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American Technologies Group. Inc.
(Bulletin Board - ATEG)

Price(3/4/99) 52 Week Range Shares Outstanding Market Capitalization
$0.48 $2.66-$0.37 23.7 million $11.4 million

The shares of American Technologies Group, Inc. are recommended for purchase by very aggressive, long-term growth oriented investors who are seeking a low-priced stock that may offer considerable upside potential, who understand and are able to accept the risks associated with investing in the shares of a "small company".

No statement or expression of opinion or any other matter herein contained is, or is deemed to be, directly or indirectly, an offer or a solicitation of an offer to buy or sell the security referred to above. The information contained herein is taken from sources believed to be reliable, but its accuracy cannot be guaranteed. There can be no assurances that future recommendations by these sources will prove profitable or will equal the performance of past recommendations. The principals and employees of Security Capital Trading, Inc. may trade in securities mentioned herein subject to self-imposed restrictions, such affiliated persons may at any time hold positions in issues recommended within this publication. Security Capital Trading, Inc. may be a market maker in the securities referred to herein.

American Technologies Group, Inc. is seeking to develop and commercialize a number of products and systems that make use of its patented and proprietary technologies. These technologies include IETM (a trademark that stands for Ice under Electrical Field which is a proprietary water cluster called the IETM Crystal), Vacuum Distillation water purification, and a high-energy particle beam. It is believed that these technologies may individually have significant applications in a number of industries including use in automotive, chemical, medical, mining, nuclear energy, oil, and personal and home care related products. Greater detail with regard to these technologies and existing and potential products can be found at the company's web site Additionally, ATEG has signed a non-binding letter of intent to acquire Commodore Separation Technologies, Inc. (EBB - CXOT), a company whose patented Supported Liquid Membrane system is capable of extracting targeted valuable materials or contaminants from liquids and gases.

In late 1998, we began to notice. newspaper advertisements for a product called The Force® Car Care Kit that had been placed by Comtrad Industries a national marketing organization. The advertisements expounded about how a revolutionary new IETM Crystal technology, which had been developed by scientists at a company called American Technologies Group, Inc., could, by treating the air in an automobile's combustion chamber, enhance engine combustion of fuel, increase engine efficiency, increase mileage, avoid carbon buildup, and avoid polluting the environment. Other products in the Car Care Kit, that also used the IETM Crystal technology, were a car wash concentrate, windshield cleaner, tire cleaner, wheel cleaner, and a vinyl/leather polish. The advertisements also offered a "no questions asked" money back guarantee to those buyers who were not completely satisfied.

Intrigued by these advertisements, we decided to take a look at American Technologies Group, Inc., the manufacturer of the Force®, and called the company in Monrovia, California for background information, financials (SEC filings), etc. We also looked at other published literature and internet web sites for additional information.

What we found was a company whose low-priced stock trades on the OTC Electronic Bulletin Board that has a market capitalization of only about $11 million and which is essentially unfollowed by "Wall Street" (our favorite kind of company).

We also found that it 1) has a somewhat "shaky" balance sheet, 2) is headed by Lawrence J. Brady (who served as an Assistant Secretary of Commerce during the Reagan Administration), 3) is in the process of extricating itself from certain "non-core" businesses (a magazine publisher, gold mill, and tungsten mine) that had been draining its bottom line, and 4) possesses certain technologies that appear to address potentially large markets that the management team is now focusing upon commercializing.

ATEG's flagship technology is the IETM crystal technology highlighted in the advertisements that originally attracted our attention. Management has described this technology in layman's terms as a highly charged water-based catalyst surrounded by a strong plus-minus electric field that enhances certain chemical, physical, and biological processes by means of an interaction at the molecular level.

To some extent, ATEG sort of reminds us of a company which we observed about 20 years ago called Digital Switch Corporation. At that time, DIGI also had a somewhat "shaky" balance sheet, had no revenues, was losing money, and many in the investment community questioned its ability to survive. However, DIGI was in the process of developing a state-of-the-art digital switching system for the telecommunications industry. At that time, most of us would not have recognized a digital switch if we were sitting next to one. What was impressive, however, was the fact that the company had a significant endorsement in the form of a $40 million order backlog for its switches from MCI and U.S. Sprint. Several months later, DIGI began to ship its switching systems and generate sales and earnings --- and the "Wall Street" parade soon followed. Investment bankers fell all over themselves to raise money for DIGI to help it pursue its business growth game plan. Ultimately, in September 1998, DIGI (which had subsequently changed its name to DSC Communications) was acquired by Pads, France-based Alcatel SA, the world's 4th largest telephone equipment maker, in a stock transaction valued at $3.2 billion.

Now we are not even remotely suggesting that ATEG will become another DIGI. In fact, as described in the Friends and Foes section at the end of this report, there are those who question the company*s technology and its prospects.

Nevertheless, just as was the case with DIGI's digital switch, we probably wouldn't recognize an IETM Crystal if we were sitting next to one. But the endorsements that its technology has been receiving from people and organizations that presumably have more knowledge than us in this area impress us. For example:

- Bob Sikorsky, whose syndicated automotive column appears in over 100 newspapers and who is the author of four books in this field, enthusiastically endorsed The Force® after 18 months of experimentation with it. It should be noted that the second edition of one of Mr. Sikorsky's books "Drive It Forever" was published by ATEG*s former publishing subsidiary.

- In August 1993, the China National Water Resources & Electric Power Material & Equipment Corporation (CWEMEC), the state-owned largest power company and 12th largest corporation in China, determined to test the ATEG IETM technology. CWEMEC is seeking to determine its ability to improve combustion efficiency, decrease emissions, reduce carbon deposition in furnaces, and lessen the frequency of equipment overhaul. The tests are expected to start this month in diesel power generating plants and may last about six months. If the tests are successfully completed, ATEG would grant CWEMEC the exclusive right to use and distribute the IETM Crystals in China for use in the generation of power.

- In September 1998, the Environment Purification Association (EPA) of Japan approved The Force® to help reduce pollutants from automobiles and trucks in that country. This approval followed testing by the Japan Automotive Technology Association, which showed that The Force® produced significant reductions in the emission of carbon monoxide (by some 32.6%), hydrocarbons (by 14.7%), and nitrogen oxide (by 7%), three environmentally damaging pollutants.

- Deveron Marketing Group Limited, which holds exclusive rights to market ATEG products in Australia and New Zealand, signed an agreement (in November 1993) with one of the largest car dealership chains in New Zealand, which has begun distributing The Force® to its 75 dealerships in that country for subsequent resale.

- Also in November 1998, an independent study conducted at the University of Southern California found that another one of ATEG's products, a bulk fuel additive called F420, posed none of its DNA-linked health dangers (DNA damage is considered a possible cause of many cancers and other serious diseases) associated with Methyl Tertiary Butyl Ether (MTBE). MTBE is a gasoline additive used to increase octane levels and enhance combustion so as to reduce harmful automobile emissions (e.g. carbon monoxide). However, MTBE use has raised environmental and health concerns in California, where, because of leaks from underground gasoline storage tanks, fuel lines and certain recreational vehicles (boats), it was found to be contaminating drinking water wells. Thus, three major oil refineries in California (Chevron, Shell, and Tosco) have discontinued MTBE's use. ATEG's F420 could well become a safe, effective alternative to MTBE. Additional positive testing of F420 has also been demonstrated by Claude Travis & Associates, an independent research laboratory in Michigan.

- On January 19, 1999, ATEG signed a distribution agreement with Hungarofek, which will distribute The Force® in Hungary. Hungarofek, which is believed to have an 80% market share in the supplying of brake drums and linings to over-the-road trucks in Hungary, has recently established a routine maintenance program for its clients that includes The Force®. The President of Hungarofek, Palatics Attila, cited its benefits such as improved vehicle performance, reduced emissions and fuel savings as especially significant in Hungary where fuel prices run about $4 per gallon. We understand that Hungarofek has firmly committed to taking a minimum of $100,000 worth of product per month (at ATEG's selling price) between January-November 1999 (which, by our arithmetic, equals a minimum of $1.l million worth of product during the term of the contract). If all goes well, the contract could be extended in Hungary as well as into neighboring countries.

On February 2, 1999, ATEG announced that it had signed a letter of intent with Boronia, Ltd. (a multi-national, London-based buyer and seller of bulk fuels in Europe, the Middle East, and in the U.S.) that will grant Boronia exclusive worldwide rights to distribute ATEG's bulk fuel catalyst, F420. Under terms of the memorandum, Boronia will pay ATEG a $2 million licensing fee ($250,000 up front, with the balance payable in installments until July 31, 1999). Upon the signing of a definitive agreement, beyond an initial six-month test marketing effort, Boronia will have to purchase at least $10 million of the catalyst from ATEG in a twelve-month period to fulfill its initial obligation to ATEG.

On February 2, 1999 ATEG also announced the signing of a non-binding letter of intent to acquire Commodore Separation Technologies, Inc. (EBB-CXOT), a company with which we were familiar, in a complicated transaction whose details are spelled out in the "Financial Condition" section of this report. CXOT is attempting to commercialize a technology that can extract targeted substances from a feedstream for reuse (if a valuable substance) or for safe disposal (if a toxic material). CXOT has a potentially large contract in place with the Maryland Environmental Service, an agency of the State of Maryland, to remove contaminants from water leaching from waste sites at the Port of Baltimore that might be polluting Chesapeake Bay. ATEG management also believes that there is a great deal of synergy between ATEG's particle beam technology and CXOT's technology for collecting radioactive particles.

The risk, as we see it, is that ATEG's technologies and products do not gain market acceptance and the company goes under.

On the other hand, given the current ATEG stock price level, the reward could be rather handsome if indeed the company's products can achieve but a small share of the potentially large markets they appear to address.

Accordingly, we recommend purchase of the shares of American Technologies Group, Inc. by very aggressive, long-term growth oriented investors who understand and can tolerate the risks associated with investing in the shares of a small company.


As noted earlier, the company decided to exit certain businesses (magazine publishing, a gold mill, and a tungsten mine) that were draining its bottom line so as to concentrate its efforts on the commercialization of its core technologies: the IETM technology, water purification, and high-energy particle beams.

IETM Technology

This is a proprietary water-based catalyst that has a number of diverse applications, and, because it is environmentally friendly, may be used as an alternative to certain harsh or polluting chemicals. For example:

1) Combustion - the company has developed a combustion air fuel enhancer product, The Force®, which improves engine performance by reducing carbon formation. ATEG has entered into several marketing arrangements, including the one with Comtrad Industries cited earlier in this report. It's worth noting that less than 1% of the purchasers of The Force® have taken the company up on its "no questions asked" money back guarantee if not satisfied with the product.

2) Personal Care and Household Products - ATEG's IETM catalyst, which enhances detergency in a safe manner, is now being used in certain personal care and household products such as laundry detergent, all purpose cleaner, glass cleaner, eye firming cream, and aloe vera based personal care products. ATEG is presently working with a major cosmetics supplier to explore the possible use of the catalyst in its products.

3) Pharmaceutical Products - It is believed that ATEG's catalyst may have broad medical and pharmaceutical applications including boosting immune system response and in surgical and cleansing wipes for non-ambulatory patients. At present, a test is underway at a major East Coast hospital under the direction of Guy & O'Neill, Inc., a manufacturer of cleaning wipes for assorted applications.

4) Fuel Additive for Bulk Fuels - A number of independent tests have found that ATEG's catalyst (F420) reduces carbon in the combustion process and may be able to be used as an alternative to MTBE. ATEG believes that it can establish relationships with major refineries that could lead to sizable revenues going forward. In fact, two refineries are presently running tests on ATEG's F420 product.

5) Printing - GAES, Inc. (Chattanooga, Tennessee) has a proprietary anti-static product that is now using ATEG's technology in the printing business. In the future, ATEG will consider offering its catalyst to other industries that also have static electricity problems to overcome.


ATEG has decided to focus its attention upon solving certain problems associated with contaminated drinking water and desalinization.

1) Vacuum Distiller - The first water purification product developed by ATEG is a vacuum water distiller that is expected to become available for marketing by the summer of 1999. At the moment, this product is in manufacturing tooling design in a factory in Taiwan by a well-known small appliance manufacturer. In addition, several possible distributors have been identified. This product will initially be marketed to household users. Further down the road, an enlarged unit will be made available to commercial users of distilled water.

2) A project is presently underway at ATEG to develop a large-scale system for the desalinization of seawater and brackish water to produce fresh water for irrigation, drinking, and emergency water supplies.


ATEG is in the process of developing a particle beam technology that it believes will have a number of diverse applications. For example;

1) Nuclear Waste Remediation - ATEG's particle beam technology is believed to offer significant advantages over current methods (underground storage) for solving the worldwide problem of disposing of nuclear waste by changing such waste into harmless components. The potential market (U.S. Department of Defense, U.S. Department of Energy, private sector companies) has been estimated at in excess of $100 billion. The company has already submitted a proposal to the U.S. Department of Energy and has begun approaching private sector companies.

2) Steam Production - ATEG intends to pursue the use of its particle beam technology for the production of steam to power turbines and generators to create electrical power. Down the road, it is possible that ATEG's particle beam technology may compete with fossil fuel consuming and nuclear powered electricity generating plants.

3) Military - It is believed that ATEG's particle beam technology may work well in satellite-to-satellite or satellite-to-missile applications. Because it is a particle generator, ATEG's beam technology may also be used to generate tritium (a weapons application).

Management / Scientific Contributors

ATEG's management team consists of a group of individuals having diverse backgrounds in business, government, the legal profession, and science.

Lawrence J. Brady - Chairman of the Board, Chief Executive Officer. Mr. Brady became associated with the company in a consulting capacity in early 1996 and assumed his current titles on December 1, 1997. Mr. Brady served as Assistant Secretary of Commerce for Trade Administration during the Reagan Administration. He has also held senior management positions with a number of well-known companies including Hill and Knowlton and the Sanders Associates subsidiary of Lockheed Corporation.

Dr. Shui-Yin Lo - Director of Research & Development. Dr. Lo has been a member of ATEG's Board of Directors since June 1993. Dr. Lo received his Ph.D. in Physics in 1966 from the University of Chicago. He is a successful inventor and the holder of many patents in the fields of particle physics, flow dynamics, nuclear power, and radionucleide abatement.

Charles R. McCarthy, Jr. - Mr. McCarthy has been a member of the ATEG Board of Directors since September 1998. He is currently Counsel to the law firm of O'Connor & Hannon which is based in both Washington D.C. and in Minneapolis. He is a former trial attorney for the U.S. Securities and Exchange Commission. In 1998, Mr. McCarthy completed a four-year term as General Counsel to the National Association of Corporate Directors.

William E. Odom - Lt. General Odom has been a member of the Board of Directors since September 1997. He is a graduate of the United States Military Academy and the holder of a Ph.D. from Columbia University. He had a distinguished military and government career that was highlighted in 1985 by his appointment as Director of the National Security Agency, a position that he occupied until 1988. General Odom served the Army as its Deputy Assistant and then Assistant Chief of Staff for Intelligence. He also served in the White House as Military Assistant to President Carter's Assistant for National Security Affairs, Zbigniew Brzezinski. At present, he serves as Director of National Security Studies at the Hudson Institute arid is an adjunct professor at Yale University.

Terry M. Wachsner - Mr. Wachsner has been a member of the Board of Directors since September 1997. He is the Senior Managing Director of Kennedy-Wilson Properties, Ltd., which manages a nation-wide portfolio of office, industrial, and residential properties valued in excess of $6 billion. It is one of the largest real estate investment and property management companies in the U.S.

Hugo Pomrehn - Executive Vice President Special Projects. Dr. Pomrehn was President and Chief Operating Officer of ATEG in the April 1995 - February 1997 period and a Director in the November 1995 - November 1997 period. Dr. Pomrehn was Under Secretary of Energy in President George Bush's administration. He was at one time Vice President and Manager of the
Los Angeles Office of Bechtel Corporation. Some of his assignments at Bechtel were Assistant Chief Nuclear and Environmental Systems Engineer, Project Engineer on the Arizona Nuclear Power Plant at Palo Verde, and Project Manager of the Korean Nuclear Projects.

Harold L. Rapp, - Chief Operating Officer and Chief Financial Officer. Mr. Rapp has held these positions at ATEG since March 1, 1997. Mr. Rapp has a degree in Electronics Technology. He is an inventor with patents in desalination and vacuum technologies and is a former Principal and Executive Vice President of Baltes-Valentino Associates, a consulting engineering firm based in Arizona. Mr. Rapp has specialized in energy management and control systems, commercial building automation systems, industrial process controls, combustion analysis systems, and industrial thermal storage energy systems.

Jim Nicastro - Vice President and Director of Marketing and Sales. Mr. Nicastro has a background in finance and sales management. He is responsible for identifying strategic partners for each of ATEG's product categories. Focusing upon international markets, Mr. Nicastro is responsible for the contract that was consummated with Hungarofek.

Michael Kobrin - Vice President Strategic Planning and Development. Mr. Kobrin holds a Masters Degree in Business and Administration with a focus upon Finance. He has been associated with ATEG for several years after having provided consulting services to the company. Mr. Kobrin has had extensive experience in corporate financial management including positions as Manager of Financial Planning and Analysis and Director of Financial and Analysis for Lindsley Lumber and Scandinavian World Cruises.


Olga Berson, Ph.D. - An ATEG Researcher with a Ph.D. in Environmental Science and Chemistry.

Wen Chong Li, Ph.D. - Former Professor of Physics Zhongshan University in China.

Alex Nicolson - An ATEG Researcher with a Master's Degree in Mechanical Engineering and a Master's Degree in Business Administration.

Chunsing Wang, Ph.D. - An ATEG Researcher with a Ph.D. in Mechanical Engineering. Dr. Wang is a co-inventor of ATEG's vacuum distiller.

Scientific Advisory Board

Benjamin Bonavida, Ph.D. - Professor in the Department of Microbiology & Immunology at the UCLA School of Medicine.

Reinhard Bruch, Ph.D. - Professor in the Physics Department at the University of Nevada, Reno. Shiu-Yuen Cheng, Ph.D. - Professor in the Mathematics Department at UCLA.

William M. Currie, Ph.D. - Holds a Ph.D. in Experimental Nuclear Physics from Glascow University

Vijay Dhir, Ph.D. - Chairman of Mechanical, Aerospace, and Nuclear Engineering at UCLA.

Anmin Liu - Engineer Manager at the Hyperion Wastewater Treatment Plant of the City of Los Angeles, California.

James S. Lo, Ph.D. - Clinical Assistant Professor in the Department of Pathology of the State University of New York.

Ed Rose - A consultant with a BS in Civil Engineering / Engineering Geology from the University of Southern California (1956)

Daniel C. Tsui, Ph.D. - Professor of Electrical Engineering at Princeton University.

Gary Williams, Ph.D. - Professor in the Physics Department at UCLA.

Charles Young, Ph.D. - Staff Physicist at the Stanford Linear Accelerator Center.

Scientific Consultants

Natalia Ivanovna Afanasyeva, Ph.D. - Senior Researcher at the Russian Academy of Science Institute of Spectroscopy and Visiting Professor of Physics at the University of Nevada.

Ji Chen Li, Ph.D. - Physicist at the University of Manchester Institute of Science and Technology in England.

Mitchio Okumura, Ph.D. - Associate Professor of Chemical Physics at Caltech in Pasadena, California.

Selim Senkan, Ph.D. - Head of the Chemical Engineering Department at UCLA. Dr. Senkan and his research team have demonstrated the suppression of coke formation in the steaming of ethane and propane. At prese~1t, ATEG is involved in a testing program along with Kinetics Technology International (a subsidiary of multi-billion-dollar Mannesmann AG) pertaining to the application of the IE technology in reducing coke formation.

Operating Results

The following table presents pertinent income statement statistics for ATEG in the two fiscal years through July 31, 1998, as well as the most recent interim period ended October 31, 1998 and the comparables from the prior year's quarter.

  Fiscal Year Ended July 31   Quarter Ended October 31  
1997 1998 1997 1998
Operating Revenues $2,615,767 $916,736 $486,587 $165,755
Operating Expenses 8,189,517 8,521,458 1,331,466 1,216,681
Accreted Dividends 857,143      
Net (Loss) Attrib to Common        
From Continuing Operations (7,967,998) (8,864,724) (1,952,400) (1,264,223)
From Discontinued Operations (1.669.379) (575.8 15) (173.703) (76.745)
Total Net (Loss) $(9,637,377) $(9,440,539) $(2,126,103) $(1,340,968)
Per Share        
From Continuing Operations $(0.43) $(0.40) $(0.09) $(0.05)
From Discontinued Operations (0.09) (0.03) (0.01) (0.01)
Total $(0.52) $(0.43) $(0.10) $(0.06)
Average Shares 18,640,000 21,922,748 20,856,670 23,381,083

The large year-to-year decline in revenues shown in the table above essentially reflects the company's decision to terminate a marketing arrangement with a company called TradeNet Marketing Inc. which was found by certain state regulators to be using deceptive marketing practices to sell some of ATEG's products. In fiscal 1997, sales to TradeNet totaled about $2 million, while in fiscal 1998 ?such sales totaled only $257,000. TradeNet was fined some $165,000 by the state of Oregon, while ATEG (the manufacturer of these products) agreed to pay $20,000 to the state to avoid prolonged litigation.

The results shown in the table above, for all practical purposes, are not indicative of its future prospects as 1) it has almost completed its withdrawal from the money losing activities as described earlier in this report, and 2) the core-technology contracts and pending business relationships that have been announced are expected to Lead to a sizable ramp up in revenues going forward.

Financial Condition

The following table presents pertinent balance sheet statistics for American Technologies at the end of fiscal 1998 (July 31, 1998) and at October 31, 1998, the most recently published data.

  Selected Balance Sheet Data at  
  July 31, 1998
October31, 1998
Cash $60,563 $20,724
Total current Assets 402,930 318,910
Property & Equipment (Net) 1,415,639 1,376,327
Technology Rights (Net) 800,000 700,000
Assets Held for Sale 3,925,051 3,925,051
Assets of Discontinued Operations 134,401 123,998
Total Assets 7,110,930 7,408,578
Total Current Liabilities 2,140,277 2,974,006
Working Capital (1,737,347) (2,655,096)
Current Ratio 0.19 to 1 0.11 to 1
Long - Term Liabilities 1,871,039 1,828,009
Total Liabilities 4,011,316 4,802,015
Accumulated Deficit (36,556,849) (37,897,817)
Shareholders' Equity $3,099,614 $2,606,563
Per Share $0.14 $0.11
Common Shares Outstanding 22,704,368 23,724,987

As can be seen in the table above, the company's balance sheet to put it politely appears quite weak. In fact, at fiscal year end July 31, 1998, its auditors (Arthur Andersen LLP) had raised doubts as to the company's ability to continue as a going concern.

More specifically, the auditors stated that, since inception, ATEG had incurred significant operating losses and its ability to operate as a going concern was dependent upon its ability to 1) obtain additional capital 2) generate significant revenues, and 3) overcome product development issues.

The Company's management team is determined to overcome these hurdles and has been taking action to do so. More specifically:

- Management decided to divest the company of "non-core" businesses (a magazine publishing operation, a tungsten mining company, and a gold mill) that were adversely impacting its bottom line, while adding possibly complementary product lines or technologies

- The magazine business was sold to a former officer of the company for $500,000.

- The Nevada-based gold mill was sold for $1.75 million, subject to up to a $300,000 downward adjustment for any necessary improvements that the buyer may have to make. The buyer paid $20,000 down and will pay the balance at a rate of$ 15,000 per month.

- The company has indicated that it has offers for the tungsten mine in the area of $l million.

- An agreement has been reached with a private investment group that is prepared to provide ATEG with a line of credit of up to $5 million.

- The company has signed a non-binding letter of intent to acquire Commodore Separation Technologies, Inc. (EBB-CXOT), a company that is beginning to commercialize a separation technology and recovery system that can selectively remove from a feedstream targeted valuable substances for reuse or toxic materials for safe disposal. The acquisition, when first announced, entailed, a very complicated transaction that would have resulted in the holders of CXOT owning some 19.9% of ATEG as well as receiving certain profit participation rights subject to 1) ATEG raising $1.3 million in a bridge financing, 2) the receipt of a letter of intent from a mutually agreed upon investment banker for a proposed minimum secondary offering or private placement of $7 million of ATEG's securities, 3) appropriate due diligence, and 4) approval by the board of directors of both companies. Subsequently, because of the delisting of CXOT's shares from NASDAQ, we understand that the terms of this deal are currently being renegotiated. Management of ATEG, which wants the deal to go through, believes that all its shareholders will ultimately be satisfied and benefit from the transaction.

Friends and Foes

In the course of conducting our background research about ATEG, we perused the Silicon Investor web site ( to find out what contributors to its message board had to say. To say the least, there were a number of very vociferous posters of both positive and negative thoughts and they did not hesitate to throw darts at each other. For the most part, the positive postings far outweighed the negatives. There was one especially harsh critic of ATEG who identified himself as David Touretzky. Mr. Touretzky is a Senior Research Computer Scientist in the Computer Science Department at the Carnegie Mellon School of Computer Sciences in Pittsburgh, PA. His hatred for ATEG goes so far that he has established his own very large web site ( on which he has alleged that officers of the company are associated with a cult, the Church of Scientology, and that ATEG's technology is a fraud. We would suggest that potential investors access that web site for further details.

For our part, we disagree with his thinking. With regard to the Church of Scientology, we could care less. We have always believed that an individual is entitled to his own beliefs about the existence or non-existence of a God and how he/she manifests that belief. If memory serves us correctly, in grade school we learned that the pilgrims came to this country for religious freedom, one of our nation's cornerstones. In any event, ATEG said that none of the members of its top management team is a Scientologist - It did not know of the beliefs of the other company employees. With regard to the technology, we choose to rely upon the backgrounds of its management team, the scientific contributors, and the endorsements and contracts cited earlier in this report.