**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, 2008




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.


Ft.
      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 19, 2008 the registrant
      had 9,883,406 shares of common stock outstanding, 1,500 shares of Series E
      Preferred Stock outstanding, and 376,794 shares of Series A Preferred 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









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**


AMERICAN
      TECHNOLOGIES GROUP, INC.


CONDENSED
      CONSOLIDATED BALANCE SHEETS


APRIL
      30,
      2008 (UNAUDITED) and JULY 31, 2007 (AUDITED)





April
                30, 2008
            
            July
                31, 2007ASSETS
            
            (unaudited)Current
                assets:Cash
                and cash equivalents
            
            $
            1,529,374
            
            $
            710,121Accounts
                receivable, net of allowance for doubtfulaccounts
                of $153,312
            
            
            6,127,311
            
            
            6,661,534Inventory
            
            
            3,732,499
            
            
            5,102,386Cost
                and estimated earnings in excess of billings
            
            
            41,079
            
            
            238,449Prepaid
                expenses
            
            
            -
            
            
            110,056Total
                current assets
            
            
            11,430,263
            
            
            12,822,546Cash
                surrender value of officers' life insurance
            
            
            -
            
            
            101,413Property
                and equipment, net
            
            
            2,412,641
            
            
            2,446,177Goodwill
            
            
            3,390,370
            
            
            3,390,370Total
                assets
            
            $
            17,233,274
            
            $
            18,760,506LIABILITIES
                AND DEFICIENCY IN STOCKHOLDERS' EQUITYCurrent
                liabilities:Accounts
                payable
            
            $
            2,508,946
            
            $
            3,979,613Accrued
                expenses
            
            
            3,798,865
            
            
            3,104,601Billings
                in excess of costs and estimated earnings
            
            
            3,054,817
            
            
            3,263,681Notes
                payable, current portion, netof
                discount of $0 as of April 30, 2008 and $2,578,928 as of July 31,
                2007
            
            
            13,799,560
            
            
            8,837,572Total
                current liabilities
            
            
            23,162,188
            
            
            19,185,467Total
                liabilities
            
            
            23,162,188
            
            
            19,185,467Deficiency
                in Stockholders' equity:Preferred
                stock, series A; 10,000,000 shares authorized;376,794
                shares issued and outstanding
            
            
            377
            
            
            377Preferred
                stock, series B; 500,000 shares authorized; no shares issued and
                outstanding
            
            
            -
            
            
            -Preferred
                stock, series C; 2,000 shares authorized; no shares issued and
                outstanding
            
            
            -
            
            
            -Preferred
                stock, series D; 900,000 shares authorized; no shares issued and
                outstanding
            
            
            -
            
            
            -Preferred
                stock, series E; 25,000 shares authorized; 1,500 shares issued and
                outstanding
            
            
            2
            
            
            2Preferred
                stock, series F; 900,000 shares authorized; no shares issued and
                outstanding
            
            
            -
            
            
            -Preferred
                stock; 50,000,000 shares authorized; no shares issued and
                outstanding
            
            
            -
            
            
            -Common
                stock; 1,000,000,000 shares authorized $.001 par value;9,883,406
                and 9,701,166 shares issued and outstanding, respectively.
            
            
            9,883
            
            
            9,701Common
                stock to be issued
            
            
            14
            
            
            14Stock
                subscription
            
            
            6,750
            
            
            6,750Additional
                paid-in capital
            
            
            78,562,994
            
            
            78,562,994Accumulated
                deficit
            
            
            (84,508,934
            )
            
            (79,004,799
            )Total
                deficiency in stockholders' equity
            
            
            (5,928,914
            )
            
            (424,961
            )Total
                liabilities and deficiency in stockholders' equity
            
            $
            17,233,274
            
            $
            18,760,506





The
      accompanying footnotes are an integral part of these unaudited condensed
      consolidated financial statements.








AMERICAN
      TECHNOLOGIES GROUP, INC.


CONDENSED
      CONSOLIDATED STATEMENTS OF OPERATIONS


FOR
      THE
      THREE MONTHS AND NINE MONTHS ENDED APRIL 30, 2008 AND 2007


(UNAUDITED)





Three
                Months ended April 30,
            
            Nine
                Months ended April 30,2008
            
            2007
            
            2008
            
            2007Net
                sales
            
            $
            7,287,402
            
            $
            8,792,899
            
            $
            24,753,484
            
            $
            25,139,914Cost
                of sales
            
            
            5,892,244
            
            
            7,833,010
            
            
            20,770,606
            
            
            21,868,569Gross
                profit
            
            
            1,395,158
            
            
            959,889
            
            
            3,982,878
            
            
            3,271,345Selling,
                general and administrative expenses
            
            
            1,039,972
            
            
            919,852
            
            
            2,864,507
            
            
            2,703,000Operating
                income
            
            
            355,186
            
            
            40,037
            
            
            1,118,371
            
            
            568,345Other
                income (expense)Interest
                income
            
            
            1,736
            
            
            1,515
            
            
            7,588
            
            
            16,964Interest
                expense
            
            
            (270,787
            )
            
            (349,225
            )
            
            (898,233
            )
            
            (1,032,366
            )Financing
                costs
            
            
            -
            
            
            (1,003,693
            )
            
            (5,708,961
            )
            
            (2,902,930
            )Total
                other income (expense)
            
            
            (269,051
            )
            
            (1,351,403
            )
            
            (6,599,606
            )
            
            (3,918,332
            )Income
                (loss) before income taxes
            
            
            86,135
            
            
            (1,311,366
            )
            
            (5,481,235
            )
            
            (3,349,987
            )Provision
                for income taxes
            
            
            6,400
            
            
            -
            
            
            13,900
            
            
            -Net
                income (loss)
            
            
            79,735
            
            
            (1,311,366
            )
            
            (5,495,135
            )
            
            (3,349,987
            )Preferred
                dividend
            
            
            3,000
            
            
            3,000
            
            
            9,000
            
            $
            9,000Net
                income (loss) attributable to common shareholders
            
            $
            76,735
            
            $
            (1,314,366
            )
            $
            (5,504,135
            )
            $
            (3,358,987
            )Income
                (loss) per share, basic and diluted
            
            $
            0.01
            
            $
            (0.09
            )
            $
            (0.38
            )
            
            (0.22
            )Income
                (loss) per share attributable to commonshareholders,
                basic and diluted
            
            $
            0.01
            
            $
            (0.09
            )
            $
            (0.38
            )
            
            (0.22
            )Weighted
                average shares outstanding
            
            
            14,386,166
            
            
            15,067,047
            
            
            14,386,166
            
            
            15,067,047




The
      accompanying footnotes are an integral part of these unaudited condensed
      consolidated financial statements.




4




AMERICAN
      TECHNOLOGIES GROUP, INC.


CONDENSED
      CONSOLIDATED STATEMENT OF DEFICIENCY IN STOCKHOLDERS' EQUITY


FOR
      THE
      NINE MONTHS ENDED


APRIL
      30,
      2008


(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
            
            
            Subscription
            
            
            Deficit
            
            
            Total**Balance,
                July 31, 2007**
            
            
            376,794
            
            $
            377
            
            
            1,500
            
            $
            2
            
            
            9,701,166
            
            $
            9,701
            
            
            13,719
            
            $
            14
            
            $
            78,562,994
            
            $
            6,750
            
            $
            (79,004,799
            )
            $
            (424,961
            )Exercise
                of Stock Options
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            182,240
            
            
            182
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            182Preferred
                dividend
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            (9,000
            )
            
            (9,000
            )Net
                loss
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            (5,495,135
            )
            
            (5,495,135
            )**Balance,
                April 30, 2008**
            
            
            376,794
            
            $
            377
            
            
            1,500
            
            $
            2
            
            
            9,883,406
            
            $
            9,883
            
            
            13,719
            
            $
            14
            
            $
            78,562,994
            
            $
            6,750
            
            $
            (84,508,934
            )
            $
            (5,928,914
            )





The
      accompanying footnotes are an integral part of these unaudited condensed
      consolidated financial statements.




5




AMERICAN
      TECHNOLOGIES GROUP, INC.


CONDENSED
      CONSOLIDATED STATEMENTS OF CASH FLOWS


FOR
      THE
      NINE MONTHS ENDED APRIL 30, 2008 AND 2007


(UNAUDITED)




2008
            
            
            2007CASH
              FLOWS FROM OPERATING ACTIVITIES:Net
                loss
            
            $
            (5,495,135
            )
            $
            (3,349,987
            )Adjustments
                to reconcile net loss to net cashprovided
                by (used in) operating activities:Depreciation
                and amortization
            
            
            129,740
            
            
            125,343Default
                fee
            
            
            3,283,666
            
            
            -Amortization
                of discount
            
            
            2,574,928
            
            
            2,602,930Changes
                in operating assets and liabilities:(Increase)
                decrease in:Accounts
                receivable
            
            
            534,223
            
            
            (1,552,406
            )Restricted
                cash
            
            
            -
            
            
            280,000Inventory
            
            
            1,369,887
            
            
            (1,224,725
            )Costs
                and earnings in excess of billings
            
            
            197,370
            
            
            (648,446
            )Prepaid
                expenses
            
            
            107,369
            
            
            118,966Increase
                (decrease) in:Accounts
                payable and accrued expenses
            
            
            (785,403
            )
            
            875,108Billings
                in excess of costs
            
            
            (208,864
            )
            
            1,397,850Net
                cash provided by (used in) operating activities
            
            
            1,707,781
            
            
            (1,375,367
            )CASH
                FLOWS FROM INVESTING ACTIVITIES:Proceeds
                from cancellation of life insurance's cash surrender
            
            
            104,100
            
            
            -Purchases
                of property and equipment
            
            
            (96,204
            )
            
            (16,726
            )Net
                cash provided by (used in) investing activities
            
            
            7,896
            
            
            (16,726
            )CASH
                FLOWS FROM FINANCING ACTIVITIES:Net
                (repayments) proceeds on revolving line of credit
            
            
            (615,356
            )
            
            -Proceeds
                  from Exercise of Stock Options
            
            
            182Payments
                on notes
            
            
            (281,250
            )
            
            (375,000
            )Net
                cash used in financing activities
            
            
            (896,424
            )
            
            (375,000
            )Net
                increase (decrease) in cash
            
            
            819,253
            
            
            (1,767,093
            )Cash
                and cash equivalents, beginning of period
            
            
            710,121
            
            
            2,337,540Cash
                and cash equivalents, end of period
            
            $
            1,529,374
            
            $
            570,447Cash
                paid for:Interest
            
            $
            879,959
            
            $
            1,025,672





The
      accompanying footnotes are an integral part of these unaudited condensed
      consolidated financial statements.




6




**AMERICAN
      TECHNOLOGIES GROUP, INC.**




**NOTES
      TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**





April
      30,
      2008 and 2007





(UNAUDITED)




**NOTE
      1 - 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 was accounted for using the purchase method of accounting in
      accordance with Statement of Financial Accounting Standards (SFAS) No.141,
      “Business Combinations.” The results of operations for North Texas have been
      included in the audited 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. 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 audited 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 Original Equipment
      Manufacturer (OEM) customers.





The
      accompanying financial statements present on a consolidated basis the accounts
      of the Company and its wholly owned subsidiaries. All significant intercompany
      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.




7




**AMERICAN
      TECHNOLOGIES GROUP, INC.**




**NOTES
      TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**





April
      30,
      2008 and 2007





(UNAUDITED)





**Basis
      of Presentation**




The
      accompanying unaudited condensed consolidated financial statements as of April
      30, 2008 and for the three month and nine month periods ended April 30, 2008
      and
      2007 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, 2007 as disclosed
      in the company's 10-KSB for that year as filed with the SEC, as it may be
      amended.




The
      results of the three months and nine months ended April 30, 2008 are not
      necessarily indicative of the results to be expected for the pending full year
      ending July 31, 2008.





**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 intercompany
      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.




8




**AMERICAN
      TECHNOLOGIES GROUP, INC.**




**NOTES
      TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**





April
      30,
      2008 and 2007





(UNAUDITED)




These
      amounts are reflected in the accompanying balance sheet as follows:




**April
                30,**
              **2008**Costs
                and estimated earnings onuncompleted
                contracts in excess of billings
            
            $
            41,079Billings
                on uncompleted contracts inexcess
                of costs and estimated earnings
            
            
            (
                3,054,817
            )$
            (
                3,013,738
            )





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.





**Accounts
      Receivable**




The
      Company provides an allowance for doubtful accounts equal to the estimated
      uncollectible amounts. The Company’s estimate is based on historical collection
      experience and a review of the current status of trade accounts receivable.
      It
      is reasonably possible that the Company’s estimate of the allowance for doubtful
      accounts will change. Accounts receivable are presented net of an allowance
      for
      doubtful accounts of $153,312 as of April 30, 2008.




**Liquidity**




As
      shown
      in the accompanying unaudited condensed consolidated financial statements,
      the
      Company incurred net loss of $5,495,135 and $3,349,987 for the nine months
      ended
      April 30, 2008 and 2007, respectively. The Company's current  liabilities,
      on a consolidated basis, exceeded its current assets by $ 11,731,925
      as of April 30, 2008.




**Inventory**




Inventory,
      consisting primarily of raw materials, is valued at the lower of cost or
      market on average cost basis.





**Income
      Taxes**





In
      accordance with SFAS No. 109, deferred income taxes are the result of the
      expected future tax consequences of temporary differences between the financial
      statement and tax bases of assets and liabilities. Generally, deferred income
      taxes are classified as current or non-current in accordance with the
      classification of the related asset or liability. Those not related to an asset
      or liability are classified as current or non-current depending on the periods
      in which the temporary differences are expected to reverse. A valuation
      allowance is provided against deferred income tax assets in circumstances where
      management believes the recoverability of a portion of the assets is not
      reasonably assured.




9





**AMERICAN
      TECHNOLOGIES GROUP, INC.**




**NOTES
      TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**





April
      30,
      2008 and 2007





(UNAUDITED)




**Long-Lived
      Assets**




ATG
      reviews, as circumstances dictate, the carrying amount of our property and
      equipment and goodwill. The purpose of these reviews is to determine whether
      the
      carrying amounts are recoverable. Recoverability is determined by examining
      and
      comparing respective carrying amounts versus expected revenue streams from
      the
      related businesses. The amount of impairment, if any, is measured based on
      the
      excess of the carrying value over the fair value.




**Property
      and Equipment**





Property
      and equipment are stated at cost. Depreciation is computed principally by the
      straight-line method at rates based on estimated useful lives as
      follows:





Office
                furniture and equipment
            
            5
                -
                10 yearsBuildings
                and improvements
            
            5
                -
                40 yearsMachinery
                and equipment
            
            3
                -
                12 years




**Cash
      Flows Presentation**





For
      purposes of the statement of cash flows, time deposits that mature in three
      months or less are considered cash and cash equivalents.





**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 collectibility of accounts receivable, the realizability of
      inventories, the amounts due under accounts payable, the valuation allowance
      of
      deferred tax assets and the fair value of our equity instruments. Actual results
      could differ from those estimates.





**Basic
      and Diluted Income (Loss) Per Share**





Basic
      and
      diluted income (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 income (loss) per share is comprised of the
      following:





**Three
                months ended**
            
            
            **Nine
                months ended**April
                30, 2008
            
            
            April
                30, 2007
            
            
            April
                30, 2008
            
            
            April
                30, 2007Common
                shares outstanding
            
            
            9,883,406
            
            
            10,382,047
            
            
            9,883,406
            
            
            10,382,047Options
                shares deemed outstanding
            
            
            4,502,760
            
            
            4,685,000
            
            
            4,502,760
            
            
            4,685,000Total
                shares outstanding for computation
            
            
            14,386,166
            
            
            15,067,047
            
            
            14,386,166
            
            
            15,067,047




10




**AMERICAN
      TECHNOLOGIES GROUP, INC.**




**NOTES
      TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**





April
      30,
      2008 and 2007





(UNAUDITED)




We
      use
      SFAS No. 128, Earnings Per Share for calculating the basic and diluted loss
      per share. We compute basic loss per share by dividing net income (loss) and
      net
      income (loss) attributable to common shareholders by the weighted average number
      of common shares outstanding. Diluted income (loss) per share is computed
      similar to basic income (loss) per share except that the denominator is
      increased to include the number of additional common shares that would have
      been
      outstanding if the potential shares had been issued and if the additional shares
      were dilutive. Common equivalent shares are excluded from the computation of
      net
      loss per share if their effect is anti-dilutive. There were 13,697,876 and
      19,879,996 common share equivalents at April 30, 2008 and 2007,
      respectively. For the nine months ended April 30, 2008 and 2007,
      these potential shares were excluded from the shares used to calculate diluted
      earnings per share as their inclusion would reduce net income (loss) per
      share.





**Goodwill
      and Other Intangibles**




In
      June
      2001, SFAS 142 “Goodwill and Other Intangible Assets” was issued. Under
      SFAS 142, goodwill is no longer amortized after December 31, 2001.
      However, it must be evaluated for impairment at least annually and any losses
      due to impairment are recognized in earnings. SFAS 142 became effective for
      the Company on January 1, 2002.





In
      August
      2001, SFAS 144 “Accounting for the Impairment or Disposal of Long-Lived
      Assets” was issued. Under SFAS 144, the Company is required to test
      long-lived assets other than goodwill for impairment whenever events or changes
      in circumstances indicate that their carrying value may not be recoverable.
      The
      Company evaluates the recoverability of long-lived assets based upon forecasted
      discounted cash flows. Should an impairment in value be indicated, the carrying
      value of intangible assets will be adjusted, based on estimates of future
      discounted cash flows resulting from the use and ultimate disposition of the
      asset. SFAS No. 144 also requires assets to be disposed of be reported at the
      lower of the carrying amount or the fair value less costs to sell.




**Segment
      Information**





SFAS
      131,
      "Disclosures about Segments of an Enterprise and Related Information"
      establishes standards for reporting information regarding operating segments
      in
      annual financial statements and requires selected information for those segments
      to be presented in interim financial reports issued to stockholders.  SFAS
      131 also establishes standards for related disclosures about products and
      services and geographic areas.  Operating segments are identified as
      components of an enterprise about which separate discrete financial information
      is available for evaluation by the chief operating decision maker, or
      decision-making group, in making decisions how to allocate resources and assess
      performance. Our operations are comprised of one business segment focusing
      its
      operations and management on the cutting, welding and assembling of metal
      components. The Company operates in two industry segments. The Company’s
      management makes financial decisions and allocates resources based on the
      information it receives from its internal management system.





**Reclassifications**





Certain
      reclassifications have been made in prior year's financial statements to conform
      to classifications used in the current period.




11





**AMERICAN
      TECHNOLOGIES GROUP, INC.**




**NOTES
      TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**





April
      30,
      2008 and 2007





(UNAUDITED)




**NOTE
      3 - FINANCIAL CONDITION AND GOING CONCERN**





To
      date,
      ATG has been unable to generate significant cash flows from 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 unaudited
      condensed consolidated financial statements, during the nine months ended April
      30, 2008, we incurred a net loss of $5,495,135. Since its inception, the Company
      has incurred significant operating losses totaling in excess of $84 million.
      In
      addition, we also received a letter from LV Administrative Services, Inc. ("LV
      Administrative Services"), acting in the capacity of administrative and
      collateral agent for Laurus, that demands the immediate payment of all past
      due
      amounts owed to Laurus by February 1, 2008. These factors, among others, raise
      substantial doubt about our ability to continue as a going concern.


As
        a
        result of our default and ongoing losses, our Board and management has
        determined that it is advisable and in the best interests of the Company
        and its
        stockholders to sell all or substantially all of the assets of Omaha Holdings
        Corp., a wholly owned subsidiary of Company to a subsidiary of Laurus Master
        Fund, which assets consist primarily of the issued and outstanding stock
        of two
        wholly owned subsidiaries of Omaha Holdings Corp. (“Sale”). Thus, on April 4,
        2008, the Board approved the Sale by majority vote and resolved to refer
        the
        matter to our stockholders for their approval.
 
 The
        purpose of the Sale is to eliminate in excess of $13.5 principal amount of
        indebtedness and accrued and unpaid interest thereon owed by us to Laurus
        Master
        Fund, as well as over $800,000 of indebtedness due to Gryphon Fund for a
        total
        value of indebtedness of approximately $14.3 million as of June 1, 2008.
        We have
        not generated adequate revenues with which to service such debt and we have
        no
        realistic independent ability to do so. Absent the Sale, we would have faced
        a
        foreclosure proceeding which would have put a further strain on our otherwise
        very limited available financial resources.
 
 We
        are in
        the process of taking the actions required to hold a special meeting of
        shareholders to approve the Sale. If the stockholders approve the Sale, it
        is
        anticipated that the Sale will be effected as soon as practicable after the
        Special Meeting. If the stockholders do not approve the Sale, then the Sale
        will
        not be effected.
 
 After
        the
        Sale the Company will be without any operating assets. It is anticipated
        that
        the Company will retain approximately $200,000 cash to be used to continue
        as a
        public entity while it seeks other business opportunities.




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.





**NOTE 4
      - CONVERTIBLE DEBENTURES AND OTHER NOTES PAYABLE**





At
      April
      30, 2008, our current outstanding borrowings were:




Notes
                Payable to Laurus:Secured
                revolving note
            
            $
            7,000,000Secured
                convertible term note A
            
            
            1,068,750Secured
                convertible term note B
            
            
            2,000,000Notes
                Payable to Gryphon:Secured
                convertible term note - North Texas
            
            
            500,000Subtotal
            
            
            10,568,750Plus:
                Default fees and accrued interest
            
            
            3,230,810Net
                current convertible debentures and other notes payable
            
            $
            13,799,560




12




**AMERICAN
      TECHNOLOGIES GROUP, INC.**




**NOTES
      TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**





April
      30,
      2008 and 2007





(UNAUDITED)




**NOTE 4
      - CONVERTIBLE DEBENTURES AND OTHER NOTES PAYABLE (CONT’D)**




**TRIGGERING
      EVENTS THAT ACCELERATE OR INCREASE A DIRECT FINANCIAL
      OBLIGATION**





As
      a
      result of our failure to timely pay our current obligations due to Laurus Master
      Fund, Ltd. ("Laurus") under our Secured Convertible Term B Note in the amount
      of
      $2,000,000, we received notification on January 31, 2008 from Laurus that
      certain events of default had occurred and are continuing beyond any applicable
      cure or grace period with respect to all of our secured obligations due to
      Laurus. We also received a letter from LV Administrative Services, Inc. ("LV
      Administrative Services"), acting in the capacity of administrative and
      collateral agent for Laurus, that demands the immediate payment of all past
      due
      amounts owed to Laurus by February 1, 2008. The amounts demanded totaled
      $13,580,810 ($10,350,000 in principal amortization, $96,777 in accrued interest,
      and $3,134,033 in Default Fees). We did not make such payments, and,
      accordingly, Laurus may take all steps it deems necessary to protect Laurus'
      interests, including the enforcement and exercise of any and all of its rights,
      remedies, liens and security interests available to it.





In
      connection with our financing with Laurus, we executed a pledge agreement in
      favor of Laurus granting them a first priority security interest in the common
      stock of each of our subsidiaries. We also executed a security agreement that
      granted Laurus a first priority security interest in all the respective goods,
      inventory, contractual rights and general intangibles, receivables, documents,
      instruments, chattel paper, intellectual property owned by us and each of our
      subsidiaries. The security agreement and stock pledge agreement state that
      if an
      "event of default" occurs under any agreement with Laurus, it has the right
      to
      take possession of the collateral, to operate our business using the collateral,
      and has the right to assign, sell, lease or otherwise dispose of and deliver
      all
      or any part of the collateral, at public or private sale or otherwise to satisfy
      its obligations under these agreements. As a consequence of our default, Laurus
      has the right to pursue any of the remedies set forth in the pledge and security
      agreements. Likewise, GMF and GSSF have similar remedies available to
      them.




As
          a
          result of our default and ongoing losses, our Board and management has
          determined that it is advisable and in the best interests of the Company
          and its
          stockholders to sell all or substantially all of the assets of Omaha Holdings
          Corp., a wholly owned subsidiary of Company to a subsidiary of Laurus Master
          Fund, which assets consist primarily of the issued and outstanding stock
          of two
          wholly owned subsidiaries of Omaha Holdings Corp. (“Sale”). Thus, on April 4,
          2008, the Board approved the Sale by majority vote and resolved to refer
          the
          matter to our stockholders for their approval.
 
 The
          purpose of the Sale is to eliminate in excess of $13.5 principal amount
          of
          indebtedness and accrued and unpaid interest thereon owed by us to Laurus
          Master
          Fund, as well as over $800,000 of indebtedness due to Gryphon Fund for
          a total
          value of indebtedness of approximately $14.3 million as of June 1, 2008.
          We have
          not generated adequate revenues with which to service such debt and we
          have no
          realistic independent ability to do so. Absent the Sale, we would have
          faced a
          foreclosure proceeding which would have put a further strain on our otherwise
          very limited available financial resources.
 
 We
          are in
          the process of taking the actions required to hold a special meeting of
          shareholders to approve the Sale. If the stockholders approve the Sale,
          it is
          anticipated that the Sale will be effected as soon as practicable after
          the
          Special Meeting. If the stockholders do not approve the Sale, then the
          Sale will
          not be effected.
 
 After
          the
          Sale the Company will be without any operating assets. It is anticipated
          that
          the Company will retain approximately $200,000 cash to be used to continue
          as a
          public entity while it seeks other business
          opportunities.


13




**AMERICAN
      TECHNOLOGIES GROUP, INC.**




**NOTES
      TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**





April
      30,
      2008 and 2007





(UNAUDITED)








**NOTE 5
      - CONCENTRATIONS**





Financial
      instruments which potentially subject us to concentrations of credit risk
      consist principally of cash, and cash equivalents 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,
      2008 included an aggregate of 49 % from three customers and for the nine months
      ended April 30, 2007 included an aggregate of 53% from one customer. One
      supplier accounted for 24% of our purchases for the nine months ended April
      30,
      2008. Two customers account for 22% of our accounts receivable at April 30,
      2008
      and one customer accounts for 22% of our accounts receivable at April 30, 2007.





**NOTE 6
      - SEGMENT INFORMATION**




The
      Company currently operates two business segments (excluding corporate): (1)
      Steel Fabrication and (2) Pole Fabrication. Intercompany receivable and payable
      are subtracted from the total assets and liabilities for the segments, that
      are
      eliminated in consolidation and therefore, do not themselves impact consolidated
      results.




The
      following table summarizes operating results by reportable segment for the
      respective nine month periods:




2008
            
            2007Sales
                to external customers:North
                Texas
            
            $
            22,365,099
            
            $
            22,389,540Whitco
            
            
            2,388,248
            
            
            2,748,456Other
            
            
            137
            
            
            1,918Total
                sales to external customers:
            
            $
            24,753,484
            
            $
            25,139,914Capital
                expenditures:North
                Texas
            
            $
            96,204
            
            $
            16,726Whitco
            
            
            -
            
            
            -Total
                capital expenditures
            
            $
            96,204
            
            $
            16,726Operating
                income (loss):North
                Texas
            
            $
            1,847,788
            
            $
            1,294,480Whitco
            
            
            33,894
            
            
            (212,853
            )Corporate
            
            
            (763,311
            )
            
            (513,282
            )Total
                operating income (loss)
            
            $
            1,118,371
            
            $
            568,345




14





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





**MANAGEMENT’S
      DISCUSSION AND ANALYSIS OF**


**FINANCIAL
      CONDITION AND RESULTS OF OPERATIONS**




Discussions
      of certain matters in this Quarterly Report on Form 10-QSB may contain
      forward-looking statements which relate to future events or our future financial
      performance. In this Form 10-QSB, forward-looking statements are generally
      identified by the words “anticipate”, “plan”, “believe”, “expect”, “estimate”,
      and the like. These statements are only predictions and involve known and
      unknown risks, uncertainties, and other factors, including the risks in the
      section entitled “Risk Factors” on pages 6 through 10 of the Company’s Annual
      Report, Form 10-KSB, filed for the year ended July 31, 2007.





The
      following discussion is intended to provide a better understanding of the
      significant changes in trends relating to the Company’s financial conditions and
      results of operations. Management’s Discussion and Analysis should be read in
      conjunction with the accompanying Condensed Consolidated Financial Statements
      and Notes thereto.




**GENERAL
      OVERVIEW**




**General**




We
      are a
      Nevada corporation. We were formed on September 27, 1988. Prior to 2001 we
      engaged in the development, commercialization and sale of products and systems
      using patented and proprietary technologies including catalyst technology and
      water purification.




We
      largely ceased operations during 2001 and began focusing efforts on
      restructuring and refinancing. In fiscal year ended July 31, 2005, we
      successfully continued these efforts by settling various pending law suits
      and
      reducing outstanding liabilities. In September 2005, we entered into various
      financing transactions and acquired North Texas Steel Company Inc. (“North
      Texas”).




**Overview**




North
      Texas is an AISC (American Institute of Steel Construction) Certified structural
      steel fabrication company based in Fort Worth, Texas. North Texas is certified
      by AISC to have the personnel, organization, experience, capability and
      commitment meeting the requirements of Conventional Steel Building Structures,
      Complex Steel Building Structures, Simple Steel Bridges and Major Steel Bridges
      categories as set forth in the AISC Certification Program. North Texas provides
      fabrication and detailing of structural steel components for commercial
      buildings, office buildings, convention centers, sports arenas, airports,
      schools, churches and bridges. Customers are general construction contractors
      who are building projects for owners, developers and government
      agencies.




The
      trade
      of steel fabrication is closely connected with both construction and industrial
      trades in the pre-fabricating of frames, plates, girders and chutes to be used
      later in the assembly or erection process. The work is conducted primarily
      indoors, in small fabricating shops or large factories. A structural steel
      fabricator works from drawings and sketches to perform the following functions
      to both ferrous and non-ferrous metals:




·
            Lay
                out steel for cutting




15




·
            Burn
                the metal




·
            Saw,
                cut, shear and punch holes in metal using drills and other power
                tools




·
            Shape,
                form and straighten metal with the use of heat and
                flame




·
            Fit
                and ream metal to specifications




·
            Rivet,
                bolt and grind metal




·
            Weld,
                with both electric arc and oxyacetylene welding
                equipment




·
            Prepare,
                prime and paint structural pieces and plates of
                steel.




North
      Texas' customers are general contractors who build large commercial buildings
      and other structures requiring precision-engineered components. Projects
      developed by North Texas include commercial buildings, office buildings,
      convention centers, sports arenas, airports, schools, churches and
      bridges.




Past
      North Texas projects include The American Airlines Center, DFW Airport
      Expansion, Dallas Convention Center Expansion, the sky boxes (suites) in the
      Texas Stadium, the bridges over the 1-35/1-20 Interchange in Fort Worth, Texas
      and the People Mover at DFW Airport. Recently completed projects include the
      Dallas Market Center Expansion, Advanced Micro Devices Office Complex, LCRA
      Redbud Center, Almetris Duren Residence Hall / University of Texas, Samsung
      C.U.B., Brewer High School/WSISD. Current projects include Trinity Terrace
      Expansion , Omni Hotel , Ft Worth, Red Oak Ranch, TCU Stadium Expansion, Alamo
      Community College Lakeside Campus, WSISD Stadium, JW Marriott, San Antonio,
      Hall
      D2 Office Building, .80 Rehab, Kansas City, and Holcim Cement.




North
      Texas sells to large general contractors. The North Texas customer list includes
      most of the leading contractors in northern Texas such as Austin Commercial,
      Inc., Thomas S. Byrne, Inc and Hensel Phe1ps. North Texas also works closely
      over the years with engineering firms such as Carter Burgess, Inc., HKS, Inc.,
      Datum Engineering, L.A. Fuess Partners and Freese & Nichols.




North
      Texas considers its current general market area to be Texas and the four
      contiguous states of New Mexico, Oklahoma, Arkansas and Louisiana. North Texas'
      focus has generally focused on the Fort Worth area due to the positive dynamics
      of the Dallas-Fort Worth metropolitan area and North Texas' very close
      relationships with the leading contractors in the area.  The Company's
      focus is naturally is in its own backyard. In the past year North Texas has
      expanded into the Austin & San Antonio areas by working closely with its
      contractor base.




North
      Texas owns 17.8 acres of land in an industrial area that is transitioning to
      retail and residential.




16




**Operations/Processes**




North
      Texas pursues potential customer projects on both a bid and negotiated basis.
      In
      either case, North Texas is invited by the general contractor for the project
      to
      present its proposal. North Texas' management believes that its reputation
      for
      fabricating complex structures and delivering projects on time is the key to
      being a contender for new projects in its market area.




The
      production capacity of North Texas depends on the complexity and mix of projects
      coming through the plant. Generally speaking, North Texas can produce
      approximately 12,000 tons of production output per year. Typically, projects
      of
      1,000 tons or less are completed within 12 months whereas larger, more complex
      projects may take considerably longer. Pricing is typically "lump sum, firm"
      and
      includes transportation to the job site and erection, which is performed by
      an
      erection subcontractor.





**Industry
      and Market**




The
      structural steel fabrication industry is made up of many well-established,
      often
      family run, businesses that concentrate on specialized segments of the industry,
      i.e. commercial, industrial, bridges, etc. While some of the companies do
      business throughout the United States, and a few export, the most common market
      approach is to focus on a geographical area of about 500 miles radius of their
      plant facility. Production capacity and certifications play an all-important
      role in the size and nature of projects that are pursued by a fabricator. The
      health of the general economy, the level of commercial building activity and
      the
      general economic growth of the region drive demand for structural steel
      components. North Texas is known as the leading heavy structural steel
      fabricator in the Dallas-Ft. Worth Market.




While
      North Texas does not actively pursue the industrial market, we have begun to
      book work in this segment and believe it represents another avenue for
      growth.





**Whitco
      Transaction**




On
      April
      25, 2006, we purchased certain assets of Whitco Company, LP (“Whitco”), a
      business conducting the sale and distribution of steel and aluminum lighting
      poles throughout the globe, in exchange for 3,750,000 common stock purchase
      warrants, valued at $1,875,000. In addition, we made cash payments totaling
      $465,253 to Whitco Company, LP’s creditors and incurred $70,000 in other
      costs related to the transaction. The Whitco assets are held in a
      separate subsidiary called Whitco Poles, Inc. The integration of the Whitco
      assets has gone well, but we have not fully realized the sales we originally
      projected. The cash portion of the Whitico financing has been paid and we are
      currently evaluating what alternative strategies we are available for realizing
      the full potential from the Whitco assets.




**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:




**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. Whitco revenues and product costs are
      recognized as the products are shipped to their customers.




17




**Allowance
      For Doubtful Accounts**




We
      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 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, 2008 to the Quarter Ended April 30,
      2007.**




**Results
      of Operations**




**Revenues**




Revenues
      for the quarter ended April 30, 2008 were approximately $6,282,731 earned by
      North Texas and $1,004,582 earned by Whitco. Revenues for the quarter ended
      April 30, 2007 were approximately $8,291,422 earned by North Texas and $501,215
      earned by Whitco.




**Cost
      of Sales**




Our
      cost
      of sales predominantly consists of labor, raw materials, outsourcing costs
      and
      absorbed indirect manufacturing costs.




Cost
      of
      sales for the quarter ended April 30, 2008 was approximately $5,121,453 or
      81.5% of revenue as compared to $7,202,584 or 86.9% of revenue for the same
      period last year for North Texas.  The improved North Texas margin was
      primarily attributable to a favorable mix of higher value added contracts.
      Cost
      of sales for the quarter ended April 30, 2008 was approximately $872,584 or
      86.9% of revenue as compared to $630,427 or 125.8% of revenue for the same
      period last year for Whitco.  The improved Whitco margin was primarily
      attributable to the elimination of operating inefficiencies in the prior
      period.





**Selling,
      General and Administrative Expenses**




For
      the
      quarter ended April 30, 2008, selling, general and administrative expenses
      totaled approximately $ 1,039,972 or 14.3% of revenue as compared to $919,852
      or
      10.5% in the same period last year. The increased expense was primarily related
      to administrative and professional fees associated with the efforts to resolve
      the Company’s liquidity problem.




18




**Interest
      Expense**




As
      the
      result of acquiring North Texas and Whitco in a highly leveraged transaction
      the
      Company’s interest expenses are significant.





Interest
      expense was $270,787 for the quarter ended April 30, 2008, as compared to
      $349,225 for the quarter ending April 30, 2007. Financing expense was $1,003,693
      during the quarter ended April 30, 2007, related to default expenses due to
      Laurus. No financing expenses were incurred during the quarter ended April
      30,
      2008 as the prepaid financing costs have been fully amortized.




**Comparison
      of the Nine Months Ended April 30, 2008 to the Nine Months Ended April 30,
      2007.**




**Revenues**




Revenues
      for the nine months ended April 30, 2008 were approximately $22,365,099 earned
      by North Texas and $2,388,248 earned by Whitco. Revenues for the nine months
      ended April 30, 2007 were approximately $22,389,540 earned by North Texas and
      $2,748,456 earned by Whitco.




**Cost
      of Sales**




Our
      cost
      of sales predominantly consists of labor, raw materials, outsourcing costs
      and
      absorbed indirect manufacturing costs.




Cost
      of
      sales for the nine months ended April 30, 2008 was approximately
      $18,750,483 or 83.8% of revenue as compared to $19,274,137 or 86.1% of revenue
      for the same period last year for North Texas.  The improved North Texas
      margin was primarily attributable to a favorable mix of higher value added
      contracts. Cost of sales for the nine months ended April 30, 2008 was
      approximately $2,121,916 or 88.8% of revenue as compared to $2,594,432 or 94.4%
      of revenue for the same period last year for Whitco. The improved Whitco
      margin was primarily attributable to the elimination of operating inefficiencies
      in the prior period.




**Selling,
      General and Administrative Expenses**




For
      the
      nine months ended April 30, 2008, selling, general and administrative
      expenses totaled approximately $2,864,507 or 11.6% of revenue. As compared
      to $
      2,703,000 or 10.8% of revenue for the same period last year. The increased
      expense was primarily related to administrative and professional fees associated
      with the efforts to resolve the Company’s liquidity problem.




19




**Interest
      Expense**




As
      the
      result of acquiring North Texas and Whitco in a highly leveraged transaction
      the
      Company’s interest expenses are significant.





Interest
      expense was $898,233 for the nine months ended April 30, 2008, as compared
      to $1,032,366 for the nine months ending April 30, 2007. Financing expense
      was
      $5,708,961 and $2,902,930 for the nine months ended April 30, 2008 and 2007,
      respectively. Included in financing expenses was the default expenses due to
      Laurus.





**Liquidity
      and Capital Resources**




The
      Company’s current operations are insufficient to service its existing debt and
      pay the administrative expenses incurred in connection with being a public
      enterprise, including legal and accounting services.





As
      a
      result of our failure to timely pay our current obligations due to Laurus Master
      Fund, Ltd. ("Laurus") under our Securied Convertible Term B Note in the amount
      of $2,000,000, we received notification on January 31, 2008 from Laurus that
      certain events of default had occurred and are continuing beyond any applicable
      cure or grace period with respect to all of our secured obligations due to
      Laurus. We also received a letter from LV Administrative Services, Inc. ("LV
      Administrative Services"), acting in the capacity of administrative and
      collateral agent for Laurus, that demands the immediate payment of all past
      due
      amounts owed to Laurus by February 1, 2008. The amounts demanded totaled
      $13,580,810 ($10,350,000 in principal amortization, $96,777 in accrued interest,
      and $3,134,033 in Default Fees). We did not make such payments, and,
      accordingly, Laurus (as well as Gryphon Master Fund, LTD ("GMF"), and GSSF
      Master Fund, LP ("GSSF")) may take all steps it deems necessary to protect
      their
      interests, including the enforcement and exercise of any and all of its rights,
      remedies, liens and security interests available to it.





In
      connection with our financing with Laurus, we executed a pledge agreement in
      favor of Laurus granting them a first priority security interest in the common
      stock of each of our subsidiaries. We also executed a security agreement that
      granted Laurus a first priority security interest in all the respective goods,
      inventory, contractual rights and general intangibles, receivables, documents,
      instruments, chattel paper, intellectual property owned by us and each of our
      subsidiaries. The security agreement and stock pledge agreement state that
      if an
      "event of default" occurs under any agreement with Laurus, it has the right
      to
      take possession of the collateral, to operate our business using the collateral,
      and has the right to assign, sell, lease or otherwise dispose of and deliver
      all
      or any part of the collateral, at public or private sale or otherwise to satisfy
      its obligations under these agreements. As a consequence of our default, Laurus
      has the right to pursue any of the remedies set forth in the pledge and security
      agreements. Likewise, GMF and GSSF have similar remedies available to
      them.


As
        a
        result of our default and ongoing losses, our Board and management has
        determined that it is advisable and in the best interests of the Company
        and its
        stockholders to sell all or substantially all of the assets of Omaha Holdings
        Corp., a wholly owned subsidiary of Company to a subsidiary of Laurus Master
        Fund, which assets consist primarily of the issued and outstanding stock
        of two
        wholly owned subsidiaries of Omaha Holdings Corp. (“Sale”). Thus, on April 4,
        2008, the Board approved the Sale by majority vote and resolved to refer
        the
        matter to our stockholders for their approval.
 
 The
        purpose of the Sale is to eliminate in excess of $13.5 principal amount of
        indebtedness and accrued and unpaid interest thereon owed by us to Laurus
        Master
        Fund, as well as over $800,000 of indebtedness due to Gryphon Fund for a
        total
        value of indebtedness of approximately $14.3 million as of June 1, 2008.
        We have
        not generated adequate revenues with which to service such debt and we have
        no
        realistic independent ability to do so. Absent the Sale, we would have faced
        a
        foreclosure proceeding which would have put a further strain on our otherwise
        very limited available financial resources.
 
 We
        are in
        the process of taking the actions required to hold a special meeting of
        shareholders to approve the Sale. If the stockholders approve the Sale, it
        is
        anticipated that the Sale will be effected as soon as practicable after the
        Special Meeting. If the stockholders do not approve the Sale, then the Sale
        will
        not be effected.
 
 After
        the
        Sale the Company will be without any operating assets. It is anticipated
        that
        the Company will retain approximately $200,000 cash to be used to continue
        as a
        public entity while it seeks other business opportunities.




20




The
      Company's independent certified public accountants have stated in their report
      included in the Company's Form 10-KSB for the year ended July 31, 2007, 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.
      These factors among others may raise substantial doubt about the Company's
      ability to continue as a going concern.





As
      of
      April 30, 2008, we had $1,529,374 in cash and equivalents.




**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.





**Recent
      Accounting Pronouncements**




In
      June
      2006, the FASB issued Interpretation No. 48, *"Accounting for Uncertainty in Income Taxes - an interpretation of FASB
      Statement No. 109,"* (FIN
      48). FIN 48 clarifies the accounting for uncertainty in tax positions and
      requires that a Company recognize in its financial statements the impact of
      a
      tax position, if that position is more likely than not of being sustained on
      audit, based on the technical merits of the position. The provisions of FIN
      48
      are effective for fiscal years beginning after December 15, 2006. The Company
      does not expect adoption of FIN 48 will have a material impact on its financial
      position, operations or cash flows.




21


In
      September 2006, the FASB issued SFAS No. 157, “Fair Value Measurements”
(“SFAS No. 157”). SFAS No. 157 defines fair value, establishes a
      framework for measuring fair value, and expands disclosures about fair value
      measurements. This Statement focuses on creating consistency and comparability
      in fair value measurements. SFAS No. 157 is effective for fiscal years
      beginning after November 15, 2007, and interim periods within those fiscal
      years.  We are currently evaluating the impact of adopting SFAS 157 on our
      financial statements.





In
      September 2006, the FASB issued its Statement of Financial Accounting Standards
      158 “Employers' Accounting for Defined Benefit Pension and Other Postretirement
      Plans”. This Statement improves financial reporting by requiring an employer to
      recognize the overfunded or underfunded status of a defined benefit
      postretirement plan (other than a multiemployer plan) as an asset or liability
      in its statement of financial position and to recognize changes in that funded
      status in the year in which the changes occur through comprehensive income
      of a
      business entity or changes in unrestricted net assets of a not-for-profit
      organization. This Statement also improves financial reporting by requiring
      an
      employer to measure the funded status of a plan as of the date of its year-end
      statement of financial position, with limited exceptions. The effective date
      for
      an employer with publicly traded equity securities is as of the end of the
      fiscal year ending after December 15, 2006. The Company does not expect adoption
      of this standard will have a material impact on its financial position,
      operations or cash flows





In
      February 2007, the FASB issued SFAS No. 159, “The Fair Value Option for
      Financial Assets and Financial Liabilities—Including an amendment of FASB
      Statement No. 115” (“SFAS 159”). This statement permits all entities to
      choose, at specified election dates, to measure eligible items at fair value
      (the “fair value option”). A business entity must report unrealized gains
      and losses on items for which the fair value option has been elected in earnings
      at each subsequent reporting date. Upfront costs and fees related to items
      for which the fair value option is elected must be recognized in earnings as
      incurred and not deferred. This statement is effective as of the beginning
      of an
      entity’s first fiscal year that begins after November 15, 2007. The Company
      is currently evaluating the impact, if any, of the adoption of SFAS
      159.




In
      December 2007, the FASB issued SFAS 141(R), which replaces SFAS 141 “Business
      Combinations”. This Statement is intended to improve the relevance, completeness
      and representational faithfulness of the information provided in financial
      reports about the assets acquired and the liabilities assumed in a business
      combination. This Statement requires an acquirer to recognize the assets
      acquired, the liabilities assumed, and any noncontrolling interest in the
      acquiree at the acquisition date, measured at their fair values as of that
      date,
      with limited exceptions specified in the Statement. Under SFAS 141(R),
      acquisition-related costs, including restructuring costs, must be recognized
      separately from the acquisition and will generally be expensed as incurred.
      That
      replaces SFAS 141’s cost-allocation process, which required the cost of an
      acquisition to be allocated to the individual assets acquired and liabilities
      assumed based on their estimated fair values. SFAS 141(R) shall be applied
      prospectively to business combinations for which the acquisition date is on
      or
      after the beginning of the first annual report period beginning on or after
      December 15, 2008. The Company will implement this Statement in
      2009.





In
      December 2007, the FASB issued SFAS No. 160, “Noncontrolling Interests in
      Consolidated Financial Statements - an amendment of ARB No. 51” (“SFAS No.
      160”). SFAS No. 160 amends Accounting Research Bulletin (“ARB”) No. 51 to
      establish accounting and reporting standards for the noncontrolling (minority)
      interest in a subsidiary and for the deconsolidation of a subsidiary. It
      clarifies that a noncontrolling interest in a subsidiary is an ownership
      interest in the consolidated entity that should be reported as equity in the
      Consolidated Financial Statements. SFAS No. 160 also requires consolidated
      net
      income to be reported at amounts that include the amounts attributable to both
      the parent and the noncontrolling interest on the face of the consolidated
      statement of income. Under SFAS No. 160, the accounting for changes in a
      parent’s ownership interest in a subsidiary that do not result in
      deconsolidation must be accounted for as equity transactions for the difference
      between the parent’s carrying value and the cash exchanged in the transaction.
      In addition, SFAS No. 160 also requires that a parent recognize a gain or loss
      in net income when a subsidiary is deconsolidated (except in the case of a
      spin-off), and requires expanded disclosure in the Consolidated Financial
      Statements that clearly identify and distinguish between the interests of the
      parent’s ownership interest and the interests of the noncontrolling owners of a
      subsidiary. This Statement is effective for fiscal years, and interim periods
      within those fiscal years, beginning on or after December 15, 2008. The Company
      will adopt SFAS No. 160 on January 1, 2009, as required, and is currently
      evaluating the impact of such adoption on its financial statements.





In
      March
      2008, the FASB issued SFAS No. 161, “Disclosures about Derivative Instruments
      and Hedging Activities”, an amendment of FASB Statement No. 133 (“SFAS No.
      161”). The new standard is intended to improve financial reporting about
      derivative instruments and hedging activities by requiring enhanced disclosures
      to enable investors to better understand their effects on an entity’s financial
      position, financial performance and cash flows. It is effective for financial
      statements issued for fiscal years and interim periods beginning after November
      15, 2008. The Company does not believe that SFAS No. 161 will have a material
      impact on its financial statements.





In
      May
      2008, the FASB issued SFAS No. 162, “The Hierarchy of Generally Accepted
      Accounting Principles” (“SFAS No. 162”). SFAS No. 162 identifies the sources of
      accounting principles and the framework for selecting the principles to be
      used
      in the preparation of financial statements of nongovernmental entities that
      are
      presented in conformity with generally accepted accounting principles (GAAP)
      in
      the United States. This Statement is effective sixty days following the SEC’s
      approval of the Public Company Accounting Oversight Board amendments to AU
      Secion 411, “The Meaning of Present Fairly in Conformity With Generally Accepted
      Accounting Principles.” The Company is currently evaluating the potential
      impact, if any, of the adoption of SFAS No. 162 on its financial
      statements.


22




In
      May
      2008, the FASB issued SFAS No. 163, “Accounting for Financial Guarantee
      Insurance Contracts”, an interpretation of FASB Statement No. 60 (“SFAS No.
      163”). SFAS
      No.
      163 requires that an insurance enterprise recognize a claim liability prior
      to
      an event of default when there is evidence that credit deterioration has
      occurred in an insured financial obligation. It also clarifies how Statement
      60
      applies to financial guarantee insurance contracts, including the recognition
      and measurement to be used to account for premium revenue and claim liabilities,
      and requires expanded disclosures about financial guarantee insurance contracts.
      It is effective for financial statements issued for fiscal years beginning
      after
      December 15, 2008, except for some disclosures about the insurance enterprise's
      risk-management activities. SFAS 163 requires that disclosures about the
      risk-management activities of the insurance enterprise be effective for the
      first period beginning after issuance. Except for those disclosures, earlier
      application is not permitted. The adoption of this statement is not expected
      to
      have a material effect on the Company's future reported financial position
      or
      results of operations.




**ITEM
      3. CONTROLS AND PROCEDURES**





**Evaluation
      of Controls and Procedures.**





The
      Company maintains a set of disclosure controls and procedures designed to ensure
      that information required to be disclosed by us in our reports filed under
      the
      Securities Exchange Act, is recorded, processed, summarized, and reported within
      the time periods specified by the SEC's rules and forms. Disclosure controls
      are
      also designed with the objective of ensuring that this information is
      accumulated and communicated to our management, as appropriate, to allow timely
      decisions regarding required disclosure.





Our
      president (Principal Executive and Financial Officer) evaluated our disclosure
      controls and procedures. Based upon this evaluation, our president (Principal
      Executive and Financial Officer) concluded that our disclosure controls and
      procedures have not been effective to ensure that information required to be
      included in our periodic SEC filings is recorded, processed, summarized, and
      reported within the time periods specified in the SEC rules and forms. However,
      at this time, our resources and size prevent us from being able to employ
      sufficient resources to enable us to have adequate segregation of duties within
      our internal control system. The Company intends to remedy the material weakness
      by hiring additional employees and reallocating duties, including
      responsibilities for financial reporting, among the Company's employees as
      soon
      as the Company has the financial resources to do so. Management is required
      to
      apply its judgment in evaluating the cost benefit relationship of possible
      changes in our disclosure controls and procedures.





**Changes
      in Internal Controls.**





There
      were no changes in the Company’s internal controls or in other factors that
      could have significantly affected those controls subsequent to the date of
      the
      Company’s most recent evaluation.




23





**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**





See
      defaults as to Laurus, GMF and GSSF noted in our last 8-K filing and in Part
      I,
      Sect. 2 (Liquidity and Capital Resources).





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





None.





**ITEM
      5. OTHER INFORMATION**





See
      Part
      I, Sect. 2 (Liquidity and Capital Resources) concerning pending sale to
      Laurus.





**ITEM
      6. EXHIBITS**





(a)
            Exhibits.




31.1
            Certification
                by Principal Officer & Chief Financial Officer pursuant to
                Sarbanes-Oxley Section 302




32.1
            Certification
                by Principal Officer and Chief Financial Officer pursuant to 18 U.S.
                C.
                Section 1350




24





**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/
                Thomas E. Durkin, IIIPresident
              (Principal
                Executive and Financial Officer)




DATE: June
      23, 2008




25