ITEM 5. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

BACKGROUND

Advanced Technologies Group, Ltd. (the Company) was incorporated in the State of Nevada in February 2000. In 2000 the Company had begun to generate revenues from the leasing of the FX3000 software system to independent IB's worldwide. In

March 2002, the Company transferred its FX3000 system to FX Direct Dealer, LLC, a joint venture company that will market the FX3000 software. At that time the Company terminated all existing leases for the FX3000 system. The Company received a 25% interest in the joint venture company in return for the transfer. The remaining 75% of the joint venture company is owned by Tradition, N.A., a subsidiary of Compagnie Financiere Tradition, a major Swiss-based financial company. On December 29, 2006 Tradition NA sold 80% of its 75% membership interest in joint venture to the Chairman of the Board of Directors of Tradition NA, who is now the primary beneficiary. Tradition NA retains 15% membership interest.

The Company also is the developer of the PromotionStat and Promote4Free software platforms, which assists on-line advertisers in monitoring their marketing effectiveness and which is planned to be marketed through the Company's subsidiaries. The Company believes that these technologies, when properly developed, will have the potential for generating significant revenues and profits for the Company.

GENERAL STATEMENT: FACTORS THAT MAY AFFECT FUTURE RESULTS.

With the exception of historical information, the matters discussed in Management's Discussion and Analysis of Financial Condition and Results of Operations contain forward looking statements under the 1995 Private Securities Litigation Reform Act that involve various risks and uncertainties. Typically, these statements are indicated by words such as "anticipates", "expects", "believes", "plans", "could", and similar words and phrases. Factors that could cause the company's actual results to differ materially from management's projections, forecasts, estimates and expectations include but are not limited to the following:

* Inability of the company to secure additional financing
* Unexpected economic changes in the United States
* The imposition of new restrictions or regulations by government agencies that affect the Company's business activities.

To the extent possible, the following discussion will highlight the activities of the Company's business activities for the fiscal years ended January 31, 2008 and January 31, 2007.

I. RESULTS OF OPERATIONS

COMPARISON OF OPERATING RESULTS.

CONSOLIDATED SALES, GROSS PROFIT, AND NET INCOME:

Total gross revenues for the fiscal year 2008 were $919,000 (compared to $1,306,012 for fiscal 2007), which consisted of $ 919,000 in revenues realized from the FX3000 joint venture (compared to $1,306,012 for fiscal 2007) and $-0- from the on-line use of the PromotionStat software (same for fiscal 2006). After

costs of revenues of $591,000 (compared to $793,758 for fiscal 2007) the Company realized net revenues of $328,000 for fiscal 2008, compared to $512,254 for fiscal 2007. The decrease in net revenues was due primarily to the decrease in revenues from the FX3000 joint venture. With its primary efforts now shifting from FX3000 joint venture, management will now focus on raising adequate funds to promote and commercialize PromotionStat and Promot4Free technology.

It is important to note that during fiscal 2007 the Company's efforts with respect to PromotionStat resulted in very limited initial revenues with respect to this technology. During fiscal 2008 management elected to freeze the development of that software.

Management's cut its administrative costs, which began during fiscal 2004, stopped during 2008 with total general and administrative expense for fiscal 2008 increasing to $3,627,891 compared to $1,204,362 for last year, an increase of $1,423,529 or more than 300%. The main area of increased cost was salaries and benefits, which increase to $3,160,071 (compared to $319,076 in fiscal 2007). As a result of the loss of software servicing arrangement for the FX3000 software platform, the management's principal focus during the fiscal 2008 was on establishing of a joint venture with the purpose of further developing and marketing of the PromotionStat software platform.

After deducting general and administrative costs, the Company experienced a loss from operations of $3,299,891 for the fiscal 2008, compared to a loss of $692,108 for last year. This represents an increase in the Company's loss of $2,677,783 or approximately 400.00% over that experienced in fiscal 2007. Management attributes this to the accumulation of base salaries of the officers of the Company.

Net loss for fiscal 2008 was $661,489, or $0.04 per share, compared to a loss of $618,337, or $.04 per share for last year. In calculating the loss per share, the Company had to take into account the dividends due the preferred shareholders at January 31, 2008 and January 31, 2007. At January 31, 2008 and January 31, 2007, the preferred dividends were in arrears for $-0- for both years.

II. DISCUSSION OF FINANCIAL CONDITION: LIQUIDITY AND CAPITAL RESOURCES

At January 31, 2008 cash on hand was $67,286 as compared with $262,081 at January 31, 2007. During fiscal 2007, the Company issued 101,588 shares of preferred stock and received net proceeds of $287,835. In fiscal years 2007 and 2006, the Company issued 1,271,850 and 1,196,427, respectively, to preferred shareholders in conjunction with the issuances of the preferred stock. In 2007, the Company also issued 1,683,252 "loyalty" warrants to the preferred stock shareholders.

The Company does not expect any material capital expenditures in fiscal year 2008. Although the existing cash resources are currently expected to provide sufficient funds through the upcoming year, the continuation of the Company as a

going concern for a period of longer than the upcoming year is dependent upon the ability of the Company to obtain the necessary financing to continue operations.

At January 31, 2008, the Company had working capital of $($2,866,833) compared to working capital of $145,051 at January 31, 2007. Working capital decreased mainly as a result of (i) [salaries due to Company's officers?] (ii) termination of service arrangement between the Company and FXDirectDealer where the Company provided programming service upgrades to the joint venture on the FX3000 including 24 hour help desk services, (iii) reduced cash on hand due to normal fluctuations in the use of cash by the Company, and (iv) discontinued subscriptions to Company's Preferred Stock and substantial increase in legal fees.

Total assets at January 31, 2008 were $2,527,218 as compared to $367,017 at January 31, 2007. [ The principal cause of this increase in total assets at January 31, 2008 was income received in the joint venture of FXDD in accordance with the K-1 statement. No cash distribution was received as of yet.]

The Company's total stockholders' equity decreased to ($411,502) at January 31, 2008 from $249,987 at January 31, 2007. [Stockholders' equity decreased principally because of the accumulated salaries to its officers and loss from operations experienced by the Company.]

The Company issued a stock dividend of 211,431 shares of common stock to the holders of the preferred stock.

During fiscal 2006, 2007 and 2008, FXDirectDealer LLC, the Company's joint venture with Tradition NA began to recognize a net profit from operations. However, due to the loans that Tradition had made to the joint venture during the initial years when it was developing its business operations, all of the net profits generated to date have been applied to the partial repayment of these loans. This fiscal year the balance of the loan was deferred for 3 years and the loan will become due and payable in 2010. In light of recent CFTC regulation (mentioned above) FXDD would be unable to disburse any profits from FXDirectDealer joint venture until minimum capital requirements of the joint venture are satisfied. Thereafter, management expects that the Company will begin to receive profit distributions on a quarterly basis as provided for in the joint venture agreement. However, the Company expects FXDirect Dealer's management to distribute the amount of profits necessary, in order to cover Company's Federal Tax liabilities as provided by the Joint Venture Agreement.

ITEM 6. MANAGEMENT'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING

The management of the Company is responsible for establishing and maintaining adequate internal control over financial reporting. internal control over financial reporting is defined in Rules 13-a-15(f) and 15d-15(f) under the Exchange Act as a process designed by, or under the supervision of, the

Company's principal executive and principal financial officers and effected by the Company's board of directors, management and other personnel to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S. generally accepted accounting principles and includes those policies and procedures that:

* pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company;
* provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorization of management and directors of the Company; and
* provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company's assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Management assessed the effectiveness of the Company's internal control over financial reporting as of January 31, 2008. In making this assessment, management used the criteria established in "Internal Control-Integrated Framework," issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

Based on this assessment, management believes that, as of January 31, 2008, the Company's internal control over financial reporting is effective and in accordance with Item 308 of Regulation S-B.

There have not been any changes in the Company's internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting.

CONCLUSION REGARDING THE EFFECTIVENESS OF DISCLOSURE CONTROLS AND PROCEDURES

Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we conducted an evaluation of our disclosure controls and procedures, as such term is defined in Rule 13a-15(e) promulgated under the Exchange Act, as of the end of the period covered by this Annual Report. Based on this evaluation, our principal executive officer and principal financial officer concluded that our disclosure controls

and procedures were ineffective as of the end of the period covered by this Annual Report on Form 10-KSB. The management will correct this failure going forward.