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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, 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)



---



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 10, 2005 was 224,312,488 Common Shares, 750,000 Class B Common Shares and 0 Class D Common Shares.



Transitional Small Business Disclosure Format:    Yes ̈No  x



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Exhibit Index at page 13.



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##### Table of Contents

PART I          FINANCIAL INFORMATION



Item 1.         Financial Statements.



|                                                                                                                                                  |  |     
|------------------------------------------------------------------------------------------------------------------------------------------------- |  | ----
|                                                                                                                                                  |  | Page
|Condensed Consolidated Balance Sheets  As of June 30, 2005 and March 31, 2005                                                                    |  | 3   
|                                                                                                                                                  | 
|Condensed Consolidated Statements of Operations  For the Three Months Ended June 30, 2005 and 2004, and May 1, 2000 (Inception) to June 30, 2005 |  | 4   
|                                                                                                                                                  | 
|Condensed Consolidated Statement of Changes in Stockholders Equity from May 1, 2000 (Inception) to June 30, 2005                                 |  | 5   
|                                                                                                                                                  | 
|Condensed Consolidated Statements of Cash Flows  For the Three Months Ended June 30, 2005 and 2004, and May 1, 2000 (Inception) to June 30, 2005 |  | 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, 2005 |           | March 31,2005(1)
|                                                      |  | (unaudited)   |           |                 
|Assets                                                |  |               |           |                  |   |          
|Cash and cash equivalents                             |  | $             | 17,960    |                  | $ | 153,655  
|Receivables                                           |  |               | 259,338   |                  |   | 301,145  
|Prepaid expenses                                      |  |               | 66,394    |                  |   | 13,879   
|                                                      |  |               |           |                  |   |          
|Total current assets                                  |  |               | 343,692   |                  |   | 468,679  
|Property and equipment, less accumulated depreciation |  |               | 610,566   |                  |   | 576,091  
|Intangible assets, less accumulated amortization      |  |               | 1,514,009 |                  |   | 1,539,688
|Deposits                                              |  |               | 12,003    |                  |   | 10,949   
|                                                      |  |               |           |                  |   |          
|Total assets                                          |  | $             | 2,480,270 |                  | $ | 2,595,407
|                                                      |  |               |           |                  |   |          
|Liabilities and Stockholders Equity                  |  |               |           |                  |   |          
|Notes payable to related parties                      |  | $             | 799,431   |                  | $ | 549,431  
|Notes payable                                         |  |               | 554,000   |                  |   | 500,000  
|Current portion of capital leases                     |  |               | 19,079    |                  |   | 21,993   
|Accounts payable                                      |  |               | 499,464   |                  |   | 403,609  
|Accrued expenses                                      |  |               | 497,722   |                  |   | 363,190  
|                                                      |  |               |           |                  |   |          
|Total current liabilities                             |  |               | 2,369,696 |                  |   | 1,838,223
|Capital leases, less current portion                  |  |               | 13,118    |                  |   |         
|                                                      |  |               |           |                  |   |          
|Total liabilities                                     |  |               | 2,382,814 |                  |   | 1,838,223
|Stockholders equity                                  |  |               | 97,456    |                  |   | 757,184  
|                                                      |  |               |           |                  |   |          
|Total liabilities and stockholders equity            |  | $             | 2,480,270 |                  | $ | 2,595,407
|                                                      |  |               |           |                  |   |          

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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.
|--- | ---------------------------------------------------------------------------------------------------------------------------



See accompanying Notes to Unaudited Condensed Consolidated Financial
Statements



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, 2005 |          |   | Three MonthsEnded June 30, 2004 |   |          | May 1, 2000(Inception) toJune 30, 2005 | 
|                                    |  | (unaudited)                     |          |   | (unaudited)                     |   |          | (unaudited)                            | 
|Operating revenues:                 |  |                                 |          |   |                                 |   |          |                                        |  |   |            |  
|Contract revenues earned            |  | $                               | 285,441  |   |                                 | $ | 491,588  |                                        |  | $ | 4,198,745  |  
|Other revenues                      |  |                                 |         |   |                                 |   | 3        |                                        |  |   | 73,478     |  
|                                    |  |                                 |          |   |                                 |   |          |                                        |  |   |            |  
|Total operating revenues            |  |                                 | 285,441  |   |                                 |   | 491,591  |                                        |  |   | 4,272,223  |  
|                                    |  |                                 |          |   |                                 |   |          |                                        |  |   |            |  
|Operating expenses:                 |  |                                 |          |   |                                 |   |          |                                        |  |   |            |  
|Payroll and related costs           |  |                                 | 582,151  |   |                                 |   | 514,948  |                                        |  |   | 4,531,681  |  
|Laboratory expenses                 |  |                                 | 154,388  |   |                                 |   | 189,465  |                                        |  |   | 1,781,182  |  
|General and administrative expenses |  |                                 | 208,630  |   |                                 |   | 275,802  |                                        |  |   | 2,625,776  |  
|                                    |  |                                 |          |   |                                 |   |          |                                        |  |   |            |  
|Total operating expenses            |  |                                 | 945,169  |   |                                 |   | 980,215  |                                        |  |   | 8,938,639  |  
|                                    |  |                                 |          |   |                                 |   |          |                                        |  |   |            |  
|Net loss                            |  | $                               | (659,728 | ) |                                 | $ | (488,624 | )                                      |  | $ | (4,666,416 | )
|                                    |  |                                 |          |   |                                 |   |          |                                        |  |   |            |  
|Loss per share (basic and diluted): |  | $                               | (0.00    | ) |                                 | $ | (0.00    | )                                      |  | $ | (0.02      | )
|                                    |  |                                 |          |   |                                 |   |          |                                        |  |   |            |  



See accompanying
Notes to Unaudited Condensed Consolidated Financial Statements



4



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ATMOSPHERIC GLOW TECHNOLOGIES, INC. & SUBSIDIARY

(A DEVELOPMENT STAGE ENTERPRISE)

Condensed Consolidated Statement of Stockholders Equity

From May 1,
2000 (Inception) to June 30, 2005 (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 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                                                            |  |                |   |  |                     |          |   |              | 11,253,640  |              |   | 112,536             |  |                     |  |                  |       |                          |   |                    |  |   | 1,278,728                 |  |   |            |   |  |   | 1,391,264  |  
|Stock based compensation                                                       |  |                |   |  |                     |          |   |              |             |              |   |                     |  |                     |  |                  |       |                          |   | 118,182            |  |   | 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 |                          |   | 118,182            |  |   | 2,515,048                 |  |   | (4,006,688 | ) |  |   | 757,184    |  
|Net loss                                                                       |  |                |   |  |                     |          |   |              |             |              |   |                     |  |                     |  |                  |       |                          |   |                    |  |   |                           |  |   | (659,728   | ) |  |   | (659,728   | )
|                                                                               |  |                |   |  |                     |          |   |              |             |              |   |                     |  |                     |  |                  |       |                          |   |                    |  |   |                           |  |   |            |   |  |   |            |  
|Balance at June 30, 2005                                                       |  |               |   |  | $                   |         |   |              | 224,132,488 |              | $ | 2,241,324           |  | 750,000             |  | $                | 7,500 |                          | $ | 118,182            |  | $ | 2,515,048                 |  | $ | (4,666,416 | ) |  | $ | 97,456     |  
|                                                                               |  |                |   |  |                     |          |   |              |             |              |   |                     |  |                     |  |                  |       |                          |   |                    |  |   |                           |  |   |            |   |  |   |            |  



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, 2005 |          |   | Three MonthsEnded June 30, 2004 |   |          | May 1, 2000(Inception) toJune 30, 2005 | 
|                                                     |  | (unaudited)                     |          |   | (unaudited)                     |   |          | (unaudited)                            | 
|Net cash used in operating activities                |  | $                               | (382,018 | ) |                                 | $ | (838,758 | )                                      |  | $ | (3,728,427 | )
|                                                     |  |                                 |          |   |                                 |   |          |                                        |  |   |            |  
|Investing activities                                 |  |                                 |          |   |                                 |   |          |                                        |  |   |            |  
|Additions to intangible assets                       |  |                                 | (2,642   | ) |                                 |   | (9,322   | )                                      |  |   | (1,628,853 | )
|Purchase of property and equipment                   |  |                                 | (47,167  | ) |                                 |   | (23,420  | )                                      |  |   | (803,005   | )
|                                                     |  |                                 |          |   |                                 |   |          |                                        |  |   |            |  
|Net cash used in investing activities                |  |                                 | (49,809  | ) |                                 |   | (32,742  | )                                      |  |   | (2,431,858 | )
|                                                     |  |                                 |          |   |                                 |   |          |                                        |  |   |            |  
|Finance activities                                   |  |                                 |          |   |                                 |   |          |                                        |  |   |            |  
|Proceeds from short term notes                       |  |                                 | 317,500  |   |                                 |   | 57,500   |                                        |  |   | 4,696,500  |  
|Repayments of short term notes                       |  |                                 | (13,500  | ) |                                 |   | (300,000 | )                                      |  |   | (380,000   | )
|Cash acquired in reverse merger                      |  |                                 |         |   |                                 |   |         |                                        |  |   | 53,017     |  
|Proceeds from issuance of common stock               |  |                                 |         |   |                                 |   | 984,714  |                                        |  |   | 1,616,764  |  
|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      |  |                                 | (7,868   | ) |                                 |   | (5,557   | )                                      |  |   | (55,814    | )
|                                                     |  |                                 |          |   |                                 |   |          |                                        |  |   |            |  
|Net cash provided by financing activities            |  |                                 | 296,132  |   |                                 |   | 736,657  |                                        |  |   | 6,178,245  |  
|                                                     |  |                                 |          |   |                                 |   |          |                                        |  |   |            |  
|Net (decrease) increase in cash and cash equivalents |  |                                 | (135,695 | ) |                                 |   | (134,843 | )                                      |  |   | 17,960     |  
|Cash and cash equivalents at beginning of period     |  |                                 | 153,655  |   |                                 |   | 301,926  |                                        |  |   |           |  
|                                                     |  |                                 |          |   |                                 |   |          |                                        |  |   |            |  
|Cash and cash equivalents at end of period           |  | $                               | 17,960   |   |                                 | $ | 167,083  |                                        |  | $ | 17,960     |  
|                                                     |  |                                 |          |   |                                 |   |          |                                        |  |   |            |  
|Supplemental disclosures of cash flow information:   |  |                                 |          |   |                                 |   |          |                                        |  |   |            |  
|Cash paid for interest                               |  | $                               | 12,928   |   |                                 | $ | 6,482    |                                        |  | $ | 108,818    |  
|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     |  
|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 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 period ended June 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 ended June 30, |          |   | May 1, 2000(Inception) toJune 30, 2005 |  
|                                     |  | 2005                        |          |   | 2004                                   |   |         
|Basic and diluted:                   |  |                             |          |   |                                        |   |          |   |  |   |            |  
|Net loss, as reported                |  | $                           | (659,728 | ) |                                        | $ | (488,624 | ) |  | $ | (4,666,416 | )
|Stock based compensation, net of tax |  |                             |         |   |                                        |   | 8,182    |   |  |   | 22,727     |  
|                                     |  |                             |          |   |                                        |   |          |   |  |   |            |  
|Net loss, pro forma                  |  | $                           | (659,728 | ) |                                        | $ | (496,806 | ) |  | $ | (4,689,143 | )
|                                     |  |                             |          |   |                                        |   |          |   |  |   |            |  
|Loss per share:                      |  |                             |          |   |                                        |   |          |   |  |   |            |  
|Basic and diluted, as reported       |  | $                           | (0.00    | ) |                                        | $ | (0.00    | ) |  | $ | (0.02      | )
|                                     |  |                             |          |   |                                        |   |          |   |  |   |            |  
|Basic and diluted, pro forma         |  | $                           | (0.00    | ) |                                        | $ | (0.00    | ) |  | $ | (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 June 30, 2005, the Company obtained loans totaling $250,000 from officers, directors and shareholders of the Company. These loans
are payable upon demand and bear interest at a rate of 10% per annum. Subsequent to June 30, 2005, the Company obtained additional loans totaling $250,000 from officers, directors and shareholders of the Company under these same arrangements and a
loan from a financial institution totaling $50,000.



During
the quarter ended June 30, 2005, the Company also financed certain insurance premiums through the issuance of a $67,500 note payable in nine monthly installments bearing interest at 7.9%.



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##### Table of Contents

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 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 June 30, 2005.



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



|                                      |  |                             |             |   |                                        |   |             |   |  |   |             |  
|------------------------------------- |  | --------------------------- | ----------- | - | -------------------------------------- | - | ----------- | - |  | - | ----------- | -
|                                      |  | Three months ended June 30, |             |   | May 1, 2000(Inception) toJune 30, 2005 |  
|                                      |  | 2005                        |             |   | 2004                                   |   |            
|Loss:                                 |  |                             |             |   |                                        |   |             |   |  |   |             |  
|Basic and diluted:                    |  |                             |             |   |                                        |   |             |   |  |   |             |  
|Loss available to common stockholders |  | $                           | (659,728    | ) |                                        | $ | (488,624    | ) |  | $ | (4,666,416  | )
|Shares:                               |  |                             |             |   |                                        |   |             |   |  |   |             |  
|Basic and diluted:                    |  |                             |             |   |                                        |   |             |   |  |   |             |  
|Weighted shares outstanding           |  |                             | 224,882,488 |   |                                        |   | 219,277,260 |   |  |   | 222,253,985 |  
|                                      |  |                             |             |   |                                        |   |             |   |  |   |             |  
|Loss per share                        |  | $                           | (0.00       | ) |                                        | $ | (0.00       | ) |  | $ | (0.02       | )
|                                      |  |                             |             |   |                                        |   |             |   |  |   |             |  



Weighted average
Common Shares outstanding for the period from May 1, 2000 (inception) to June 30, 2005, 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 $659,728, $488,624, and $4,666,416 in the quarters ended June 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 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.



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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) 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 $659,728 for the three months ended June 30, 2005 and we have had consecutive losses totaling
$4,666,416 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 a decrease in revenues for the quarter ended June 30, 2005 due to a shifting of 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 June 30, 2005 Compared to Three Months Ended June 30, 2004



We incurred a net loss of $659,728 for the three months ended June 30, 2005, compared to a net loss of $488,624 for the
three months ended June 30, 2004 for an increase in net loss of $171,104 or 35%. Our revenues decreased by 42% as we focused technical resources on completing a prototype project by September 2005. In June we directed more resources back to existing
and new Phase II contracts, and expect that comparable revenues will return to those of the second quarter of last fiscal year. Overall, operating expenses have decreased 4% including a 24% decrease general and administrative costs mainly due to
higher legal and professional fees in 2004 associated with certain public filings and offerings not present in 2005, offset by a 13% increase in payroll costs mainly due to the accrual of severance costs associated with a terminated employee of the
Company.



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



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commercialization state its 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.



At June 30, 2005, we had $17,960 in cash and
cash equivalents. The goal of our current fundraising efforts is to raise an additional $6,500,000 for operations. 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 additional loans
totaling $300,000 (of which $50,000 has been repaid as described below) from Kimberly Kelly-Wintenberg, President, Chief Operating Officer, a director and shareholder of AGT together with Alan L. Wintenberg, her husband and an employee of AGT, Gault
Financial, LLC, a shareholder of AGT, Patrick L. Martin, a director and shareholder of AGT, Douglas W. Lesher, a shareholder of AGT, and JoshCo, an entity owned by two shareholders of AGT. These are payable upon demand and bear interest at a rate of
10% per annum. In August of 2005, AGT obtained an unsecured loan from Capital One Bank in the principal amount of $50,000. The loan bears interest at a rate of 10.75% per annum and is payable in monthly installments over 84 months. The proceeds of
the loan were used to repay a short term loan of $50,000 made by JoshCo. 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.



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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 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;
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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| |  |  | 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
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | 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, 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 June 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 June 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 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.) |  |                     |  | *         



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|                                                                                                                                                             |  |                     |  |           
|------------------------------------------------------------------------------------------------------------------------------------------------------------ |  | ------------------- |  | ----------
|                                                                                                                                                             |  | ExhibitTable Number |  | PageNumber
|(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                                                                                          |  |                     |  | 16        
|(ii)    Certifications  Chief Accounting Officer, Sharon L. Draper                                                                                          |  |                     |  | 18        
|IV.   Section 1350 Certifications                                                                                                                            |  | 32                  |  |           
|(i)     Certification Chief Executive Officer, Thomas W. Reddoch and Chief Accounting Officer, Sharon L.
Draper                                             |  |                     |  | 20        
|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: August 12, 2005By:

/s/ Sharon L. DraperSharon L. Draper, Chief Accounting OfficerDate: August 12, 2005




15