of $850, including principal and interest, bearing interest at 10.75%.



|3. | Stock Issued to Satisfy Liabilities
|-- | -----------------------------------



The Company issued Common Shares in settlement of certain liabilities in the amounts of $45,000 and $11,062. The number of shares issued was 180,000 and
100,568, respectively.



|4. | 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 15,349,675 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 460,047 at September 30, 2005.



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Notes to Unaudited Condensed Consolidated Financial Statements, Continued



|4. | Loss per Share (continued)
|-- | --------------------------



The following table sets forth the computation of basic loss per share for the three and six months ended September 30, 2005 and 2004, and from
inception to September 30, 2005:



|                                      |  |                                 |             |   |                                |   |             |                                             |  |   |             |   |  |   |             |   |  |   |             |  
|------------------------------------- |  | ------------------------------- | ----------- | - | ------------------------------ | - | ----------- | ------------------------------------------- |  | - | ----------- | - |  | - | ----------- | - |  | - | ----------- | -
|                                      |  | Three months endedSeptember 30, |             |   | Six months ended September 30, |   |             | May 1, 2000(Inception) toSeptember 30, 2005 | 
|                                      |  | 2005                            |             |   | 2004                           |   |             | 2005                                        |  |   | 2004        |   | 
|Loss:                                 |  |                                 |             |   |                                |   |             |                                             |  |   |             |   |  |   |             |   |  |   |             |  
|Basic and diluted:                    |  |                                 |             |   |                                |   |             |                                             |  |   |             |   |  |   |             |   |  |   |             |  
|Loss available to common shareholders |  | $                               | (491,821    | ) |                                | $ | (620,875    | )                                           |  | $ | (1,151,549  | ) |  | $ | (1,109,499  | ) |  | $ | (5,158,237  | )
|                                      |  |                                 |             |   |                               
|Shares:                               |  |                                 |             |   |                                |   |             |                                             |  |   |             |   |  |   |             |   |  |   |             |  
|Basic and diluted:                    |  |                                 |             |   |                                |   |             |                                             |  |   |             |   |  |   |             |   |  |   |             |  
|Weighted shares outstanding           |  |                                 | 225,050,880 |   |                                |   | 223,277,488 |                                             |  |   | 224,978,712 |   |  |   | 221,009,500 |   |  |   | 222,681,939 |  
|                                      |  |                                 |             |   |                                |   |             |                                             |  |   |             |   |  |   |             |   |  |   |             |  
|Loss per share                        |  | $                               | (0.00       | ) |                                | $ | (0.00       | )                                           |  | $ | (0.01       | ) |  | $ | (0.01       | ) |  | $ | (0.02       | )
|                                      |  |                                 |             |   |                                |   |             |                                             |  |   |             |   |  |   |             |   |  |   |             |  



Weighted average
Common Shares outstanding for the period from May 1, 2000 (inception) to September 30, 2005, are retroactively computed to reflect the capital structure of the Company after the reverse merger.



|5. | 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 $1,151,549, $1,109,499, and $5,158,237 in the six months ended September 30, 2005 and 2004, 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 additional capital will be raised through private placement offerings or notes to fund the continuing efforts to commercialize the OAUGDP®technology. Absent additional capital from time to time, management may reduce commercialization costs and focus more effort on
existing revenue generated from research and development contracts.



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) 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 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



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$1,151,549 for the six months ended September 30, 2005 and we have had cumulative losses totaling
$5,158,237 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®). Revenues from these contracts have increased an average of 54% each of the last
three years with an annualized decrease in revenues for the six months ended September 30, 2005 of 8.5% due to a decision to shift labor resources from government contracts to commercial development. 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 September 30, 2005 Compared to Three Months Ended September 30, 2004



We incurred a net loss of $491,821 for the three months
ended September 30, 2005, compared to a net loss of $620,875 for the three months ended September 30, 2004 for a decrease in net loss of $129,054 or 21%. Our revenues increased by 22% due to new contracts in 2005. Overall, operating
expenses have decreased 2.2% including a 7.7% decrease in payroll mainly due to the recognition of stock based compensation costs during the 2004 period offset somewhat by an increase in number of employees in 2005. General and administrative costs
decreased 8.1% mainly due to higher legal and professional fees in 2004 associated with certain public filings and offerings not present in 2005, offset by a 30.4% increase in laboratory expenses due to costs associated with increased revenues.



Six Months Ended September 30, 2005 Compared to Six
Months Ended September 30, 2004



We
incurred a net loss of $1,151,549 for the six months ended September 30, 2005, compared to a net loss of $1,109,499 for the six months ended September 30, 2004 for an increase in net loss of $42,050 or 3.8%. Our revenues decreased by 10.4%
as we focused technical resources on completing a prototype during the first quarter of the current period. In June we directed more resources back to existing and new contracts. Overall, operating expenses have decreased 2.8% with the most
significant decrease being a 16.1% decrease in general and administrative costs due to higher legal and professional fees in 2004 associated with certain public filings and offerings not present in 2005. 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 the sale of equity. The Company needs substantial additional funding in the near future to develop and bring to a commercialization state its OAUGDP®technology. While there is no guarantee we can obtain



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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.



At September 30, 2005, we had $75,249 in cash and cash
equivalents. The goal of our current fundraising efforts is to raise an additional $6,500,000 for operations. During the current fiscal year we have raised $157,302 in capital through the sale of stock for cash and in satisfaction of liabilities of
the Company. The Company issued 180,000 and 100,568 Common Shares in settlement of certain liabilities in the amounts of $45,000 and $11,062, respectively. Expenditures for 2006, specifically payroll and related costs, are expected to remain flat or
increase slightly based on the pace of fundraising. Furthermore, AGT has most of its development team in place. With the additional funds management hopes to raise, and current or likely contract revenues, we should have sufficient capital to meet
our operating needs for two years.



Outstanding debt of $500,000 is expected to be refinanced or converted into Common Shares within the next twelve months by several stockholders who have committed to fund the principal balance in exchange for 2,727,273 Common Shares. In
addition, subsequent to quarter-end, AGT obtained an additional loan in the principal amount of $75,000. The principal is payable on or before November 7, 2006 and bears interest at a rate of 10% per annum. At the option of the lender, the
principal may be converted into Common Shares of the Company at the same price as shares are being sold in any private placement active at the time of conversion, but in no event at a price greater than $0.15 per share. The lender also is entitled
to receive 75,000 Common Shares of the Company as an inducement to make the loan. AGT does 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. 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. 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.



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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 financing on acceptable terms. If such financing is not available on satisfactory terms, we may be unable to expand the 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.



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.



| |  |  | the lack of working capital needed to further develop and apply the OAUGDP®technology and managements ability to find acceptable financing to supply 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 product specialists 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 or the risk that competitors will develop similar or functionally similar products; and
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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| |  |  | 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 September 30, 2005. 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 controls and procedures as of
September 30, 2005 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 September 30, 2005 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. Unregistered Sales of Equity Securities and Use of Proceeds.



In July 2005, AGT issued 180,000 Common Shares to the University of Tennessee Research Foundation in payment of license fee owed to it by
AGT. The shares were issued in a private transaction under Section 4(2) of the Securities Act of 1933 (the Securities Act).



In August 2005, AGT issued 161,000 Common Shares for $36,140 in an offering under Regulation S under the Securities Act. The issue was
part of an offering of up to 18,750,000 Common Shares at a price equal to the final bid on the Electronic Bulleting Board for AGTs shares on the day before the transaction. The placement agent for the offering is Swift Investment Bank, Ltd.
which receives a 35% commission on funds raised by it offshore.



In September 2005, AGT issued 100,568 Common Shares in connection with an employment agreement at a rate of $0.11 per share and 28,000 Common Shares in an offering under Section 506 of Regulation D under the
Securities Act at a rate of $0.25 per share. LandOak Securities, LLC, a company owned by a director and shareholder of AGT, acted as placement agent and received a 6% commission on the sales under Regulation D.



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



Exhibits Index



|     |  |                                                 |  |                                                                                                                                                      |  |                     |  |           
|---- |  | ----------------------------------------------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------------- |  | ----------
|     |  |                                                 |  |                                                                                                                                                      |  | ExhibitTable Number |  | PageNumber
|I.   |  | Articles of Incorporation and Bylaws            |  | 3                                                                                                                                                    |  |                    
|     |  | (i)                                             |  | Certificate of Incorporation of Tice Technology, Inc.                                                                                                |  |                     |  | ±         
|     |  | (ii)                                            |  | Certificate of Amendment to Certificate of Incorporation of Tice Technology, Inc. (now Atmospheric Glow Technologies, Inc.)                          |  |                     |  | *         
|     |  | (ii)                                            |  | Amended and Restated Bylaws of Atmospheric Glow Technologies, Inc.                                                                                   |  |                     |  | x         
|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. |  | Rule 13a-14(a)/15d-14(a) Certifications         |  | 31                                                                                                                                                   |  |                    
|     |  | (i)                                             |  | Certifications  Chief Executive Officer, Thomas W. Reddoch                                                                                          |  |                     |  | 17        
|     |  | (ii)                                            |  | Certifications  Chief Accounting Officer, Sharon L. Draper                                                                                          |  |                     |  | 19        
|IV.  |  | Section 1350 Certifications                     |  | 32                                                                                                                                                   |  |                    
|     |  | (i)                                             |  | Certification Chief Executive Officer, Thomas W. Reddoch and Chief Accounting Officer, Sharon L. Draper                                             |  |                     |  | 21        
|V.   |  | Additional Exhibits                             |  | 99                                                                                                                                                   |  |                    
|     |  | (i)                                             |  | Audit Committee Charter                                                                                                                              |  |                     |  | x         

---

|± | 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-KSB for the year ended March 31, 2004.
|- | --------------------------------------------------------------------------------

|x | Previously filed as an exhibit to Form 10-KSB for the year ended March 31, 2005.
|- | --------------------------------------------------------------------------------

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



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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 ChiefExecutive OfficerDate: November 11, 2005By:

/s/ Sharon L. DraperSharon L. Draper, Chief Accounting OfficerDate: November 11, 2005




16