<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, 1998
[ ] 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.)
1017 SOUTH MOUNTAIN AVENUE, 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
--- ---
As of December 10, 1998, the registrant had 23,824,987 shares of Common
Stock outstanding.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C> <C>
PART I FINANCIAL INFORMATION
ITEM 1 Condensed Consolidated Financial Statements
Condensed Consolidated Balance Sheets as of October 31, 1998
and July 31, 1998 3
Condensed Consolidated Statements of Operations for the Three
Months ended October 31, 1998 and 1997 5
Condensed Consolidated Statements of Cash Flows for the Three
Months ended October 31, 1998 and 1997 6
Notes to the Condensed Consolidated Financial Statements 7
ITEM 2 Management's Discussion and Analysis 10
PART II OTHER INFORMATION
ITEM 2 Changes in Securities 11
ITEM 6 Exhibits and Reports on Form 8-K 11
Signatures 12
</TABLE>
FORWARD-LOOKING STATEMENTS
IN ADDITION TO HISTORICAL INFORMATION, THIS QUARTERLY REPORT CONTAINS
FORWARD-LOOKING STATEMENTS WITHIN THE MEANING OF THE PRIVATE SECURITIES
LITIGATION REFORM ACT OF 1995, AND THE COMPANY DESIRES TO TAKE ADVANTAGE OF
THE "SAFE HARBOR" PROVISIONS THEREOF. THEREFORE THE COMPANY IS INCLUDING THIS
STATEMENT FOR THE EXPRESS PURPOSE OF SUCH SAFE HARBOR WITH RESPECT TO ALL
SUCH 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 2
<PAGE>
AMERICAN TECHNOLOGIES GROUP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS - OCTOBER 31, 1998 AND JULY 31, 1998
<TABLE>
<CAPTION>
ASSETS
October 31, July 31,
1998 1998
----------- ----------
(unaudited)
<S> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents $ 20,724 $ 60,563
Accounts receivable, net of allowance
for doubtful accounts of $10,000 and $28,800 at
October 31, 1998 and July 31, 1998, respectively 16,583 46,029
Inventories, net 135,010 149,658
Due from officers/shareholders 141,198 138,198
Other current assets 5,395 8,482
----------- ----------
Total current assets 318,910 402,930
----------- ----------
PROPERTY AND EQUIPMENT 1,837,406 1,837,406
Less--Accumulated depreciation and
amortization (461,079) (421,767)
----------- ----------
1,376,327 1,415,639
----------- ----------
TECHNOLOGY RIGHTS, net of accumulated
amortization of $500,000 at October 31, 1998
and $400,000 at July 31, 1998, respectively 700,000 800,000
OTHER ASSETS 964,292 432,909
ASSETS HELD FOR SALE 3,925,051 3,925,051
ASSETS OF DISCONTINUED OPERATIONS 123,998 134,401
----------- ----------
$7,408,578 $7,110,930
----------- ----------
----------- ----------
</TABLE>
The accompanying notes are an integral part of these condensed consolidated
balance sheets.
3
<PAGE>
AMERICAN TECHNOLOGIES GROUP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS - OCTOBER 31, 1998 AND JULY 31, 1998
LIABILITIES AND STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
October 31, July 31,
1998 1998
------------ -----------
(unaudited)
<S> <C> <C>
CURRENT LIABILITIES:
Accounts payable $ 498,360 $ 360,028
Accrued liabilities 210,506 145,770
Accrued professional fees 263,254 243,600
Amounts due to related parties 440,230 264,345
Current portion of notes payable 380,432 372,824
Current portion of capital lease obligations 22,344 22,344
Convertible debentures 275,000 75,000
Liabilities of discontinued operations 383,880 356,366
Deposit on sale of discontinued operations 500,000 300,000
------------ -----------
Total current liabilities 2,974,006 2,140,277
NOTES PAYABLE, net of current portion 1,587,642 1,587,955
CAPITAL LEASE OBLIGATIONS, net of current portion 240,367 283,084
------------ -----------
Total liabilities 4,802,015 4,011,316
------------ -----------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Series A Convertible Preferred Stock:
Par value--$.001,
Authorized--10,000,000 shares
Issued and outstanding--378,061 shares 378 378
Series B Convertible Preferred Stock:
Par value--$.001,
Authorized--500,000 shares
Liquidation value--$8.00 per share
None issued and outstanding - -
Series C Convertible Preferred Stock:
Par value--$.001,
Authorized--2,000 shares
Liquidation value--$1,000 per share
None issued and outstanding - -
Common Stock:
Par value--$.001,
Authorized--100,000,000 shares
Issued and outstanding -- 23,724,987 and
22,704,368 shares at October 31, 1998
and July 31, 1998, respectively 23,725 22,704
Additional paid-in capital 40,441,837 39,569,941
Stock subscriptions 38,440 63,440
Deficit (37,897,817) (36,556,849)
------------ -----------
Total stockholders' equity 2,606,563 3,099,614
------------ -----------
$ 7,408,578 $ 7,110,930
------------ -----------
------------ -----------
</TABLE>
The accompanying notes are an integral part of these condensed consolidated
balance sheets.
4
<PAGE>
AMERICAN TECHNOLOGIES GROUP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED OCTOBER 31, 1998 AND 1997
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended October 31,
1998 1997
------------ -------------
<S> <C> <C>
REVENUES:
Technology products $ 40,932 $ 431,025
Rental income 63,500 -
Other 61,323 55,562
------------ -------------
Total operating revenues 165,755 486,587
------------ -------------
OPERATING EXPENSES
General and administrative 801,239 569,431
Marketing and product development 118,674 307,059
Research and development 169,218 359,115
Mining operations 27,550 95,861
Amortization of technology rights 100,000 -
------------ -------------
Total operating expenses 1,216,681 1,331,466
------------ -------------
OTHER (EXPENSE) INCOME
Interest expense, net (173,956) (1,107,521)
Loss on investment in a joint venture (39,341) -
------------ -------------
(213,297) (1,107,521)
------------ -------------
NET LOSS FROM CONTINUING OPERATIONS
BEFORE DISCONTINUED OPERATIONS (1,264,223) (1,952,400)
DISCONTINUED OPERATIONS (NOTE 7) (76,745) (173,703)
------------ -------------
NET LOSS $(1,340,968) $(2,126,103)
------------ -------------
------------ -------------
BASIC AND DILUTED NET LOSS PER SHARE
Continuing operations $ (0.05) $ (0.09)
Discontinued operations (0.01) (0.01)
------------ -------------
Net Loss $ (0.06) $ (0.10)
------------ -------------
------------ -------------
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING 23,381,083 20,856,670
------------ -------------
------------ -------------
</TABLE>
The accompanying notes are an integral part of these condensed consolidated
statements.
5
<PAGE>
AMERICAN TECHNOLOGIES GROUP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED OCTOBER 31, 1998 AND 1997
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended October 31,
1998 1997
------------ -------------
<S> <C> <C>
CASH FLOW FROM OPERATING ACTIVITIES:
Net Loss $(1,340,968) $(2,126,103)
Adjustments to reconcile net loss to net cash used
in operating activities:
Depreciation and amortization 139,312 39,642
Stock issued as consideration for services 214,062 4,235
Imputed interest expense for notes payable and capital lease 18,427 20,899
Interest and financing costs on convertible debt 110,667 1,075,000
Loss on investment in joint venture 39,341 -
Changes in assets and liabilities:
Accounts receivable 29,446 356,973
Inventories 14,648 (32,452)
Other current assets 3,087 -
Accounts payable and accrued liabilities 222,722 (179,447)
Amounts due to related parties 33,385 -
------------ -------------
Net cash used in operating activities (515,871) (841,253)
------------ -------------
CASH FLOW FROM INVESTING ACTIVITIES:
Purchase of property and equipment - (174,768)
Other assets (3,536) (105,065)
------------ -------------
Net cash used in investing activities (3,536) (279,833)
------------ -------------
CASH FLOW FROM FINANCING ACTIVITIES:
Advances to shareholders/officers (3,000) 200
Advances from related parties 142,500 -
Net proceeds from issuance of convertible debt 156,000 2,834,880
Payments on notes payable (3,849) (4,577)
Payments on capital lease obligation (50,000) -
Deposit on sale of discontinued operations 200,000 -
Net proceeds from issuance of stock - 55,537
------------ -------------
Net cash provided by financing activities 441,651 2,886,040
------------ -------------
NET CASH FLOWS FROM DISCONTINUED OPERATIONS 37,917 70,639
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (39,839) 1,835,593
CASH AND CASH EQUIVALENTS, beginning of period 60,563 1,025,076
------------ -------------
CASH AND CASH EQUIVALENTS, end of period $ 20,724 $2,860,669
------------ -------------
------------ -------------
SUPPLEMENTAL SCHEDULE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:
Stock issued for technology rights $ - $1,200,000
------------ -------------
------------ -------------
</TABLE>
The accompanying notes are an integral part of these condensed consolidated
financial statements.
6
<PAGE>
AMERICAN TECHNOLOGIES GROUP, INC. AND SUBSIDIARIES
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
1. BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated 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, 1998 are not necessarily indicative of the results that may be
expected for the year ended July 31, 1999. For further information,
please refer to the consolidated financial statements and notes thereto
included in the Company's Annual Report on Form 10-KSB/A for the year
ended July 31, 1998.
2. ORGANIZATION, LINE OF BUSINESS AND SIGNIFICANT BUSINESS RISKS
a. 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. ATG also is involved in research and development of
proprietary energy and environmental systems and services which offer
cost-effective solutions to reduce, and in some cases eliminate,
hazardous chemical by-products or emissions resulting from industrial
production and combustion processes.
b. SIGNIFICANT BUSINESS RISKS
Since its inception, the Company has incurred significant operating
losses. The ability of the Company to operate as a going concern is
dependent upon its ability to (1) obtain sufficient additional capital,
(2) generate significant revenues through its existing assets and
operating business, and (3) overcome significant product development
issues. The Company plans to raise additional working capital through
private offerings of debt and equity. 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.
c. NET LOSS PER SHARE
Net loss per common share is based upon the weighted average number of
common shares outstanding during the fiscal year. The Company has
adopted the provisions of SFAS No. 128, "Earnings Per Share" issued in
February 1997. Common share equivalents were not considered as they
would be anti-dilutive and had no impact on earnings per share for any
periods presented. However, the impact under the treasury method of
dilutive stock options would have been incremental shares of 31,111
and 1,404,292 for three months ended October 31, 1998 and 1997,
respectively.
Page 7
<PAGE>
d. RECLASSIFICATIONS
Certain amounts in the October 31, 1997 consolidated financial
statements have been reclassified to conform to current year
presentation.
3. DEBENTURES
During October, 1998, the Company issued $200,000, in the aggregate, of
6 percent subordinated convertible debentures, maturing November 1,
2003. Interest is due semi-annually commencing May 1, 1999 or upon
conversion. The principal and accrued interest is convertible into
shares of ATG's Common Stock at the lower of a fixed conversion price
of $0.62 or a variable conversion price equal to 75 percent of the
average closing bid price of ATG's Common Stock during the five trading
days preceding the date of conversion. The debentures include warrants
to purchase 20,000 shares of Common Stock at $0.75 per share. The
Company anticipates that all of the debentures (including interest)
will be converted into ATG's Common Stock. Imputed interest of $66,667
and financing costs of $44,000 was recorded as interest expense in
connection with the $200,000 of debentures in the accompanying
Consolidated Statements of Operations for the three month period ended
October 31, 1998.
4. TECHNOLOGY RIGHTS
Under the 1992 agreement pursuant to which the Company acquired the
right to use the Clean Air Pac, the Company was required to pay a 1.25
percent cash royalty plus up to one million shares of Series A
Convertible Preferred Stock to BWN based upon sales of The Force(R). In
August, 1997, in exchange for 500,000 shares of Common Stock valued at
$1,200,000, the Company acquired all remaining interests and royalty
rights of Robert W. Carroll and BWN Oil Investments Corporation, a
Nevada corporation, to the Clean Air Pac which is used by the Company
in The Force airborne fuel treatment. The technology rights are
amortized based on the straight line basis over a period of three
years. The Consolidated Statements of Operations include $100,000 of
amortization of technologies rights for the three month period ended
October 31, 1998.
5. CAPITAL STOCK
a. COMMON STOCK
During August 1998, the Company entered into two separate consulting
agreements for services. Under the terms of the agreements, the Company
issued 1,000,000 shares of ATG's Common Stock valued at $781,250 for
services which is amortized on a straight line basis over the terms of
the agreements expiring May 31, 1999 and July 31, 1999. General and
Administrative expenses include amortization expense of $214,062 for
the three months ended October 31, 1998 in the accompanying
Consolidated Statements of Operations. As of October 31, 1998, the
remaining unamortized cost of $567,188 is included in other assets in
the accompanying Consolidated Balance Sheets.
b. STOCK SUBSCRIPTIONS
During the three months ended October 31, 1998, the Company issued
20,619 shares of Common Stock valued at $25,000 which were included
within stock subscriptions as of July 31, 1998. As of October 31, 1998,
the Company had not issued (i) 2,000 shares of Common Stock owed for
services rendered prior to July 31, 1998, valued at $3,940 and (ii)
22,500 shares of Common Stock sold under private placement for an
aggregate of $34,500 in cash received prior to July 31, 1997. These
amounts have been included within stock subscriptions in the
accompanying Consolidated Balance Sheets.
Page 8
<PAGE>
6. JOINT VENTURE
In February, 1998, the Company formed a joint venture with
approximately 25% ownership interest, which will be accounted for in
accordance with the equity method. The joint venture markets various
personal and home care products containing the Company's proprietary
IE(TM) crystals. Sales of these products commenced in June, 1998. The
Company made an initial investment of $124,100 in the joint venture.
The Company's share of net loss from this joint venture was
approximately $39,341 for the three months ended October 31, 1998. The
net assets of the joint venture were approximately $834,000 as of
October 31, 1998.
As of October 31, 1998, the Company had approximately $9,000 in
accounts receivable due from the joint venture. Included in the
Consolidated Statement of Operations is $8,000 of other income relating
to the joint venture during the three months ended 31, 1998.
7. DISCONTINUED OPERATIONS
On June 23, 1998, the Company entered into an agreement with a former
officer-shareholder to sell the stock of ATG Media, Inc. for $500,000.
The closing date was initially set as August 15, 1998, but has been
extended by the parties. The sale is contingent on the sale of
2,250,000 shares of the former officer's Common Stock to an unrelated
third party for proceeds of at least $2,000,000. If the former
officer's stock is not purchased, the Company is obligated to return
the amount of purchase price paid in cash or shares of ATG's Common
Stock valued at $0.89 per share. As of October 31, 1998, the Company
received $500,000 of the purchase price, which is included in current
liabilities in the accompanying financial statements.
Included in assets of discontinued operations are inventories and
accounts receivable. Included in liabilities of discontinued operations
are accounts payable and deferred subscription revenue.
Loss from operations of discontinued operations are approximately
$76,745 and $173,703 for the three months ended October 31, 1998 and
1997, respectively. The Company estimates that the purchase price less
the carrying value and costs of disposal will not result in a loss on
the disposal.
8. ASSETS HELD FOR SALE
Included in assets held for sale in the accompanying Consolidated
Balance Sheets are Tempiute property of $560,000 and Manhattan property
and equipment of $3,365,051. The Company no longer plans to develop
these properties but plans to sell, lease or otherwise dispose of its
investment.
9. RELATED PARTY TRANSACTIONS
Included in amounts due to related parties in the accompanying
Consolidated Balance Sheets is $142,500 in short term borrowings from
related parties during the three months ended October 31, 1998.
10. SUBSEQUENT EVENT
During November, 1998 the Company issued $450,000, in the aggregate, of
6 percent subordinated convertible debentures, maturing November 1,
2003. Interest is due semi-annually commencing May 1, 1999 or upon
conversion. The principal and accrued interest is convertible into
shares of ATG's Common Stock at the lower of a fixed conversion price
of $0.62 or a variable conversion price equal to 75 percent of the
average closing bid price of ATG's Common Stock during the five trading
days preceding the date of conversion. The debentures include warrants
to purchase 45,000 shares of Common Stock at $0.75 per share.
Subsequent to the end of the quarter, the Company issued 100,000
shares of Common Stock valued at $40,000 to a consultant for a
special project relating to trading activity of the Company's Common
Stock on the NASD OTC Bulletin Board.
Page 9
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
Management continued its efforts to refocus the Company's activities on its core
technologies, along with new product development, including new applications for
I(E)-TM- crystals, and commercialization. With the extended period of time
required for new products to generate significant revenue, the Company reduced
the cash used in operations by $325,400 from $841,300 to $515,900 for the three
months ended October 31, 1997 and October 31, 1998, respectively. The principal
source of working capital during the three months ended October 31, 1998 was the
issuance of $200,000 of principal amount of convertible debentures, deposit of
$200,000 on the sale of ATG Media, Inc. and loans from related parties of
$142,500. During the comparable period in 1997, the principal source of working
capital was net proceeds from the issuance of convertible debentures of
$2,834,900. The Company anticipates utilizing $900,000 in cash during the
three remaining quarters of fiscal 1999.
Revenue decreased by $320,800 from $486,600 to $165,800 for the three months
ended October 31, 1997 and October 31, 1998, respectively, principally due to
the Company's decision to stop selling I(E) crystals for use in laundry products
by TradeNet and the length of time necessary to develop and commercialize new
applications of I(E) crystals.
Reflecting the reduction in operations while management develops the plan to
implement the strategic direction set by the Board of Directors during the prior
fiscal year, operating expenses decreased by $114,800 from $1,331,500 to
$1,216,700 for the three months ended October 31, 1997 and October 31, 1998,
respectively. The decrease was due to decreases of $188,500 in marketing and
product development, $189,900 in research and development and $68,300 in mining
operations, offset by increases of $231,800 in general and administrative and
$100,000 in amortization of technology rights. The increase in general and
administrative expenses is principally related to increase costs of investment
bankers and other financial and legal expenses.
ATG's net loss decreased by $785,100 from $2,126,100 to $1,341,000 at October
31, 1997 and October 31, 1998, respectively, principally due to decreased
interest expenses of $933,500 offset by decreases in revenues of $320,800.
Total assets increased by $297,700 from $7,110,900 to $7,408,600 at July 31,
1998 and October 31, 1998, respectively. This increase was the net result of an
increase in Other Assets of $531,400, which reflects the unamortized value of a
consulting agreement entered into during August, 1998 for which the Company
issued 1,000,000 shares of ATG's Common Stock in payment, offset by decreases in
cash of $39,800, accounts receivable of $29,400, assets of discontinued
operations of $10,400 and increases in accumulated depreciation and amortization
of $139,300.
Total liabilities increased by $790,700 from $4,011,300 to $4,802,000 at July
31, 1998 and October 31, 1998, respectively. This increase was principally due
to increases in accounts payable of $138,300, accrued liabilities of $64,700,
amounts due to related parties of $175,900, convertible debentures of $200,000
and deposit of $200,000 on sale of discontinued operations.
Subsequent to October 31, 1998, the Company issued an additional $450,000 in
principal amount of convertible debentures to provide additional cash for
operations. Until such time as significant revenues are generated, which is
anticipated to occur prior to the end of fiscal 1999, the Company will continue
to require financing from the sale of securities. Any additional financing may
involve substantial dilution to the interests of the Company's then existing
shareholders. The inability to secure such financing would have a material
adverse effect on the Company.
Page 10
<PAGE>
PART II
OTHER INFORMATION
ITEM 2 CHANGES IN SECURITIES
(a) Not applicable.
(b) Not applicable.
(c) Not applicable.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) EXHIBITS.
4.5 Form of 6% Convertible Debenture *
27 Financial Data Schedule
- ------------------------------
* Previously filed as Exhibit 4.1 to the Company's Registration Statement of
Form S-3 filed with the Securities and Exchange Commission on December 3,
1998.
(b) REPORTS ON FORM 8-K.
None
Page 11
<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/ LAWRENCE J. BRADY
-------------------------
Lawrence J. Brady
Chairman of the Board and
Chief Executive Officer
Date: December 15, 1998
By: /s/ HAROLD RAPP
-------------------------
Harold Rapp
Chief Financial Officer
Date: December 15, 1998
Page 12
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM CONSOLIDATED
BALANCE SHEETS AND CONSOLIDATED STATEMENTS OF OPERATIONS AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUL-31-1999
<PERIOD-START> AUG-01-1998
<PERIOD-END> OCT-31-1998
<CASH> 20,724
<SECURITIES> 0
<RECEIVABLES> 16,583
<ALLOWANCES> 0
<INVENTORY> 135,010
<CURRENT-ASSETS> 318,910
<PP&E> 5,762,457<F1>
<DEPRECIATION> 461,079
<TOTAL-ASSETS> 7,408,578
<CURRENT-LIABILITIES> 2,974,006
<BONDS> 1,828,009
0
378
<COMMON> 23,725
<OTHER-SE> 2,582,460
<TOTAL-LIABILITY-AND-EQUITY> 7,408,578
<SALES> 40,932
<TOTAL-REVENUES> 165,755
<CGS> 0<F2>
<TOTAL-COSTS> 1,216,681
<OTHER-EXPENSES> 39,341
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 173,956
<INCOME-PRETAX> (1,264,223)
<INCOME-TAX> 0
<INCOME-CONTINUING> (1,264,223)
<DISCONTINUED> 76,745
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1,340,968)
<EPS-PRIMARY> (0.06)<F3>
<EPS-DILUTED> (0.06)
<FN>
<F1>Include assets held for sale
<F2>Not calculated
<F3>Include continuing and discontinuing operations
</FN>
</TABLE>
