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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Amendment No. 4 to
FORM 10-KSB/A
[X] ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the fiscal year ended July 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
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AMERICAN TECHNOLOGIES GROUP, INC.
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(Name of small business issuer in its charter)
NEVADA 95-4307525
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(State or other jurisdiction of (IRS. Employer
incorporation or organization) Identification No.)
1017 SOUTH MOUNTAIN AVENUE, MONROVIA, CA. 91016
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(Address of principal executive offices) (zip code)
Issuer's telephone number: (626) 357-5000
Securities registered under Section 12(b) of the Exchange Act:
Title of each class Name of exchange on which registered
None
Securities registered under Section 12(g) of the Exchange Act:
Common Stock
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(Title of Class)
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
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Check if there is no disclosure of delinquent filers in response to Item
405 of Regulations S-B not contained in this form, and no disclosure will be
contained, to the best of the registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB. [ ]
The registrant's revenues for its most recent fiscal year were $916,736.
As of October 31, 1998, the registrant had 23,725,587 shares of Common Stock
outstanding. The aggregate market value of the voting stock held by
non-affiliates was $15,033,743 computed by reference to the average of the
low bid and high ask prices on October 30, 1998.
DOCUMENTS INCORPORATED BY REFERENCE
None.
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Explanatory Note: This Amendment No 4. to Form 10-KSB amends Item 1.
Description of Business, Core Technologies, IE-TM- Technology. Amended
portions are italicized.
FORWARD-LOOKING STATEMENTS
IN ADDITION TO HISTORICAL INFORMATION, THIS ANNUAL REPORT CONTAINS
FORWARD-LOOKING STATEMENTS WHICH WE BELIEVE ARE 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, THAT COULD CAUSE ACTUAL RESULTS TO DIFFER
MATERIALLY FROM HISTORICAL RESULTS OR THOSE ANTICIPATED. IN THIS REPORT, THE
WORDS "ANTICIPATES," "BELIEVES," "INTENDS," "FUTURE" AND SIMILAR EXPRESSIONS
IDENTIFY FORWARD-LOOKING STATEMENTS CONTAINED HEREIN, WHICH SPEAK ONLY AS OF
THE DATE HEREOF. THE COMPANY UNDERTAKES NO OBLIGATION TO PUBLICLY REVISE
THESE FORWARD-LOOKING STATEMENTS TO REFLECT EVENTS OR CIRCUMSTANCES THAT MAY
ARISE AFTER THE DATE HEREOF.
PART I
ITEM 1. DESCRIPTION OF BUSINESS
GENERAL
American Technologies Group, Inc., a Nevada corporation (the "Company" or "ATG")
formed September 27, 1988, is engaged in the development, commercialization and
sale of products and systems using its patented and proprietary technologies.
The Company concentrates its technology discovery and development processes in
three core technology areas: 1. IE-TM- Technology, 2. Water Purification,
and 3. High Energy Particle Beams. 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. Additionally, many commercial products may be improved through IE
Technology including detergents, cosmetics and nutritional supplements.
The Company's efforts with IE Technology have yielded commercial applications
including household cleaning products and combustion enhancers. ATG anticipates
a coke formation suppresser and a descaler will be commercialized in fiscal
1999, although there can be no assurance to this affect. In the water
purification area, the Company's low pressure vacuum distillation system is
undergoing tooling design for a home use version for introduction to the
marketplace in mid-1999.
The third core technology is the high energy particle beam which is proposed
to produce a beam of heavy particles. This beam functions in much the same
way as the
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common laser. The important difference is that the high energy particle beam
is composed of particles rather than light. By accelerating the beam,
extremely high energy levels are possible. The development of the high
energy particle beam is being conducted through an ATG sponsored research
program with the California Institute of Technology.
To maintain its focus on the Company's core technologies, the Company decided
to sell its wholly-owned subsidiary, ATG Media, Inc., a Minnesota corporation
("ATG Media"), and to dispose of the mining property and equipment of New
Concept Mining, Inc., a Nevada corporation ("New Concept"). New Concept has
entered into a lease/purchase agreement for its Manhattan, Nevada gold
properties and a letter of intent for the sale of its Manhattan, Nevada gold
mill. Negotiations are on-going for the sale of its Tempiute, Nevada
tungsten and garnet properties. The Company has entered into an agreement
for the sale of ATG Media which transaction is anticipated to close prior to
MARCH 31, 1999.
BUSINESS STRATEGY
ATG's focus is on research, new technology, and product development. ATG
pursues technologies at a rate that is consistent with the Company's available
economic and human resources. Once a technology is nearing commercialization,
the Company determines if the marketing, production and operational
responsibility for the product should be borne by the Company or shifted to a
marketing and manufacturing partner. As a result, ATG explores licensing
strategies or joint venture opportunities to commercialize its developed
technologies with existing companies that have the sales, marketing, production
and distribution expertise in the product industries to determine the best
strategy for long-term growth and value.
CORE TECHNOLOGIES
IE TECHNOLOGY
After more than five years of self-funded research utilizing ATG's own
laboratory along with facilities at the University of California, Los
Angeles, and Zhongshan University in China, among others, ATG's scientists
have developed new commercial and industrial products from what their
scientists have named IE Technology.
IE Technology refers to the Company's proprietary process which produces
water solutions containing water clusters that are stable at room
temperature. ATG can produce different kinds of water solutions for
different applications.
Independent researchers observe these water clusters by different standard
research tools including:
- laser autocorrelation
- electron microscope
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- atomic force microscope
- UV spectroscopy
These instruments confirm the presence in our prepared water solutions of the
water clusters which are the basis of our IE Technology.
The clusters are groups of water molecules configured in such a way so as to
produce relatively large plus/minus polarity. We believe this polarity is
what gives the clusters their catalytic properties. Tests indicate that
these water clusters improve the performance of various chemical, physical
and biological processes, including combustion enhancement, descaling, enzyme
processes and de-coking. For example, in internal combustion engines the
clusters attracts hydrocarbons and oxygen resulting in a more complete
burning of the fuel. This results in improved efficiency and reduced carbon
deposits in the combustion chamber. In certain biological applications
related to enzyme production, the clusters have been shown to significantly
improve enzyme yield or rate of enzyme production. In one instance enzyme
cultures utilizing IE Technology water solutions required 97 fewer hours to
achieve the same growth level as comparable cultures utilizing distilled
water. NOT ALL TESTS HAVE ACHIEVED SUCH RESULTS. SUBSTANTIAL ADDITIONAL
TESTING REMAINS TO BE CONDUCTED TO DETERMINE THE EFFECTS OF IE TECHNOLOGY ON
DIFFERENT ENZYMES AND IF THE USE OF IE TECHNOLOGY IN ENZYME PRODUCTION ON A
COMMERCIAL SCALE IS VIABLE. The increased enzyme production rate that may be
achieved utilizing IE Technology water solutions may result in cost savings
to the enzyme production industry.
ATG, through its own research projects and those conducted at various
universities on its behalf, continues to identify IE Technology variants and
define potential commercial applications. Current projects cover commercial
applications in numerous fields. For example, initial studies by the Company
indicate that certain bacterial activities may be increased as much as 200%
through use of the IE Technology. Professors at UCLA are working with ATG on
applications for the enhancement of chemical processes and on medical
applications.
Dr. Benjamin Bonavida a UCLA Professor of Immunology, studied the effects of
IE solutions on the human immune system. His research showed possible IE
solutions applications in the area of immunotherapy for treatment of cancer
and infectious diseases. Research to date has shown that the clusters exert
a positive influence on the human immune system. Dr. Bonavida has shown that
the catalyst significantly increases the production of cytokines which
stimulate the response of the human immune system. Further research, which
is currently being carried on by Dr. Bonavida, is required to refine the
preliminary findings, but we believe that the catalyst will be shown to have
applications in the treatment of certain human immune system deficiency
disorders. The estimated cost for the preparatory research and validation
necessary before starting clinical trials is $300,000. ATG intends to seek
grants from the numerous sources supporting research into immune system
disorders and their treatment. Generally it takes approximately 7 years to
complete the US Food and Drug Administration product approval cycle. However,
with treatments for immune deficiency disorders accelerated testing and
review is possible. There can be no assurance that ATG will obtain any grants
or will be successful in obtaining the approvals necessary for marketing a
product.
Dr. Selim Senkan, Chairman of the UCLA Department of Chemical Engineering,
studied the effects of IE solutions on carbon reduction in internal
combustion engines. His efforts identified an application of IE solutions as
a fuel additive for carbon reduction.
Substantial research is still required to develop marketable products, and it
is ATG's present marketing strategy to apply the technology to existing
products with expectations of improving those products to competitive
advantage. There can be no assurance that IE Technology has applications as
indicated, or other applications, and even if there are such applications,
that these will be accepted in the marketplace or become commercially viable.
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ATG focuses its marketing for IE Technology products on existing commercial
product lines and industrial processes that can be improved through their
use. The Company targets industries for which consumers demand new and
improved methods and products that are environmentally safe. Such industries
and products include enzyme production, petrochemicals and fuels, plastics
production and detergents.
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SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the registrant
caused this Amendment No. 4 to its report on Form 10-KSB for the fiscal year
ended July 31, 1998 to be signed on its behalf by the undersigned, thereunto
duly authorized.
AMERICAN TECHNOLOGIES GROUP, INC.
By: /s/ Lawrence J. Brady
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Lawrence J. Brady
Chairman of the Board and
Chief Executive Officer
Date: July 20, 1999
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.
Signature Title Date
/s/ Lawrence J. Brady Chairman of the Board, July 20, 1999
--------------------- Chief Executive Officer
Lawrence J. Brady
/s/ Yan Lin Chief Financial Officer, July 20, 1999
----------------- Chief Accounting Officer
Yan Lin
/s/ William Odom Director July 20, 1999
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William Odom
/s/ Shui-Yin Lo Director and Director of July 20, 1999
--------------- Research and Development
Shui-Yin Lo
/s/ Larry Pressler Director July 20, 1999
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Larry Pressler
/s/ Charles McCarthy Director July 20, 1999
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Charles McCarthy
Director July __, 1999
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Alan Brooks
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