<PAGE>

                      SECURITIES AND EXCHANGE COMMISSION
                            Washington, D.C. 20549
   
                                Amendment No. 1
    
                                      to
                                   Form 10-Q

(X) Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
    Exchange Act of 1934, for the Quarter Ended September 30, 1997.
                                       or
( ) Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange
    Act of 1934, for the Transition Period from ________ to ________

Commission file number 1-9748


                       AMERICAN FILM TECHNOLOGIES, INC.
             -----------------------------------------------------
              (Exact name of registrant as specified its charter)

Delaware                                                    23-2359277
------------------------------------------------------------------------------
(State or other juridiction of                    (IRS Employer Identification
 incorporation or organization)                               Number)

                   4105 Sorrento Valley Blvd., San Diego, CA
                   -----------------------------------------
                92121 (Address of principal executive offices)

Registrant's telephone number including area code: (619) 623-0830

         Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or 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 REGISTRANTS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE
PRECEDING FIVE YEARS: Indicate by check mark whether the registrant has filed
all documents and reports required to be filed by Section 12, 13 or 15(d) of
the Securities Exchange Act of 1934 subsequent to the distribution of
securities under a plan confirmed by a court. YES     NO  X
                                                  ---    ---

         As of September 30, 1997, there were 72,008,051 shares of common
stock outstanding.


<PAGE>

                         PART 1. FINANCIAL INFORMATION

                       American Film Technologies, Inc.
                     Condensed Consolidated Balance Sheets

   
<TABLE>
<CAPTION>
                                                                   September 30,
                                                                       1997          June 30,
Assets                                                              (unaudited)        1997
                                                                   ------------    ------------
<S>                                                                <C>             <C>         
Current Assets:
  Cash                                                             $     95,212    $    159,730
  Other current assets                                                  121,474         122,787
                                                                   ------------    ------------
Total current assets                                                    216,686         282,517

Equipment and software, at cost, net                                    255,144         350,754
Film library, net                                                       121,875         187,500
                                                                   ------------    ------------

                                                                   $    593,705    $    820,771
                                                                   ============    ============

Liabilities and stockholders' equity/(deficit):
Current Liabilities:
  Notes payable:                                                        405,307         405,307
     Other loans                                                         12,300          35,274
  Accounts payable and accrued expenses                                 533,038         549,869
  Accrued compensation                                                  135,780         134,580
                                                                   ------------    ------------
Total current liabilities                                             1,086,425       1,125,030

Long-term notes payable                                               1,284,493       1,250,213
Stock options & subscriptions subject to repurchase                     620,000         620,000
                                                                   ------------    ------------
Total liabilities                                                     2,990,918       2,995,243

Stockholders' equity/(deficit):
Common stock, $.002 par value:
  Authorized shares - 225,000,000: issued and outstanding shares
72,008,051 and 69,567,310 at September 30, 1997
and  June 30, 1997  respectively                                        147,402         147,402
Capital in excess of par value                                       16,051,185      15,879,186
Deferred compensation                                                (1,282,000)     (1,342,000)
Accumulated deficit                                                 (17,313,800)    (16,859,060)
                                                                   ------------    ------------
Total stockholders' equity/(deficit)                                  2,397,213      (2,174,472)
                                                                   ------------    ------------
                                                                    $   593,705    $    820,771
                                                                   ============    ============
</TABLE>
See accompanying notes 
    


                                        
<PAGE>



                       American Film Technologies, Inc.
                Condensed Consolidated Statements of Cash Flows
            For the Three months ended September 30, 1997 and 1996
                                  (Unaudited)


   
<TABLE>
<CAPTION>

                                                          September 30,     September 30, 
CASH FLOWS FROM OPERATION ACTIVITIES:                          1997              1996 
                                                            ---------         ---------

<S>                                                         <C>               <C>       
Net (loss)                                                  ($454,740)        ($487,045)
Adjustments to reconcile net (loss) to net cash
  (used) by operating activities:
    Depreciation and amortization                             161,235           139,707
    Amortization of Deferred compensation                      60,000            60,000
    Changes in assets and liabilities:
        Other current assets                                    1,313            49,910
        Accounts payable and accrued expenses                 (16,831)          (12,165)
        Accrued compensation                                    1,200            (6,731)
                                                            ---------         ---------
Net cash (used) by operating activities                       247,823          (256,324)



Cash Flows From Financing Activities:
    Principal payments on notes payable - other                11,306           (19,057)
    Proceeds from  sale of common stock                       171,999           200,000
                                                            ---------         ---------
Net cash provided by financing activities                     183,305           180,943

Net increase/(decrease) in cash                               (64,518)          (75,381)
Cash, beginning of period                                     159,730           338,669
                                                            ---------         ---------
Cash, end of period                                         $  95,212         $ 263,288

Supplemental disclosures of cash flow information:
  Cash paid during the period for interest                  $     752         $   4,708

  Reduction of Long term debt written down against
    Reorganization value in excess of identifiable assets                     $  13,176
</TABLE>
    
   
    
See accompanying notes.





                                       


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                          PART II : OTHER INFORMATION


Item 6.  Exhibits and Reports on Form 8-K

                  (a)      Exhibits

                           The following exhibits are filed with this report:

                           4.1      Senior Secured Convertible Promissory
                                    Note, dated as of October 14, 1997, issued
                                    to Gerald M. Wetzler by the Company.

                           10.1     Senior Secured Note Purchase Agreement,
                                    dated as of October 14, 1997, between
                                    American Film Technologies, Inc., on the
                                    one hand, and York Capital Management,
                                    L.P., Neil Flanzraich, Gerald M. Wetzler,
                                    Robert L. Frome, Robert Eide Family Trust,
                                    and Howard M. Lorder Irrevocable Trust, on
                                    the other hand.

                           10.2     Security Agreement, dated as of October
                                    14, 1997, between American Film
                                    Technologies, Inc., on the one hand, and
                                    York Capital Management, L.P., Neil
                                    Flanzraich, Gerald M. Wetzler, Robert L.
                                    Frome, Robert Eide Family Trust, and
                                    Howard M. Lorder Irrevocable Trust, on the
                                    other hand.

                  (b)      Reports on Form 8-K.

                           None.


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                                  Signatures

In accordance with the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.

AMERICAN FILM TECHNOLOGIES, INC.


   
Date: March 18, 1998               By: /s/  Gerald M. Wetzler,
     --------------------            -------------------------
                                          Gerald M. Wetzler,
                                          Chairman, Chief Executive Officer and
                                          Acting Chief Financial and Accounting
                                          Officer