**UNITED
      STATES**


**SECURITIES
      AND EXCHANGE COMMISSION**


WASHINGTON,
      D.C. 20549




**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, 2007




o
            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
                Employerincorporation
                or organization)
            
            Identification
                No.)






412
      W
      Bolt St.


Fort
      Worth, TX 76113


(Address
      of principal executive offices) (zip code)




Issuer's
      telephone number: (817) 927-5333





Securities
      registered under Section 12(b) of the Exchange Act:





Title
      of
      each class Name of exchange on which registered


None




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 o




**APPLICABLE
      ONLY TO ISSUERS INVOLVED IN BANKRUPTCY**





**PROCEEDINGS
      DURING THE PRECEDING FIVE YEARS**




Check
      whether the registrant filed all documents and reports required to be filed
      by
      Section 12, 13 or 15(d) of the Exchange Act after the distribution of securities
      under a plan confirmed by a court. Yes o No o








**APPLICABLE
      ONLY TO CORPORATE ISSUERS**




State
      the
      number of shares outstanding of each of the registrant's classes of common
      equity, as of the latest practicable date: As of June 14, 2007 the registrant
      had 10,382,047 common stock outstanding, 1,500 shares of Series E Stock issued
      and outstanding, and 376,794 shares of Series A Stock outstanding.




Transitional
      Small Business Disclosure Format (Check one): Yes o No x




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







TABLE
                OF CONTENTSPART
                I
            FINANCIAL
                INFORMATIONITEM
                1
            Financial
                StatementsCondensed
                Consolidated Balance Sheet (unaudited)
            1Condensed
                Consolidated Statements of Operations (unaudited)
            2Condensed
                Consolidated Statement of Stockholders' Equity (unaudited)
            3Condensed
                Consolidated Statements of Cash Flows (unaudited)
            4Notes
                to Condensed Consolidated Financial Statements (unaudited)
            5ITEM
                2
            Management's
                Discussion and Analysis or Plan of Operation
            10ITEM
                3
            Controls
                and Procedures
            14PART
                II
            OTHER
                INFORMATION
            16ITEM
                1
            Legal
                Proceedings
            16ITEM
                2
            Unregistered
                Sales of Equity Securities and Use of Proceeds
            16ITEM
                3
            Defaults
                Upon Senior Securities
            16ITEM
                4
            Submission
                of Matters to a Vote of Security Holders
            16ITEM
                5
            Other
                Information
            16ITEM
                6
            Exhibits
            16SIGNATURES
            17







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 REFLECT EVENTS OR CIRCUMSTANCES
      THAT
      MAY ARISE AFTER THE DATE HEREOF.








**PART
      I. FINANCIAL INFORMATION**


**ITEM
        1. FINANCIAL STATEMENTS**


AMERICAN
        TECHNOLOGIES GROUP, INC.
 CONDENSED
        CONSOLIDATED BALANCE SHEET
 APRIL
        30,
        2007
 (Unaudited)
 
 ASSETSCurrent
                  assets:Cash
                  and cash equivalents
              
              $
              570,447Accounts
                  receivable, net of allowance for doubtfulaccounts
                  of $84,002
              
              
              7,601,039Inventory
              
              
              4,798,170Cost
                  and estimated earnings in excess of billings
              
              
              832,457Total
                  current assets
              
              
              13,802,113Cash
                  surrender value of officers' life insurance
              
              
              101,413Property
                  and equipment, net
              
              
              2,454,491Goodwill
              
              
              3,390,370Total
                  assets
              
              $
              19,748,387LIABILITIES
                  AND STOCKHOLDERS' EQUITYCurrent
                  liabilities:Accounts
                  payable
              
              $
              5,303,397Accrued
                  expenses
              
              
              2,927,354Billings
                  in excess of costs and estimated earnings
              
              
              2,891,325Notes
                  payable, current portion, net ofdiscount
                  of $1,000,000
              
              
              3,300,650Total
                  current liabilities
              
              
              14,422,726Notes
                  payable, long term portion, net ofdiscount
                  of $2,162,752
              
              
              5,230,348Total
                  liabilities
              
              
              19,653,074Stockholders'
                  equity:Preferred
                  stock, series A
              
              
              377Preferred
                  stock, series E
              
              
              2Common
                  stock
              
              
              10,382Common
                  stock to be issued
              
              
              14Stock
                  subscription
              
              
              6,750Additional
                  paid-in capital
              
              
              78,562,313Accumulated
                  deficit
              
              
              (78,484,525
              )Total
                  stockholders' equity
              
              
              95,313Total
                  liabilities and stockholders' equity
              
              $
              19,748,387
 
 The
        accompanying footnotes are an integral part of this unaudited condensed
        consolidated financial statement.
  1
 
 AMERICAN
        TECHNOLOGIES GROUP, INC.
 CONDENSED
        CONSOLIDATED STATEMENTS OF OPERATIONS
 FOR
        THE
        THREE MONTHS AND NINE MONTHS ENDED APRIL 30, 2007 AND 2006
 (Unaudited)
 
 Three
                  Months ended April 30,
              
              Nine
                  Months ended April 30,2007
              
              2006
              
              2007
              
              2006(Restated)
              
              
              
              (Restated)Net
                  sales
              
              $
              8,792,899
              
              $
              6,430,604
              
              $
              25,139,914
              
              $
              16,736,644Cost
                  of sales
              
              
              7,833,010
              
              
              5,611,395
              
              
              21,868,569
              
              
              14,724,752Gross
                  profit
              
              
              959,889
              
              
              819,209
              
              
              3,271,345
              
              
              2,011,892Selling,
                  general and administrative expenses
              
              
              919,852
              
              
              527,716
              
              
              2,703,000
              
              
              9,236,600Operating
                  income (loss)
              
              
              40,037
              
              
              291,493
              
              
              568,345
              
              
              (7,224,708
              )Other
                  income (expense)Interest
                  income
              
              
              1,515
              
              
              28,898
              
              
              16,964
              
              
              88,206Interest
                  expense
              
              
              (349,225
              )
              
              (1,339,163
              )
              
              (1,032,366
              )
              
              (3,668,269
              )Financing
                  costs
              
              
              (1,003,693
              )
              
              (19,175
              )
              
              (2,902,930
              )
              
              (3,469,325
              )Total
                  other income (expense)
              
              
              (1,351,403
              )
              
              (1,329,440
              )
              
              (3,918,332
              )
              
              (7,049,388
              )Loss
                  before income taxes
              
              
              (1,311,366
              )
              
              (1,037,947
              )
              
              (3,349,987
              )
              
              (14,274,096
              )Provision
                  for income taxes
              
              
              -
              
              
              7,500
              
              
              -
              
              
              19,405Net
                  loss
              
              
              (1,311,366
              )
              
              (1,045,447
              )
              
              (3,349,987
              )
              
              (14,293,501
              )Preferred
                  dividend
              
              $
              3,000
              
              
              4,000
              
              
              9,000
              
              $
              158,800Net
                  loss attributable to common shareholders
              
              $
              (1,314,366
              )
              $
              (1,049,447
              )
              $
              (3,358,987
              )
              $
              (14,452,301
              )Loss
                  per share, basic and diluted
              
              $
              (0.09
              )
              $
              (0.26
              )
              $
              (0.22
              )
              $
              (4.46
              )Loss
                  per share attributable to commonshareholders,
                  basic and diluted
              
              $
              (0.09
              )
              $
              (0.26
              )
              $
              (0.22
              )
              $
              (4.51
              )Weighted
                  average shares outstanding
              
              
              15,067,047
              
              
              3,976,592
              
              
              15,067,047
              
              
              3,206,447
 
 The
        accompanying footnotes are an integral part of this unaudited condensed
        consolidated financial statement.
  2
  AMERICAN
        TECHNOLOGIES GROUP, INC.
 CONDENSED
        CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
 FOR
        THE
        NINE MONTHS ENDED
 APRIL
        30,
        2007
 (Unaudited)
 Preferred
                    Stock
                
                Preferred
                    Stock
                
                
                
                Common
                    Stock
                
                AdditionalSeries
                    A
                
                Series
                    E
                
                Common
                    Stock
                
                To
                    be Issued
                
                Paid
                    in
                
                Stock
                
                AccumulatedShares
                
                Amount
                
                Shares
                
                Amount
                
                Shares
                
                Amount
                
                Shares
                
                Amount
                
                Capital
                
                Subscriptions
                
                Deficit
                
                Total**Balance,
                    July 31, 2006**
                
                
                376,794
                
                $
                377
                
                
                1,500
                
                $
                2
                
                
                10,382,047
                
                $
                10,382
                
                
                13,719
                
                $
                14
                
                $
                78,562,313
                
                $
                6,750
                
                $
                (75,125,538
                )
                $
                3,454,300Preferred
                    dividend
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                -
                
                
                
                
                
                (9,000
                )
                
                (9,000
                )Net
                    loss
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                (3,349,987
                )
                
                (3,349,987
                )**Balance,
                    April 30, 2007**
                
                
                376,794
                
                $
                377
                
                
                1,500
                
                $
                2
                
                
                10,382,047
                
                $
                10,382
                
                
                13,719
                
                $
                14
                
                $
                78,562,313
                
                $
                6,750
                
                $
                (78,484,525
                )
                $
                95,313
 
 The
        accompanying footnotes are an integral part of this unaudited condensed
        consolidated financial statement.
  3
  AMERICAN
        TECHNOLOGIES GROUP, INC.
 CONDENSED
        CONSOLIDATED STATEMENTS OF CASH FLOWS
 FOR
        THE
        NINE MONTHS ENDED APRIL 30, 2007 AND 2006
 (Unaudited)
 
 2007
              
              2006(Restated)CASH
                  FLOWS FROM OPERATING ACTIVITIES:Net
                  loss
              
              $
              (3,349,987
              )
              $
              (14,293,501
              )Adjustments
                  to reconcile net loss to net cashused
                  in operating activities:Depreciation
                  and amortization
              
              
              125,343
              
              
              98,767Amortization
                  of discount
              
              
              2,602,930
              
              
              2,695,956Amortization
                  of loan costs
              
              
              -
              
              
              66,219Stock
                  issued for services
              
              
              -
              
              
              12,995Changes
                  in operating assets and liabilities:(Increase)
                  decrease in:Accounts
                  receivable
              
              
              (1,552,406
              )
              
              (1,512,836
              )Restricted
                  cash
              
              
              280,000
              
              
              (280,000
              )Inventory
              
              
              (1,224,725
              )
              
              303,540Costs
                  and earnings in excess of billings
              
              
              (648,446
              )
              
              1,010,863Prepaid
                  expenses
              
              
              118,966
              
              
              33,045Increase
                  (decrease) in:Accounts
                  payable and accrued expenses
              
              
              875,108
              
              
              10,669,381Billings
                  in excess of costs
              
              
              1,397,850
              
              
              (125,063
              )Net
                  cash used in operating activities
              
              
              (1,375,367
              )
              
              (1,320,634
              )CASH
                  FLOWS FROM INVESTING ACTIVITIES:Cash
                  paid for acquisitions
              
              
              -
              
              
              (669,823
              )Cash
                  received through acquisition
              
              
              -
              
              
              5,587,017Purchases
                  of property and equipment
              
              
              (16,726
              )
              
              (45,742
              )Net
                  cash provided by (used in) investing activities
              
              
              (16,726
              )
              
              4,871,452CASH
                  FLOWS FROM FINANCING ACTIVITIES:Proceeds
                  from issuance of notes
              
              
              -
              
              
              599,098Payments
                  on notes
              
              
              (375,000
              )
              
              (271,770
              )Net
                  cash provided by (used in) financing activities
              
              
              (375,000
              )
              
              327,328Net
                  increase (decrease) in cash
              
              
              (1,767,093
              )
              
              3,878,146Cash
                  and cash equivalents, beginning of year
              
              
              2,337,540
              
              
              12,953Cash
                  and cash equivalents, end of year
              
              $
              570,447
              
              $
              3,891,099Cash
                  paid for:Interest
              
              $
              1,025,672
              
              $
              628,289Income
                  taxes
              
              
              -
              
              
              -
 
 Non
        Cash
        Financial Activities:
 The
        purchase price for the North Texas Steel Acquisition of $11,000,000 was paid
        directly to the North Texas Steel Stockholders by our lenders.
 
 The
        accompanying footnotes are an integral part of this unaudited condensed
        consolidated financial statement.




4




**AMERICAN
        TECHNOLOGIES GROUP, INC.**
  **NOTES
        TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**
 **(UNAUDITED)**
 
 April
        30,
        2007 and 2006
 
 **NOTE
        1 - ORGANIZATION AND LINE OF BUSINESS**
  **Organization
        and Line of Business**
 
 American
        Technologies Group, Inc. (the "Company", "ATG", “we”, “us”, “our”), a Nevada
        corporation, was 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.
 
 The
        Company largely ceased operations during 2001 and had begun focusing efforts
        on
        restructuring and refinancing. In fiscal year ended July 31, 2005, we
        successfully continued these efforts to settle various pending lawsuits reduce
        outstanding liabilities, acquire an equity funding facility to finance
        acquisition of new products, entities and technologies, and otherwise strengthen
        the business.
 
 On
        September 7, 2005, ATG, through a newly formed wholly owned subsidiary, Omaha
        Holdings Corp. ("Omaha"), entered into a Share Purchase Agreement ("Agreement")
        with the stockholders of North Texas Steel Company, Inc. ("North Texas"),
        a
        privately-held company. Effective with the Agreement, all previously outstanding
        common stock owned by North Texas's shareholders was exchanged for $11,000,000.
        The transaction is accounted for using the purchase method of accounting
        in
        accordance with SFAS No.141, “Business Combinations.” The results of operations
        for North Texas have been included in the condensed consolidated statements
        of
        operations since the date of acquisition.
 
 North
        Texas Steel Company, Inc., is an American Institute of Steel Construction
        certified structural steel fabrication company and provides fabrication and
        detailing of structural steel components for commercial buildings, office
        buildings, convention centers, sports arenas, airports, schools, churches
        and
        bridges. North Texas fabricates structural steel from two locations in Fort
        Worth, Texas. North Texas fabricates structural steel from two locations
        in Fort
        Worth, Texas. It contracts with and grants credit to customers primarily
        located
        in southwestern United States.
 
 On
        April
        25, 2006, ATG, through a newly formed wholly owned subsidiary, Whitco Poles,
        Inc. (“Whitco”), acquired certain assets of Whitco Company, LP. The transaction
        is accounted for using the purchase method of accounting in accordance with
        SFAS
        No.141, “Business Combinations.” The results of operations for the Whitco
        Company, LP assets have been included in the condensed consolidated statements
        of operations since the date of acquisition.
 
 Whitco
        Company has been a provider of light poles to commercial and industrial markets
        worldwide. Whitco provides marketing expertise and engineering knowledge
        to a
        nationwide contracted lighting representative base as well as OEM
        customers.
 
 The
        accompanying financial statements present on a consolidated basis the accounts
        of the Company and its wholly owned subsidiaries. All significant inter-company
        accounts and transactions have been eliminated in consolidation.
  A
        summary
        of the significant accounting policies applied in the preparation of the
        accompanying financial statements follows.
  **Basis
        of Presentation**
  The
        accompanying un-audited condensed consolidated financial statements as of
        April
        30, 2007 and for the three month and nine month periods ended April, 30 2007
        and
        2006 have been prepared by the Company pursuant to the rules and regulations
        of
        the Securities and Exchange Commission, including Form 10-QSB and Regulation
        S-B. The information furnished herein reflects all adjustments (consisting
        of
        normal recurring accruals and adjustments), which are, in the opinion of
        management, necessary to fairly present the operating results for the respective
        periods. Certain information and footnote disclosures normally present in
        annual
        financial statements prepared in accordance with accounting principles generally
        accepted in the United States of America have been omitted pursuant to such
        rules and regulations. The Company believes that the disclosures provided
        are
        adequate to make the information presented not misleading. These financial
        statements should be read in conjunction with the audited consolidated financial
        statements and explanatory notes for the year ended July 31, 2006 as disclosed
        in the company's 10-KSB for that year as filed with the SEC, as it may be
        amended.
  5
 
 **AMERICAN
        TECHNOLOGIES GROUP, INC.**
  **NOTES
        TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**
 **(UNAUDITED)**
 
 April
        30,
        2007 and 2006
  The
        results of the three months and nine months ended April 30, 2007 are not
        necessarily indicative of the results to be expected for the pending full
        year
        ending July 31, 2007.
  **Restatement**
  The
        financial statements for the three and nine months ended April 30, 2006 have
        been restated as a result of the discount attributed to our September 2005
        convertible debt financings. The reduction resulted from the recalculation
        of
        the fair value of warrants issued with the debt. We previously valued the
        warrants at full fair value. In accordance with EITF 00-27, we have now valued
        the warrants based on relative fair value. As a result, the warrant value
        was
        reduced by $5,177,064. Due to the reduction in the warrant value, we have
        now
        recorded a beneficial conversion feature in the amount of $2,173,455. The
        net
        effect of these adjustments is to reduce the discount by
        $3,003,609.
  Because
        of the reduction in the discount, interest expense for the three and nine
        month
        periods ended April 30, 2006 was reduced by $244,129 and $644,610,
        respectively.
  We
        have
        additionally corrected the weighted average shares outstanding for the three
        and
        nine month periods ended April 30, 2006 to include option shares deemed
        outstanding due to the nominal consideration associated with their potential
        exercise.
  The
        effects of the above adjustments are summarized as follows:
  Three
                  Months
              
              Nine
                  MonthsApril
                  30, 2006
              
              April
                  30, 2006Net
                  loss - as reported
              
              
              (1,289,576
              )
              
              (14,938,111
              )Net
                  loss - as restated
              
              
              (1,045,447
              )
              
              (14,293,501
              )Net
                  loss attributable to common shareholders - as reported
              
              
              (1,293,576
              )
              
              (15,096,911
              )Net
                  loss attributable to common shareholders - as restated
              
              
              (1,049,447
              )
              
              (14,452,301
              )Loss
                  per common share - as reported
              
              
              (0.35
              )
              
              (4.83
              )Loss
                  per common share - as restated
              
              
              (0.26
              )
              
              (4.51
              )Weighted
                  average shares outstanding - as reported
              
              
              3,723,783
              
              
              3,124,029Weighted
                  average shares outstanding - as restated
              
              
              3,976,592
              
              
              3,206,447
 **NOTE
        2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES**
 
 **Basis
        of Consolidation**
 
 Our
        consolidated financial statements and the accompanying notes, which are prepared
        in accordance with U.S. generally accepted accounting principles (“GAAP”),
        include American Technologies Group, Inc. and all subsidiaries. We consolidate
        all majority-owned and controlled subsidiaries as well as variable interest
        entities in which we are the primary beneficiary as defined by Financial
        Accounting Standards Board (“FASB”) Interpretation No. 46R, “Consolidation of
        Variable Interest Entities, an interpretation of ARB No. 51.” We did not
        participate in any variable interest entities for the period
        presented.
 
 The
        accompanying financial statements present on a consolidated basis the accounts
        of the Company and its wholly owned subsidiaries. All significant inter-company
        accounts and transactions have been eliminated in consolidation.
 
 **Revenue
        Recognition**
 
 For
        financial reporting purposes the major constructions contracts completed
        by
        North Texas, profits are recognized using the percentage of completion method.
        Under this method, revenues are recognized based on the percentage of costs
        incurred to date to estimated total cost for each contract. Revisions in
        estimated contract profits are made in the period in which circumstances
        requiring the revisions become known. These estimates are subject to change
        in
        the near-term and could significantly impact the financial statements. Provision
        for estimated losses on uncompleted contracts is made in the period in which
        such losses are determined. Contract costs include all direct material and
        labor
        costs and those indirect costs related to contract performance, such as indirect
        labor, supplies, tools and repairs. Selling, general and administrative costs
        are charged to expense as incurred.
 
 On
        contracts where costs and estimated earnings are in excess of billings, the
        excess is treated as a current asset. Where billings are in excess of costs
        and
        estimated earnings, the excess is treated as a current
        liability.
  6
 
 **AMERICAN
        TECHNOLOGIES GROUP, INC.**
  **NOTES
        TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**
 **(UNAUDITED)**
  April
        30,
        2007 and 2006
  These
        amounts are reflected in the accompanying balance sheet as follows:
  **April 30,**
                **2007**Costs
                  and estimated earnings onuncompleted
                  contracts in excess of billings
              
              $
              832,457Billings
                  on uncompleted contracts inexcess
                  of costs and estimated earnings
              
              
              (2,891,325
              )$
              (2,058,868
              )
 
 Whitco
        revenues and product costs are recognized as their products are shipped to
        their
        customers. Whitco's product lines, while requiring similar manufacturing
        processes, such as welding and forming metal assemblies, as North Texas,
        are
        primarily catalog specified products with much shorter lead and production
        times.
 
 **Use
        of Estimates**
 
 In
        the
        normal course of preparing financial statements in conformity with accounting
        principles generally accepted in the United States of America, management
        is
        required to make estimates and assumptions that affect the reported amounts
        of
        assets and liabilities and disclosure of contingent assets and liabilities
        at
        the date of the financial statements and the reported amounts of revenues
        and
        expenses during the reporting period. Significant estimates made by management
        include the ability to collect accounts receivable, the ability to utilize
        inventories at cost, the amounts due under accounts payable, the valuation
        allowance of deferred tax assets and the fair market value of our equity
        instruments. Actual results could differ from those estimates.
 
 **Basic
        and Diluted Income (Loss) Per Share**
 
 Basic
        and
        diluted loss per common share is based upon the weighted average number of
        common shares outstanding during the fiscal year computed under the provisions
        of SFAS No. 128, Earnings Per Share. Common share equivalents were not
        considered as they would be anti-dilutive and had no impact on loss per share
        for any periods presented. The number of shares outstanding in the computation
        of loss per share is comprised of the following:
 **Three
                    months ended**
                
                **Nine
                    months ended**April
                    30, 2007
                
                
                April
                    30, 2006
                
                
                April
                    30, 2007
                
                
                April
                    30, 2006
 Common
                    shares outstanding
                
                
                10,382,047
                
                
                2,788,783
                
                
                10,382,047
                
                
                2,315,751Options
                    shares deemed outstanding
                
                
                4,685,000
                
                
                1,187,809
                
                
                4,685,000
                
                
                890,696Weighted
                    average shares outstanding for computation
                
                
                15,067,047
                
                
                3,976,592
                
                
                15,067,047
                
                
                3,206,447
 
 **Reclassifications**
 
 Certain
        reclassifications have been made in prior year's financial statements to
        conform
        to classifications used in the current year.
  7
 
 **AMERICAN
        TECHNOLOGIES GROUP, INC.**
  **NOTES
        TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**
 **(UNAUDITED)**
  April
        30,
        2007 and 2006
  **NOTE
        3 - FINANCIAL CONDITION AND GOING CONCERN**
 
 To
        date,
        ATG has been unable to generate significant cash flows from our business
        operations. As a result, we have funded our operations through investor
        financing, including sales of common stock and the exercise of warrants and
        options. The Company has also used debt to fund its operations. Until such
        time
        as we are able to generate significant cash flows from operations through
        increased sales of our products, we will be required to continue our reliance
        on
        investor financing and debt to fund our operations.
 
 Our
        financial statements have been presented on the basis that we are a going
        concern, which contemplates the realization of assets and the satisfaction
        of
        liabilities in the normal course of business. As shown in the consolidated
        financial statements, during the three months and nine months ended April
        30,
        2007, we incurred a net loss of $1,311,366 and $3,349,987 and negative operating
        cash flow of $1,375,367. The Company’s current liabilities exceeded its current
        assets by $620,613 as of April 30, 2007. Since its inception, the Company
        has incurred significant operating losses totaling approximately $78 million.
        These factors, among others, raise substantial doubt about our ability to
        continue as a going concern.
 
 The
        financial statements do not include any adjustments relating to the
        recoverability and classification of recorded asset amounts or the amounts
        and
        classification of liabilities that might be necessary should we be unable
        to
        continue as a going concern. Our continuation as a going concern is dependent
        upon its ability to generate sufficient cash flow to meet our obligations
        on a
        timely basis, to obtain additional financing, and ultimately to attain
        successful operations. Management is continuing its efforts to obtain additional
        funds so that we can meet our obligations and sustain operations. Management
        continues to focus on improving our results of operations by increasing sales
        and decreasing our cost structure to improve cash flows from
        operations.
  **NOTE
        4 - ACQUISITIONS**
 
 On
        September 7, 2005, the Company, through a newly formed wholly owned subsidiary,
        Omaha Holdings Corp. ("Omaha"), entered into a Share Purchase Agreement
        ("Agreement") with the stockholders of North Texas Steel Company, Inc. ("North
        Texas"), a privately-held company. Effective with the Agreement, all previously
        outstanding common stock owned by North Texas's shareholders was exchanged
        for
        $11,000,000 in cash. The Company also incurred costs directly attributable
        to
        the acquisition of $1,593,370. The transaction is accounted for using the
        purchase method of accounting in accordance with SFAS No.141, “Business
        Combinations.” The results of operations for North Texas have been included in
        the condensed consolidated statements of operations since the date of
        acquisition.
 
 On
        April
        25, 2006, the Company, through a newly formed wholly owned subsidiary, Whitco
        Poles, Inc., acquired certain assets of Whitco Company, L.P. The Company
        issued
        3,750,000 common stock purchase warrants, valued at $1,875,000. The transaction
        is accounted for using the purchase method of accounting in accordance with
        SFAS
        No.141, “Business Combinations.” The results of operations for the assets
        acquired have been included in the condensed consolidated statements of
        operations since the date of acquisition.
  Pro
        forma
        un-audited financial information for the three and nine months ended April
        30,
        2006, assuming that the acquisitions had occurred as of August 1, 2005 is
        as
        follows:
 
 **Three
                  months ended**
              
              **Nine
                  months**
                **ended****April
                  30, 2006**
              
              **April
                  30, 2006**Revenues
              
              $
              8,890,401
              
              $
              31,538,624Net
                  (Loss) income
              
              
              (1,436,848
              )
              
              (15,084,671
              )(Loss)
                  income per share
              
              $
              (0.36
              )
              $
              (4.70
              )
  8
 
 **AMERICAN
        TECHNOLOGIES GROUP, INC.**
  **NOTES
        TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**
 **(UNAUDITED)**
  April
        30,
        2007 and 2006
 
 The
        un-audited pro forma amounts are not necessarily indicative of the results
        that
        would have occurred if the acquisitions of North Texas and Whitco had been
        completed on the date indicated.
 
 **NOTE
        5 - CONCENTRATIONS**
 
 Financial
        instruments which potentially subject us to concentrations of credit risk
        consist principally of cash, cash investments and accounts
        receivable.
 
 We
        maintain our cash and cash equivalents in bank deposit accounts which, at
        times,
        exceed federally insured limits. The Company has not experienced any losses
        in
        these accounts. ATG believes it is not exposed to any significant credit
        risk on
        cash and cash equivalents.
 
 Concentration
        of credit risk with respect to accounts receivable is limited due to the
        geographic distribution of the entities comprising the Company's customer
        base.
        The Company's revenues earned on contracts for the nine months ended April
        30,
        2007 included an aggregate of 53% from one customer. The same customer accounts
        for 22% of our accounts receivable at April 30, 2007. The Company’s costs of
        sales for the nine months ended April 30, 2007 included an aggregate of 28%
        from
        two vendors. These same two vendors account for 41% of our accounts payable
        at
        April 30, 2007.
 
 **NOTE
        6 - CONVERTIBLE DEBENTURES AND OTHER NOTES PAYABLE**
  Our
        secured term note B with Laurus in the principal amount of $2,000,000
        convertible into up to 6,006,006 shares of our common stock originally matured
        and was fully payable on March 6, 2007. We did not pay the amount due on
        that
        date. Rather we received a written extension of the maturity date of the
        Term B
        note on the condition that we agree to pay a $300,000 extension fee. In
        addition, as part of the extension of the maturity date to May 7, 2007, Laurus
        also agreed to extend the time for the effectiveness of the Form SB-2
        Registration Statement we filed as required by our Registration Rights Agreement
        with Laurus to May 7, 2007. As of April 30, 2007, the Company has accrued,
        but
        not paid, the $300,000 extension fee.
 As
          of
          this time we have neither paid the amounts due under the Term B note or
          caused
          or registration statement to be effective. Rather, Laurus has again agreed
          to
          extend the time we have to pay the note and to cause our registration statement
          to be effective from May 7, 2007 to July 31, 2007. Prior to July 31,
          2007, we will seek to refinance our debt with Laurus. If we cannot
          refinance our debt in the time allowed, we will have to negotiate for additional
          extensions.
 **NOTE
          7 - RELATED PARTY TRANSACTIONS**
 
 On
          February 28, 2007, the Company accepted the resignation of William N. Plamondon
          III, as Chief Executive Officer and finalized the terms of his departure.
          Pursuant to the attached Severance and Release Agreement, Mr. Plamondon,
          and
          R.I. Heller Co., LLC and certain other parties who have worked with RI
          Heller
          have agreed that Mr. Plamondon will serve as CEO through March 1, 2007,
          that RI
          Heller and Mr. Plamondon will transfer, without charge, all shares of common
          stock of the Company owned by them (680,000 shares) to the Company, that
          RI
          Heller will receive $120,000 for Mr. Plamondon's and RI Heller's services
          (payable in 12 monthly installments of $10,000), and that the parties will
          mutually release each other for all claims to the date of the agreement.
          As of
          April 30, 2007, the 680,000 common shares have not been transferred to
          the
          Company.
  9




**ITEM
      2. MANAGEMENT'S DISCUSSION AND ANALYSIS AND RESULTS OF
      OPERATION**





**MANAGEMENT’S
      DISCUSSION AND ANALYSIS OF**


**FINANCIAL
      CONDITION AND RESULTS OF OPERATIONS**




The
      following discussion and analysis should be read in conjunction with our
      financial statements. This discussion should not be construed to imply that
      the
      results discussed herein will necessarily continue into the future, or that
      any
      conclusion reached herein will necessarily be indicative of actual operating
      results in the future.




**SUMMARY
      of RECENT TRANSACTIONS**




**Whitco
      Transaction**





On
      April
      25, 2006, the Company, through a newly formed wholly owned subsidiary, Whitco
      Poles, Inc., (“Whitco Poles”) acquired certain assets of Whitco Company, L.P. We
      issued 3,750,000 common stock purchase warrants, valued at
      $1,875,000.





**North
      Texas Transaction**





On
      September 7, 2005, through Omaha, our wholly owned subsidiary, we entered into
      the Agreement with the shareholders (the "North Texas Shareholders") of North
      Texas Steel Co., Inc. (“North Texas”). Under the terms of the agreement, Omaha
      acquired 100% of the common stock of North Texas in exchange for the payment
      of
      the Purchase Price. North Texas is engaged in the business of steel fabrication
      and is based in Fort Worth, Texas. We completed the acquisition of North Texas
      on September 7, 2005. The Purchase Price was paid as follows:





·
            $9,150,000
                was paid to the North Texas Shareholders;·
            $1,350,000
                was paid to an account designated pursuant to the terms of the North
                Texas
                Steel/Omaha Holdings Pension Plan Joint Account Agreement dated September
                7, 2005 (the "Pension Plan Agreement"); and·
            $500,000
                was paid to an account designated pursuant to the terms of the North
                Texas
                Steel/Omaha Holdings Indemnity Joint Account Agreement dated September
                7,
                2005 (the "Indemnity Agreement").





Each
      of
      the North Texas Shareholders, in connection with the acquisition, entered into
      standard non-compete/non-solicitation arrangements.





**GENERAL
      OVERVIEW**




From
      February 2002 through its acquisition of North Texas in September 2005, the
      Company largely had ceased its historical operations and incurred nominal
      operating expenses, primarily related to the maintenance of its corporate
      existence.




The
      following analysis of the consolidated results of operations
      includes the Company and its wholly-owned subsidiaries Omaha
      Holdings Corporation, North Texas and Whitco Poles.





**Critical
      Accounting Policies**




The
      preparation of our financial statements in conformity with accounting principles
      generally accepted in the United States requires us to make estimates and
      judgments that affect our reported assets, liabilities, revenues, and expenses,
      and the disclosure of contingent assets and liabilities. We base our estimates
      and judgments on historical experience and on various others assumptions we
      believe to be reasonable under the circumstances. Future events, however, may
      differ markedly from our current expectations and assumptions. While there
      are a
      number of significant accounting policies affecting our consolidated financial
      statements; we believe the following critical accounting policies involve the
      most complex, difficult and subjective estimates and judgments:


10




**Revenue
      Recognition**




Significant
      portions of North Texas' revenues are derived from construction and service
      projects. Revenues from fixed-price, cost-plus-fee, time and material and
      unit-price contracts are recognized using the percentage-of-completion method
      of
      accounting which recognizes income as work on a contract progresses. Recognition
      of revenues and profits generally are related to costs incurred in providing
      the
      services required under the contract. Earned revenue is the amount of cost
      incurred on the contract in the period plus the proportional amount of gross
      profit earned during the same period. This method is used because management
      considers total cost to be the best available measure of completion of
      construction contracts in progress. Provisions for estimated losses on
      construction contracts in progress are made in their entirety in the period
      in
      which such losses are determined without reference to the percentage complete.
      Changes in job performance, job conditions and estimated profitability,
      including those arising from contract penalty provisions and final contract
      settlements, may result in revisions to revenue and costs, and are recognized
      in
      the period in which the revisions are determined. Claims for additional revenue
      are not recognized until the period in which such claims are allowed. Direct
      contract costs include all direct labor, direct materials and some estimating
      costs and shop and equipment costs. General and administrative costs are charged
      to expense as incurred. Revenue from discontinued operations was recognized
      when
      persuasive evidence of an arrangement existed, the price was fixed, title had
      transferred, collection of resulting receivables was probable, no customer
      acceptance requirements existed and there were no remaining significant
      obligations.




Whitco
      Poles’ revenues and product costs are recognized as their products are shipped
      to their customers. Whito’s product lines, while requiring similar manufacturing
      processes as use by North Texas (such as welding and formal metal assemblies)
      are primarily catalog specific products with much shorter lead and production
      times.





**Allowance
      For Doubtful Accounts**




We
      are
      required to estimate the collectibility of our trade receivables. A considerable
      amount of judgment is required in assessing the realization of these receivables
      including the current creditworthiness of each customer and related aging of
      the
      past due balances. In order to assess the collectibility of these receivables,
      we perform ongoing credit evaluations of our customers' financial condition.
      Through these evaluations we may become aware of a situation where a customer
      may not be able to meet its financial obligations due to deterioration of its
      financial viability, credit ratings or bankruptcy. The reserve requirements
      are
      based on the best facts available to us and are reevaluated and adjusted as
      additional information is received. Our reserves are also based on amounts
      determined by using percentages applied to certain aged receivable categories.
      These percentages are determined by a variety of factors including, but are
      not
      limited to, current economic trends, historical payment and bad debt write-off
      experience. We are not able to predict changes in the financial condition of
      our
      customers and if circumstances related to our customers deteriorate, our
      estimates of the recoverability of our receivables could be materially affected
      and we may be required to record additional allowances. Alternatively, if we
      provided more allowances than are ultimately required, we may reverse a portion
      of such provisions in future periods based on our actual collection
      experience


**Comparison
        of the Quarter Ended April 30, 2006 to the Quarter Ended April 30,
        2007**
 
 **Results
        of Operations**
 
 **Revenues**
 
 Revenues
        for the quarter ended April 30, 2007 resulted from operations of North Texas
        Steel and Whitco Poles. The Company’s revenues for the three months ended April
        30, 2007 were approximately $8,793,000 and were approximately $6,431,000
        for the
        three months ended April 30, 2006.  A primary reason for the increase in
        revenue was the inclusion of Whitco’s revenue in the 2007 quarter as well as
        improved market conditions. Whitco was not acquired until April 25, 2006.
 
 **Cost
        of Sales**
 
 The
        cost
        of sales for the quarter ended April 30, 2007 was approximately $7,833,000
        and approximately $5,611,000 in 2006. A primary reason for the increase was
        the
        inclusion Whitco costs of sales in 2007. Whitco cost of sales for the quarter
        ended April 30, 2007 were approximately $630,000. The Company's gross margin
        was
        approximately $960,000 and $819,000 for the three months ended April 30,
        2007
        and 2006, respectively or 10.9 % and 12.7 % of revenue, respectively.
 
 The
        cost
        of sales predominantly consists of the cost of labor, raw materials, outsourcing
        costs and absorbed indirect manufacturing costs.
  **Selling,
        General and Administrative Expenses**
 
 For
        the
        quarters ended April 30, 2007 and 2006, selling, general and administrative
        expenses were approximately $920,000 and $528,000, respectively, which consist
        primarily of administrative expenses. General and administrative expenses
        increased by approximately $392,000 from 2006.  This
        increase was primarily from increased expenses associated with the acquisition
        and operation of Whitco and professional fees associated with the Company’s 2006
        audit and SEC filings.
  11
  **Interest
        Expense**
 
 Interest
        and financing expense results primarily from the acquisition of the North
        Texas
        operations in a highly leveraged transaction. Interest and finance costs
        include
        the amortization of debt discount resulting from the non cash cost associated
        with equity instruments issued in connection with the debt and a beneficial
        conversion feature attributable to the debt instruments.
  **Comparison
        of the Nine Months Ended April 30, 2006 to the Nine Months Ended April 30,
        2007**
 
 **Results
        of Operations**
  **Revenues**
 
 Revenues
        for the nine months ended April 30, 2007 resulted from the operations of
        North
        Texas Steel and Whitco Poles. The Company’s revenues for the nine months ended
        April 30, 2007 were approximately $25,140,000 and were approximately $16,737,000
        for the nine months ended April 30, 2006. A primary reason for the increase
        in
        revenue was the inclusion of Whitco’s revenue in the 2007 period. Whitco was not
        acquired until April 25, 2006. Whitco sales for the nine months ended April
        30,
        2007 were approximately $2,748,000. Also, North Texas revenues have been
        included for the full nine months ended April 30, 2007. In the 2006 period,
        North Texas revenues were included from the September 7, 2005
        acquisition.
 Structural
          orders backlog at April 30, 2007 was approximately $23,000,000 compared
          to a
          backlog of about $15,076,000 on April 30, 2006. Our bidding remains strong.
          We
          expect the fabricated structural steel market to remain strong for the
          remainder
          of 2007 and into 2008. There is still concern over extended mill rolling
          lead
          times and continued increase in mill base pricing and their effects on
          the
          design and construction community .
 
 **Cost
          of Sales**
 
 The
          cost
          of sales for the nine months ended April 30, 2007 was approximately
          $21,869,000 and approximately $14,725,000 in 2006. A primary reason for
          the
          increase was the inclusion Whitco costs of sales in 2007. Whitco cost of
          sales
          for the nine months ended April 30, 2007 were approximately $2,594,000.The
          Company's gross margin was approximately $3,271,000 and $2,012,000 for
          the nine
          months ended April 30, 2007 and 2006, respectively or 13 % and 12 % of
          revenue,
          respectively..
 
 The
          cost
          of sales predominantly consists of the cost of labor, raw materials, outsourcing
          costs and absorbed indirect manufacturing costs.
  **Selling,
          General and Administrative Expenses**
 
 For
          the
          nine months ended April 30, 2007 and 2006, selling, general and
          administrative expenses were approximately $2,703,000 and $9,237,000,
          respectively, which consist primarily of administrative expenses. General
          and
          administrative expenses decreased by approximately $6,534,000 from 2006.
          This
          decrease was primarily from consulting fees incurred in 2006 **.** Our
          selling, general and administrative expenses are and will remain high as
          a
          result of complying with various federal and state regulatory filing
          requirements.
  **Interest
          Expense**
 
 Interest
          and financing expense results primarily from the acquisition of the North
          Texas
          operations in a highly leveraged transaction. Interest and finance costs
          include
          the amortization of debt discount resulting from the non cash cost associated
          with equity instruments issued in connection with the debt and a beneficial
          conversion feature attributable to the debt instruments.
 12
 **Restatement**
  The
          financial statements for the three and nine months ended April 30, 2006
          have
          been restated as a result of the discount attributed to September 2005
          convertible debt financings. The reduction resulted from the recalculation
          of
          the fair value of warrants issued with the debt. We previously valued the
          warrants at full fair value. In accordance with EITF 00-27, we have now
          valued
          the warrants based on relative fair value. As a result, the warrant value
          was
          reduced by $5,177,064. Due to the reduction in the warrant value, we have
          now
          recorded a beneficial conversion feature in the amount of $2,173,455. The
          net
          effect of these adjustments is to reduce the discount by
          $3,003,609.
  Because
          of the reduction in the discount, interest expense for the three and nine
          month
          periods ended April 30, 2006 was reduced by $244,129 and $644,610,
          respectively.
  We
          have
          additionally corrected the weighted average shares outstanding for the
          three and
          nine month periods ended April 30, 2006 to include option shares deemed
          outstanding due to the nominal consideration associated with their potential
          exercise.
  The
          effects of the above adjustments are summarized as follows:
  Three
                    Months
                
                Nine
                    MonthsApril
                    30, 2006
                
                April
                    30, 2006Net
                    loss - as reported
                
                
                (1,289,576
                )
                
                (14,938,111
                )Net
                    loss - as restated
                
                
                (1,045,447
                )
                
                (14,293,501
                )Net
                    loss per common share - as reported
                
                
                (1,293,576
                )
                
                (15,096,911
                )Net
                    loss per common share - as restated
                
                
                (1,049,447
                )
                
                (14,452,301
                )Loss
                    per common share - as reported
                
                
                (0.35
                )
                
                (4.83
                )Loss
                    per common share - as restated
                
                
                (0.26
                )
                
                (4.51
                )Weighted
                    average shares outstanding - as reported
                
                
                3,723,783
                
                
                3,124,029Weighted
                    average shares outstanding - as restated
                
                
                3,976,592
                
                
                3,206,447
 As
          a
          result of this restatement, our forms 10QSB for the periods ending October
          31,
          2005, January 31, 2006 and April 30, 2006 will need to be amended to reflect
          such restatement. The Company is the process of preparing and filing amended
          forms 10QSB for those periods.
 **Liquidity
        and Capital Resources**
  As
        of
        April 30, 2007, we had approximately $570,000 in cash and equivalents. The
        Company’s current liabilities exceeded its current assets by $620,613 as of
        April 30, 2007. While in prior periods, we have had sufficient cash on hand
        to meet our obligations, as a result of the recapitalization, we may not
        have
        funds to meet our future working capital and financing needs. As a result,
        additional financing will be required in order to meet our current and projected
        cash flow deficits from operations and development. Although we are seeking
        financing to support our working capital needs, we have no commitments or
        assurances that it will be successful in raising the funds
        required.
 
 We
        believe that we will be successful in meeting the working capital needs to
        fund
        the current level of operating activities, capital expenditures and debt
        and
        other obligations through July 31, 2007 when the Laurus convertible term
        note B
        matures. However, if during that period or thereafter, we are not successful
        in
        generating sufficient capital resources and /or successfully refinancing
        our
        debt and/or obtaining additional extensions from Laurus on terms acceptable
        to
        us, this could have a material adverse effect on the Company's business,
        results
        of operations liquidity and financial condition .
 
 If
        in the
        future, if we are not capable of generating sufficient revenues from operations
        and its capital resources are insufficient to meet future requirements, we
        may
        have to raise funds to continue our operations.
  13
 
 While
        the
        Company has continued to raise capital to meet its working capital requirements,
        additional financing is required in order to meet future needs. There are
        no
        assurances the Company will be successful in raising the funds required and
        any
        equity raised would be substantially dilutive to existing
        shareholders.
 
 The
        Company's independent certified public accountants have stated in their report
        included in the Company's July 31, 2006 Form 10-KSB, that the Company has
        incurred operating losses in the last two years, and that the Company is
        dependent upon management's ability to develop profitable operations and
        to
        restructure its long- and short-term debt obligations to its principal sources
        of capital. These factors among others may raise substantial doubt about
        the
        Company's ability to continue as a going concern.
  **Off-
        Balance Sheet Arrangements**
 
 We
        do not
        maintain off-balance sheet arrangements nor do we participate in non-exchange
        traded contracts requiring fair value accounting treatment.
  **Inflation**
 
 The
        effect of inflation on our revenue and operating results was not significant.
        Our operations are located in North America and there are no seasonal aspects
        that would have a material effect on our financial condition or results of
        operations.




**ITEM
      3. CONTROLS AND PROCEDURES**





As
      of the
      end of the period covered by this report, we conducted an evaluation, under
      the
      supervision and with the participation of our chief executive officer and chief
      financial officer of our disclosure controls and procedures (as defined in
      Rule
      13a-15(e) and Rule 15d-15(e) of the Exchange Act). Based upon their evaluation,
      our chief executive officer and chief financial officer concluded that our
      disclosure controls and procedures need improvement and were not effective
      as of
      April 30, 2007 to ensure that information required to be disclosed by us in
      the
      reports that we file or submit under the Exchange Act is recorded, processed,
      summarized and reported, within the time periods specified in the Commission's
      rules and forms.  Our management is in the process of identifying
      deficiencies with regard to our disclosure controls and procedure and
      implementing corrective measures, which includes the establishment of new
      internal policies related to financial reporting.


14




**Changes
      in Internal Control over Financial Reporting**





As
      required by Rule 13a-15(d), the Company’s Chief Executive and Chief Financial
      Officer, conducted an evaluation of the Company’s internal controls over
      financial reporting to determine whether any changes occurred during the fourth
      fiscal quarter that have materially affected, or are reasonably likely to
      materially affect, the Company’s internal control over financial reporting.
      During the preparation of the Company’s financial statements as of and for the
      year ended July 31, 2006, the Company has concluded that the current system
      of
      disclosure controls and procedures was not effective because of the internal
      control weaknesses identified below. As a result of this conclusion, the Company
      has initiated the changes in internal control, to the extent possible given
      limitations in financial and manpower resources, also described below. It should
      be noted that any system of controls, however well designed and operated, can
      provide only reasonable, and not absolute, assurance that the objectives of
      the
      system will be met. In addition, the design of any control system is based
      in
      part upon certain assumptions about the likelihood of future
      events.





**Lack
      of Adequate Accounting Staff**





The
      Company was aware of its staffing needs and took steps to address its
      understaffed Finance and Accounting team to correct this material weakness.
      The
      Company engaged an independent contractor with extensive CFO-level management
      and SEC reporting experience in public companies. The Company feel’s this
      addition to the Company’s Finance and Accounting team will improve the quality
      of future period financial reporting.





**Timely
      Closing of the Books**





Management
      identified a material weakness based on the Company’s delay in closing its
      books. To correct this material weakness, checklists will be developed
      delineating tasks, preparation responsibilities, and review responsibilities
      targeting specific completion dates. The checklist will provide evidentiary
      support of work performed and reviewed. Specific checklist will be developed
      for
      non-quarter end months, quarter end months, and the annual close. These
      checklists have been developed and will be implemented in the year
      end close process and utilized in the preparation of the 2007 Form 10-KSB
      and subsequent period ends.





Pursuant
      to temporary rules of the Securities and Exchange Commission, this annual report
      does not include a report regarding the Company’s internal controls and
      procedures over financial reporting.


15





**PART
      II**





**OTHER
      INFORMATION**





**ITEM
      1. LEGAL PROCEEDINGS**




From
      time
      to time, the Company may become involved in various lawsuits and legal
      proceedings which arise in the ordinary course of business. However, litigation
      is subject to inherent uncertainties, and an adverse result in these or other
      matters may arise from time to time that may harm the Company’s business. The
      Company is currently not aware of nor has any knowledge of any such legal
      proceedings or claims that we believe will have, individually or in the
      aggregate, a   material adverse affect on our business, financial condition
      or operating results.




**ITEM
      2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF
      PROCEEDS.**





None.





**ITEM
      3. DEFAULTS ON SENIOR SECURITIES**





Our
        secured term note B with Laurus in the principal amount of $2,000,000
        convertible into up to 6,006,006 shares of our common stock originally matured
        and was fully payable on March 6, 2007. We did not pay the amount due on
        that
        date. Rather we received a written extension of the maturity date of the
        Term B
        note on the condition that we agree to pay a $300,000 extension fee. In
        addition, as part of the extension of the maturity date to May 7, 2007, Laurus
        also agreed to extend the time for the effectiveness of the Form SB-2
        Registration Statement we filed as required by our Registration Rights Agreement
        with Laurus to May 7, 2007. As of April 30, 2007, the Company has accrued,
        but
        not paid, the $300,000 extension fee.
 As
          of
          this time we have neither paid the amounts due under the Term B note or
          caused
          or registration statement to be effective. Rather, Laurus has again agreed
          to
          extend the time we have to pay the note and to cause our registration statement
          to be effective from May 7, 2007 to July 31, 2007. Prior to July 31,
          2007, we will seek to refinance our debt with Laurus. If we cannot
          refinance our debt in the time allowed, we will have to negotiate for additional
          extensions.




**ITEM
      4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS**





None.





**ITEM
      5. OTHER INFORMATION**





None.




**ITEM
      6. EXHIBITS**





(a)
            Exhibits.


31.1
              Certification
                  by Chief Executive Officer pursuant to Sarbanes-Oxley Section
                  302
  32.1
              Certification
                  by Chief Executive Officer pursuant to 18 U.S. C. Section
                  1350
 16




**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.**/s/
                Dr. Gary FrommDr.
                Gary FrommCHIEF
                FINANCIAL OFFICER




DATE:
      6/19/07







17