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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 December 31, 2004



Commission File Number 333-11591



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Atmospheric Glow Technologies, Inc.

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



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



924 Corridor Park
Boulevard

Knoxville, Tennessee 37932

(Address of principal executive offices)



(865) 777-3776

(Issuers telephone number)



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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 ̈



The number
of shares outstanding of each of the registrants classes of common stock on February 9, 2005 was 223,122,488 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 14.



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##### Table of Contents

PART I - FINANCIAL INFORMATION



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



|                                                      |  |                  |           |                   |   |          
|----------------------------------------------------- |  | ---------------- | --------- | ----------------- | - | ---------
|                                                      |  | December 31,2004 |           | March 31,2004 (1)
|                                                      |  | (unaudited)      |           |                  
|Assets                                                |  |                  |           |                   |   |          
|Cash and cash equivalents                             |  | $                | 203,209   |                   | $ | 301,926  
|Receivables                                           |  |                  | 383,694   |                   |   | 260,963  
|Prepaid expenses                                      |  |                  | 34,699    |                   |   | 11,314   
|                                                      |  |                  |           |                   |   |          
|Total current assets                                  |  |                  | 621,602   |                   |   | 574,203  
|Property and equipment, less accumulated depreciation |  |                  | 580,862   |                   |   | 578,699  
|Intangible assets, less accumulated amortization      |  |                  | 1,567,916 |                   |   | 1,636,078
|Deposits                                              |  |                  | 10,949    |                   |   | 10,949   
|                                                      |  |                  |           |                   |   |          
|Total assets                                          |  | $                | 2,781,329 |                   | $ | 2,799,929
|                                                      |  |                  |           |                   |   |          
|Liabilities and Stockholders Equity                  |  |                  |           |                   |   |          
|Note payable to related parties                       |  | $                | 549,431   |                   | $ | 549,431  
|Notes payable                                         |  |                  | 515,636   |                   |   | 300,000  
|Current portion of capital leases                     |  |                  | 24,469    |                   |   | 22,918   
|Accounts payable                                      |  |                  | 331,567   |                   |   | 423,045  
|Accrued expenses                                      |  |                  | 261,755   |                   |   | 528,068  
|                                                      |  |                  |           |                   |   |          
|Total current liabilities                             |  |                  | 1,682,858 |                   |   | 1,823,462
|                                                      |  |                 
|Deferred compensation                                 |  |                  | 7,500     |                   |   | 30,000   
|Capital leases, less current portion                  |  |                  | 3,457     |                   |   | 22,048   
|                                                      |  |                  |           |                   |   |          
|Total liabilities                                     |  |                  | 1,693,815 |                   |   | 1,875,510
|                                                      |  |                 
|Stockholders equity                                  |  |                  | 1,087,514 |                   |   | 924,419  
|                                                      |  |                  |           |                   |   |          
|Total liabilities and stockholders equity            |  | $                | 2,781,329 |                   | $ | 2,799,929
|                                                      |  |                  |           |                   |   |          

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|(1) | The March 31, 2004 Condensed Consolidated Balance Sheet was derived from the audited balance sheet for the year then ended.
|--- | ---------------------------------------------------------------------------------------------------------------------------



See accompanying Notes to 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 Months EndedDecember 31, |          |   | Nine Months Ended December 31, |   |          | May 1, 2000(Inception) toDecember 31, 2004 | 
|                                    |  | 2004                           |          |   | 2003                           |   |          | 2004                                       |  |   | 2003        |   | 
|                                    |  | (unaudited)                    |          |   | (unaudited)                    |   |          | (unaudited)                                |  |   | (unaudited) |   |  | (unaudited) |          
|Operating revenues:                 |  |                                |          |   |                                |   |          |                                            |  |   |             |   |  |             |           |   |  |   |            |  
|Contract revenues earned            |  | $                              | 576,985  |   |                                | $ | 267,780  |                                            |  | $ | 1,546,289   |   |  | $           | 665,860   |   |  | $ | 3,574,974  |  
|Other revenues                      |  |                                | 2        |   |                                |   | 2        |                                            |  |   | 7           |   |  |             | 114       |   |  |   | 73,477     |  
|                                    |  |                                |          |   |                                |   |          |                                            |  |   |             |   |  |             |           |   |  |   |            |  
|Total operating revenues            |  |                                | 576,987  |   |                                |   | 267,782  |                                            |  |   | 1,546,296   |   |  |             | 665,974   |   |  |   | 3,648,451  |  
|                                    |  |                                |          |   |                                |   |          |                                            |  |   |             |   |  |             |           |   |  |   |            |  
|Operating expenses:                 |  |                                |          |   |                                |   |          |                                            |  |   |             |   |  |             |           |   |  |   |            |  
|                                    |  |                                |          |   |                               
|Payroll and related costs           |  |                                | 447,942  |   |                                |   | 300,715  |                                            |  |   | 1,615,102   |   |  |             | 619,086   |   |  |   | 3,454,517  |  
|Laboratory expenses                 |  |                                | 112,705  |   |                                |   | 144,291  |                                            |  |   | 465,354     |   |  |             | 288,376   |   |  |   | 1,452,722  |  
|General and administrative expenses |  |                                | 188,569  |   |                                |   | 280,987  |                                            |  |   | 747,568     |   |  |             | 565,301   |   |  |   | 2,180,220  |  
|                                    |  |                                |          |   |                                |   |          |                                            |  |   |             |   |  |             |           |   |  |   |            |  
|Total operating expenses            |  |                                | 749,216  |   |                                |   | 725,993  |                                            |  |   | 2,828,024   |   |  |             | 1,472,763 |   |  |   | 7,087,459  |  
|                                    |  |                                |          |   |                                |   |          |                                            |  |   |             |   |  |             |           |   |  |   |            |  
|Net loss                            |  | $                              | (172,229 | ) |                                | $ | (458,211 | )                                          |  | $ | (1,281,728  | ) |  | $           | (806,789  | ) |  | $ | (3,439,008 | )
|                                    |  |                                |          |   |                                |   |          |                                            |  |   |             |   |  |             |           |   |  |   |            |  
|Loss per share (basic and diluted): |  | $                              | (0.00    | ) |                                | $ | (0.00    | )                                          |  | $ | (0.01       | ) |  | $           | (0.00     | ) |  | $ | (0.02      | )
|                                    |  |                                |          |   |                                |   |          |                                            |  |   |             |   |  |             |           |   |  |   |            |  



See accompanying
Notes to Condensed Consolidated Financial Statements.



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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 December 31, 2004 (unaudited)



|                                                          |  |                |   |  |                     |          |   |              |             |              |   |                     |  |                     |  |                          |       |                    |   |           |                           |   |            |   |  |   |            |  
|--------------------------------------------------------- |  | -------------- | - |  | ------------------- | -------- | - | ------------ | ----------- | ------------ | - | ------------------- |  | ------------------- |  | ------------------------ | ----- | ------------------ | - | --------- | ------------------------- | - | ---------- | - |  | - | ---------- | -
|                                                          |  | PreviousShares |   |  | PreviousShareAmount |          |   | CommonShares |             | CommonAmount |   | Class BCommonShares |  | Class BCommonAmount |  | AdditionalPaid inCapital |       | AccumulatedDeficit |   |           | TotalStockholders Equity |  
|Shares issued October 20, 2000                            |  | 101,101        |   |  | $                   | 116,020  |   |              |            |              | $ |                    |  |                    |  | $                        |      |                    |   |           |                           |   |            |   |  | $ | 116,020    |  
|Non-member contribution                                   |  |                |   |  |                     |          |   |              |             |              |   |                     |  |                     |  |                          |       |                    | $ | 34,730    |                           |   |            |   |  |   | 34,730     |  
|Net loss                                                  |  |                |   |  |                     |          |   |              |             |              |   |                     |  |                     |  |                          |       |                    |   |           |                           | $ | (99,937    | ) |  |   | (99,937    | )
|                                                          |  |                |   |  |                     |          |   |              |             |              |   |                     |  |                     |  |                          |       |                    |   |           |                           |   |            |   |  |   |            |  
|Balance at December 31, 2000                              |  | 101,101        |   |  |                     | 116,020  |   |              |             |              |   |                     |  |                     |  |                          |       |                    |   | 34,730    |                           |   | (99,937    | ) |  |   | 50,813     |  
|                                                          |  |                |   |  |                     |          |   |              |            
|Shares issued                                             |  |                |   |  |                     |          |   |              |             |              |   |                     |  |                     |  |                          |       |                    |   |           |                           |   |            |   |  |   |            |  
|Additional amounts received for shares previously issued  |  |                |   |  |                     | 4,700    |   |              |             |              |   |                     |  |                     |  |                          |       |                    |   |           |                           |   |            |   |  |   | 4,700      |  
|Shares redeemed                                           |  | (11,200        | ) |  |                     | (13,000  | ) |              |             |              |   |                     |  |                     |  |                          |       |                    |   |           |                           |   |            |   |  |   | (13,000    | )
|Net loss                                                  |  |                |   |  |                     |          |   |              |             |              |   |                     |  |                     |  |                          |       |                    |   |           |                           |   | (89,208    | ) |  |   | (89,208    | )
|                                                          |  |                |   |  |                     |          |   |              |             |              |   |                     |  |                     |  |                          |       |                    |   |           |                           |   |            |   |  |   |            |  
|Balance at December 31, 2001                              |  | 89,901         |   |  |                     | 107,720  |   |              |            |              |   |                    |  |                    |  |                          |      |                    |   | 34,730    |                           |   | (189,145   | ) |  |   | (46,695    | )
|                                                          |  |                |   |  |                     |          |   |              |            
|Shares issued                                             |  | 9,877          |   |  |                     | 168,235  |   |              |             |              |   |                     |  |                     |  |                          |       |                    |   |           |                           |   |            |   |  |   | 168,235    |  
|Net loss                                                  |  |                |   |  |                     |          |   |              |             |              |   |                     |  |                     |  |                          |       |                    |   |           |                           |   | (621,619   | ) |  |   | (621,619   | )
|                                                          |  |                |   |  |                     |          |   |              |             |              |   |                     |  |                     |  |                          |       |                    |   |           |                           |   |            |   |  |   |            |  
|Balance at December 31, 2002                              |  | 99,778         |   |  |                     | 275,955  |   |              |            |              |   |                    |  |                    |  |                          |      |                    |   | 34,730    |                           |   | (810,764   | ) |  |   | (500,079   | )
|                                                          |  |                |   |  |                     |          |   |              |            
|Net loss                                                  |  |                |   |  |                     |          |   |              |             |              |   |                     |  |                     |  |                          |       |                    |   |           |                           |   | (1,020,152 | ) |  |   | (1,020,152 | )
|                                                          |  |                |   |  |                     |          |   |              |             |              |   |                     |  |                     |  |                          |       |                    |   |           |                           |   |            |   |  |   |            |  
|Balance at December 31, 2003                              |  | 99,778         |   |  |                     | 275,955  |   |              |            |              |   |                    |  |                    |  |                          |      |                    |   | 34,730    |                           |   | (1,830,916 | ) |  |   | (1,520,231 | )
|                                                          |  |                |   |  |                     |          |   |              |            
|Recapitalization of company resulting from reverse merger |  | (99,778        | ) |  |                     | (275,955 | ) |              | 210,828,848 |              |   | 2,108,288           |  | 750,000             |  |                          | 7,500 |                    |   | 705,681   |                           |   |            |   |  |   | 2,545,514  |  
|Common stock issued                                       |  |                |   |  |                     |          |   |              | 2,050,000   |              |   | 20,500              |  |                     |  |                          |       |                    |   | 205,000   |                           |   |            |   |  |   | 225,500    |  
|Net loss                                                  |  |                |   |  |                     |          |   |              |             |              |   |                     |  |                     |  |                          |       |                    |   |           |                           |   | (326,364   | ) |  |   | (326,364   | )
|                                                          |  |                |   |  |                     |          |   |              |             |              |   |                     |  |                     |  |                          |       |                    |   |           |                           |   |            |   |  |   |            |  
|Balance at March 31, 2004                                 |  |               |   |  |                     |         |   |              | 212,878,848 |              |   | 2,128,788           |  | 750,000             |  |                          | 7,500 |                    |   | 945,411   |                           |   | (2,157,280 | ) |  |   | 924,419    |  
|                                                          |  |                |   |  |                     |          |   |              |            
|Common stock issued                                       |  |                |   |  |                     |          |   |              | 10,243,640  |              |   | 102,436             |  |                     |  |                          |       |                    |   | 1,051,478 |                           |   |            |   |  |   | 1,153,914  |  
|Stock based compensation                                  |  |                |   |  |                     |          |   |              |             |              |   |                     |  |                     |  |                          |       |                    |   | 290,909   |                           |   |            |   |  |   | 290,909    |  
|Net loss                                                  |  |                |   |  |                     |          |   |              |             |              |   |                     |  |                     |  |                          |       |                    |   |           |                           |   | (1,281,728 | ) |  |   | (1,281,728 | )
|                                                          |  |                |   |  |                     |          |   |              |             |              |   |                     |  |                     |  |                          |       |                    |   |           |                           |   |            |   |  |   |            |  
|Balance at December 31, 2004                              |  |               |   |  | $                   |         |   |              | 223,122,488 |              | $ | 2,231,224           |  | 750,000             |  | $                        | 7,500 |                    | $ | 2,287,798 |                           | $ | (3,439,008 | ) |  | $ | 1,087,514  |  
|                                                          |  |                |   |  |                     |          |   |              |             |              |   |                     |  |                     |  |                          |       |                    |   |           |                           |   |            |   |  |   |            |  



See accompanying
Notes to Condensed Consolidated Financial Statements



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##### Table of Contents

ATMOSPHERIC GLOW TECHNOLOGIES, INC. & SUBSIDIARY

(A DEVELOPMENT STAGE ENTERPRISE)

Condensed Consolidated Statements of Cash Flows



|                                                     |  |                                  |            |   |                                  |   |          |                                           |  |   |            |  
|---------------------------------------------------- |  | -------------------------------- | ---------- | - | -------------------------------- | - | -------- | ----------------------------------------- |  | - | ---------- | -
|                                                     |  | Nine MonthsEndedDecember 31,2004 |            |   | Nine MonthsEndedDecember 31,2003 |   |          | May 1, 2000(Inception) toDecember 31,2004 | 
|                                                     |  | (unaudited)                      |            |   | (unaudited)                      |   |          | (unaudited)                               | 
|Net cash used in operating activities                |  | $                                | (1,350,699 | ) |                                  | $ | (808,836 | )                                         |  | $ | (3,106,456 | )
|                                                     |  |                                  |            |   |                                  |   |          |                                           |  |   |            |  
|Investing activities                                 |  |                                  |            |   |                                  |   |          |                                           |  |   |            |  
|Additions to intangible assets                       |  |                                  | (16,801    | ) |                                  |   | (13,096  | )                                         |  |   | (1,626,119 | )
|Purchase of property and equipment                   |  |                                  | (83,727    | ) |                                  |   | (35,150  | )                                         |  |   | (730,548   | )
|                                                     |  |                                  |            |   |                                  |   |          |                                           |  |   |            |  
|Net cash used in investing activities                |  |                                  | (100,528   | ) |                                  |   | (48,246  | )                                         |  |   | (2,356,667 | )
|                                                     |  |                                  |            |   |                                  |   |          |                                           |  |   |            |  
|Finance activities                                   |  |                                  |            |   |                                  |   |          |                                           |  |   |            |  
|Proceeds from short term notes                       |  |                                  | 557,500    |   |                                  |   | 940,000  |                                           |  |   | 4,379,000  |  
|Repayments of short term notes                       |  |                                  | (341,864   | ) |                                  |   |         |                                           |  |   | (350,864   | )
|Cash acquired in reverse merger                      |  |                                  |           |   |                                  |   |         |                                           |  |   | 53,017     |  
|Proceeds from issuance of common stock               |  |                                  | 1,153,914  |   |                                  |   |         |                                           |  |   | 1,379,414  |  
|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      |  |                                  | (17,040    | ) |                                  |   | (15,697  | )                                         |  |   | (42,013    | )
|                                                     |  |                                  |            |   |                                  |   |          |                                           |  |   |            |  
|Net cash provided by financing activities            |  |                                  | 1,352,510  |   |                                  |   | 924,303  |                                           |  |   | 5,666,332  |  
|                                                     |  |                                  |            |   |                                  |   |          |                                           |  |   |            |  
|Net (decrease) increase in cash and cash equivalents |  |                                  | (98,717    | ) |                                  |   | 67,221   |                                           |  |   | 203,209    |  
|                                                     |  |                                  |           
|Cash and cash equivalents at beginning of period     |  |                                  | 301,926    |   |                                  |   | 49,628   |                                           |  |   |           |  
|                                                     |  |                                  |            |   |                                  |   |          |                                           |  |   |            |  
|Cash and cash equivalents at end of period           |  | $                                | 203,209    |   |                                  | $ | 116,849  |                                           |  | $ | 203,209    |  
|                                                     |  |                                  |            |   |                                  |   |          |                                           |  |   |            |  
|Supplemental disclosures of cash flow information:   |  |                                  |            |   |                                  |   |          |                                           |  |   |            |  
|Cash paid for interest                               |  | $                                | 9,246      |   |                                  | $ | 2,268    |                                           |  | $ | 22,942     |  
|Members equity in exchange for rent                 |  |                                  |           |   |                                  |   |         |                                           |  |   | 4,500      |  
|Equipment contributed by non-members                 |  |                                  |           |   |                                  |   |         |                                           |  |   | 34,730     |  
|Equipment acquired with capital lease                |  |                                  |           |   |                                  |   |         |                                           |  |   | 69,939     |  
|Furniture acquired with note payable                 |  |                                  |           |   |                                  |   |         |                                           |  |   | 11,600     |  
|Note payable paid with equity                        |  |                                  |           |   |                                  |   |         |                                           |  |   | 36,600     |  
|Minority interest in subsidiary acquired with equity |  |                                  |           |   |                                  |   |         |                                           |  |   | 27,310     |  
|Debt satisfied with stock                            |  |                                  |            |   |                                  |   |          |                                           |  |   | 2,960,495  |  
|Net assets obtained in reverse merger                |  |                                  |           |   |                                  |   |         |                                           |  |   | 151,749    |  
|Net liabilities assumed in reverse merger            |  |                                  |           |   |                                  |   |         |                                           |  |   | 597,321    |  



See accompanying
Notes to Condensed Consolidated Financial Statements.



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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- and nine-month periods ended December 31, 2004 are not necessarily indicative of the results that may be expected for the year ending March 31, 2005.



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



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



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



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



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



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##### Table of Contents

Notes to Condensed Consolidated Financial Statements, Continued



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



On April 26, 2004, the Company granted options to
purchase 909,091 shares of Common Stock at $0.11 per share to an employee and recognized $118,182 in compensation expense related to these options. On July 15, 2004, the Company granted options to purchase 909,091 shares of Common Stock at $0.11 per
share to an employee and recognized $172,727 in compensation expense related to these options.



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



|                                     |  |                                |          |   |                                |   |          |                                            |  |   |            |   |  |   |          |   |  |   |            |  
|------------------------------------ |  | ------------------------------ | -------- | - | ------------------------------ | - | -------- | ------------------------------------------ |  | - | ---------- | - |  | - | -------- | - |  | - | ---------- | -
|                                     |  | Three months endedDecember 31, |          |   | Nine months ended December 31, |   |          | May 1, 2000(Inception) toDecember 31, 2004 | 
|                                     |  | 2004                           |          |   | 2003                           |   |          | 2004                                       |  |   | 2003       |   | 
|Basic and diluted:                   |  |                                |          |   |                                |   |          |                                            |  |   |            |   |  |   |          |   |  |   |            |  
|Net loss, as reported                |  | $                              | (172,229 | ) |                                | $ | (458,211 | )                                          |  | $ | (1,281,728 | ) |  | $ | (806,789 | ) |  | $ | (3,439,008 | )
|Stock based compensation, net of tax |  |                                |         |   |                                |   |         |                                            |  |   | 22,727     |   |  |   |         |   |  |   | 22,727     |  
|                                     |  |                                |          |   |                                |   |          |                                            |  |   |            |   |  |   |          |   |  |   |            |  
|Net loss, pro forma                  |  | $                              | (172,229 | ) |                                | $ | (458,211 | )                                          |  | $ | (1,304,455 | ) |  | $ | (806,789 | ) |  | $ | (3,461,735 | )
|                                     |  |                                |          |   |                                |   |          |                                            |  |   |            |   |  |   |          |   |  |   |            |  
|Loss per share:                      |  |                                |          |   |                                |   |          |                                            |  |   |            |   |  |   |          |   |  |   |            |  
|Basic and diluted, as reported       |  | $                              | (0.00    | ) |                                | $ | (0.00    | )                                          |  | $ | (0.01      | ) |  | $ | (0.00    | ) |  | $ | (0.02      | )
|                                     |  |                                |          |   |                                |   |          |                                            |  |   |            |   |  |   |          |   |  |   |            |  
|Basic and diluted, pro forma         |  | $                              | (0.00    | ) |                                | $ | (0.00    | )                                          |  | $ | (0.01      | ) |  | $ | (0.00    | ) |  | $ | (0.02      | )
|                                     |  |                                |          |   |                                |   |          |                                            |  |   |            |   |  |   |          |   |  |   |            |  



2. Notes Payable



During the quarter ended September 30, 2004, the Company issued a $300,000
convertible note payable, bearing interest at prime plus 3% (8.25% at December 31, 2004). Principal and interest are payable March 10, 2005. The note is convertible into Common Shares at $0.25 per share at the option of the holder.



During the quarter ended December 31, 2004, the Company issued a $200,000
convertible note payable, bearing interest at 10%. Principal and interest are payable March 14, 2005. The note is convertible into Common Shares at $0.25 per share at the option of the holder.



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##### Table of Contents

Notes to 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 690,071 at December 31, 2004.



The following table sets forth the computation of basic loss per share
for the three- and nine-months ended December 31, 2004:



|                                      |  |                                 |             |   |                                |   |             |                                            |  |   |             |   |  |   |             |   |  |   |             |  
|------------------------------------- |  | ------------------------------- | ----------- | - | ------------------------------ | - | ----------- | ------------------------------------------ |  | - | ----------- | - |  | - | ----------- | - |  | - | ----------- | -
|                                      |  | Three months ended December 31, |             |   | Nine months ended December 31, |   |             | May 1, 2000(Inception) toDecember 31, 2004 | 
|                                      |  | 2004                            |             |   | 2003                           |   |             | 2004                                       |  |   | 2003        |   | 
|Loss:                                 |  |                                 |             |   |                                |   |             |                                            |  |   |             |   |  |   |             |   |  |   |             |  
|Basic and diluted:                    |  |                                 |             |   |                                |   |             |                                            |  |   |             |   |  |   |             |   |  |   |             |  
|Loss available to common shareholders |  | $                               | (172,229    | ) |                                | $ | (458,211    | )                                          |  | $ | (1,281,728  | ) |  | $ | (806,789    | ) |  | $ | (3,439,008  | )
|                                      |  |                                 |             |   |                               
|Shares:                               |  |                                 |             |   |                                |   |             |                                            |  |   |             |   |  |   |             |   |  |   |             |  
|Basic and diluted:                    |  |                                 |             |   |                                |   |             |                                            |  |   |             |   |  |   |             |   |  |   |             |  
|Weighted shares outstanding           |  |                                 | 223,707,488 |   |                                |   | 221,824,397 |                                            |  |   | 221,824,397 |   |  |   | 221,824,397 |   |  |   | 221,824,397 |  
|                                      |  |                                 |             |   |                                |   |             |                                            |  |   |             |   |  |   |             |   |  |   |             |  
|Loss per share                        |  | $                               | (0.00       | ) |                                | $ | (0.00       | )                                          |  | $ | (0.01       | ) |  | $ | (0.00       | ) |  | $ | (0.02       | )
|                                      |  |                                 |             |   |                                |   |             |                                            |  |   |             |   |  |   |             |   |  |   |             |  



Weighted average
Common Shares outstanding for the three- and nine-months ended December 31, 2003 and the period from May 1, 2000 (inception) to December 31, 2004, are retroactively computed to reflect the capital structure of the Company after the reverse merger.



4. Continuing Operations



The accompanying financial statements have been prepared on a going concern
basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. As shown in the financial statements, the Company had losses of $172,229, $1,281,728, and $3,439,008 in the three- and
nine-months ended December 31, 2004 and from inception to date, respectively. This factor, among others, may indicate the Company will be unable to continue as a going concern for a reasonable period of time. Management realizes the Company must
reach profitable operations and generate additional funds in order to continue as a going concern. The Company expects that up to $4,700,000 in additional capital will be raised to fund its operations through its private placement offering which
began on July 26, 2004. As of December 31, 2004, $180,000 have been raised and 720,000 shares issued.



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Notes to Condensed Consolidated Financial Statements, continued



Subsequent to year end in January 2005, the Company entered into an agreement
whereby an entity was engaged to identify potential investors, lenders or strategic partners to invest in, lend to or enter into a transaction with the Company. Such entity will receive a nonrefundable $25,000 fee and, if a transaction is entered
into as a result of their efforts, will receive fees based upon the size and type of transaction. The agreement has an initial term of six months and continues thereafter from month to month unless terminated. Fees are payable for transactions
entered into within eighteen months after termination.



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



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



As the successor business of APH,
AGT is considered a development stage enterprise and is currently dependent upon capital raised mainly through private placements. Our net loss was $172,229 and $1,281,728 for the three- and nine-months ended December 31, 2004 and we have had
consecutive losses totaling $3,439,008 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 47% each of the last two years with annualized revenues in the current year increasing 132%. 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
December 31, 2004 Compared to Three Months Ended December 31, 2003



We incurred a net loss of $172,229 for the three months ended December 31, 2004, compared to a net loss of $458,211 for the three months ended December 31, 2003 for a decrease in net loss of $285,982 or 62%. The
decrease in losses is primarily due to an increase in revenues of 115% through new contract awards and other contracts advancing into the Phase II or Phase III stage through successes achieved at lower contract stage levels. Overall, our annualized
operating expenses have increased 3% including a 49% increase in payroll and related costs due to our increased employee levels to service additional contract awards and improve our marketing efforts. This increase was offset by a 33% decrease in
general and administrative expenses as certain legal, professional and contracted services associated with our reverse acquisition, which were incurred in the three-month period ended December 31, 2003 were not repeated in the 2004 period.



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Nine Months Ended December 31, 2004 Compared to Nine Months Ended December 31, 2003



We incurred a net loss of $1,281,728 for the nine months
ended December 31, 2004, compared to a net loss of $806,789 for the nine months ended December 31, 2003 for an increase in net loss of $474,939 or 59%. We increased revenues by 132% due to new contract awards and other contracts advancing into the
Phase II or Phase III stage through successes achieved at lower contract stage levels. However, overall, annualized operating expenses have increased 92% with the most significant increase being a 161% increase in payroll and related costs due in
part to stock based compensation of $290,909 in the nine months ended December 31, 2004 not present in the same nine month period of the prior fiscal period. Other increases in expense are primarily due to the increased contract and development
activity.



Inflation



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



Liquidity and Capital Resources



Since our inception, we have financed our operations
primarily through equity fundraising. The Company needs substantial additional funding in the near future to develop and bring to a commercialization state the OAUGDP® technology. While there is no guarantee we can obtain such future funding, we
have been successful in our efforts thus far and expect that future offerings, along with contract revenues, will provide sufficient capital to continue through our next fiscal year. Failure to obtain new funding could have a material adverse effect
on our liquidity. We also continue to look for strategic partners to co-develop or co-market products using the OAUGDP® technology. We do not expect any significant unfunded capital expenditures during the next year.



We began a private placement offering on July 26, 2004 to
raise up to $4,700,000 in additional capital to fund operations. To date, $180,000 has been raised and 720,000 shares issued. Expenditures for next year, specifically payroll and related costs, are expected to increase with contract growth and newly
implemented marketing efforts.



During the
third quarter of fiscal 2005, we issued a $200,000 convertible note payable bearing interest at a rate of 10% per annum. Principal and interest are payable March 14, 2005. The note is convertible into Common Shares of the Company at a rate of $0.25
per share at the option of the note holder.



In January 2005, AGT entered into an agreement whereby an entity was engaged to identify potential investors, lenders or strategic partners to invest in, lend to or enter into a transaction with AGT. Such entity will receive a nonrefundable
$25,000 fee and, if a transaction is entered into as a result of their efforts, will receive fees based upon the size and type of transaction. The agreement has an initial term of six months and continues thereafter from month to month unless
terminated. Fees are payable for transactions entered into within eighteen months after termination.



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Special Considerations



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



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



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



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



Other Factors
Relating to Forward-Looking Statements



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



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



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



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



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



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



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



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



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



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



Item 3. Controls and Procedures.



Evaluation of Disclosure Controls and Procedures



The Companys Chief Executive Officer and the Chief Accounting Officer have evaluated of the effectiveness of the design and
operations of the Companys disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934 (the Exchange Act) as of the end of the period covered by this report. 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 and the Chief Accounting Officer concluded that the Companys disclosure controls and procedures as of the end of the period covered by this report were effective to ensure that information required
to be disclosed by the Company in the reports filed or submitted by it under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SECs rules and forms; and include controls and procedures
designed to ensure that information required to be disclosed by the Company in such reports is accumulated and communicated to the Companys management, including the Chief Executive Officer and the Chief Accounting Officer, as appropriate, to
allow timely decisions regarding required disclosure.



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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 December 31, 2004 that has materially affected, or is reasonably likely to materially affect, the Companys
internal control over financial reporting.



PART II - OTHER
INFORMATION



Item 2. Changes in Securities



On December 14, 2004, AGT issued a note
in the principal amount of $200,000, bearing interest at 10% per annum. Principle and interest are due and payable on March 10, 2005. At the holders option, the outstanding balance on the note may be converted into Common Shares of AGT at a
rate of $0.25 per share. The note was issued to one holder privately under Section 4(2) of the Securities Act of 1933.



On December 23, 2004, AGT received $40,000 from one investor and $15,000 from one investor for the purchase of a total of 220,000 of its
Common Shares under a private placement which began at the end of July, 2004. The shares were issued under the exemption from registration found in Rule 506 of Regulation D promulgated under the Securities Act of 1933. LandOak Securities, LLC, a
company owned by a director and shareholder of AGT is acting as placement agent and received a 6% commission on the sales.



Item 6. Exhibits



Exhibits Index



|                                                                                                                                                            |  |                     |  |           
|----------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------------- |  | ----------
|                                                                                                                                                            |  | ExhibitTable Number |  | PageNumber
|I.      Articles of Incorporation and Bylaws                                                                                                                |  | 3                   |  |           
|(i)    Certificate of Incorporation of Tice Technology, Inc. (now Atmospheric Glow Technologies, Inc.)                                                      |  |                     |  | ±         
|(ii)   Bylaws of Tice Technology, Inc.                                                                                                                      |  |                     |  | ±         
|(iii)  Certificate of Amendment to Certificate of Incorporation of Tice Technology, Inc.                                                                    |  |                     |  | *         
|                                                                                                                                                            |  |                    
|II.    Instruments Defining Rights of Security Holders                                                                                                      |  | 4                   |  |           
|(i)    Registration Rights Agreement Giving Purchasers under the Private Placement Closed on June 25, 1999 Certain Demand
and Piggyback Registration Rights |  |                     |  | #         
|                                                                                                                                                            |  |                    
|III.   Rule 13a-14(a)/Rule 15d-14(a) Certifications                                                                                                         |  | 31                  |  |           
|(i)    Certifications  Chief Executive Officer, Thomas W. Reddoch                                                                                          |  |                     |  | 17        



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|                                                                                                                |  |                     |  |           
|--------------------------------------------------------------------------------------------------------------- |  | ------------------- |  | ----------
|                                                                                                                |  | ExhibitTable Number |  | PageNumber
|(ii)  Certifications  Chief Accounting Officer, Sharon L. Draper                                               |  |                     |  |           
|                                                                                                                |  |                    
|IV. Section 1350 Certifications                                                                                 |  | 32                  |  | 19        
|(i)    Certification Chief Executive Officer, Thomas W. Reddoch and Chief Accounting Officer, Sharon L.
Draper |  |                     |  | 21        

---

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

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

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



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SIGNATURES



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



Atmospheric Glow Technologies, Inc.By:

/s/ Thomas W. ReddochThomas W. Reddoch,Chairman and Chief Executive OfficerDate: February 10, 2005By:

/s/ Sharon L. DraperSharon L. Draper, Chief Accounting
OfficerDate: February 10, 2005




16