**U.S. SECURITIES AND EXCHANGE COMMISSION**Washington, D.C. 20549FORM 10-QSB

(x) QUARTERLY REPORT PURSUANT TO SECTION 13 OR15 (d)OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30,2002

( )TRANSITION REPORT PURSUANT TO SECTION 13 OR15 (d)OF THE SECURITIES EXCHANGE ACT COMMISSION OF 1934

for the Transition period September 30, 2002

Commission file number 0-9951

**ADVANCED OXYGEN TECHNOLOGIES, INC.**-------------------------------------------------------------(Exact name of small business issuer as specified in its charter)

Delaware                                             91-1143622-----------------------                             ----------------------(State ofIncorporation)              (IRS Employer Identification No.)

C/O Crossfield, Inc., 133 W 13th Street, NewYork, NY 10011-------------------------------------------------------(Address of principal executive offices)

C/O Crossfield, Inc. (212)-727-7085---------------------------------------------------(Issuer's telephone number)

Check whether the issuer (1) has filed allreports required to be filled by Section 13 or 15(d)of the Exchange Act during the past 12 months (or for suchshorter period that the Registrantwas required to file such reports), and (2) has been subject tosuch filing requirements forthe past 90 days. Yes (X) No

The number of shares of common stockoutstanding as of September 30, 2002 was 32,973,585.

Transitional Small Business Disclosure Format(check one): Yes( ) No( X )

ADVANCED OXYGEN TECHNOLOGIES, INC.

| **INDEX**                                                                                                                                   |
|---------------------------------------------------------------------------------------------------------------------------------------------|
| PART I: Financial        Information                                                                                                        | **2** |
| Item I: Financial Statements                                                                                                                | **2** |
| Balance Sheet                                                                                                                               | **2** |
| Income Statement                                                                                                                            | **3** |
| Statement of Cash Flow                                                                                                                      | **4** |
| Statement of Changes                                                                                                                        | **5** |
| Item 2: Management's Discussion and                        Analysis of Financial Condition and                        Results of Operations | **6** |
| PART II                                                                                                                                     | **8** |
| Item 1: Legal Proceedings                                                                                                                   | **8** |
| Item 6. Exhibits and Reports on Form 8-K                                                                                                    | **8** |
| Signature                                                                                                                                   | **8** |
| Exhibit A                                                                                                                                   | **9** |

PART 1: FINANCIAL INFORMATION 

Item I: Financial Statements for the three months endingSeptember 30, 2002. (Un-audited)

| **Balance Sheet,        September 30, 2002**                                                                      | **3        Months** |
|-------------------------------------------------------------------------------------------------------------------|---------------------|
| Current Assets                                                                                                    |                |
| Cash                                                                                                              | 0                   |
| Receivables                                                                                                       | 6,529               |
| Inventory                                                                                                         |                |
| Total Current Assets                                                                                              | 6,529               |
|                                                                                                              |                |
|                                                                                                              |                |
| Property and equipment                                                                                            |                |
| Fixed Assets                                                                                                      | 911,391             |
| Accumulated Depreciation                                                                                          | (911,391)           |
| Total Property - Equipment                                                                                        | (0)                 |
|                                                                                                              |                |
|                                                                                                              |                |
| Other Assets, Deposits                                                                                            | 0                   |
|                                                                                                              |                |
| ===============================                                                                                   | ===========         |
| **Total Assets**                                                                                                  | **6,529**           |
|                                                                                                              |                |
| Liabilities and Capital                                                                                           |                |
| Current Liabilities                                                                                               |                |
| Accounts Payable                                                                                                  | 225,359             |
| Other Current Liabilities                                                                                         | 42,599              |
| Total Current Liabilities                                                                                         | 267,958             |
|                                                                                                              |                |
|  Long Term Liabilities                                                                                       |                |
| Note Payable, Crossfield                                                                                          | 129,630             |
| Note Payable, Director                                                                                            | 5,456               |
| Total  Long Term        Liabilities                                                                          | 135,086             |
| ================================                                                                                  | ===========         |
| Total Liabilities                                                                                                 | 403,044             |
|                                                                                                              |                |
| Capital                                                                                                           |                |
| Beginning Balance Equity                                                                                          | 16,700              |
| Preferred Stock                                                                                                   | 50                  |
| Common Stock                                                                                                      | 329,736             |
| Paid in Capital                                                                                                   | 20,490,298          |
| Retained Earnings                                                                                                 | (21,220,715)        |
| Treasury Stock                                                                                                    | (7,284)             |
| Net Income                                                                                                        | (5,301)             |
| Total Capital                                                                                                     | (396,516)           |
|                                                                                                              |                |
| ================================                                                                                  | ===========         |
| **Total Liabilities and        Capital**                                                                          | **6,529**           |
|                                                                                                              |                |
|                                                                                                              |                |
| **Income Statement** for        the three month period ending September 30, 2002                                  | **3 Months**        |
| Revenues                                                                                                          |                |
| Database Management                                                                                               | 0                   |
| Total Revenues                                                                                                    | 0                   |
|                                                                                                              |                |
| Cost of Sales                                                                                                     | 0                   |
|                                                                                                              |                |
| Gross Profit                                                                                                      | 0                   |
|                                                                                                              |                |
| Expenses                                                                                                          |                |
| Airline Expense                                                                                                   | 437                 |
| Auto                                                                                                              | 118                 |
| Car Rental                                                                                                        | 62                  |
| Employee Benefits                                                                                                 | 27                  |
| Hotels                                                                                                            | 45                  |
| Cleaning                                                                                                          | 35                  |
| Travel- Meals and        entertainment                                                                            | 786                 |
| Office Expense                                                                                                    | 546                 |
| Postage                                                                                                           | 449                 |
| Telephone                                                                                                         | 1,236               |
| Travel                                                                                                            | 1,425               |
| Other Expenses                                                                                                    | 135                 |
| Total Expenses                                                                                                    | 5,301               |
| ================================                                                                                  | ===========         |
| **Net Income**                                                                                                    | **(5,301)**         |
|                                                                                                              |                |
|                                                                                                              |                |
| **Statement of Cash Flow**        for the three month period ending September 30, 2002                            | **3 Months**        |
|                                                                                                              |                |
| Cash flow from operating        activities                                                                        |                |
| Net Income                                                                                                        | (5,301)             |
|                                                                                                              |                |
| Adjustments to reconcile net        income to cash provided by operations                                         |                |
| Accounts Payable                                                                                                  | (5,750)             |
| Total Adjustments                                                                                                 | (5,750)             |
|                                                                                                              |                |
| ================================                                                                                  | ===========         |
| Net Cash provided by        operations                                                                            | (11,051)            |
|                                                                                                              |                |
| Cash Flows from financing                                                                                         |                |
| Proceeds from:                                                                                                    |                |
| Note Payable, Crossfield,        Inc.                                                                             | 11,051              |
| Other Long Term Liabilities                                                                                       |                |
|                                                                                                              |                |
| Used For:                                                                                                         |                |
| Net Cash used in Financing                                                                                        | 11,051              |
|                                                                                                              |                |
| ================================                                                                                  | ===========         |
| **Net Increase (decrease)        in cash**                                                                        | **0**               |
|                                                                                                              |                |
|                                                                                                              |                |
| **Statement of Changes in        Financial Position** for the three month period ending        September 30, 2002 | **3 Months**        |
|                                                                                                              |                |
| Sources of Working Capital                                                                                        |                |
| Net Income                                                                                                        | (5,301)             |
| Add Backs not requiring working capital                                                                           |                |
| Depreciation                                                                                                      |                |
|                                                                                                              |                |
| Working capital from        operations                                                                            | (5,301)             |
|                                                                                                              |                |
| Other Sources                                                                                                     |                |
| Note Payable, Crossfield, Inc.                                                                                    | 11,051              |
| Other Long Term Liabilities                                                                                       |                |
| Total Sources                                                                                                     | 5,750               |
|                                                                                                              |                |
| Uses of Working Capital                                                                                           |                |
|                                                                                                              |                |
|                                                                                                              |                |
| Total Uses                                                                                                        | 0                   |
| ================================                                                                                  | ===========         |
| **Net change**                                                                                                    | **5,750**           |
|                                                                                                              |                |
|                                                                                                              |                |
| Analysis of components of        change                                                                           |                |
| Increase (decrease) in        Current Assets                                                                      |                |
| (Increase) decrease in        Current Liabilities:                                                                |                |
| Accounts Payable                                                                                                  | 5,750               |
| **Net Change**                                                                                                    | **5,750**           |

  

Item 2: Management's Discussion and Analysis of FinancialCondition and Results of Operations.

The Company maintains a database ("Database") ofbusiness contacts that have participated in conference events.The Database was obtained through acquisition and the Company'sactivities of marketing events and producing CD-ROMS for clients.The Company maintains and updates contact fields on a quarterlybasis.AOXY has a database management contract with Dun and Bradstreet,("DB") and Walter Karl, Inc., a division of InfoUSA,Inc. ("WK") whereby, Walter Karl, Inc. will broker theCompany's Database. Walter Karl's function is to market and rentthe data contained in the Database. This is available in one oftwo formats: on a one time basis, or a 'database' basis wherebythe customer will commit to a minimum number of contact names.The majority of the customers using the Database through WK aredirect business to business marketers. WK receives a fee for eachsale. During the year ending June 30, 2002 Walter Karl was theCompany’s only source of revenue. During this period, WalterKarl is the Company’s only customer.AOXY has an agreement with Dun and Bradstreet whereby DB willupdate, correct, append, and offer deletions to the Database. DBwill evaluate the Database each time, and has the option topurchase contacts on a case by case as they see fit, in whichcase AOXY would receive a fee. Correspondingly, should AOXY,rent, sell or otherwise profit from registered DB information,AOXY would pay a fee to DB. To date, AOXY has not sold anyregistered DB information.The Company had a location in Santa Clarita, CA for operations.The Company had abandoned this facility and equipment andmaintains no staff other than the sole officer of the Company.Currently, the sole officer of the Company allows the Company tomaintain its books, records and operations at its office.

The Company continues it efforts to raise capital to supportoperations and growth, and is actively searching acquisition ormerger with another company that would compliment AOXY orincrease its earnings potential. During this period, the Companyhas had discussions with candidates, and has had no success insecuring negotiations or a transaction. Further, the Company'sfinancial position makes it difficult for the Company to continueoperations. The foregoing raise substantial doubt about theCompany's ability to continue as a going concern. The Company'scontinuation as a going concern is dependent on the attainment ofprofitable operations and meeting its obligations on a timelybasis, which during this period, the Company has not been able todo.

Acquisition Efforts:

The Company continues it efforts to raise capital to supportoperations and growth, and is actively searching acquisition ormerger with another company that would compliment AOXY orincrease its earnings potential. The Company has been indiscussion with Companies looking to be acquired. AOXY has notnegotiated any terms nor proposed any acquisition of any of thesecompanies. In addition, the Company is in discussion withpotential lending institutions to assist in financing anyproposed acquisition. The Company expects difficulty in financingthe growth of the increased business or acquisition and has beenconcentrating on raising capital and/or obtaining a line ofcredit.

Historical Operations:On March 9, 1998, pursuant to an Agreement for Purchase and Saleof Specified Business Assets ("Purchase Agreement"), aPromissory Note ("Note"),and a Security Agreement("Security Agreement") all dated March 9, 1998,Advanced Oxygen Technologies, Inc. (the "Company")purchased certain tangible and intangible assets (the"Assets") including goodwill and rights under certaincontracts, from Integrated Marketing Agency, Inc., a CaliforniaCorporation ("IMA").

Pursuant to an employment agreement dated March 09, 1998between the Company and John Teuber ("EmploymentAgreement"), on September 04, 1998 the Company terminatedJohn Teuber for cause without relinquishing any of its rights orremedies. 

Pursuant to the Note, the Purchase Agreement, and the SecurityAgreement between the Company and ("IMA"), the Companyon September 04, 1998 exercised its right of "Set Off"of the Note, as defined therein due to IMA's breach of numerousrepresentations, warranties and covenants contained in the Noteand certain ancillary documents. The Company further reserved anyand all rights and remedies available to it under the Note,Purchase Agreement and Security Agreement. 

The Company entered into a two year employment agreement("NAG Agreement" as contained in Exhibit I of theregistrants SEC Form 10-K for the period ending June 30, 1998)with Nancy Gaylord on March 13, 1998. On September 18, 1998,Nancy Gaylord terminated her employment with the Company. The NAGAgreement had no provision for this termination. The Companyentered into a lease agreement as contained in Exhibit I of theregistrants SEC Form 10-QSB for the period ending September 30,1998 with America-United Enterprises Inc. on October 01, 1998 andtook possession of 4,700 sf. of premises on November 06,1998 inSanta Clarita for its CA location. Currently, this is the onlyCalifornia location of the Company. 

On December 9, 1998 the company delivered to IMA,"Notification to Indemnifying Party and Demand forIndemnification for $2,251,266." Pursuant to the Note, thePurchase Agreement, the Security Agreement, and the EmploymentAgreement (collectively the "Agreements"), the Companydemanded that IMA pay $2,251,266 or defend the Company againstthe Liabilities (as defined therein) due to, among other things,IMA's breach, representations, warranties, and violation of theAgreements. 

On January 29, 1999, pursuant to the Purchase Agreement of1/28/99, Advanced Oxygen Technologies, Inc. ("AOXY")purchased 1,670,000 shares of convertible preferred stock ofAdvanced Oxygen Technologies, Inc. ("STOCK") and a$550,000 promissory note issued by Advanced Oxygen Technologies,Inc. ("Note") from Integrated Marketing Agency, Inc.("IMA"). The terms of the Purchase Agreement were: AOXYpaid $15,000 to IMA, assumed a Citicorp Computer Equipment Lease,#010-0031648-001 from IMA, delivered to IMA certain tangiblebusiness property (as listed in Exhibit A of the PurchaseAgreement), executed a one year $5,000 promissory note with IMA,and delivered to IMA a Request For Dismissal of case #PS003684(restraining order) filed in Los Angeles county superior court.IMA sold, transferred, and delivered to AOXY the Stock and theNote. IMA sold, transferred, assigned and delivered the Note andthe Stock to AOXY, executed documents with Citicorp Leasing, Inc.to effectuate an express assumption by AOXY of the obligationunder lease #010-0031648-001 in the amount of $44,811.26,executed a UCC2 filing releasing UCC-1 filing #9807560696 filedby IMA on March 13, 1998, and delivered such documents asrequired. In addition, both IMA and AOXY provided mutualliability releases for the other. 

On December 31, 2000, AOXY entered into an agreement withEastern Star, ltd, and Baldwin Construction Co (the"Purchasers") whereby  the Purchasers will buythree million shares of capital stock of AOXY for one hundred andtwenty five thousand dollars pursuant to a purchase agreement("Purchase Agreement"). The Company has concluded theissuance and delivery of the shares pursuant to the PurchaseAgreement. In addition, the Company received a request from AnnSejeroe for a conversion of her 1 Preferred Share number P 0002issued April 16, 1998, and in accordance with the restrictions,terms and conditions, as evidenced on the reverse side of theshare certificate, the Company issued 333,333 shares bearing arestrictive legend.

Forward Looking Statements 

Certain statements contained in this report, includingstatements concerning the Company's future and financingrequirements, the Company's ability to obtain market acceptanceof its products and the competitive market for sales of smallproduction business' and other statements contained hereinregarding matters that are not historical facts, are forwardlooking statements; actual results may differ materially fromthose set forth in the forward looking statements, whichstatements involve risks and uncertainties, including withoutlimitation to those risks and uncertainties set forth in any ofthe Company's Registration Statement's under the heading"Risk Factors" or any other such heading. In addition,historical performance of the Company should not be considered asan indicator for future performance, and as such, the futureperformance of the Company may differ significantly fromhistorical performance. 

PART II 

Item 1: Legal Proceedings 

There were no legal proceedings brought against the Companyduring this period. 

Item 6. Exhibits and Reports on Form 8-K 

There were no reports on Form 8-K filed during this period.

SIGNATURE 

In accordance with the requirements of the Exchange Act, theRegistrant has caused this report to be signed on its behalf bythe undersigned, thereunto duly authorized. 

Date: October 7, 2002

/s/ Robert E. Wolfe /s/ ------------------------------------------ Robert E. Wolfe, Chairman of the Board and Chief Executive Officer and Principal Financial Officer