AMERICAN TECHNOLOGY CORP /DE/
8-K, 1996-08-19
RADIO & TV BROADCASTING & COMMUNICATIONS EQUIPMENT
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                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549


                                    FORM 8-K
                                 CURRENT REPORT


     Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): August 19, 1996 (August 15,
1996)



                         AMERICAN TECHNOLOGY CORPORATION
             (Exact name of registrant as specified in its charter)



 Delaware                               0-24248               87-0361799
(State or other jurisdiction of       (Commission      (I.R.S. Empl. Ident. No.)
incorporation or organization)        File Number)



   12725 Stowe Drive, Poway. California                      92064
 (Address of principal executive offices)                  (Zip Code)


                                 (619) 679-2114
              (Registrant's telephone number, including area code)


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ITEM 5.    OTHER EVENTS

On August 15, 1996 the Company completed the private offering and sale for cash
of an aggregate of $700,000 of unsecured 6% Convertible Subordinated Promissory
Notes due July 31, 1998 ("Notes") to a limited number of investors. The
principal and interest amount of each Note may at the election of the Note
holder be converted one or more times into fully paid and nonassessable shares
of common stock, $.00001 par value, of the Company, at a price which is the
lower of (i) $2.00 per share or (ii) 80% of five days market price prior to
conversion but not less than $0.80 per share. These securities were offered and
sold without registration under the Securities Act of 1933, as amended, upon the
exemption provided by Rule 903 of Regulation S thereunder and an appropriate
legend was placed on the Notes.

Proceeds from the sale of the Notes is intended for media and public relations
to aid in licensing the Company's new sound reproduction technology as well as
related prototyping, testing and demonstrations and for working capital. There
can be no assurance that the Company can successfully develop or exploit its
various technologies.

The Company presently has 7,626,228 common shares issued and outstanding.

ITEM 7.    FINANCIAL STATEMENTS AND EXHIBITS

(a) Financial statements of businesses acquired.
       None

(b) Pro forma financial information.
       None

(c) Exhibits

         4.6      Form of 6% Convertible Subordinated Promissory Note due July
                  31, 1998 aggregating $700,000 granted to six investors



                                   SIGNATURES

         Pursuant to 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 hereunto duly authorized.

                                              AMERICAN TECHNOLOGY CORPORATION





Date: August 19, 1996                         By: /s/ ROBERT PUTNAM
                                                  ------------------
                                              Robert Putnam
                                              President and CEO



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                         AMERICAN TECHNOLOGY CORPORATION


                                  EXHIBIT 4.6

               Form of 6% Convertible Subordinated Promissory Note
                     due July 31, 1998 aggregating $700,000
                (Individual Notes differ as to amount and Payee)


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                                                                     EXHIBIT 4.6

     THIS INSTRUMENT HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE
    SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), IN RELIANCE UPON REGULATION
    S THEREUNDER, AND CANNOT BE OFFERED OR SOLD IN THE UNITED STATES OR TO, OR
    FOR THE ACCOUNT OR BENEFIT OF, ANY U.S. PERSON, EXCEPT PURSUANT TO
    REGULATION S OR ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION
    REQUIREMENTS OF THE ACT.

                          (ALL AMOUNTS IN U.S. DOLLARS)

                         AMERICAN TECHNOLOGY CORPORATION
                   6% CONVERTIBLE SUBORDINATED PROMISSORY NOTE

                                Due July 31, 1998

      August ___, 1996                                      US$_________. 00
      Poway, California

         FOR VALUE RECEIVED, American Technology Corporation, the undersigned
      Delaware corporation (together with all successors, "Borrower"), hereby
      promises to pay to the order of

         Payee:
                           or his, her or its successors or assigns
                           (collectively, "Noteholder") at

         Address:


      or at such other address or addresses as Noteholder may subsequently
      designate in writing to Borrower, the full and true sum of
      ________________ and NO/100 Dollars ($______________.00), due and payable
      in one (1) installment on or before July 31, 1998, unless sooner
      accelerated ("Maturity Date"), plus simple interest thereon at the rate of
      six percent (6.00%) per annum, in lawful monies of the United States of
      America. Interest shall accrue and be payable at the Maturity Date. If the
      Maturity Date should fall on a weekend or national holiday, payment shall
      be due on the following business day.

         1. Any payment shall be deemed timely made if received by Noteholder
      within ten (10) calendar days of the due date. Payments received shall be
      imputed first to late or penalty charges then due, next to interest
      payments then due, and next to the remaining principal balance.

         2. Borrower may not prepay the principal or any accrued interest amount
      due under this Note in full or in part without the prior written agreement
      of Noteholder.

         3. (a) The outstanding principal amount of this Note (or increments
      thereof of at least $50,000) and any proportionate accrued interest may,
      at any time and from time to time, be converted at the option of the
      Noteholder into fully paid, nonassessable shares of Common Stock of the
      Borrower, $.00001 par value per share, at the Conversion Price per share
      as hereinafter defined, subject to restrictions and limitations set forth
      herein. The Conversion Price shall be the lesser of (i) 80% of the average
      of the highest and lowest sale prices each day for the five trading days
      immediately preceding the date of conversion, but in no event shall the
      Conversion Price be less than $0.80 per share, or (ii) $2.00 per share. If
      there are no trades on any particular date, such date shall not count as
      one of the five trading days. The Common Stock of the Borrower into which
      principal is converted ("conversion shares") will not be registered under
      the Securities Act of 1933, as amended ("Act"), but shall be sold, issued
      and delivered in reliance upon Rule 903 of Regulation S under the Act.

                  (b) Certificates which are issued evidencing the conversion
      shares shall, unless and until removed in accordance with applicable law,
      bear an appropriate restrictive legend to the effect that the shares have
      not been 

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      registered under the Act but have been offered and sold in reliance upon
      Regulation S and may not, during the applicable restricted period, be
      offered or sold within the United States of America or to any "U.S.
      Person" (as defined in Rule 902 of Regulation S).

                  (c) Conversion shall be effected by Noteholder's writing which
      unequivocally expresses Noteholder's intent to effect the conversion and
      states the amount of principal being converted (the Company shall compute
      the proportionate accrued interest being converted) and tender of such
      writing and this original Note to Borrower. Conversion shall be deemed to
      occur on the date such writing is presented to Borrower by fax or other
      means as long as the original Note is received promptly thereafter. Upon
      such conversion duly made, Borrower shall execute a new Note of like tenor
      for the balance of the principal amount of this Note not converted to
      common stock, and deliver such new Note and common stock to Noteholder.
      Borrower shall bear all expenses and charges of issuing and delivering the
      conversion shares.

                  (d) The conversion rate set forth in paragraph 3(a) will be
      subject to adjustment if the Borrower is reorganized, merged, consolidated
      or party to a plan of exchange with another corporation pursuant to which
      shareholders of the Borrower receive any shares of stock or other
      securities, or in the event of any sale or other transfer of all or
      substantially all of the Borrower's assets, or in case of any
      reclassification of Borrower's common stock. Noteholder shall be entitled,
      after the occurrence of any such event, to receive on conversion thereof
      the kind and amount of shares of stock or other securities, cash or other
      property receivable upon such event by a holder of the number of Common
      Shares into which the principal balance of this Note at such time might
      have been converted immediately prior to occurrence of the event. In
      addition, the conversion rate set forth in paragraph 3(a) of this Note
      will be appropriately adjusted if the Borrower's common stock is split or
      combined.

         4. Forced Conversion. The Company is entitled, at its option, at any
      time when the trading price (being the average of the highest and lowest
      sale price of the Company's common stock on a particular date) of the
      Company's common stock has equaled or exceeded US$3.25 per share for ten
      consecutive trading days during which market sales occurred, upon five (5)
      days' prior written notice ("Notice of Mandatory Conversion") to the
      holders of the Notes, to require the holders of the Notes to convert the
      amount of principal outstanding and all interest accrued under the Notes
      through the date of the Notice of Mandatory Conversion into fully paid and
      nonassessable shares of Common Stock at a conversion price of US$2.00 per
      share of Common Stock. The Company shall notify the holder of the
      Company's intent to force conversion by giving written notice to the
      holder by facsimile or other electronic means, if possible, with original
      notice to follow by two-day courier. Conversion pursuant to this Section 4
      shall be effective with respect to each holder on the fifth (5th) day (the
      "Mandatory Conversion Effective Date") following the confirmed receipt by
      the holder or any other person at the holder's designated address of the
      original notice referred to in the preceding sentence.

                  Upon the effective date of forced conversion of a Note, the
      Note shall be deemed void and no longer shall constitute an obligation of
      the Company or evidence of an obligation, irrespective of when surrendered
      to the Company. This provision requires the Company to convert all
      principal and interest owing under all Notes outstanding at the time of
      forced conversion. The holder of a Note so converted shall be required to
      surrender the original of the forcibly converted Note as promptly as
      possible to the Company, which shall mark the Note "canceled" upon receipt
      and retain permanent custody of it. Upon the Company's receipt of the
      original Note, the Company shall deliver to the surrendering holder the
      shares of Common Stock called for by this provision.

         5. In the event that this Note is placed with an attorney for
      collection or that Noteholder resorts to legal process in order to enforce
      any rights under this Note, Borrower shall pay all reasonable costs,
      including attorneys' fees, thereby incurred by the Noteholder.

         IN WITNESS WHEREOF, the undersigned Borrower has executed this
      Promissory Note and has affixed hereto its corporate seal.

                                         AMERICAN TECHNOLOGY CORPORATION

      (SEAL)                        By.......................................
                                            AUTHORIZED OFFICER

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