|SECURITIES
AND EXCHANGE COMMISSIONWashington, D.C. 20549


Amendment
Number 1 toFORM 10-QSB


[X] QUARTERLY REPORT
UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934


For the quarterly
period ended October 31, 2000



[   ] TRANSITION REPORT
UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934


For the transition
period from __________ to ____________



Commission
file number 0-23268


American Technologies
Group, Inc.(Name of small business issuer in its charter)
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Nevada
          (State or other jurisdiction ofincorporation or organization) |  | 95-4307525(IRS Employer
     Identification No.)
|------------------------------------------------------------------------------ |  | ------------------------------------------------

|1017 South Mountain
Avenue, Monrovia, CA. 91016(Address of principal executive offices) (zip code)



Issuers telephone
number: (626) 357-5000


Check
whether the issuer (1) filed all reports 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 ___



As of
December 8, 2000, the registrant had 49,199,778 shares of Common Stock outstanding.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|TABLE OF
CONTENTS
|-----------------

|        | PAGE
|------- | ----
|PART I  |     
|       
|ITEM 1  |     
|       
|        |     
|        |     
|       
|        |     
|        |     
|       
|        |     
|        |     
|       
|        |     
|       
|ITEM 2  |     
|       
|PART II |     
|       
|ITEM 2  |     
|       
|ITEM 6  |     
|       
|        |     

|FORWARD-LOOKING
STATEMENTS


IN ADDITION TO HISTORICAL
INFORMATION, THIS QUARTERLY REPORT CONTAINS FORWARD-LOOKING STATEMENTS. THE
FORWARD-LOOKING STATEMENTS IN THIS REPORT REFLECT THE COMPANYS CURRENT
VIEWS WITH RESPECT TO FUTURE EVENTS AND FINANCIAL PERFORMANCE. THESE
FORWARD-LOOKING STATEMENTS ARE SUBJECT TO CERTAIN RISKS AND UNCERTAINTIES,
INCLUDING THOSE DISCUSSED HEREIN AND IN OTHER REPORTS FILED WITH THE SECURITIES
AND EXCHANGE COMMISSION, THAT COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY
FROM HISTORICAL RESULTS OR THOSE ANTICIPATED. IN THIS REPORT, THE WORDS
ANTICIPATES, BELIEVES, INTENDS,
FUTURE, AND SIMILAR EXPRESSIONS IDENTIFY FORWARD-LOOKING STATEMENTS
CONTAINED HEREIN, WHICH SPEAK ONLY AS OF THE DATE HEREOF. THE COMPANY UNDERTAKES
NO OBLIGATION TO PUBLICLY REVISE THESE FORWARD-LOOKING STATEMENTS TO RELFECT
EVENTS OR CIRCUMSTANCES THAT MAY ARISE AFTER THE DATE HEREOF.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Page 2
|------

|AMERICAN TECHNOLOGIES
GROUP, INC. AND SUBSIDIARIES


CONSOLIDATED BALANCE
SHEETS


OCTOBER 31, 2000 AND
JULY 31, 2000
|---------------------------------------------------------------------------------------------------------------------

|                                                       | October 31,2000 | July 31,2000
|------------------------------------------------------ | --------------- | ------------
|
|ASSETS                                                 |                 |             
|Current assets:                                        |                
|Cash and cash equivalents                              |                 | $     18,021
|Accounts receivable, net of allowance for doubtful     |                
|accounts of $10,000 at October 31, 2000  and           |                
|July 31, 1999, respectively                            |                 | 26,309      
|Inventories, net                                       |                 | 165,196     
|Other current assets                                   |                 | 112,881     
|                                                      
|Total current assets                                   |                 | 322,407     
|                                                      
|Property and equipment, net of accumulated             |                
|depreciation and amortization of $578,593 and $723,583 |                
|at October 31, 2000 and July 31, 2000, respectively    |                 | 154,230     
|                                                      
|Notes receivable,  net of imputed interest             |                
|of $824,000 at October 31, 2000                        |                
|and July 31, 2000, respectively                        |                 | 1,676,000   
|                                                      
|Other assets                                           |                 | 249,953     
|                                                      
|                                                       |                 | $2,402,590  
|                                                      

|The accompanying notes
are an integral part of these consolidated financial statements.3
|----------------------------------------------------------------------------------------

|AMERICAN TECHNOLOGIES
GROUP, INC. AND SUBSIDIARIES


CONSOLIDATED BALANCE
SHEETS-CONTINUED


OCTOBER 31, 2000 AND
JULY 31, 2000
|-------------------------------------------------------------------------------------------------------------------------------

|                                                       | October 31,2000 | July 31,2000  
|------------------------------------------------------ | --------------- | --------------
|
|LIABILITIES AND STOCKHOLDERS DEFICIT                  |                 |               
|Current liabilities:                                   |                
|Accounts payable                                       |                 | $      547,794
|Accrued interest payable                               |                 | 366,490       
|Accrued payroll and related liabilities                |                 | 259,452       
|Accrued professional fees                              |                 | 264,159       
|Other accrued liabilities                              |                 | 179,530       
|Amounts due to related parties                         |                 | 359,705       
|Notes payable                                          |                 | 780,205       
|Current portion of convertible debentures              |                 | 2,125,000     
|                                                      
|Total current liabilities                              |                 | 4,882,335     
|                                                       |                
|Convertible debentures, net of current portion         |                 | 432,500       
|Deferred gain on sale-leaseback                        |                 | 272,781       
|                                                      
|                                                       |                
|Total liabilities                                      |                 | 5,587,616     
|                                                      
|                                                       |                
|Commitments and contingencies                          |                
|                                                       |                
|Stockholders deficit:                                 |                
|Series A convertible preferred stock, $.001 par value; |                
|10,000,000 shares authorized; 378,061 shares           |                
|Issued and outstanding                                 |                 | 378           
|Series B convertible preferred stock, $.001 par value; |                
|500,000 shares authorized; liquidation value at $8.00  |                
|per share; none issued and outstanding                 |                 |              
|Series C convertible preferred stock, $.001 par value; |                
|2,000 shares authorized; liquidation value at $1,000   |                
|per share; none issued and outstanding                 |                 |              
|Common stock, $.001 par value; 100,000,000 shares      |                
|authorized; 49,199,778 and 44,955,772 shares issued    |                
|and outstanding at October 31, 2000 and July 31, 2000, |                
|respectively                                           |                 | 49,200        
|Additional paid-in capital                             |                 | 51,998,469    
|Stock subscriptions                                    |                 | 6,750         
|Prepaid consulting expenses                            |                 | (154,526      
|Accumulated deficit                                    |                 | (55,085,297   
|                                                      
|Total stockholders deficit                            |                 | (3,185,026    
|                                                      
|                                                       |                 | $   2,402,590 
|                                                      

|The accompanying notes
are an integral part of these consolidated financial statements.4
|----------------------------------------------------------------------------------------

|AMERICAN TECHNOLOGIES
GROUP, INC. AND SUBSIDIARIES


CONSOLIDATED
STATEMENTS OF OPERATIONS


FOR THE THREE MONTHS
ENDED OCTOBER 31, 2000 AND 1999


(Unaudited)
|---------------------------------------------------------------------------------------------------------------------------------------------------------------

|                                                  | Three Months Ended October 31,
|------------------------------------------------- | ------------------------------
|
|Revenues:                                         |                               
|Technology products                               |                               
|Other                                             |                               
|                                                 
|Total operating revenues                          |                               
|                                                 
|                                                  |                               
|Operating Expenses:                               |                               
|General and administrative                        |                               
|Marketing and product development                 |                               
|Research and development                          |                               
|Mining operations                                 |                               
|Amortization of technology rights                 |                               
|                                                 
|Total operating expenses                          |                               
|                                                 
|                                                  |                               
|Other (Expense) Income:                           |                               
|Interest expense, net                             |                               
|Gain on sale-leaseback                            |                               
|                                                 
|                                                  |                               
|                                                 
|                                                  |                               
|Net loss attributable to common stockholders      |                               
|                                                 
|                                                  |                               
|Basic and fully diluted net loss per common share |                               
|                                                 
|                                                  |                               
|Weighted average number of                        |                               
|common shares outstanding                         |                               
|                                                 

|The accompanying notes
are an integral part of these consolidated financial statements.5
|----------------------------------------------------------------------------------------

|AMERICAN TECHNOLOGIES
GROUP, INC. AND SUBSIDIARIES


CONSOLIDATED
STATEMENTS OF CASH FLOWS


FOR THE THREE MONTHS
ENDED OCTOBER 31, 2000 AND 1999


(Unaudited)
|---------------------------------------------------------------------------------------------------------------------------------------------------------------

|                                                               | Three Months Ended October 31,
|-------------------------------------------------------------- | ------------------------------
|
|Cash flows from operating activities:                          |                               
|Net loss                                                       |                               
|Adjustments to reconcile net loss to net cash used             |                               
|in operating activities:                                       |  
;                       
|Depreciation and amortization                                  |                               
|Amortization of prepaid consulting expenses                    |                               
|Amortization of deferred gain on sale-leaseback                |                               
|Stock issued and subscribed as consideration for services      |                               
|Imputed interest income on notes receivable                    |                               
|Imputed and accrued interest expense on convertible debentures |                               
|Stock options issued to consultants and employees              |                               
|Changes in operating assets and liabilities:                   |                               
|Accounts receivable                                            |                               
|Inventories                                                    |                               
|Other current assets                                           |                               
|Accounts payable and accrued liabilities                       |                               
|Amounts due to related parties                                 |                               
|                                                              
|Net cash used in operating activities                          |                               
|                                                              
|                                                               |                               
|Cash flows from investing activities:                          |                               
|                                                               |                               
|Cash flows from financing activities:                          |                               
|Proceeds from issuance of convertible debentures               |                               
|Net Proceeds from dispositon of assets                         |                               
|Payments on notes payable                                      |                               
|Payments on short-term loan to an officer                      |                               
|Net proceeds from issuance of stock and stock subscriptions    |                               
|                                                              
|Net cash provided by financing activities                      |                               
|                                                              
|                                                               |                               
|Net change in cash and cash equivalents                        |                               
|                                                               |                               
|Cash and cash equivalents, beginning of period                 |                               
|                                                              
|                                                               |                               
|Cash and cash equivalents, end of period                       |                               
|                                                              
|                                                               |                               
|Supplemental disclosure of non-cash investing                  |                               
|and financing activities:                                      |                               
|                                                               |                               
|Conversion of debentures                                       |                               
|                                                              
|Cancellation of debt by repricing of option                    |                               
|                                                              
|Sale price of land and buildings, net                          |                               
|Less:  Repayment of a note to a mortgage holder                |                               
|Repayment of a note to a related party                         |                               
|Pepayment of other debts related to the property               |                               
|Deposit on lease of the building                               |                               
|                                                              
|Net proceeds                                                   |                               
|                                                              

|The accompanying notes
are an integral part of these consolidated financial statements.6
|----------------------------------------------------------------------------------------

|AMERICAN TECHNOLOGIES
GROUP, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS


(unaudited)
|-------------------------------------------------------------------------------------------------------------

|1. |  | Basis
of Presentation
|-- |  | ---------------------

| | The
accompanying unaudited consolidated financial statements have been prepared in accordance
with generally accepted accounting principles for interim financial information and with
the instructions to Rule 10-01 of Regulation S-X. Accordingly, they do not include all of
the information and notes required by generally accepted accounting principles for
complete financial statements. In the opinion of management, all adjustments (consisting
of normal recurring adjustments) considered necessary for a fair presentation have been
included. Operating results for the three month period ended October 31, 2000 are not
necessarily indicative of the results that may be expected for the year ended July 31,
2001. For further information, please refer to the consolidated financial statements and
notes thereto included in the Companys Annual Report on Form 10-KSB for the year ended
July 31, 2000.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|2. |  | Organization,
Line of Business and Significant Business Risks
|-- |  | -------------------------------------------------------------

| |  | a. |  | Organization
and Line of Business
| |  | -- |  | ---------------------------------

| | American
Technologies Group, Inc. (the Company or ATG), a Nevada corporation, is engaged in
the development, commercialization and sale of products and systems using its patented
and proprietary technologies. The resulting products are intended to offer cost-effective
solutions to reduce, and in some cases eliminate, hazardous chemical by-products or
emissions resulting from industrial and combustion processes. The Companys proprietary
catalyst technology may improve many commercial products including detergents and
cosmetics.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | b. |  | Significant
Business Risks
| |  | -- |  | --------------------------

| | Since
its inception, the Company has incurred significant operating losses. The ability of the
Company to operate as a going concern is dependent upon its ability (1) to obtain
sufficient additional debt and/or equity capital, and (2) generate significant revenues
through its existing assets and operating business. The Company plans to raise additional
working capital through private offerings of debt and equity. The successful outcome of
future activities cannot be determined at this time and there are no assurances that if
achieved, the Company will have sufficient funds to execute its business plans or
generate positive operating results. These issues, among others, raise substantial doubt
about the ability of the Company to continue as a going concern. The financial statements
do not include any adjustments relating to the recoverability and classification of asset
carrying amounts or the amount and classification of liabilities that might result should
the Company be unable to continue as a going concern.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | c. |  | Net
Loss Per Share
| |  | -- |  | ------------------

| | Net
loss per common share is based upon the weighted average number of common shares
outstanding during the fiscal year under the provisions of Statement of Financial
Accounting Standards No. 128, Earnings Per Share. Common share equivalents were not
considered as they would be anti-dilutive and had no impact on earnings per share for any
periods presented. However, the impact under the treasury method of dilutive stock
options would have been incremental shares of 1,429,701 and 20,000 for the three months
ended October 31, 2000 and 1999, respectively.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Page 7
|------

|
|

|3. |  | Property
and equipment
|-- |  | ----------------------

| | On
August 25, 2000, the Company sold its land and buildings with a net book value of
approximately $950,000 to a third party in a sale-leaseback transaction for total
consideration of $1,300,000. As a result of the sale, the Company paid its note payable
of $877,500 with related accrued interest and recorded a deferred gain of $286,125 on the
sale. The deferred gain will be recognized over the term of the lease.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|4. |  | Debentures
|-- |  | ----------

| | In
September, 2000, the Company issued $500,000 of 8% convertible debentures, maturing
September 5, 2002. Accrued interest on these convertible debentures is due on the earlier
of conversion or maturity. The conversion price is the lower of 75% of the average of the
lowest three trading prices during the fifteen trading days prior to issuance or 80% of
the average of the lowest three trading prices during ninety days prior to conversion. In
connection with these convertible debentures 500,000 stock warrants to acquire stock at
an exercise price of $0.09 per share were issued to a finder. The conversion feature and
the warrants vest immediately. In connection with the discount conversion feature and the
fair value of the warrants, the Company has recorded imputed interest expense of $204,696
included in interest expense in the accompanying Statements of Operations. These
debentures have registration rights and antidilution rights related to any conversions to
common stock as discussed in the agreements. In addition, these debenture agreements
contain loan covenants with which the Company was in compliance at October 31, 2000.
Therefore, this debenture is classified as a long-term liability in the accompanying
consolidated balance sheet at October 31, 2000.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The
conversion rights of the Companys debentures may qualify as imbedded derivatives as
defined in Statement of Financial Accounting Standards No. 133 (SFAS 133), Accounting
for Derivative Instruments and Hedging Activities. Based on initial investigations,
management believes the effect of applying SFAS 133 is not significant to the financial
statements of the Company at October 31, 2000 and for the three months then ended.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|5. |  | Capital
Stock
|-- |  | -------------

| |  | a. |  | Common
Stock
| |  | -- |  | ------------

| | During
September 2000, the Company issued 125,000 shares of common stock for $10,000 to an
investor and 3,369,006 shares of common stock for $253,368 to warrant holders at exercise
prices ranging from $0.072 to $0.09 per share.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | During
October 2000, the Company issued 750,000 shares of common stock valued at $90,000 to
non-employee directors as compensation for services as board members.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------

| | During
fiscal 2000, the Company entered into several consulting agreements for services. Under
the terms of the agreements, the Company issued shares of common stock for services, the
value of which was recorded to prepaid consulting expenses and is being amortized on a
straight-line basis over the terms of the agreements. General and Administrative expenses
include prepaid consulting amortization expense of $19,375 and $432,800 for the three
months ended October 31, 2000 and 1999, respectively, in the accompanying Consolidated
Statements of Operations. As of October 31, 2000, the remaining unamortized cost of
$154,526 is included in prepaid consulting expenses in stockholders equity section in
the accompanying Consolidated Balance Sheets.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | b. |  | Stock
Subscriptions
| |  | -- |  | -------------------

| | As
of October 31, 2000, the Company had not issued 15,000 shares of Common Stock owed for
services rendered prior to July 31, 2000, valued at $6,750 which is included within stock
subscriptions in the accompanying Consolidated Balance Sheets.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Page 8
|------

|
|

|6. |  | Assets
Held for Sale
|-- |  | --------------------

| | Included
in other assets at October 31, 2000 and 1999, respectively, in the accompanying
Consolidated Balance Sheets is the mining property referred to as the Tempiute property
with a remaining book value of $70,000, net of impairment of $324,847 recognized during
fiscal year 1999 (based on the estimated realizable value as indicated in non-binding
offer to buy this property).
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | During
fiscal year 1999, the Company sold its interest in the Manhattan mill and the remaining
gold mines to Western Mine Development for a non-interest-bearing note of $2,500,000
which has been discounted to $1,676,000 based upon an imputed interest rate of 10%. The
note is payable in installments from January 1, 2002 to January 1, 2008.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|7. |  | Related
Party Transactions
|-- |  | --------------------------

| | During
the three months ended October 31, 2000, the Company made payment of $55,000 due to an
officer on a short term borrowing.
| | --------------------------------------------------------------------------------------------------------------------------------

| | In
October, 2000, the Company entered into an agreement with a related party to reprice an
option to purchase 50,000 shares to $0.10 per share from $0.50 per share in exchange for
forgiveness of $125,000 due to the option holder. The difference between the value of the
repriced options ($2,592) and the $125,000 note balance of $122,408 was recorded as a
contribution of capital as the transaction was between related parties.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|8. |  | Subsequent
Events
|-- |  | -----------------

| | Subsequent
to the end of the quarter, the Company issued $250,000 of 8% convertible debentures,
maturing November 15, 2002. Accrued interest on these convertible debentures is due on
the earlier of conversion or maturity. The conversion price is the lower of $0.068 or 80%
of the average of the three lowest trading prices during ninety days prior to conversion.
In connection with these convertible debentures 250,000 stock warrants to acquire stock
at an exercise price of $0.099 per share were issued to a finder. The conversion feature
and the warrants vest immediately. These debentures have registration rights and
antidilution rights related to any conversions to common stock as discussed in the
agreements.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Page 9
|------

|
|

|9. |  | Industry
Segment Information
|-- |  | ----------------------------

| | The
Companys principal remaining business segment is Technology Products (The Force(R)).
| | -----------------------------------------------------------------------------------------

| | Financial
information about industry segments as of and for the three months ended October 31, 2000
and 1999, respectively, is as follows:
| | ------------------------------------------------------------------------------------------------------------------------------------------

|                                        | Three Months Ended October 31,
|--------------------------------------- | ------------------------------
|
|Operating revenues:                     |                               
|Technology products                     |                               
|Corporate                               |                               
|Mining                                  |                               
|                                       
|Total operating revenues                |                               
|                                       
|Operating loss:                         |                               
|Technology products, including research |                               
|and development                         |                               
|Corporate                               |                               
|Mining, including impairment            |                               
|                                       
|Net operating loss                      |                               
|                                       
|Identifiable assets:                    |                               
|Technology products                     |                               
|Mining assets held for sale             |                               
|Corporate and other                     |                               
|                                       
|Total                                   |                               
|                                       

| | Operating
loss is revenues minus operating expenses.
| | ----------------------------------------------------

| | Identifiable
assets by segment are assets used in or otherwise identifiable with the Companys
operations in each segment.
| | --------------------------------------------------------------------------------------------------------------------------

|Page 12
|-------

|Item 2.
Managements Discussion and Analysis


Management continued its
efforts to refocus the Companys activities on its core technologies, along
with new product development and commercialization. Management anticipates these
efforts will result in significant revenue commencing in the second or third
quarters of fiscal 2001, although there can be no assurance to this effect.


RESULTS OF OPERATIONS FOR THE THREE
MONTHS ENDED OCTOBER 31, 2000 AND 1999


Total revenue decreased by
$77,000 from $84,200 to $7,200 for the three months ended October 31, 1999 and
October 31, 2000, respectively, principally due to a decrease in sales of
technology products of $57,700. However, sale of technology products during the
second fiscal quarter of 2001 are anticipated to be significantly greater than
sales during the comparable period of fiscal 2000.


Operating expenses
decreased by $599,300 from $1,343,200 to $743,900 for the three months ended
October 31, 1999 and October 31, 2000, respectively. The decrease was
principally due to decreased general and administrative expenses of $419,100,
marketing and product development expenses of $35,100, research and development
of $40,500 and amortization of technology rights of $100,000. The decrease in
general and administrative expenses was principally the result of a decrease in
the non-cash amortization of prepaid consulting expense of $413,400 as a result
of significant shares issued in late fiscal 1999 to consultants for long-term
agreements that were amortized in the three months ended October 31, 1999; such
equivalent consultant shares were not issued at the end of fiscal 2000.


Other expenses decreased by
$263,700 from $532,700 to $269,000 for the three months ended October 31, 1999
and October 31, 2000, respectively, principally due to a decrease in interest
expense which during the earlier period included significant non-cash imputed
interest related to a convertible debenture.


The Companys net loss
decreased by $786,000 from $1,791,700 to $1,005,700 for the three months ended
October 31, 1999 and October 31, 2000, respectively, principally due to
decreased operating expenses of $599,300 and decreased interest expense of
$250,300 offset by a decrease in total revenue of $77,000. This reflects
managements continuing efforts to reduce overhead expenses.


LIQUIDITY AND CAPITAL RESOURCES


Since its inception, the
Company has incurred significant operating losses. The ability of the Company to
operate as a going concern is dependent upon its ability to (1) obtain
sufficient additional capital and (2) generate significant revenues through its
existing assets and operating business. The Company plans to raise additional
working capital through private offerings of debt and equity. The successful
outcome of future activities cannot be determined at this time and there are no
assurances that if achieved, the Company will have sufficient funds to execute
its business plans or generate positive operating results. These issues, among
others, raise substantial doubt about the ability of the Company to continue as
a going concern.


Total assets decreased by
$924,700 from $3,327,300 to $2,402,600 at July 31, 2000 and October 31, 2000,
respectively. This decrease was the principal result of the sale of the
Companys land and building with a net book value of approximately
$950,000.


Total liabilities decreased
by $705,500 from $6,293,100 to $5,587,600 at July 31, 2000 and October 31, 2000,
respectively. This decrease was principally due to decreases in notes payable of
924,800 and amount due to related parties of $239,100, offset by an increase in
convertible debentures of $500,000. The decrease in notes payable principally
resulted from the payment of the $877,500 note secured by the building sold by
the Company.


Page 11
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|The Company decreased the
cash used in operations by $30,800 from $786,900 to $756,100 for the three
months ended October 31, 1999 and October 31, 2000, respectively. The principal
source of working capital during the three months ended October 31, 2000 was net
proceeds of $432,500 from the issuance of $500,000 of principal amount of
secured convertible debentures, net proceeds of $263,400 from issuance of stock
and net proceeds of $126,500 from sale of the land and building. During the
comparable period in 1999, the principal source of working capital was the
issuance of $500,000 of principal amount of convertible debentures.


The Companys current
cash monthly operating expenses are approximately $200,000. Management believes
the Companys current cash reserves plus funds which may be available upon
the effectiveness of a registration statement on Form SB-2 filed with the
Securities and Exchange Commission from the issuance of additional convertible
notes pursuant to the subscription agreements discussed below, along with
anticipated minimum projected revenues for fiscal 2001, will be sufficient for
the Company to operate in the normal course for the next 12 months.


Based on the fact that the
Company has now received two orders for The Force from the domestic trucking
industry, and based upon projections provided by the Companys existing
customers, management believes that there is sufficient and verifiable evidence
to support a projection of sufficient minimum revenues, significantly exceeding
historical revenues, to provide the Company with enough working capital to
continue to operate. There can be no assurance that actual sales will be
generated as projected and sufficient to meet the Companys cash operating
requirements. If sufficient revenues are not attained, the Company may not be
able to continue as a going concern.


The Company has entered
into subscription agreements providing for up to $5,000,000 of financing and has
received $900,000 under these agreements. Based on the current market price of
the Companys common stock, the Company can issue convertible notes for an
additional $250,000 to $1,150,000 depending upon the timing of conversions of
the notes, if any, by the holders of the notes. The Company also has an
arrangement with Bristol Equities Inc. for an equity line of credit in the
amount of $12 million. Unless the market price of the Companys common
stock increases significantly or the Companys stockholders amend the
Companys articles of incorporation to increase the authorized number of
shares of common stock, the Company will be unable to draw upon the funds
available under the equity line. As a result, as stated previously, the
Companys ability to continue as a going concern is highly dependent upon
the generation of revenues.


Going Concern


The Companys
independent public accountants have stated in their report included in the
Companys Annual Report on Form 10-KSB that the Company has incurred
significant operating losses in the last two years, has a working capital
deficit and is in default on some convertible debentures. These conditions raise
substantial doubt about the Companys ability to continue as a going
concern.


Statements included in this
Managements Discussion and Analysis and elsewhere in this Form 10-QSB, in
future filings by the Registrant with the Securities and Exchange Commission and
in the Registrants press releases and oral statements made with the
approval of authorized executive officers, if the statements are not historical
or current facts, should be considered forward-looking statements.
These statements are subject to certain risks and uncertainties that could cause
actual results to differ materially from historical earnings and those presently
anticipated or projected. Registrant wishes to caution the reader not to place
undue reliance on any such forward-looking statements, which speak only as of
the date made.


Page 12
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|PART II


OTHER
INFORMATION



Item 2  Changes
in Securities


(a)  Not applicable.


(b)  Not applicable.


(c)  During September 2000,
the Company sold $500,000 principal amount of 8% convertible debentures to two
sophisticated investors. The debentures are convertible at the rate of the lower
of $0.068 or 80% of the average of the lowest three trading prices during the
ninety days prior to conversion. A finder received warrants to purchase 500,000
shares of common stock at $0.09.


Also
during September 2000, the Company issued 125,000 shares to a sophisticated
investor for $10,000.


During
October 2000, the Company issued 750,000 shares of common stock valued at
$90,000 to non-employee directors as compensation for services as board members.


The foregoing transactions
are claimed to be exempt from registration under the Securities Act of 1933, as
amended, pursuant to Section 4(2) thereof, as a transaction not involving a
public offering, in that the purchasers had full access to all material
information concerning the Company and were acquiring the securities for
investment and not with a view to distribution. There were no underwriting
discounts or commissions paid in connection with the transactions nor was any
advertising or other form of general solicitation used by the Company.



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


(a)  Exhibits.


27  Financial Data Schedule


(b)  Reports on Form 8-K.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | None.
| | -----

|Page 13
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|SIGNATURES


In
accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused this
amended report to be signed on its behalf by the undersigned, thereunto duly authorized.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | AMERICAN TECHNOLOGIES GROUP, INC.
| | ---------------------------------
| | By:                              
| | Date:                            

|Page 14
|-------