7<PAGE>


                       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 October 31, 2004

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

            For the transition period from __________ to ____________


                         Commission file number 0-23268

                        AMERICAN TECHNOLOGIES GROUP, INC.
                        ---------------------------------
                 (Name of small business issuer in its charter)

           NEVADA                                                95-4307525
(State or other jurisdiction of                                (IRS Employer
incorporation or organization)                               Identification No.)

                         P.O. BOX 90, MONROVIA, CA 91016
               (Address of principal executive offices) (zip code)


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

Check whether the issuer (1) filed all reports to be filed by Section 13 or
15(d) of the Exchange Act during the past 12 months (or for such shorter period
that the registrant was required to file such reports), and (2) has been subject
to such filing requirements for the past 90 days. Yes [X] No[ ]

                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 [ ] No[ ]

                      APPLICABLE ONLY TO CORPORATE ISSUERS

As of December 20, 2004 the registrant had 99,776,704 shares of Common Stock
outstanding.

Transitional Small Business Disclosure Format (Check one): Yes [ ] No[X]




<PAGE>


TABLE OF CONTENTS

PART I   FINANCIAL INFORMATION

ITEM 1   Financial Statements

         Balance Sheets as of October 31, 2004 (unaudited) and July
         31, 2004

         Statements of Operations (unaudited) for the three months ended
         October 31, 2004 and October 31, 2003

         Statements of Cash Flows (unaudited) for the three months ended
         October 31, 2004 and October 31, 2003

         Notes to Financial Statements (unaudited)

ITEM 2   Management's Discussion and Analysis

ITEM 3   Controls and Procedures

PART II  OTHER INFORMATION

ITEM 1   Legal Proceedings

ITEM 2   Changes in Securities

ITEM 3   Defaults Upon Senior Securities

ITEM 4   Submission to a Vote of Security Holders

ITEM 5   Other Information

ITEM 6   Exhibits and Reports on Form 8-K

SIGNATURES



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.




<PAGE>



PART I.  FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS
<TABLE>

                                    AMERICAN TECHNOLOGIES GROUP, INC.

                                             BALANCE SHEETS

                                   October 31, 2004 and July 31, 2004

                                                                            OCTOBER 31,      JULY 31,
ASSETS                                                                         2004            2004
                                                                           -------------   -------------
                                                                            (UNAUDITED)
<S>                                                                        <C>             <C>

Current assets:
     Cash                                                                  $      8,840    $      5,531
     Accounts receivable, net of allowance for doubtful
       accounts of $1,465 and $1,465 at October 31, 2004
       and July 31, 2004, respectively                                               --              --
     Inventories, net                                                             1,221           2,666
                                                                           -------------   -------------

         Total current assets                                              $     10,061    $      8,197
                                                                           =============   =============

LIABILITIES AND STOCKHOLDERS' DEFICIT

Current liabilities:
     Accounts payable and other accrued liabilities                        $    861,596    $    861,596
     Accrued interest payable - convertible debentures                          799,757         731,625
     Accrued interest - related party                                           164,324         145,314
     Accrued payroll and related liabilities                                    413,243         413,243
     Amounts due to related party                                               130,800         130,800
     Note payable - related party                                               857,553         831,277
     Convertible debentures                                                   1,409,511       1,409,511
                                                                           -------------   -------------

         Total current liabilities                                            4,636,784       4,523,366
                                                                           -------------   -------------

Stockholders' deficit:
     Series A convertible preferred stock, $.001 par value;
       10,000,00 shares authorized; 378,061 shares issued and
       outstanding                                                                  378             378
     Series B convertible preferred stock, $.001 par value;
       500,000 shares authorized; liquidation value at $8.00 per share;
       none issued and outstanding                                                   --              --
     Series C convertible preferred stock, $.001 par value; 2,000 shares
       authorized; liquidation value at $1,000 per share; none issued
       and outstanding                                                               --              --
     Common stock, $.001 par value; 1,000,000,000 shares authorized;
       99,776,704 shares issued and outstanding at October 31, 2004
       and July 31, 2004, respectively, and 4,115,596 shares committed
       but not issued                                                           103,892         103,892
     Additional paid-in capital                                              52,941,367      52,941,367
     Stock subscriptions                                                          6,750           6,750
     Accumulated deficit                                                    (57,679,110)    (57,567,556)
                                                                           -------------   -------------
         Total stockholders' deficit                                         (4,626,723)     (4,515,169)
                                                                           -------------   -------------

                                                                           $     10,061    $      8,197
                                                                           =============   =============

               The accompanying notes are an integral part of these financial statements

                                                   3
</TABLE>


<PAGE>
<TABLE>

                          AMERICAN TECHNOLOGIES GROUP, INC.

                               STATEMENTS OF OPERATIONS
                                     (Unaudited)

                 For The Three Months Ended October 31, 2004 and 2003
<CAPTION>


                                                         OCTOBER 31,     OCTOBER 31,
                                                            2004            2003
                                                        -------------   -------------
                                                         (UNAUDITED)     (UNAUDITED)
<S>                                                     <C>             <C>

Revenues:
     Technology products and licensing fees             $      3,611    $      1,214
                                                        -------------   -------------
         Total operating revenue                               3,611           1,214
                                                        -------------   -------------

Operating expenses:
     General and administrative                               26,374          40,706
     Cost of sales                                             1,649             109
                                                        -------------   -------------
         Total operating expenses                             28,023          40,815
                                                        -------------   -------------

Other expense:
     Interest expense - convertible debentures               (68,132)        (68,132)
     Interest expense - related party                        (19,010)        (15,632)
                                                        -------------   -------------
     Other expense, net                                      (87,142)        (83,764)
                                                        -------------   -------------

Net loss                                                $   (111,554)   $   (123,365)
                                                        =============   =============

Basic and diluted net loss per common share             $     (0.001)   $     (0.001)
                                                        =============   =============

Weighted average number of common shares outstanding:
     Basic and diluted                                    99,776,704      99,776,704
                                                        =============   =============



      The accompanying notes are an integral part of these financial statements

                                          4
</TABLE>


<PAGE>
<TABLE>

                             AMERICAN TECHNOLOGIES GROUP, INC.

                                  STATEMENTS OF CASH FLOWS
                                        (Unaudited)

                   For The Three Months Ended October 31, 2004 and 2003
<CAPTION>

                                                              OCTOBER 31,     OCTOBER 31,
                                                                 2004            2003
                                                             -------------   -------------
                                                              (UNAUDITED)     (UNAUDITED)
<S>                                                          <C>             <C>


Cash flows from operating activities:
     Net loss                                                $   (111,554)   $   (123,365)
     Adjustments to reconcile net loss to net cash used in
       operating activities:
         Changes in operating assets and liabilities:
              Inventories                                           1,445             109
              Accounts payable and accrued liabilities             87,142          84,136
                                                             -------------   -------------

         Net cash used in operating activities                    (22,967)        (39,120)
                                                             -------------   -------------

Cash flows from financing activities:
     Payments on notes payable                                         --          (1,306)
     Payments of amounts due to related parties                        --            (500)
     Proceeds from notes payable - related party                   26,276          40,000
                                                             -------------   -------------

     Net cash provided by financing activities                     26,276          38,194
                                                             -------------   -------------

Net change in cash                                                  3,309            (926)

Cash, beginning of period                                           5,531           2,361
                                                             -------------   -------------

Cash, end of period                                          $      8,840    $      1,435
                                                             =============   =============


         The accompanying notes are an integral part of these financial statements

                                            5
</TABLE>



<PAGE>

                        AMERICAN TECHNOLOGIES GROUP, INC.

                          NOTES TO FINANCIAL STATEMENTS
                                   (Unaudited)

              For The Three Months Ended October 31, 2004 and 2003

NOTE 1 - BASIS OF PRESENTATION
------------------------------

The accompanying unaudited financial statements have been prepared in accordance
with generally accepted accounting principles for interim financial information
and with the instructions to Rule 10-01 of Regulation S-X. Accordingly, they do
not include all of the information and notes required by generally accepted
accounting principles for complete financial statements. In the opinion of
management, all adjustments (consisting of normal recurring adjustments)
considered necessary for a fair presentation have been included. Operating
results for the three-month period ended October 31, 2004 are not necessarily
indicative of the results that may be expected for the year ended July 31, 2005.
For further information, please refer to the financial statements and notes
thereto included in the Company's Annual Report on Form 10-KSB for the year
ended July 31, 2004.

NOTE 2 - ORGANIZATION, LINE OF BUSINESS AND SIGNIFICANT BUSINESS RISKS
----------------------------------------------------------------------

Organization and Line of Business
---------------------------------

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

The Company has suspended substantive operations subsequent to July 31, 2001.
Management is currently pursuing various options to obtain additional funding,
including the sale of a majority equity position to investors with an
alternative business plan.

To date, we have been unable to generate significant cash flows from our
business operations. As a result, we have funded our operations through investor
financing, including sales of common stock and the exercise of warrants and
options. We have also used debt to fund our operations. Until such time as we
are able to generate significant cash flow 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.

We do not have existing capital resources or credit lines available that are
sufficient to fund our operations and capital requirements as presently planned
over the next 12 months. We are actively pursuing additional funds through the
issuance of debt and/or equity instruments. We may also seek additional funds
from the sale of most or all of our assets. However, such funds may not be
available on favorable terms or at all.

Significant Business Risks
--------------------------

Since its inception, the Company has incurred significant operating losses
totaling over $57 million, and at October 31, 2004, has a working capital
deficit of $4,626,723 and has suspended substantive operations. The ability of
the Company to operate as a going concern is dependent upon its ability (1) to
obtain sufficient additional debt and/or equity capital, (2) sell or license
certain technologies and/or (3) generate significant revenues through its
existing assets and operating business. The successful outcome of future
activities cannot be determined at this time and there are no assurances that if
achieved, the Company will have sufficient funds to execute their business plans
or generate positive operating results. These issues, among others, raise
substantial doubt about the ability of the Company to continue as a going
concern. The financial statements do not include any adjustments relating to the
recoverability and classification of asset carrying amounts or the amount and
classification of liabilities that might result should the Company be unable to
continue as a going concern.

                                       6

<PAGE>
                        AMERICAN TECHNOLOGIES GROUP, INC.

                          NOTES TO FINANCIAL STATEMENTS
                                   (Unaudited)

              For The Three Months Ended October 31, 2004 and 2003

NOTE 2 - ORGANIZATION, LINE OF BUSINESS AND SIGNIFICANT BUSINESS RISKS,
continued
--------------------------------------------------------------------------------

Management is currently pursuing various options to obtain additional funding
including the sale of a majority equity position to investors with an
alternative business plan.

Net Loss Per Share
------------------

Net loss per common share is based upon the weighted average number of common
shares outstanding during the fiscal year under the provisions of Statement of
Financial Accounting Standards No. 128, "Earnings Per Share." Common share
equivalents were not considered as they would be anti-dilutive and had no impact
on earnings per share for any periods presented. Had common share equivalents
been considered, the incremental shares from dilutive options, warrants, and
convertible debentures would have been 533,566,950 and 902,848,000 for the three
months ended October 31, 2004 and 2003, respectively.

Segments
--------

The Company operates in one business segment, technology products, as a result
of the sale of its mining business in fiscal 2000.

Stock-Based Compensation
------------------------

The Company accounts for non-employee stock-based compensation under Statement
of Financial Accounting Standards No. 123 ("SFAS 123"), "Accounting for
Stock-Based Compensation." SFAS 123 defines a fair value based method of
accounting for stock-based compensation. However, SFAS 123 allows an entity to
continue to measure compensation cost related to stock and stock options issued
to employees using the intrinsic method of accounting prescribed by Accounting
Principles Board Opinion No. 25 ("APB 25"), "Accounting for Stock Issued to
Employees." Under APB 25, compensation cost, if any, is recognized over the
respective vesting period based on the difference, on the date of grant, between
the fair value of the Company's common stock and the grant price. Entities
electing to remain with the accounting method of APB 25 must make pro forma
disclosures of net income and earnings per share, as if the fair value method of
accounting defined in SFAS No. 123 had been applied.

In December 2002, SFAS 148, "Accounting for Stock-Based Compensation -
Transition and Disclosure," was issued. SFAS 148 amends SFAS 123 to provide
alternative methods of transition for voluntary change to the fair value based
method of accounting for stock-based employee compensation. In addition, SFAS
148 amends the disclosure requirements of SFAS 123 to require prominent
disclosures in both annual and interim financial statements about the method of
accounting for stock-based employee compensation and the effect of the method
used on reported results. The provisions of SFAS 148 are effective for financial
statements for fiscal years ending after December 15, 2002. The Company adopted
the disclosure provisions of SFAS 148 in these financial statements. The Company
does not anticipate adopting the fair value based method of accounting for
stock-based compensation.

At October 31, 2004, the Company has two stock-based employee compensation
plans. The Company accounts for these plans under the recognition and
measurement principles of APB 25, and related interpretations. During the three
months ended October 31, 2004 and 2003, no stock-based employee compensation
cost is reflected in the accompanying unaudited statements of operations, as all
options granted under those plans had exercise prices equal to or greater than
the market value of the underlying common stock on the date of grant. Had
compensation cost for the Company's Plans been determined consistent with the
provisions of SFAS 123, the Company's net loss would not have changed.


                                       7

<PAGE>
                        AMERICAN TECHNOLOGIES GROUP, INC.

                          NOTES TO FINANCIAL STATEMENTS
                                   (Unaudited)

              For The Three Months Ended October 31, 2004 and 2003

NOTE 2 - ORGANIZATION, LINE OF BUSINESS AND SIGNIFICANT BUSINESS RISKS,
continued
--------------------------------------------------------------------------------

Derivative Instruments
----------------------

The Company accounts for freestanding derivative financial instruments
potentially settled in its own common stock under Emerging Issues Task Force
("EITF") Issue No. 00-19, "Accounting for Derivative Financial Instruments
Indexed to, and Potentially Settled in, a Company's Own Stock." As of October
31, 2004 the Company does have sufficient authorized shares available to settle
its open stock-based contracts. Pursuant to EITF Issue No. 00-19, the Company is
required to recognize the initial fair value of the applicable contracts
(consisting primarily of non-employee stock warrants and options to purchase
common stock) as an asset or liability, and subsequently measure the change in
the fair value (based on a Black-Scholes computation), with gains and losses
included in a statement of operations. The Company has determined that there is
no fair value associated with the freestanding derivatives since the Company has
sufficient authorized shares.

NOTE 3 - NOTE PAYABLE - RELATED PARTY
-------------------------------------

In November 2001, the Company signed an unsecured promissory note for borrowings
of up to $400,000 with a third party who has since become the Company's chief
executive officer, which was later amended and increased to $800,000. The note
was due August 8, 2002. The note has not been repaid and is due on demand. As of
October 31, 2004, the Company has a balance of $857,553 under the promissory
note. Borrowings bear interest at 9% per annum with interest payments due
monthly. The Company has not paid interest since fiscal 2001. Accrued interest
on this note totaled $164,324 as of October 31, 2004. Interest expense on the
notes payable above totaled $19,010 and $15,632 for the three months ended
October 31, 2004 and 2003, respectively.

NOTE 4 - CONVERTIBLE DEBENTURES
-------------------------------

Convertible debentures are summarized as follows as of October 31, 2004:

Convertible debentures, 7.5%                                  $      75,000
Secured subordinated convertible debentures, 8%                   1,334,511
                                                              -------------

                                                              $   1,409,511
                                                              =============

The 7.5% convertible debentures matured on October 15, 1999 and are in default.
The Company continues to accrue interest on these notes at 7.5%. Accrued
interest on these convertible debentures is due on the earlier of conversion or
maturity and both the accrued interest and the principal are payable in cash or
the Company's common stock at the Company's discretion. The conversion price is
equal to the lower of the average closing bid price of the common stock for the
five trading days prior to the closing or 75% of the average closing bid price
of the common stock for the five trading days prior to conversion.

The remaining outstanding 8% convertible debentures have all matured and are in
default. The Company continues to accrue interest at a 20% default interest rate
on these debentures. These debentures are convertible at fixed or variable
rates, at prices ranging from $0.002 to $0.05 per share as of October 31, 2004.

NOTE 5 - STOCKHOLDERS' EQUITY
-----------------------------

Stock Subscriptions
-------------------

As of October 31, 2004, the Company had not issued 15,000 shares of Common Stock
owed for services at $0.45 per share totaling $6,750 which is included in stock
subscriptions in the accompanying balance sheets.


                                       8

<PAGE>
                        AMERICAN TECHNOLOGIES GROUP, INC.

                          NOTES TO FINANCIAL STATEMENTS
                                   (Unaudited)

              For The Three Months Ended October 31, 2004 and 2003

NOTE 5 - STOCKHOLDERS' EQUITY, continued
----------------------------------------

Increase in Authorized Shares
-----------------------------

On August 30, 2002, the shareholders approved an amendment to the Company's
certificate of incorporation to increase the authorized number of shares of
common stock from 100,000,000 shares to 1,000,000,000 shares. The Company has
not filed the Certificate of Amendment of Certificate of Incorporation with the
Secretary of the State of Nevada as of December 16, 2004.

Committed Common Stock
----------------------

In connection with certain settlement agreements entered into with note holders,
employees and vendors during 2002, the Company committed to issue 4,115,596
shares of the Company's common stock. At October 31, 2004, the committed shares
have not been issued.

NOTE 6 - COMMITMENTS AND CONTINGENCIES
--------------------------------------

Litigation
----------

The Company is involved in various lawsuits arising in the normal course of
business. Management believes that any financial responsibility that may be
incurred in settlement of such claims and lawsuits would either be covered by
insurance or would not be material to the Company's financial position of
results of operations.

Leases
------

The Company leases offices and warehouse space under month-to-month agreements.
For quarters ended October 31, 2004 and 2003, rent expense totaled $4,500 and
$4,500, respectively.

Indemnities and Guarantees
--------------------------

During the normal course of business, the Company has made certain indemnities
and guarantees under which it may be required to make payments in relation to
certain transactions. The duration of these indemnities and guarantees varies
and, in certain cases, is indefinite. The majority of these indemnities and
guarantees do not provide for any limitation of the maximum potential future
payments the Company could be obligated to make. Historically, the Company has
not been obligated to make significant payments for these obligations and no
liabilities have been recorded for these indemnities and guarantees in the
accompanying balance sheet.



                                       9
<PAGE>


ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS

As reported in our prior public reports, the Company largely had ceased
operations during the fiscal year 2001 and began focusing efforts on
restructuring and refinancing. In 2004 and 2003, the Company successfully
continued these efforts to settle various pending law suits, reduce outstanding
liabilities, acquire an equity funding facility to finance acquisition of new
products, entities and technologies, and otherwise strengthen the business.

During 2002, the Company entered into various settlement agreements with
noteholders, employees and vendors. The summary of the related debt
extinguishments is as follows:

Settlement of convertible debentures, loan payable and
accrued interest totaling $2,515,941 in exchange for
7,000,000 shares of common stock with a value of
$35,000 and patents with a net book value of $37,187              $   2,443,754

Settlement of amount due to related party and accrued
payroll of $339,433 and $110,777, respectively, in exchange
for 960,000 shares of common stock and 3,040,000 shares of
committed common stock valued at $20,000                                430,210

Settlement of accrued payroll of $96,128 in exchange for
1,625,000 shares of common stock and 600,000 shares of
committed common stock valued at $8,475 and an agreement
to be paid $45,000                                                       42,653

Gain on write-down of accounts payable due to lack of
performance by the vendor or lack of recent collection
activity on the part of the vendor                                      255,469

Gain on the settlement of accounts payable of $110,000 in
exchange for 1,060,460 shares of common stock valued at $10,605          99,395

Gain on settlement of accrued payroll of $52,785 in exchange
for 450,000 shares of common stock and 475,596 shares of
committed common stock valued at $4,949 and an agreement
to be paid $12,000                                                       35,836
                                                                    ------------

                                                                    $ 3,307,317
                                                                    ============

During 2003, the Company entered into a settlement agreement
with a former employee regarding accrued payroll of $86,219
in exchange for 325,000 shares of common stock valued at
$1,138 and agreement to be paid $64,398.                            $    20,683
                                                                    ============

We will continue to explore possibilities for licensing and distributing the
distiller for manufacture and sales in selected Asian markets. The same is true
for the Force products, which still find interested customers both domestically
and overseas. Efforts will be underway to examine strengthening the distribution
network so as to increase sales. The acquisition of new entities, technologies
and products to create value for shareholders, too, will be underway in the form
of evaluating possible investments.

To date, we have been unable to generate significant cash flows from our
business operations. As a result, we have funded our operations through investor
financing, including sales of common stock and the exercise of warrants and
options. We have also used debt to fund our operations. Until such time as we
are able to generate significant cash flow 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.


                                       10
<PAGE>

We do not have existing capital resources or credit lines available that are
sufficient to fund our operations and capital requirements as presently planned
over the next 12 months. We are actively pursuing additional funds through the
issuance of debt and/or equity instruments. We may also seek additional funds
from the sale of most or all of our assets. However, such funds may not be
available on favorable terms or at all.


                                                    October 31,     October 31,
RESULTS OF OPERATIONS:                                 2004            2003
                                                   -------------   -------------
REVENUE:
Technology rights                                  $      3,611    $      1,214
                                                   -------------   -------------

OPERATING EXPENSES:
General and Administrative                               26,374          40,706
Marketing Product Development                             1,649             109
                                                   -------------   -------------
            Total Operating Expenses                     28,023          40,815
                                                   -------------   -------------


OTHER EXPENSE:                                          (87,142)        (83,764)
                                                   -------------   -------------

Net Loss Attributable to Common Stockholders       $   (111,554)   $   (123,365)
                                                   =============   =============

Basic and Fully Diluted Net Loss Per Common Share: $    ($0.001)   $    ($0.001)
                                                   =============   =============

Weighted average number of common shares
      outstanding                                    99,776,704      99,776,704
                                                   =============   =============


Technology rights revenue increased by $2,397 from $1,214 for the period ending
October 31, 2003 to $3,611 for the period ending October 31, 2004 due generally
to a relatively large sale to one customer of our products during the quarter
ended October 31, 2004.

A majority of our efforts during the past twelve months has been focused on
stabilizing our financial situation, settling lawsuits with major creditors and
former employees, increasing our authorized capital stock, and beginning the
process of seeking new technologies and activities to merge into.

                                       11
<PAGE>

LIQUIDITY AND CAPITAL RESOURCES

To date, we have been unable to generate significant cash flows from our
business operations. As a result, we have funded our operations through investor
financing, including sales of common stock and the exercise of warrants and
options. We have also used debt to fund our operations. Until such time as we
are able to generate significant cash flow 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.

We do not have existing capital resources or credit lines available that are
sufficient to fund our operations and capital requirements as presently planned
over the next twelve months. We are actively pursuing additional funds through
the issuance of debt and/or equity instruments. We may also seek additional
funds from the sale of most or all of our assets. However, such funds may not be
available on favorable terms or at all.

We have concluded that without new acquisitions of technology and products, the
shareholders cannot hope to see their investment valued at a level, which is
deserving.

In November 2001, the Company signed a promissory note with a third party who
has since become the Company's chief executive officer for $400,000, which was
later increased to $800,000. The note is unsecured and due on demand. As of
October 31, 2004, the Company has a balance of $857,553 outstanding under the
promissory note. Borrowings bear interest at 9% per annum with interest payments
due monthly. The Company has not paid interest since fiscal 2001 and the first
quarter of fiscal 2005. Accrued interest for this note totaled $164,324 as of
October 31, 2004.

GOING CONCERN

Since its inception, the Company has incurred significant operating losses
totaling over $57 million, and at October 31, 2004, has a working capital
deficit of $4,626,723, is in default on its convertible debentures and has
suspended substantive operations. The ability of the Company to operate as a
going concern is dependent upon its ability to (1) obtain sufficient additional
debt and/or equity capital, (2) sell or license certain technologies and/or (3)
generate significant revenues through its existing assets and operating
business. Our independent auditors indicated in their auditor's report for the
year ended July 31, 2004 that these issues, among others, raise substantial
doubt about the ability of the Company to continue as a going concern. The
financial statements do not include any adjustments relating to the
recoverability and classification of asset carrying amounts or the amount and
classification of liabilities that might result should the Company be unable to
continue as a going concern.

ITEM 3. CONTROLS AND PROCEDURES

(a)      EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES

         As of October 31, 2004, we carried out an evaluation, under the
         supervision and with the participation of our Chief Executive Officer
         and Chief Financial Officer, of the effectiveness of the design and
         operation of our disclosure controls and procedures. Based on this
         evaluation, our Chief Executive Officer and Chief Financial Officer
         concluded that our disclosure controls and procedures are effective in
         timely alerting them to material information required to be included in
         our periodic reports that are filed with the Securities and Exchange
         Commission. It should be noted that the design of any system of
         controls is based in part upon certain assumptions about the likelihood
         of future events, and there can be no assurance that any design will
         succeed in achieving its stated goals under all potential future
         conditions, regardless of how remote. In addition, we reviewed our
         internal controls, and there have been no significant changes in our
         internal controls or in other factors that could significantly affect
         those controls subsequent to the date of their last valuation.

(b)      CHANGES IN INTERNAL CONTROLS

         There were no significant changes in the Company's internal controls or
         in other factors that could significantly affect these controls during
         the quarter covered by this Report or from the end of the reporting
         period to the date of this Form 10-QSB.


                                       12
<PAGE>

                                     PART II
                                OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

Not applicable.

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

None.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

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

None.

ITEM 5. OTHER INFORMATION

None.

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

(a) Exhibits.

31.1     Certification by Chief Executive Officer and
         Chief Financial Officer pursuant to Sarbanes-Oxley
         Section 302:                                          Provided Herewith

32.1     Certification by Chief Executive Officer and
         Chief Financial Officer pursuant to 18 U.S. C.
         Section 1350:                                         Provided Herewith




                                       13
<PAGE>


                                   SIGNATURES

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

                        AMERICAN TECHNOLOGIES GROUP, INC.





BY: /S/ DR. GARY FROMM
    ------------------
    DR. GARY FROMM
    CHAIRMAN OF THE BOARD AND
    CHIEF EXECUTIVE OFFICER



Date: December 20, 2004

In accordance with the Exchange Act, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.





/S/ DR. GARY FROMM          CHAIRMAN OF THE BOARD,          DECEMBER 20, 2004
------------------          CHIEF EXECUTIVE OFFICER
    GARY FROMM          ACTING CHIEF FINANCIAL OFFICER
                        ACTING CHIEF ACCOUNTING OFFICER



                                       14