<PAGE>

                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                               AMENDMENT NO. 1 TO
                                   FORM 10-QSB


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

                  For the quarterly period ended April 30, 1999


         []       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                            95-4307525
                       ------                            ----------
           (State or other jurisdiction of              (IRS Employer
           incorporation or organization)            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 June 10, 1999, the registrant had 27,408,785 shares of Common
Stock outstanding.


<PAGE>


                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                         PAGE
                                                                                         ----
<S>             <C>                                                                      <C>
PART I          FINANCIAL INFORMATION

ITEM 1          Condensed Consolidated Financial Statements

                Condensed Consolidated Balance Sheets
                as of April 30, 1999 and July 31, 1998                                       3

                Condensed Consolidated Statements of Operations
                for the Three and Nine Months ended April 30, 1999 and 1998                  5

                Condensed Consolidated Statements of Cash Flows
                for the Nine Months ended April 30, 1999 and 1998                            6

                Notes to the Condensed Consolidated Financial Statements                     7

ITEM 2          Management's Discussion and Analysis                                         12


PART II         OTHER INFORMATION


ITEM 6          Exhibits and Reports on Form 8-K                                             15

                Signatures                                                                   16
</TABLE>


                           FORWARD-LOOKING STATEMENTS

IN ADDITION TO HISTORICAL INFORMATION, THIS QUARTERLY REPORT CONTAINS
FORWARD-LOOKING STATEMENTS WITHIN THE MEANING OF THE PRIVATE SECURITIES
LITIGATION REFORM ACT OF 1995, AND THE COMPANY DESIRES TO TAKE ADVANTAGE OF THE
"SAFE HARBOR" PROVISIONS THEREOF. THEREFORE THE COMPANY IS INCLUDING THIS
STATEMENT FOR THE EXPRESS PURPOSE OF SUCH SAFE HARBOR WITH RESPECT TO ALL SUCH
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

<PAGE>



               AMERICAN TECHNOLOGIES GROUP, INC. AND SUBSIDIARIES

         CONSOLIDATED BALANCE SHEETS - APRIL 30, 1999 AND JULY 31, 1998

                                     ASSETS
<TABLE>
<CAPTION>
                                                                            April 30,        July 31,
                                                                               1999            1998
                                                                         ---------------   ------------
                                                                           (Unaudited)
<S>                                                                      <C>               <C>
CURRENT ASSETS:
      Cash and cash equivalents                                             $   48,448     $    60,563
      Accounts receivable, net of allowance for
          doubtful accounts of $10,000 and $28,811
          at April 30, 1999 and July 31, 1998, respectively                     62,637          46,029
      Inventories, net                                                         179,432         149,658
      Due from officers/shareholders                                             5,580         138,198
      Other current assets                                                           -           8,482
                                                                         --------------    ------------
           Total current assets                                                296,097         402,930
                                                                         --------------    ------------


PROPERTY AND EQUIPMENT                                                       1,837,406       1,837,406
      Less--Accumulated depreciation and
          amortization                                                        (539,184)       (421,767)
                                                                         --------------    ------------
                                                                             1,298,222       1,415,639
                                                                         --------------    ------------


TECHNOLOGY RIGHTS, net of accumulated
          amortization of $700,000 and $400,000
          at April 30, 1999 and July 31, 1998, respectively                    500,000         800,000

OTHER ASSETS                                                                   393,752         432,909

ASSETS HELD FOR DISPOSAL                                                     2,710,845       3,925,051

ASSETS OF DISCONTINUED OPERATIONS                                                    -         134,401
                                                                         --------------    ------------

                                                                           $ 5,198,916     $ 7,110,930
                                                                         ==============    ============
</TABLE>



              The accompanying notes are an integral part of these
                    condensed consolidated balance sheets.

                                       3

<PAGE>



               AMERICAN TECHNOLOGIES GROUP, INC. AND SUBSIDIARIES

         CONSOLIDATED BALANCE SHEETS - APRIL 30, 1999 AND JULY 31, 1998

                      LIABILITIES AND STOCKHOLDERS' EQUITY

<TABLE>
<CAPTION>
                                                                                    April 30,          July 31,
                                                                                      1999               1998
                                                                                ---------------     --------------
                                                                                   (Unaudited)
<S>                                                                             <C>                 <C>
CURRENT LIABILITIES:
      Accounts payable                                                             $ 1,130,202       $    360,028
      Accrued liabilities                                                              595,962            145,770
      Accrued professional fees                                                        237,035            243,600
      Amounts due to related parties                                                   434,876            264,345
      Current portion of notes payable                                               1,276,230            372,824
      Current portion of capital lease obligations                                      22,344             22,344
      Convertible debentures                                                         1,675,000             75,000
      Liabilities of discontinued operations                                                 -            356,366
      Deposit on sale of discontinued operations                                             -            300,000
                                                                                ---------------     --------------
           Total current liabilities                                                 5,371,649          2,140,277

NOTES PAYABLE, net of current portion                                                1,019,408          1,587,955
CAPITAL LEASES OBLIGATIONS, net of current portion                                     253,780            283,084
                                                                                ---------------     --------------

           Total liabilities                                                         6,644,837          4,011,316
                                                                                ---------------     --------------

COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' EQUITY:
      Series A Convertible Preferred Stock:
          Par value--$.001,
          Authorized--10,000,000 shares
          Issued and outstanding--378,061 shares                                           378                378
      Series B Convertible Preferred Stock:
          Par value--.001,
          Authorized--500,000 shares
          Liquidation value--$8.00 per share
          None issued and outstanding                                                        -                  -
      Series C Convertible Preferred Stock:
          Par value--.001,
          Authorized--2,000 shares
          Liquidation value--$1,000 per share
          None issued and outstanding                                                        -                  -
      Common Stock:
          Par value--$.001, Authorized--100,000,000 shares Issued and
          outstanding -- 27,408,785 and 22,704,368 shares at April 30, 1999
          and July 31, 1998, respectively                                               27,409             22,704
      Additional paid in capital                                                    43,454,520         39,569,941
      Stock subscriptions                                                               13,320             63,440
      Prepaid consulting                                                            (1,164,084)                 -
      Deficit                                                                      (43,777,464)       (36,556,849)
                                                                                ---------------     --------------
           Total stockholders' equity                                               (1,445,921)         3,099,614
                                                                                ---------------     --------------

                                                                                   $ 5,198,916       $  7,110,930
                                                                                ===============     ==============
</TABLE>


              The accompanying notes are an integral part of these
                    condensed consolidated balance sheets.

                                       4
<PAGE>

               AMERICAN TECHNOLOGIES GROUP, INC. AND SUBSIDIARIES

                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

           FOR THE THREE AND NINE MONTHS ENDED APRIL 30, 1999 AND 1998

                                   (Unaudited)

<TABLE>
<CAPTION>
                                                               For Three Months Ended April 30,     For Nine Months Ended April 30,
                                                                     1999               1998              1999              1998
                                                              --------------     --------------     -------------     -------------
<S>                                                           <C>                <C>                <C>               <C>
REVENUES:
      Technology products                                      $    107,880       $     84,981      $    204,360      $    623,881
      Rental income                                                  19,000             50,000            96,000           100,000
      Other                                                          14,355             26,325           126,386            99,651
                                                              --------------     --------------     -------------     -------------
         Total operating revenues                                   141,235            161,306           426,746           823,532
                                                              --------------     --------------     -------------     -------------

OPERATING EXPENSES
      General and administrative                                  1,755,884            733,521         4,005,850         1,994,866
      Marketing and product development                             112,278             88,407           647,518           600,461
      Research and development                                      169,286            225,094           519,943           871,515
      Mining operations                                              35,495             20,551           117,570           115,863
      Amortization of technology rights                             100,000            100,000           300,000           300,000
      Loss on impairment of assets held for sale                    200,000                  -         1,200,000                 -
                                                              --------------     --------------     -------------     -------------
           Total operating expenses                               2,372,943          1,167,573         6,790,881         3,882,705
                                                              --------------     --------------     -------------     -------------

OTHER (EXPENSE) INCOME
      Interest expense, net                                        (108,281)           (34,684)         (845,396)       (1,562,065)
      Loss on investment in a joint venture                               -                  -           (39,341)                -
                                                              --------------     --------------     -------------     -------------
                                                                   (108,281)           (34,684)         (884,737)       (1,562,065)
                                                              --------------     --------------     -------------     -------------

NET LOSS FROM CONTINUING OPERATIONS
          BEFORE DISCONTINUED OPERATIONS                         (2,339,989)        (1,040,951)       (7,248,872)       (4,621,238)


LOSS ON DISCONTINUED OPERATIONS (NOTE 6)                            (24,368)          (231,071)         (201,943)         (518,812)
GAIN ON DISPOSAL OF
          DISCONTINUED OPERATIONS                                   230,200                  -           230,200                 -
                                                              --------------     --------------     -------------     -------------
                                                                    205,832           (231,071)           28,257          (518,812)
                                                              --------------     --------------     -------------     -------------

NET LOSS BEFORE EXTRAORDINARY ITEM                               (2,134,157)        (1,272,022)       (7,220,615)       (5,140,050)

EXTRAORDINARY ITEM
      Gain on extinguishment of debt                                      -             85,775                 -            85,775

                                                              --------------     --------------     -------------     -------------
NET LOSS                                                       $ (2,134,157)      $ (1,186,247)     $ (7,220,615)     $ (5,054,275)
                                                              ==============     ==============     =============     =============

BASIC AND DILUTED NET LOSS PER SHARE
      Continuing operations                                    $      (0.09)      $      (0.05)     $      (0.29)     $      (0.21)
      Discontinued operations                                          0.01              (0.01)             0.00             (0.02)
      Extraordinary item                                               0.00               0.00              0.00              0.00
                                                              --------------     --------------     -------------     -------------
          Net Loss                                             $      (0.08)      $      (0.06)     $      (0.29)     $      (0.23)
                                                              ==============     ==============     =============     =============

WEIGHTED AVERAGE NUMBER OF
       COMMON SHARES OUTSTANDING                                 26,850,333         22,441,203        25,070,103        21,662,736
                                                              ===============     ==============    ==============    =============
</TABLE>

              The accompanying notes are an integral part of these
                    condensed consolidated balance sheets.

                                       5
<PAGE>


               AMERICAN TECHNOLOGIES GROUP, INC. AND SUBSIDIARIES

                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

                FOR THE NINE MONTHS ENDED APRIL 30, 1999 AND 1998

                INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS

                                   (Unaudited)
<TABLE>
<CAPTION>
                                                                                   Nine Months Ended April 30,
                                                                                      1999              1998
                                                                              ---------------      --------------
<S>                                                                           <C>                  <C>
CASH FLOW FROM OPERATING ACTIVITIES:
      Net Loss                                                                  $ (7,220,615)       $ (5,054,275)
      Adjustments to reconcile net loss to net cash used
          in operating activities:
          Depreciation and amortization                                              431,623             419,390
          Write-off of advances to officers and shareholders                         136,698                   -
          Stock issued as consideration for services                               1,745,046             119,465
          Imputed interest expense for notes payable and capital lease                42,502                   -
          Interest and financing costs on convertible debt                           624,121           1,471,771
          Gain on disposal of discontinued operations                               (230,200)                  -
          Gain on extinguishment of debt                                                   -             (85,775)
          Loss on impairment of assets held for sale                               1,200,000                   -
          Loss on investment in joint venture                                         39,341                   -
          Loss on disposal of equipment                                                    -              10,161
      Changes in assets and liabilities:
          Accounts receivable                                                        (16,608)            366,736
          Inventories                                                                (29,774)            (44,925)
          Other current assets                                                         8,482              (7,286)
          Accounts payable and accrued liabilities                                 1,213,801            (258,159)
                                                                              ---------------      --------------
               Net cash used in operating activities                              (2,055,583)         (3,062,897)
                                                                              ---------------      --------------

CASH FLOW FROM INVESTING ACTIVITIES:
          Purchase of property and equipment                                               -             (67,206)
          Investment in a joint venture                                                    -            (105,000)
          Other                                                                         (184)           (294,688)
                                                                              ---------------      --------------
               Net cash used in investing activities                                    (184)           (466,894)
                                                                              ---------------      --------------

CASH FLOW FROM FINANCING ACTIVITIES:
          Advances to shareholders/officers                                           (4,080)            (72,273)
          Advances from related parties                                              170,531                   -
          Proceeds from notes payable                                                325,000                   -
          Net proceeds from issuance of convertible debt                           1,405,913           2,834,880
          Payments on notes payable                                                  (11,947)           (230,686)
          Payments on capital lease obligation                                       (50,000)            (50,000)
          Deposit on sale of discontinued operations                                 201,000                   -
          Net proceeds from issuance of stock                                              -              81,427
                                                                              ---------------      --------------
               Net cash provided by financing activities                           2,036,417           2,563,348
                                                                              ---------------      --------------

NET CASH FLOWS FROM DISCONTINUED OPERATIONS                                            7,235              76,001

NET DECREASE IN CASH AND CASH EQUIVALENTS                                            (12,115)           (890,442)

CASH AND CASH EQUIVALENTS, beginning of period                                        60,563           1,025,076
                                                                              ---------------      --------------

CASH AND CASH EQUIVALENTS, end of period                                        $     48,448        $    134,634
                                                                              ===============      ==============

SUPPLEMENTAL SCHEDULE OF NON-CASH INVESTING
       AND FINANCING ACTIVITIES:
          Stock issued for deposit on sale of discontinued operations           $    500,000        $          -
                                                                              ===============      ==============
          Stock issued for consulting service                                   $  2,901,250        $    119,465
                                                                              ===============      ==============
          Stock issued for technology rights                                    $          -        $  1,200,000
                                                                              ===============      ==============
          Convertible debenture issued for commission                           $          -        $    225,000
                                                                              ===============      ==============
          Notes issued for mining properties                                    $          -        $    200,000
                                                                              ===============      ==============
          Conversion of debentures                                              $          -        $  3,150,000
                                                                              ===============      ==============
</TABLE>



              The accompanying notes are an integral part of these
                    condensed consolidated balance sheets.

                                       6

<PAGE>



               AMERICAN TECHNOLOGIES GROUP, INC. AND SUBSIDIARIES

            NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

                                   (unaudited)

1.       BASIS OF PRESENTATION

         The accompanying unaudited condensed 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 and nine month periods ended
         April 30, 1999 are not necessarily indicative of the results that may
         be expected for the year ended July 31, 1999. For further information,
         please refer to the consolidated financial statements and notes thereto
         included in the Company's Annual Report on Form 10-KSB/A for the fiscal
         year ended July 31, 1998.

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. ATG also is involved in research and development of
         proprietary energy and environmental systems and services which offer
         cost-effective solutions to reduce, and in some cases eliminate,
         hazardous chemical by-products or emissions resulting from industrial
         production and combustion processes.

         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 to (1) obtain sufficient additional capital,
         (2) generate significant revenues through its existing assets and
         operating business, and (3) overcome significant product development
         issues. 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. The Company has
         adopted the provisions of SFAS No. 128, "Earnings Per Share" issued in
         February 1997. 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 69,127 and
         972,781 for the nine months ended April 30, 1999 and 1998,
         respectively.

                                       Page 7

<PAGE>

         d.       RECLASSIFICATIONS

         Certain amounts in the April 30, 1998 consolidated financial statements
         have been reclassified to conform to current year presentation.

3.       DEBENTURES

         During the nine months ended April 30, 1999, the Company issued
         pursuant to subscription agreements $1,050,000, in the aggregate, of 6
         percent subordinated convertible debentures, maturing November 1, 2003.
         Interest is due semi-annually commencing May 1, 1999 or upon
         conversion. The principal and accrued interest are convertible into
         shares of ATG's Common Stock at the lower of a fixed conversion price
         of $0.62 or a variable conversion price equal to 75 percent of the
         average closing bid price of ATG's Common Stock during the five trading
         days preceding the date of conversion. The debentures include warrants
         to purchase 105,000 shares of Common Stock at $0.75 per share. The
         Company anticipates that all of the debentures (including interest)
         will be converted into ATG's Common Stock. Imputed interest of $350,000
         and financing costs of $194,087 were recorded as interest expense in
         connection with the $1,050,000 of debentures in the accompanying
         Consolidated Statements of Operations for the three and nine month
         periods ended April 30, 1999.

         In connection with the 6 percent subordinated convertible debentures,
         the Company placed 5,000,000 shares of ATG's Common Stock in escrow to
         be released to the extent due upon conversion of these debentures.

         In December 1998, the Company issued under a separate subscription
         agreement $250,000, in the aggregate, of 3 percent subordinated
         convertible debentures, maturing December 1, 2003. Interest is due upon
         the maturity date. The principal and accrued interest are convertible
         into 431,035 shares of ATG's Common Stock at a fixed conversion price
         of $0.58 per share. Imputed interest of $56,034 was recorded as
         interest expense in connection with the $250,000 of debentures in the
         accompanying Consolidated Statements of Operations for the three and
         nine month periods ended April 30, 1999.

         In February, 1999, the Company issued a 3 percent subordinated
         convertible debenture, maturing December 1, 2003 in the principal
         amount of $300,000. Interest is due on the maturity date. The principal
         and accrued interest are convertible into 600,000 shares of ATG's
         Common Stock at a fixed conversion price of $0.50 per share. The
         debentures include warrants to purchase 55,000 shares of Common Stock
         at $0.75 per share. Imputed interest of $24,000 was recorded as
         interest expense in connection with the $300,000 of debentures in the
         accompanying Consolidated Statements of Operations for the three and
         nine month periods ended April 30, 1999.

         During the three months ended April 30, 1999, the Company received from
         a debenture holder an 8 percent interest bearing loan with principal of
         $175,000 due December 1999 and $150,000 due May 1999, respectively. The
         loan includes warrants to purchase 25,000 shares of Common Stock at
         $0.75 per share and 35,000 shares at $0.35 per share, which prices are
         at or above market value on the date of issuance.


                                       Page 8

<PAGE>

4.       CAPITAL STOCK

         a.       COMMON STOCK

         During August 1998, the Company entered into two separate consulting
         agreements for services. Under the terms of the agreements, the Company
         issued 1,000,000 shares of ATG's Common Stock valued at $781,250 for
         services which is amortized on a straight line basis over the terms of
         the agreements expiring May 31, 1999 and July 31, 1999. During December
         1998, the Company entered into three separate consulting agreements for
         services. Under the terms of the agreements, the Company issued
         3,000,000 shares of ATG's Common Stock valued at $2,080,000 for
         services which is amortized on a straight line basis over the terms of
         the agreements expiring July, 1999, September, 1999 and November 1999.
         General and Administrative expenses include amortization expense of
         $847,050 and $1,697,167 for the three and nine month periods ended
         April 30, 1999 in the accompanying Consolidated Statements of
         Operations. As of April 30, 1999, the remaining unamortized cost of
         $1,164,084 is included in prepaid consulting under stockholders' equity
         in the accompanying Consolidated Balance Sheets.

         During November 1998, the Company issued 100,000 shares of Common Stock
         valued at $40,000 to a consultant for a special project relating to
         trading activity of the Company's Common Stock on the OTC Bulletin
         Board.

         During April 1999, the Company issued 561,798 shares of Common Stock to
         a former officer of the Company for the deposit of $500,000 placed with
         ATG pursuant to the agreement (see Note 6).

         b.       STOCK SUBSCRIPTIONS

         During the nine months ended April 30, 1999, the Company issued 20,619
         shares of Common Stock valued at $25,000 and 22,000 shares of Common
         Stock valued at $33,000 which were included within stock subscriptions
         as of July 31, 1998 and recorded a subscription of services for 4,000
         shares valued at $7,879. As of April 30, 1999, the Company had not
         issued (i) 6,000 shares of Common Stock owed for services rendered
         through January 31, 1999, valued at $11,820 and (ii) 500 shares of
         Common Stock sold under private placement for an aggregate of $1,500 in
         cash received prior to July 31, 1997. These amounts have been included
         within stock subscriptions in the accompanying Consolidated Balance
         Sheets.

5.       JOINT VENTURE

         In February, 1998, the Company formed a joint venture with
         approximately 25% ownership interest, which is accounted for in
         accordance with the equity method. The joint venture markets various
         personal and home care products containing the Company's proprietary
         IE(TM) crystals. Sales of these products commenced in June, 1998. The
         Company made an initial investment of $124,100 in the joint venture of
         which losses of $82,059 had been recognized in fiscal 1998. Due to the
         significant losses of the joint venture, the joint members agreed to
         terminate its exclusive right to the Company' IE Crystal and to consent
         to the withrawal of the Company as a member. The Company's remaining
         investment in this joint venture of $39,341 was written off during the
         nine months ended April 30, 1999.

6.       DISCONTINUED OPERATIONS

         On June 23, 1998, the Company entered into an agreement with a former
         officer-shareholder to sell the stock of ATG Media, Inc. for $500,000.
         The closing date was initially set as August 15, 1998, but had been
         extended by mutual agreement of the parties. The transaction was
         contingent


                                       Page 9

<PAGE>


         on the sale of 2,250,000 shares of the former officer's Common Stock
         to an unrelated third party for proceeds of at least $2,000,000. If
         the former officer's stock was not purchased, the Company was
         obligated to return the amount of purchase price paid in cash or
         shares of ATG's Common Stock valued at $0.89 per share. In April 1999,
         the transaction was canceled and the Company issued 561,798 shares of
         Common Stock to the former officer for the deposit of $500,000
         pursuant to the agreement.

         In April 1999, the Company sold the stock of ATG Media, Inc. to an
         unrelated third party. This third party paid $1,000 in cash and agreed
         to assume ATG Media's liabilities estimated at $300,000. In addition,
         at ATG's option, the buyer will provide ATG $200,000 of various
         advertising and promotional credits in ATG Media's publication, web
         site and other promotional venues on favorable terms. In the event that
         all of the promotional credits are not utilized by ATG prior to May 1,
         2000, the residual purchase price shall be paid in cash at the
         Company's option. The gain on the sale recorded was $230,020 in the
         accompanying Consolidated Statements of Operations for the three and
         nine months ended April 30, 1999. Due to the contingent nature of the
         promotion credits, the Company has taken 100 percent reserve against
         the value of these credits.

         Loss from operations of discontinued operations are $24,368 and
         $231,071 for the three months ended April 30, 1999 and 1998,
         respectively, and $201,943 and $518,812 for the nine months ended April
         30, 1999 and 1998, respectively.

7.       ASSETS HELD FOR SALE

         Included in assets held for sale in the accompanying Consolidated
         Balance Sheets are the Tempiute property of $360,000, the Manhattan
         gold property of $1,083,030 and Manhattan mill properties of
         $1,267,814, net of impairment. The Company wrote down $200,000 of
         impairment on the Tempiute property based on preliminary offers to
         purchase the property during the quarter ended April 30, 1999. The
         Company no longer plans to develop these properties but plans to sell,
         lease or otherwise dispose of its investment.

         In November 1997, the Company entered into a Mining Lease and Option to
         Purchase Agreement with Royal Gold, Inc. In April, 1999, Royal Gold
         advised the Company that it was exercising its right to terminate the
         agreement. In addition, in April, 1999, the Company was advised that
         NewGold, Inc. was unable to fulfill its obligations regarding the
         purchase of the Manhattan gold mill. In July, 1999, the Company sold
         these properties (see Note 9). The Company wrote down $1,000,000 of
         estimated impairment on these properties based on the net realizable
         value from the sale.

8.       RELATED PARTY TRANSACTIONS

         Included in amounts due to related parties in the accompanying
         Consolidated Balance Sheets is $142,500 in short term borrowings from
         related parties as of April 30, 1999. In consideration of these
         borrowings, the Company granted an option to purchase 75,000 shares of
         ATG's Common Stock at $0.40 per share.

         The Company wrote off $136,700 of loans due from officers/shareholders
         which amount has been recorded as compensation expense. The loans were
         originally provided for various reasons with approximately 75% of the
         aggregate loan amount incurred in 1997 as a means by former officers to
         attract or retain certain personnel. The majority of the remaining
         amount was incurred on behalf of an officer in connection with legal
         fees relating to the particle beam technology.

                                       Page 10

<PAGE>

9.       SUBSEQUENT EVENTS

         In July, 1999, the Company sold the Manhattan gold mill and properties
         to Western Mine Development for the assumption of the notes due
         (approximate total of $956,000) on the property and the payment of
         $2,500,000 plus interest over nine years against a 2% net smelter
         royalty.













                                       Page 11

<PAGE>


ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS

Management is continuing its on going efforts to refocus the Company's
activities on its core technologies, along with new product development,
including new applications for its IE technology, and commercialization of those
applications which are already perfected. Management believes that these efforts
have started to have positive effect in the quarter ended April 30, 1999.

RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED
APRIL 30, 1999 AND 1998

Revenue decreased by $20,100 from $161,300 to $141,200 for the three months
ended April 30, 1998 and April 30, 1999, respectively, due to declines in rental
and other income partially offset by a 27% increase in revenue ($22,900) from
the sale of technology products (The Force(R)). The Force is the Company's
principal commercial product. This increase in sales results from the
substantial efforts of management to focus on product sales.

The implementation of the strategic direction set by the Board of Directors
during the prior fiscal year has resulted in certain increases in operating
costs. Most of these costs have been non-cash as several consultants retained to
assist the Company in redefining itself to only focusing on its core
technologies agreed to be paid with shares of the Company's common stock.
Operating expenses increased by $1,205,400 from $1,167,600 to $2,373,000 for the
three months ended April 30, 1998 and April 30, 1999, respectively. The increase
was due to increases of $1,022,400 in general and administrative expense (due to
additional consulting expenses including prepaid services and settlement cost
accrual), $23,900 in marketing and product development, $14,900 in mining
expense and $200,000 in loss on impairment of mining properties partially offset
by a decrease of $55,800 in research and development expenses.

ATG's net loss for the third quarter of fiscal 1999 increased by $948,000 to
$2,134,200 from $1,186,200. The increase is principally due to increased
operating expenses and other expenses of $1,279,000, offset by decreases of
$206,700 in losses from discontinued operations and a gain from disposal of
discontinued operations of $230,200.

RESULTS OF OPERATIONS FOR THE NINE MONTHS ENDED
APRIL 30, 1999 AND 1998

Revenue decreased by $396,800 from $823,500 to $426,700 for the nine months
ended April 30, 1998 and April 30, 1999, respectively, principally due to the
Company's decision to stop selling IE crystals for use in laundry products by
TradeNet Marketing Inc. and the continuing transition from pure research and
development to commercialization and sales of products.

Reflecting the implementation of the strategic direction set by the Board of
Directors during the prior fiscal year, operating expenses increased by
$2,908,200 from $3,882,700 to $6,790,900 for the nine months ended April 30,
1998 and April 30, 1999, respectively. The increase was principally due to
increases of $2,011,000 in general and administrative expense (due to additional
consulting expenses including prepaid services and settlement cost), $47,000 in
marketing and product development costs and $1,200,000 in loss on impairment of
mining properties partially offset by decreases of $351,600 in research and
development.

Other expenses for the nine months ended April 30, 1999 decreased by $677,400 to
$884,700 from 1,562,100 for the corresponding period of fiscal 1998 due to a
decrease in interest expense.

ATG's net loss for the nine months ended April 30, 1999 increased by $2,166,300
to $7,220,600 from $5,054,300 for the corresponding period of fiscal 1998. The
increased loss is principally due to increased


                                       Page 12

<PAGE>


operating expenses of $2,908,200 and a decrease in revenues of $396,800
partially offset by decreases in other expenses of $677,400 and losses from
discontinued operations of $316,900 and a gain from disposal of discontinued
operations of $230,200.

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, (2) generate significant
revenues through its existing assets and operating business, and (3) overcome
significant product development issues. 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 $1,912,000 from $7,110,900 at July 31, 1998 to
$5,198,900 at April 30, 1999. This decrease was principally the net result of
amortization of technology rights of $300,000, write-off of amounts due from
officers/shareholders of $136,700, impairment loss on mining properties of
$1,200,000 and disposal of assets of discontinued operations of $134,400
partially offset by increases in net inventories of $29,800. In accordance with
SFAS Number 121, the Company has recorded an impairment loss of $1,000,000
associated with the sale of Manhattan properties and $200,000 to reduce the net
realizable value of it Tempiute mining property based upon its marketing efforts
to dispose of this property. Additional losses may be incurred depending upon
the outcome of these marketing efforts. The amounts written off from officers
represents the aggregate amount previously due from 5 people and has been
recorded as compensation expense. The loans were originally provided for various
reasons with approximately 75% of the aggregate loan amount incurred in 1997 as
a means by former officers to attract or retain certain personnel. The majority
of the remaining amount was incurred on behalf of an officer in connection with
legal fees relating to the particle beam technology. Due to the Company's cash
shortage, its ability to remunerate employees is limited. The Board agreed to
forgive the loans as a means to compensate the following individuals without the
expenditure of additional cash: Lawrence J. Brady, Shui-Yin Lo, Harold Rapp,
John M. Dab and Alex Nicolson.

Total liabilities increased by $2,633,500 from $4,011,300 to $6,644,800 at July
31, 1998 and April 30, 1999, respectively. This increase was due principally to
increases in accounts payable of $770,200, accrued liabilities of $450,200,
amounts due to related parties of $170,600, convertible debentures of $1,600,000
and notes payable of $334,900 partially offset by decreases in deposit on sale
of a subsidiary of $300,000 and liabilities of discontinued operations of
$356,400.

The Company's working capital deficiency at April 30, 1999 increased by
$3,338,200 to $5,075,600 from $1,737,400 at July 31, 1998. This increase is
principally the result of continuing operating losses incurred by the Company
which have been financed by increases in convertible debentures of $1,600,000,
accounts payable and accrued liabilities of $1,220,400, amounts due to related
parties of $170,600 and current portion of notes payable of $903,400 partially
offset by decreases in deposit on sale of a subsidiary of $300,000 and
liabilities of discontinued operations of $356,400. The Company anticipates that
$1,600,000 in convertible debentures will be converted into Common Stock during
fiscal 1999.

The principal source of working capital during the nine month period ending
April 30, 1999 was the sale of $1,600,000 of principal amount of convertible
debentures, short term loan of $325,000 and deposit on sale of a subsidiary of
$200,000. During the comparable period in 1998, the principal source of working
capital was the sale of $3,225,000 of principal amount of convertible
debentures.

Subsequent to April 30, 1999, the Company continued to finance its operations
with debt and equity. Negotiations are ongoing for a bridge loan with net
proceeds of $1,300,000 leading to a secondary public


                                       Page 13

<PAGE>



offering of Preferred Stock of the Company for $10,000,000, both in
connection with the Company's proposed acquisition of Commodore Separation
Technologies Inc. The proposed transaction with Commodore Separation
Technologies is discussed below. The Company's continued operations are
dependent upon obtaining some financing, of which there can be no assurance.

In January, 1999, the Company signed a letter of intent which effectuates its
acquisition of Commodore Separation Technologies, although the transaction is
structured as a merger. Execution of the definitive agreement is dependent upon
the Company having adequate financial resources to meet its operating expenses
during the remainder of the calendar year. Commodore Separation Technologies is
commercializing a proprietary separation technology and recovery system known as
SLiM(TM). SLiM stands for Supported Liquid Membrane. SLiM can selectively remove
from water valuable substances for reuse or toxic materials for safe disposal.

If the transaction is completed as proposed, the existing shareholders of
American Technologies would own approximately 80.1 percent of the Company and
the shareholders of Commodore Separation Technologies would own approximately
19.9 percent of the Company. In addition, the Commodore Separation Technologies
shareholders will receive one third of the after tax profit of the existing
business of Commodore Separation Technologies.

Statements included in this Management's Discussion and Analysis or Plan of
Operation 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" made pursuant to the safe harbor
provisions of the Private Securities Litigation Reform Act of 1995. 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 14

<PAGE>



                                     PART II

                                OTHER INFORMATION


ITEM 2.  CHANGES IN SECURITIES AND USE OF PROCEEDS

     ( c ) In April, 1999, the Company issued 561,798 shares of Common Stock to
     John R. Collins in lieu of the repayment of $500,000 paid by Mr. Collins on
     deposit against the purchase of ATG Media, Inc. The sale of ATG Media, Inc.
     to Mr. Collins was not completed due to the failure of certain conditions
     to closing. The foregoing stock issuance was exempt from registration
     pursuant to Section 4(2) of the Securities Act of 1933 as a transaction by
     an issuer not involving any public offering. No underwriter was utilized in
     the offering and no commissions were paid.

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K.

(a)      EXHIBITS.


27   Financial Data Schedule

------------------------------

 (b) REPORTS ON FORM 8-K.

         None



                                       Page 15

<PAGE>





                                   SIGNATURES

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


                                            AMERICAN TECHNOLOGIES GROUP, INC.


                                            By: /s/ LAWRENCE J. BRADY
                                                 ----------------------------
                                                 Lawrence J. Brady
                                                 Chairman of the Board and
                                                 Chief Executive Officer

                                            Date:  September 7, 1999


                                       Page 16