##### Table of Contents

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549



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FORM 10-QSB



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QUARTERLY REPORT UNDER SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2007

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 ̈

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

The number of shares outstanding of each of the registrants classes of common stock on July 31, 2007 was 238,912,074 Common Shares, 750,000
Class B Common Shares and 0 Class D Common Shares.

Transitional Small Business Disclosure Format:    Yes ̈No  x

Exhibit Index at page 14.



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##### Table of Contents

PART I FINANCIAL INFORMATION





|                                                                                                                                                  |  |     
|------------------------------------------------------------------------------------------------------------------------------------------------- |  | ----
|Item 1.       Financial Statements.                                                                                                               |  |     
|                                                                                                                                                  |  | Page
|Condensed Consolidated Balance Sheets  As of June 30, 2007 and March 31, 2007                                                                    |  | 3   
|                                                                                                                                                  | 
|Condensed Consolidated Statements of Operations  For the Three Months Ended June 30, 2007 and 2006, and May 1, 2000 (Inception) to June 30, 2007 |  | 4   
|                                                                                                                                                  | 
|Condensed Consolidated Statement of Changes in Stockholders Deficit from May 1, 2000 (Inception) to June 30, 2007                                |  | 5   
|                                                                                                                                                  | 
|Condensed Consolidated Statements of Cash Flows  For the Three Months Ended June 30, 2007 and 2006, and May 1, 2000 (Inception) to June 30, 2007 |  | 6   
|                                                                                                                                                  | 
|Notes to Unaudited Condensed Consolidated Financial Statements                                                                                    |  | 7   
|                                                                                                                                                  | 
|Item 2.       Managements Discussion and Analysis or Plan of Operation                                                                           |  | 10  
|                                                                                                                                                  | 
|Item 3.       Controls and Procedures                                                                                                             |  | 13  
|                                                                                                                                                  | 
|PART II    OTHER INFORMATION                                                                                                                      |  | 14  
|                                                                                                                                                  | 
|Item 3.       Defaults Upon Senior Securities                                                                                                     |  | 14  
|                                                                                                                                                  | 
|Item 6.       Exhibits                                                                                                                            |  | 14  
|                                                                                                                                                  | 
|SIGNATURES                                                                                                                                        |  | 16  
|                                                                                                                                                  | 
|CERTIFICATIONS                                                                                                                                    |  | 17  



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##### Table of Contents

ATMOSPHERIC GLOW TECHNOLOGIES, INC. & SUBSIDIARY

(A DEVELOPMENT STAGE ENTERPRISE)

Condensed Consolidated Balance Sheets



|                                                       |  |               |            |   |                   |   |            |  
|------------------------------------------------------ |  | ------------- | ---------- | - | ----------------- | - | ---------- | -
|                                                       |  | June 30, 2007 |            |   | March 31,2007 (1) |  
|                                                       |  | (unaudited)   |            |   |                   |  
|Assets                                                 |  |               |            |   |                   |   |            |  
|Cash and cash equivalents                              |  | $             | 19,181     |   |                   | $ | 25,421     |  
|Restricted cash                                        |  |               | 30,635     |   |                   |   | 84,170     |  
|Trade receivables                                      |  |               | 102,504    |   |                   |   | 222,253    |  
|Prepaid expenses                                       |  |               | 16,538     |   |                   |   | 35,319     |  
|                                                       |  |               |            |   |                   |   |            |  
|Total current assets                                   |  |               | 168,858    |   |                   |   | 367,163    |  
|Property and equipment, less accumulated depreciation  |  |               | 411,169    |   |                   |   | 446,739    |  
|Intangible assets, less accumulated amortization       |  |               | 563,117    |   |                   |   | 587,825    |  
|Deposits                                               |  |               | 7,988      |   |                   |   | 7,988      |  
|                                                       |  |               |            |   |                   |   |            |  
|Total assets                                           |  | $             | 1,151,132  |   |                   | $ | 1,409,715  |  
|                                                       |  |               |            |   |                   |   |            |  
|                                                       |  |              
|Liabilities and Stockholders Deficit                  |  |               |            |   |                   |   |            |  
|Current portion of notes payable to related parties    |  | $             | 2,784,554  |   |                   | $ | 2,559,845  |  
|Notes payable                                          |  |               | 282,354    |   |                   |   | 494,304    |  
|Current portion of long-term debt                      |  |               | 6,217      |   |                   |   | 6,053      |  
|Current portion of capital leases                      |  |               | 7,161      |   |                   |   | 6,839      |  
|Accounts payable                                       |  |               | 591,335    |   |                   |   | 631,124    |  
|Accrued expenses                                       |  |               | 499,233    |   |                   |   | 589,603    |  
|                                                       |  |               |            |   |                   |   |            |  
|Total current liabilities                              |  |               | 4,170,854  |   |                   |   | 4,287,768  |  
|Notes payable to related parties, less current portion |  |               | 30,000     |   |                   |   | 45,000     |  
|Long-term debt, less current portion                   |  |               | 35,473     |   |                   |   | 36,592     |  
|Capital leases, less current portion                   |  |               |           |   |                   |   | 1,916      |  
|                                                       |  |               |            |   |                   |   |            |  
|Total liabilities                                      |  |               | 4,236,327  |   |                   |   | 4,371,276  |  
|Stockholders deficit                                  |  |               | (3,085,195 | ) |                   |   | (2,961,561 | )
|                                                       |  |               |            |   |                   |   |            |  
|Total liabilities and stockholders deficit            |  | $             | 1,151,132  |   |                   | $ | 1,409,715  |  
|                                                       |  |               |            |   |                   |   |            |  

See accompanying Notes to Unaudited Condensed Consolidated Financial Statements

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|(1) | The March 31, 2007 Condensed Consolidated Balance Sheet was derived from the audited balance sheet for the year then ended.
|--- | ---------------------------------------------------------------------------------------------------------------------------



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##### Table of Contents

ATMOSPHERIC GLOW TECHNOLOGIES, INC. & SUBSIDIARY

(A DEVELOPMENT STAGE ENTERPRISE)

Condensed Consolidated Statements of Operations



|                                    |  |                                 |          |   |                                 |   |           |                                        |  |   |            |  
|----------------------------------- |  | ------------------------------- | -------- | - | ------------------------------- | - | --------- | -------------------------------------- |  | - | ---------- | -
|                                    |  | Three MonthsEnded June 30, 2007 |          |   | Three MonthsEnded June 30, 2006 |   |           | May 1, 2000(Inception) toJune 30, 2007 | 
|                                    |  | (unaudited)                     |          |   | (unaudited)                     |   |           | (unaudited)                            | 
|Operating revenues:                 |  |                                 |          |   |                                 |   |           |                                        |  |   |            |  
|Contract revenues earned            |  | $                               | 466,438  |   |                                 | $ | 391,925   |                                        |  | $ | 7,810,821  |  
|Other revenues                      |  |                                 | 49,809   |   |                                 |   | 8,776     |                                        |  |   | 243,805    |  
|                                    |  |                                 |          |   |                                 |   |           |                                        |  |   |            |  
|Total operating revenues            |  |                                 | 516,247  |   |                                 |   | 400,701   |                                        |  |   | 8,054,626  |  
|                                    |  |                                 |          |   |                                 |   |           |                                        |  |   |            |  
|                                    |  |                                 |         
|Operating expenses:                 |  |                                 |          |   |                                 |   |           |                                        |  |   |            |  
|Payroll and related costs           |  |                                 | 411,951  |   |                                 |   | 501,682   |                                        |  |   | 8,719,013  |  
|Laboratory expenses                 |  |                                 | 49,445   |   |                                 |   | 103,995   |                                        |  |   | 2,746,328  |  
|General and administrative expenses |  |                                 | 246,583  |   |                                 |   | 428,122   |                                        |  |   | 5,288,216  |  
|Impairment of intangible assets     |  |                                 |         |   |                                 |   |          |                                        |  |   | 752,101    |  
|                                    |  |                                 |          |   |                                 |   |           |                                        |  |   |            |  
|Total operating expenses            |  |                                 | 707,979  |   |                                 |   | 1,033,799 |                                        |  |   | 17,505,658 |  
|                                    |  |                                 |          |   |                                 |   |           |                                        |  |   |            |  
|Net loss                            |  | $                               | (191,732 | ) |                                 | $ | (633,098  | )                                      |  | $ | (9,451,032 | )
|                                    |  |                                 |          |   |                                 |   |           |                                        |  |   |            |  
|Loss per share (basic and diluted): |  | $                               | (0.00    | ) |                                 | $ | (0.00     | )                                      |  | $ | (0.04      | )
|                                    |  |                                 |          |   |                                 |   |           |                                        |  |   |            |  

See accompanying Notes to Unaudited Condensed Consolidated Financial Statements



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##### Table of Contents

ATMOSPHERIC GLOW TECHNOLOGIES, INC. & SUBSIDIARY

(A DEVELOPMENT STAGE ENTERPRISE)

Condensed Consolidated Statement of Stockholders Deficit

From
May 1, 2000 (Inception) to June 30, 2007 (unaudited)



|                                                          |  |                |   |  |                       |          |   |              |             |               |   |                     |  |                     |  |                          |       |                    |   |           |                                    |   |            |   |  |   |            |  
|--------------------------------------------------------- |  | -------------- | - |  | --------------------- | -------- | - | ------------ | ----------- | ------------- | - | ------------------- |  | ------------------- |  | ------------------------ | ----- | ------------------ | - | --------- | ---------------------------------- | - | ---------- | - |  | - | ---------- | -
|                                                          |  | PreviousShares |   |  | Previous Share Amount |          |   | CommonShares |             | Common Amount |   | Class BCommonShares |  | Class BCommonAmount |  | AdditionalPaid inCapital |       | AccumulatedDeficit |   |           | TotalStockholders (Deficit)Equity |  
|Shares issued October 20, 2000                            |  | 101,101        |   |  | $                     | 116,020  |   |              |            |               | $ |                    |  |                    |  | $                        |      |                    | $ |          |                                    | $ |           |   |  | $ | 116,020    |  
|Non-Member contribution in 2000                           |  |                |   |  |                       |          |   |              |             |               |   |                     |  |                     |  |                          |       |                    |   | 34,730    |                                    |   |            |   |  |   | 34,730     |  
|Additional amounts received 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 |  | (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    |  
|Common stock issued in 2005                               |  |                |   |  |                       |          |   |              | 11,253,640  |               |   | 112,536             |  |                     |  |                          |       |                    |   | 1,278,728 |                                    |   |            |   |  |   | 1,391,264  |  
|Stock based compensation in 2005                          |  |                |   |  |                       |          |   |              |             |               |   |                     |  |                     |  |                          |       |                    |   | 290,909   |                                    |   |            |   |  |   | 290,909    |  
|Common stock issued in 2006                               |  |                |   |  |                       |          |   |              | 8,296,849   |               |   | 82,969              |  |                     |  |                          |       |                    |   | 963,516   |                                    |   |            |   |  |   | 1,046,485  |  
|Net loss through March 31, 2005                           |  |                |   |  |                       |          |   |              |             |               |   |                     |  |                     |  |                          |       |                    |   |           |                                    |   | (6,585,403 | ) |  |   | (6,585,403 | )
|                                                          |  |                |   |  |                       |          |   |              |             |               |   |                     |  |                     |  |                          |       |                    |   |           |                                    |   |            |   |  |   |            |  
|Balance at March 31, 2006                                 |  |               |   |  |                       |         |   |              | 232,429,337 |               |   | 2,324,293           |  | 750,000             |  |                          | 7,500 |                    |   | 3,478,564 |                                    |   | (6,585,403 | ) |  |   | (775,046   | )
|                                                          |  |                |   |  |                       |          |   |              |            
|Common stock, shares issued                               |  |                |   |  |                       |          |   |              | 5,882,737   |               |   | 58,828              |  |                     |  |                          |       |                    |   | 285,946   |                                    |   |            |   |  |   | 344,774    |  
|Stock-based compensation                                  |  |                |   |  |                       |          |   |              |             |               |   |                     |  |                     |  |                          |       |                    |   | 142,608   |                                    |   |            |   |  |   | 142,608    |  
|Net loss                                                  |  |                |   |  |                       |          |   |              |             |               |   |                     |  |                     |  |                          |       |                    |   |           |                                    |   | (2,673,897 | ) |  |   | (2,673,897 | )
|                                                          |  |                |   |  |                       |          |   |              |             |               |   |                     |  |                     |  |                          |       |                    |   |           |                                    |   |            |   |  |   |            |  
|Balance at March 31, 2007                                 |  |               |   |  |                       |         |   |              | 238,312,074 |               |   | 2,383,121           |  | 750,000             |  |                          | 7,500 |                    |   | 3,907,118 |                                    |   | (9,259,300 | ) |  |   | (2,961,561 | )
|                                                          |  |                |   |  |                       |          |   |              |            
|Common stock, shares issued                               |  |                |   |  |                       |          |   |              | 400,000     |               |   | 4,000               |  |                     |  |                          |       |                    |   | 16,000    |                                    |   |            |   |  |   | 20,000     |  
|Stock-based compensation                                  |  |                |   |  |                       |          |   |              |             |               |   |                     |  |                     |  |                          |       |                    |   | 48,098    |                                    |   |            |   |  |   | 48,098     |  
|Net loss                                                  |  |                |   |  |                       |          |   |              |             |               |   |                     |  |                     |  |                          |       |                    |   |           |                                    |   | (191,732   | ) |  |   | (191,732   | )
|                                                          |  |                |   |  |                       |          |   |              |             |               |   |                     |  |                     |  |                          |       |                    |   |           |                                    |   |            |   |  |   |            |  
|Balance at June 30, 2007                                  |  |               |   |  | $                     |         |   |              | 238,712,074 |               | $ | 2,387,121           |  | 750,000             |  | $                        | 7,500 |                    | $ | 3,971,216 |                                    | $ | (9,451,032 | ) |  | $ | (3,085,195 | )
|                                                          |  |                |   |  |                       |          |   |              |             |               |   |                     |  |                     |  |                          |       |                    |   |           |                                    |   |            |   |  |   |            |  

See accompanying Notes to Unaudited 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



|                                                     |  |                                 |          |   |                                 |   |          |                                        |  |   |            |  
|---------------------------------------------------- |  | ------------------------------- | -------- | - | ------------------------------- | - | -------- | -------------------------------------- |  | - | ---------- | -
|                                                     |  | Three MonthsEnded June 30, 2007 |          |   | Three MonthsEnded June 30, 2006 |   |          | May 1, 2000(Inception) toJune 30, 2007 | 
|                                                     |  | (unaudited)                     |          |   | (unaudited)                     |   |          | (unaudited)                            | 
|Net cash used in operating activities                |  | $                               | (87,883  | ) |                                 | $ | (482,398 | )                                      |  | $ | (6,447,680 | )
|                                                     |  |                                 |          |   |                                 |   |          |                                        |  |   |            |  
|                                                     |  |                                 |         
|Investing activities                                 |  |                                 |          |   |                                 |   |          |                                        |  |   |            |  
|Additions to intangible assets                       |  |                                 | (2,103   | ) |                                 |   | (814     | )                                      |  |   | (1,652,100 | )
|Proceeds from sale of fixed assets                   |  |                                 | 15,000   |   |                                 |   |         |                                        |  |   | 15,000     |  
|Purchase of property and equipment                   |  |                                 |         |   |                                 |   |         |                                        |  |   | (843,002   | )
|                                                     |  |                                 |          |   |                                 |   |          |                                        |  |   |            |  
|Net cash provided by (used in) investing activities  |  |                                 | 12,897   |   |                                 |   | (814     | )                                      |  |   | (2,480,102 | )
|                                                     |  |                                 |          |   |                                 |   |          |                                        |  |   |            |  
|                                                     |  |                                 |         
|Finance activities                                   |  |                                 |          |   |                                 |   |          |                                        |  |   |            |  
|Proceeds from short term notes                       |  |                                 | 233,363  |   |                                 |   | 298,100  |                                        |  |   | 7,360,426  |  
|Repayments of short term notes                       |  |                                 | (236,559 | ) |                                 |   | (74,762  | )                                      |  |   | (1,183,759 | )
|Cash acquired in reverse merger                      |  |                                 |         |   |                                 |   |         |                                        |  |   | 53,017     |  
|Proceeds from issuance of common stock               |  |                                 | 20,000   |   |                                 |   | 245,341  |                                        |  |   | 2,593,985  |  
|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      |  |                                 | (1,593   | ) |                                 |   | (5,069   | )                                      |  |   | (93,849    | )
|                                                     |  |                                 |          |   |                                 |   |          |                                        |  |   |            |  
|Net cash provided by financing activities            |  |                                 | 15,211   |   |                                 |   | 463,610  |                                        |  |   | 8,977,598  |  
|                                                     |  |                                 |          |   |                                 |   |          |                                        |  |   |            |  
|Net (decrease) increase in cash and cash equivalents |  |                                 | (59,775  | ) |                                 |   | (19,602  | )                                      |  |   | 49,816     |  
|Cash and cash equivalents at beginning of period     |  |                                 | 109,591  |   |                                 |   | 55,150   |                                        |  |   |           |  
|                                                     |  |                                 |          |   |                                 |   |          |                                        |  |   |            |  
|Cash and cash equivalents at end of period           |  | $                               | 49,816   |   |                                 | $ | 35,548   |                                        |  | $ | 49,816     |  
|                                                     |  |                                 |          |   |                                 |   |          |                                        |  |   |            |  
|                                                     |  |                                 |         
|Supplemental disclosures of cash flow information:   |  |                                 |          |   |                                 |   |          |                                        |  |   |            |  
|Cash paid for interest                               |  | $                               | 57,956   |   |                                 | $ | 31,445   |                                        |  | $ | 381,149    |  
|Members equity in exchange for rent                 |  |                                 |         |   |                                 |   |         |                                        |  |   | 4,500      |  
|Equipment contributed by non-members                 |  |                                 |         |   |                                 |   |         |                                        |  |   | 34,730     |  
|Equipment acquired with capital lease                |  |                                 |         |   |                                 |   |         |                                        |  |   | 101,011    |  
|Furniture acquired with note payable                 |  |                                 |         |   |                                 |   |         |                                        |  |   | 11,600     |  
|Note payable paid with equity                        |  |                                 |         |   |                                 |   |         |                                        |  |   | 111,600    |  
|Minority interest in subsidiary acquired with equity |  |                                 |         |   |                                 |   |         |                                        |  |   | 27,310     |  
|Debt satisfied with stock                            |  |                                 |          |   |                                 |   |          |                                        |  |   | 3,130,283  |  
|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



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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 (the Company or AGT) is a development stage enterprise that conducts 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. The Company will
continue to be a development stage enterprise until commercial applications of its technologies are realized.

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, 2007 are
not necessarily indicative of the results that may be expected for the year ending March 31, 2008.

The balance sheet at March 31,
2007 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, 2007.

Restricted Cash and
Cash Equivalents - The Company has restricted cash of $30,635 and $84,170 as of June 30, 2007 and March 31, 2007, respectively. This balance is required by a government contract whereupon transfers to operations can occur as costs are
incurred.

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.



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



Accounting for Stock-Based Compensation - The Company accounts for its stock options under the
recognition and measurement provisions of FASB Statement No. 123(R),Share-Based Payment(FAS 123(R)). The Company recognized $48,098 in compensation expense under its stock option arrangements for the three month
period ended June 30, 2007, with no such expense required to be recognized for the three months ended June 30, 2006.

A summary of
options outstanding under the Companys stock option arrangements as of June 30, 2007 and changes during the three month period then ended is presented below:



|                               |  |               |   |  |                                 |      |                           |           |                                 |   |     
|------------------------------ |  | ------------- | - |  | ------------------------------- | ---- | ------------------------- | --------- | ------------------------------- | - | ----
|                               |  | Common Shares |   |  | Weighted Average Exercise Price |      | Stock Options Exercisable |           | Weighted Average Exercise Price
|Under option at March 31, 2007 |  | 12,079,114    |   |  |                                 |      |                           | 6,079,114 |                                 | $ | 0.28
|Options expired                |  | (530,023      | ) |  | $                               | 3.10 |                           |           |                                 |   |     
|                               |  |               |   |  |                                 |      |                           |           |                                 |   |     
|Under option at June 30, 2007  |  | 11,549,091    |   |  |                                 |      |                           | 7,549,091 |                                 | $ | 0.11
|                               |  |               |   |  |                                 |      |                           |           |                                 |   |     



|2. | Notes Payable to Related Parties, Notes Payable and Long-term Debt
|-- | ------------------------------------------------------------------

During the quarter ended June 30, 2007, the Company extended the maturity date of a $200,000 unsecured loan from a third party, bearing interest at 12% per annum to June 19, 2007. As an inducement to
extend the maturity date, the holder received 400,000 Common Shares of the Company. Subsequent to June 30, 2007, the holder received an additional 200,000 Common Shares to extend the maturity date to August 19, 2007.

Subsequent to June 30, 2007, the Company entered into a $50,000 promissory note with a bank which is payable in January 2008 and bears interest at
the banks prime rate (8.25% at June 30, 2007.) The note is collateralized by equipment with a carrying value of approximately $200,000 and is secured by the personal guarantees of certain members of the Companys board of directors.
The proceeds of this note were used to retire a certain note payable which had matured during the quarter ended June 30, 2007.

Subsequent to June 30, 2007, the Company negotiated extensions on $1,987,000 of its convertible notes which had matured on July 31, 2007. The notes, including accrued interest thereon, were extended through September 30,
2007. The Company is in default on the remaining $300,000 convertible note payable for non-payment and is negotiating with the holders of the notes for similar extensions.



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

Basic 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



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Notes to Unaudited Condensed Consolidated Financial Statements, Continued



|3. | Loss Per Share (continued)
|-- | --------------------------



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 convertible debt of 57,924,733 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 were 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 at June 30, 2007.

The following table sets forth the computation of basic loss per share for the three months ended June 30, 2007 and 2006, and from inception to
June 30, 2007:



|                                      |  |                             |             |   |                                        |   |             |   |  |   |             |  
|------------------------------------- |  | --------------------------- | ----------- | - | -------------------------------------- | - | ----------- | - |  | - | ----------- | -
|                                      |  | Three months ended June 30, |             |   | May 1, 2000(Inception) toJune 30, 2007 |  
|                                      |  | 2007                        |             |   | 2006                                   |   |            
|Loss:                                 |  |                             |             |   |                                        |   |             |   |  |   |             |  
|Basic and diluted:                    |  |                             |             |   |                                        |   |             |   |  |   |             |  
|Loss available to common stockholders |  | $                           | (191,732    | ) |                                        | $ | (633,098    | ) |  | $ | (9,451,032  | )
|                                      |  |                             |            
|Shares:                               |  |                             |             |   |                                        |   |             |   |  |   |             |  
|Basic and diluted:                    |  |                             |             |   |                                        |   |             |   |  |   |             |  
|Weighted shares outstanding           |  |                             | 239,162,074 |   |                                        |   | 234,401,649 |   |  |   | 228,925,233 |  
|                                      |  |                             |             |   |                                        |   |             |   |  |   |             |  
|Loss per share                        |  | $                           | (0.00       | ) |                                        | $ | (0.00       | ) |  | $ | (0.04       | )
|                                      |  |                             |             |   |                                        |   |             |   |  |   |             |  

Weighted average Common Shares outstanding for the period from May 1, 2000 (inception) to
June 30, 2007, 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 $191,732,
$633,098 and $9,451,032 in the quarters ended June 30, 2007 and 2006, and inception to date, respectively. Additionally, the Company has suffered negative cash flows from operations of $87,883 for the three months ended June 30, 2007 and
$6,447,680 since inception and also has a net capital deficiency of approximately $3,085,000 as of June 30, 2007. The Company is also in default on certain of its loan obligations and is currently negotiating with those lenders to secure
extensions or other remedies. These conditions raise substantial doubt about the Companys ability to continue as a going concern for a reasonable period of time.

The Company has implemented certain cost-saving measures which provide for decreased labor costs through employee attrition and layoffs in addition to salary and benefit reductions for existing employees. The Company
has also reduced its leased facility by approximately 30% and expects to realize further savings through the elimination of certain incidental services currently provided by third parties.



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Notes to Unaudited Condensed Consolidated Financial Statements, Continued



|4. | Continuing Operations (continued)
|-- | ---------------------------------



Management realizes the Company must reach profitable operations and generate additional funds in
order to continue as a going concern. The Company is aggressively pursuing additional capital and is continuing to explore business development opportunities. Absent additional capital, management may further reduce commercialization efforts and
focus on existing revenue generated from research and development contracts.



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

AGT is a development stage enterprise currently dependent upon capital raised mainly through private placements and debt. AGTs net loss was $191,732 for the three months ended June 30, 2007 and the Company
has experienced cumulative losses of $9,451,032 since inception of the business on May 1, 2000. Current revenues consist substantially of research and development contracts related to potential applications of the patented OAUGDP® technology. Annualized revenues from these contracts increased approximately 19% this year from the previous year. However, as with other development stage enterprises, contract revenues do not
cover all of the Companys costs, specifically the additional personnel needed to advance the technology further toward the product stage. While total revenues increased 28.8%, expenses were actually reduced by approximately 31.5% in the
current quarter compared to the same quarter in 2006, mainly due to implementation of a number of cost reduction initiatives by the Company.

Results
of Operations

Three Months Ended June 30, 2007 Compared to the Three Months Ended June 30, 2006

The Company decreased its net loss by 69.7%, as AGT incurred a net loss of $191,732 for the quarter ended June 30, 2007 compared to a net loss of
$633,098 for the quarter ended June 30, 2006. AGT revenues increased by 28.8% mainly due to an increase in funds from government research and development contracts, resulting from additional successful efforts to obtain additional revenues from
these sources, while at the same time, operating expenses decreased 31.5% primarily due to implementation of a number of cost reduction initiatives by the Company including decreased personnel levels, less outsourced services and lower legal and
professional fees due to reduced equity sales and success fee-only arrangements with potential funding sources.

Inflation

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



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Liquidity and Capital Resources

Since the Companys inception, AGT has financed its operations primarily through the sale of
equity, and more recently through debt, the majority of which is convertible to equity. The Company needs substantial additional funding in the very near future to sustain operations, further develop its technologies and commercialize the
OAUGDP® technology. There is no guarantee such future funding can be obtained as soon as it is needed.

At June 30, 2007, AGT had $49,816 in cash and cash equivalents, $30,635 of which is restricted for use on one contract. The goal of the Companys current fundraising efforts is to raise an additional $1 to
2 million for operations. AGT is working with a number of investment groups to obtain such financing, utilizing non-exclusive, contingent fee-only provisions. Such future funds if obtained, coupled with anticipated contract revenues, should
provide sufficient capital to continue through the next fiscal year. Failure to obtain new funding would have a material adverse effect on AGTs liquidity and viability.

During the quarter ending June 30, 2007, and in line with its cost reduction efforts, AGT released 4,000 square feet of its leasehold to another
party, with part of this transaction including the sale of some furniture and cubicles for $15,000. Subsequent to the quarter ended June 30, 2007, the Company obtained a $50,000 note from a financial institution, payable on January 9,
2008, bearing interest at prime rate (8.25% at June 30, 2007), secured by guarantees of four board members and collateralized by certain equipment with a carrying value of approximately $200,000. The entire proceeds from this note were used to
payoff another note with another financial institution that expired during the quarter ended June 30, 2007. There have been no other recent borrowings or other new cash inflows with the exception of the receipt of accounts receivable.

Expenditures for fiscal year 2008, specifically payroll and related costs, are expected to decrease an additional 10% to 15% due to the
significant cost reduction efforts already undertaken. The objective for plasma-related operations is to be self-sustaining (i.e., cash flow neutral) until such time as the technology may be profitably commercialized.

Future Operations

Management believes that future revenues are dependent on a number of factors including general economic factors, the ability of AGT to secure necessary funding to sustain operations, continue the development and
commercialization of the OAUGDP® technology through contracts, partnering or equity sales, the ability to successfully develop and market the technology, and ultimately the competition for
the market and market acceptance of the technology.

In addition to the plasma technology-related opportunities, management has been
aggressively pursuing a number of complementary business opportunities to add significant revenue and profitability. As of the date of this filing, none of these specific alternatives are imminent and it is too early to predict the outcome from
these efforts.



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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. See
Other Factors Relating to Forward-Looking Statements below.

New Capital. The viability of future operations is heavily
dependent on the Companys ability to raise sufficient capital for its operating requirements. There are no assurances that such funds can be secured.

Product Development. One determinant of the Companys future success will be
AGTs ability to develop and commercialize new applications using the OAUGDP® technology. There are no assurances that the Company can successfully develop or commercialize new
applications of the OAUGDP® technology.

Key Management and Technical
Staff. AGT 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.

Alternative Business Opportunities. In addition to future revenue opportunities related to its plasma technology, management has been aggressively
pursuing a number of complementary business opportunities to add significant revenue and profitability. As of the date of this filing, none of these specific alternatives are imminent and it is too early to predict the outcome from these efforts.

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. Management cannot assure that the Company will be able to anticipate or respond timely to the changes that could adversely affect AGTs 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 AGT securities.

There can be no assurance that AGT will be able to generate any additional funding with acceptable terms. If such money is not available on satisfactory
terms, the Company may be unable to expand the business or develop new customers as needed and its operating results may be adversely affected to the extent that the Company may no longer be viable. Debt financing will increase expenses and must be
repaid regardless of operating results. Funding in the form of equity could result in dilution to existing stockholders.



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##### Table of Contents

Some of the more prominent known risks and uncertainties of AGTs business are set forth below.
However, this section does not discuss all possible risks and uncertainties to which the Company is 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 in the Business section and elsewhere in Managements Discussion and Analysis and the factors listed below:



| |  |  | 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,
distribute and sell products based on the OAUGDP® technology, or the inability of the Company to find potential buyers for that technology;
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | the shortage of qualified and competent engineers, scientists or product specialists and the risk that the Company 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
the Companys revenue for the foreseeable future;
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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



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



| |  |  | 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 the Company is unable to keep pace.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Item 3. | Controls and Procedures.
|------- | ------------------------

Evaluation of Disclosure Controls and Procedures

The Companys Chief Executive Officer, who is also the Companys interim 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, 2007. Disclosure controls and procedures are designed to ensure that information required to be disclosed by a company in its periodic SEC
filings is



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##### Table of Contents

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, 2007 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, 2007 that has materially affected, or is reasonably likely to materially affect, the Companys internal control over financial reporting. However, during the Companys fiscal quarter ended
June 30, 2007, the Companys Chief Accounting Officer left AGT to pursue other career opportunities and a replacement has not yet been made. The former Chief Accounting Officer has assisted in transitioning her related responsibilities on
an interim basis to the Chief Executive Officer.

PART II OTHER INFORMATION



|Item 3. | Defaults Upon Senior Securities.
|------- | --------------------------------

AGT is in default
on a convertible promissory note having a principal balance of $300,000 and unpaid, accrued interest in the amount of $12,500 as of the loans maturity date of July 31, 2007. The Company is continuing to negotiate with the lender to extend
the maturity date on the note until September 30, 2007.



|Item 6. | Exhibits.
|------- | ---------



|                                                                                                                                    |  |                     |  |           
|----------------------------------------------------------------------------------------------------------------------------------- |  | ------------------- |  | ----------
|                                                                                                                                    |  | 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.) |  |                     |  | *         
|(iii)  Amended and Restated Bylaws of Atmospheric Glow Technologies, Inc.                                                           |  |                     |  | x         
|II.     Instruments Defining Rights of Security Holders                                                                             |  | 4                   |  |           
|(i)     Common Stock Purchase Warrant                                                                                               |  |                     |  | #         
|III.    Material Contracts                                                                                                          |  | 10                  |  |           
|(i)     2006 Equity Incentive Plan of Atmospheric Glow Technologies, Inc.                                                           |  |                     |  | #         
|(ii)    Employment Agreement - W. Scott McDonald and Atmospheric Glow Technologies, Inc.                                            |  |                     |  | #         
|(iii)  Stock Option Agreement - W. Scott McDonald and Atmospheric Glow Technologies, Inc.                                           |  |                     |  | #         



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|                                                                                                         |  |                     |  |           
|-------------------------------------------------------------------------------------------------------- |  | ------------------- |  | ----------
|                                                                                                         |  | ExhibitTable Number |  | PageNumber
|(iv)   Severance Agreement - W. Scott McDonald and Atmospheric Glow Technologies, Inc.                   |  |                     |  | #         
|IV.   Rule 13a-14(a)/15d-14(a) Certifications                                                            |  | 31                  |  |           
|(i)     Certifications  Chief Executive Officer and interim Chief Accounting Officer, W. Scott
McDonald |  |                     |  | 17        
|V.     Section 1350 Certifications                                                                       |  | 32                  |  |           
|(i)     Certification  Chief Executive Officer and interim Chief Accounting Officer, W. Scott
McDonald  |  |                     |  | 19        
|VI.   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-QSB for the quarter ended June 30, 2006.
|- | ----------------------------------------------------------------------------------



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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/ W. Scott McDonaldW. Scott McDonald,Chief Executive Officer and Interim Chief Accounting OfficerDate:

August 13, 2007




16