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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JANUARY 28, 1999
REGISTRATION NO.
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
AMERICAN TECHNOLOGY CORPORATION
(Exact name of Registrant as specified in its charter)
Delaware 87-0361799
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification Number)
13114 Evening Creek Drive South
San Diego, California 92128
(619) 679-2114
(Address, including zip code, and telephone number, including area code, of
Registrant's principal executive offices)
Cornelius J. Brosnan
Chairman, President and Chief Executive Officer
AMERICAN TECHNOLOGY CORPORATION
13114 Evening Creek Drive South
San Diego, California 92128
(619) 679-2114
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
Copies to:
Jeremy D. Glaser, Esq.
COOLEY GODWARD LLP
4365 Executive Drive, Suite 1100
San Diego, CA 92121
(619) 550-6000
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE
PUBLIC: From time to time after this Registration Statement becomes effective.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, other than securities offered in connection with
dividend or interest reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. [ ]
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CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
PROPOSED
PROPOSED MAXIMUM
MAXIMUM AGGREGATE AMOUNT OF
TITLE OF CLASS OF AMOUNT TO OFFERING PRICE OFFERING REGISTRATION
SECURITIES TO BE REGISTERED BE REGISTERED PER SHARE(1) PRICE(1) FEE
--------------------------- ------------- ------------ -------- ---
<S> <C> <C> <C> <C>
Common Stock, $.00001 par value 1,089,367 $5.41 $5,893,475 $1,638
</TABLE>
(1) Estimated solely for the purpose of calculating the amount of the
registration fee pursuant to Rule 457(c) of the Securities Act of 1933. The
price per share and aggregate offering price are based upon the average of
the high and low sales price of American Technology Corporation's common
stock on January 26, 1999 as reported in the over-the-counter market on the
National Association of Securities Dealers OTC Electronic Bulletin Board
System. It is not known how many shares will be purchased under this
registration statement or at what price such shares will be purchased.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE
OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
<PAGE> 3
PROSPECTUS
THE INFORMATION CONTAINED IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED.
THESE SECURITIES MAY NOT BE SOLD TO YOU UNTIL THE REGISTRATION STATEMENT FILED
WITH THE SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT
AN OFFER TO SELL THESE SECURITIES AND IT IS NOT SOLICITING AN OFFER TO BUY THESE
SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
SUBJECT TO COMPLETION, DATED JANUARY 28, 1999
1,089,367 SHARES
AMERICAN TECHNOLOGY CORPORATION
COMMON STOCK
----------
Selling stockholders identified in this prospectus are selling
1,089,367 shares of American Technology Corporation common stock. American
Technology Corporation will not receive any of the proceeds from the sale of
shares by the selling stockholders. American Technology Corporation's common
stock is listed in the over-the-counter market on the National Association of
Securities Dealers OTC Electronic Bulletin Board System under the symbol "ATCO."
The closing sale price of the common stock, as reported on the National
Association of Securities Dealers OTC Electronic Bulletin Board System on
January 26, 1999, was $5.44 per share.
The selling stockholders may sell the shares of common stock described
in this prospectus in public or private transactions, on or off the National
Association of Securities Dealers OTC Electronic Bulletin Board System, at
prevailing market prices, or at privately negotiated prices. The selling
stockholders may sell shares directly to purchasers or through brokers or
dealers. Brokers or dealers may receive compensation in the form of discounts,
concessions or commissions from the selling stockholders. More information is
provided in the section entitled "Plan of Distribution."
INVESTING IN THE COMMON STOCK INVOLVES A HIGH DEGREE OF RISK. SEE "RISK
FACTORS," BEGINNING ON PAGE 4.
Neither the Securities Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if this
prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.
The date of this prospectus is ____________, 1999.
<PAGE> 4
WHERE YOU CAN GET MORE INFORMATION
We are a reporting company and file annual, quarterly and current
reports, proxy statements and other information with the SEC. You may read and
copy these reports, proxy statements and other information at the SEC's public
reference rooms in Washington, D.C., New York, NY and Chicago, IL. You can
request copies of these documents by writing to the SEC and paying a fee for the
copying cost. Please call the SEC at 1-800-SEC-0330 for more information about
the operation of the public reference rooms. In addition, you can read and copy
our SEC filings at the office of the National Association of Securities Dealers,
Inc. at 1735 K Street, Washington, D.C. 20006.
The SEC allows us to "incorporate by reference" information that we
file with them, which means that we can disclose important information to you by
referring you to those documents. The information incorporated by reference is
an important part of this prospectus, and information that we file later with
the SEC will automatically update and supersede this information. We incorporate
by reference the documents listed below and any future filings we will make with
the SEC under Section 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act
of 1934:
- Annual Report on Form 10-KSB for the year ended September 30,
1998;
- Registration Statement on Form 10-SB, which includes a
description of American Technology Corporation's common stock.
You may request a copy of these filings at no cost, by writing or
telephoning us at the following address or telephone number:
American Technology Corporation
13114 Evening Creek Drive South
San Diego, CA 92128
Attn: Secretary
(619) 679-2114
This prospectus is part of a larger registration statement we filed
with the SEC. You should rely only on the information incorporated by reference
or provided in this prospectus. We have not authorized anyone else to provide
you with different information. We are not making an offer of these securities
in any state where the offer is not permitted. You should not assume that the
information in this prospectus is accurate as of any date other than the date on
the front of the document.
2.
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THE COMPANY
Except for historical information, the information contained in this
prospectus and in our SEC reports are "forward looking" statements about our
expected future business and performance. Our actual operating results and
financial performance may prove to be very different from what we might have
predicted as of the date of this prospectus. The risks described below address
some of the factors that may affect our future operating results and financial
performance.
American Technology Corporation is a consumer electronics company that
develops, markets and licenses proprietary sound reproduction and other
electronic technologies. Our primary business is in the marketing of two
proprietary sound reproduction technologies, SFT(TM), Stratified Field
Technology and HSS(TM), Hypersonic Sound Technology. We also market a line of
portable consumer electronic products under our own label.
SFT(TM) is an advanced speaker technology with some of the same
characteristics as electrostatic speakers, which are known for very high sound
quality and low distortion. Our SFT(TM) technology consists of several high
performance, non-magnetic flat panel speaker designs with a favorable size/low
bass response relationship.
Our HSS(TM) technology creates a new method of sound reproduction using
a proprietary electronic process which causes an ultrasonic beam to interact in
mid-air producing wide spectrum audio along the beam. The sound beam has a very
high degree of directionality and maintains sound volume over longer distances
than traditional methods of sound reproduction.
Our objective is to be a leader in developing, marketing and licensing
sound reproduction technologies that address large and expanding domestic and
international consumer electronics markets. We seek to have our SFT(TM) and
HSS(TM) technologies become important alternatives to conventional loudspeakers
in target market segments. We believe it is becoming increasingly difficult for
manufacturers to differentiate their sound reproduction electronic products to
offer consumers new choices. We also believe the rapid emergence of flat panel
computer and television monitors and the growing computer multimedia market
provides growing new opportunities for SFT(TM).
Our executive offices are located at 13114 Evening Creek Drive South,
San Diego, California 92128, telephone number (619) 679-2114. The Company's web
site address is http://www.atcsd.com/. Information contained in our web site is
not part of this Prospectus.
3.
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USE OF PROCEEDS
American Technology Corporation will not receive any proceeds from the
sale of the shares of common stock offered by the selling stockholders.
RISK FACTORS
An investment in the shares being offered hereby involves a high degree
of risk. In deciding whether to purchase shares of our common stock, you should
carefully consider the following risk factors, in addition to other information
contained in this prospectus, in our most recent annual report on Form 10-KSB,
and in any other documents incorporated by reference into this prospectus from
our other SEC filings.
HISTORY OF LOSSES; ABSENCE OF PROFITABILITY; VARIABILITY OF RESULTS;
AND RELIANCE ON CUSTOMERS. We have an accumulated deficit of $8,764,013 as of
September 30, 1998, with net losses of $4,593,713 for fiscal 1998 and $2,144,363
for fiscal 1997. We also expect to incur additional operating losses in future
periods. We cannot guarantee that we will be able to achieve or sustain
significant periods of profitability in the future. In addition, the sales of
our products are subject to significant quarterly and seasonal variability. We
have been and we expect to continue to be reliant on a limited number of
customers, and the loss of any of these customers could adversely effect our
financial condition and results of operations.
FUTURE FINANCING REQUIREMENTS. We intend to fund our operations and
other capital needs for the next twelve months substantially from cash on hand
resulting from the proceeds from equity offerings. We will need substantial
funds for operating costs and working capital during the next twelve months. We
may also need funds for future expansion of our operations. We cannot guarantee,
however, that existing funds, and those generated from operations, if any, will
be sufficient. Further, we cannot guarantee that future additional financing, if
required, will be available on acceptable terms, if at all.
TECHNOLOGY IN DEVELOPMENT. Our SFT(TM) and HSS(TM) technologies are
still in the development stage. We cannot guarantee that a commercially viable
SFT(TM) or HSS(TM) technology system can be completed due to the inherent risks
of technology development, limitations on financing, competition, obsolescence,
loss of key technical personnel and other factors. We have not generated
significant revenues from SFT(TM) or the HSS(TM) technology to date, and we
cannot guarantee any significant revenues in the future.
The development of SFT(TM) and the HSS(TM) technology has taken longer
than anticipated by management and could be subject to additional delays.
Moreover, we cannot guarantee that a commercially viable SFT(TM) or HSS(TM)
technology will be completed on a timely basis, or would perform on a
cost-effective basis.
4.
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Even if SFT(TM) or HSS(TM) technology is introduced, we can make no
assurances that it will achieve market acceptance. Our various development
projects are high risk in nature, and unanticipated technical obstacles can
arise at any time and result in lengthy and costly delays or result in
determination that further development is unfeasible. If we do not successfully
develop and exploit our technology, our financial condition and results of
operations and business prospects would be adversely effected.
SIGNIFICANT COMPETITION AND POSSIBLE OBSOLESCENCE. Technological
competition from other and more established electronic and loudspeaker
manufacturers is significant and expected to increase. Most of the companies
with which we expect to compete have substantially greater capital resources,
research and development staffs, marketing and distribution programs and
facilities. Many of them also have substantially greater experience in the
production and marketing of products. In addition, one or more of our
competitors may have developed or may succeed in developing technologies and
products that are more effective than any of ours, rendering our technology and
products obsolete or noncompetitive.
NEW TECHNOLOGY FACES MANY BARRIERS AND RISKS. The introduction of new
technology targeted for wide use often faces barriers to commercialization and
many risks that cannot currently be identified. Accordingly, our
commercialization of SFT(TM) and the HSS(TM) technology may face many unknown
barriers and risks. For example, the HSS(TM) technology employs ultrasonics.
Although ultrasonics are employed in a wide variety of medical and industrial
applications, we cannot guarantee that we will not face barriers to introduction
due to the use of ultrasonics. Our technology uses relatively small amounts of
ultrasonic energy which dissipates rapidly in air. In addition, we employ
frequencies above those that may be harmful to pets but within those used by
medical devices. Although we believe the frequencies and the amount of energy
employed is harmless, and that the emission of such frequencies is not presently
subject to government regulation, barriers to commercialization may develop or
ultrasonics may become subject to future regulation or interpretation of
existing regulation.
DEPENDENCE ON THIRD PARTY STRATEGIC ALLIANCES AND BUSINESS
RELATIONSHIPS. Our strategy is to establish business relationships with leading
participants in various segments of the electronics and sound reproduction
markets to assist us in developing, marketing and selling consumer electronic
products and products that include our SFT(TM) or HSS(TM) technologies. We
believe this strategy will enable us to take advantage of the superior financial
resources, technological capabilities, proprietary positions and market presence
of these companies in developing, marketing and selling products, if any, that
result from the SFT(TM) or HSS(TM) technology in the sound reproduction market.
Although our strategy is to establish closer relationships with selected
companies through specific product collaborations, licensing or product supply
arrangements,
5.
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we may not be able to successfully collaborate to develop commercial products to
exploit our technologies. To date, we have entered into only one such
collaborative arrangement.
Our success will depend on our ability to enter into strategic
arrangements with new partners on commercially reasonable terms. If we fail to
enter into such strategic arrangements with third parties, our financial
condition, results of operations, cash flows and business prospects may be
adversely effected. Any future relationships may require us to share control
over our development, manufacturing and marketing programs or to relinquish
rights to certain versions of our technology.
NO ACTIVE TRADING MARKET; MARKET VOLATILITY. Our shares are traded on
the OTC Bulletin Board, a screen-based trading system operated by the National
Association of Securities Dealers, Inc. Securities traded on the OTC Bulletin
Board are, for the most part, thinly traded and are subject to special
regulations not imposed on securities listed or traded on the NASDAQ system or
on a national securities exchange. Our shares, like securities of other small,
growth-oriented companies, have experienced in the past and are expected to
experience in the future significant price and volume volatility which increases
the risk of ownership to investors. Historically, our common stock has
experienced low trading volume. We cannot guarantee that the market price of our
common stock will remain at its present level, and any future changes in market
price cannot be predicted. Past performance of our common stock does not
guarantee or imply future performance. Factors such as announcements by us or
our competitors concerning technological innovations, new commercial products or
procedures, proposed government regulations and developments or disputes
relating to patents or proprietary rights may have a significant effect on the
market price of our common stock. Changes in the market price of our common
stock may have no connection with our actual financial results.
PATENTS AND PROPRIETARY RIGHTS SUBJECT TO UNCERTAINTY. We have nineteen
patent applications pending on our sound reproduction technologies and we are
considering additional patent applications. We cannot guarantee that patents
will be issued from any of our pending applications, or that any claims allowed
from existing or pending patents will be of sufficient scope or strength or that
any patents that may be issued to us will not be challenged or invalidated.
Further, we cannot guarantee the patents will be issued in all countries where
our products can be sold or licensed to provide us meaningful protection or any
commercial advantage. Our competitors may also be able to design around our
patents.
The electronics industry is characterized by vigorous protection and
pursuit of intellectual property rights or positions, which have resulted in
significant and often protracted and expensive litigation. There is currently no
pending intellectual property litigation against us. We cannot guarantee,
however,
6.
<PAGE> 9
that our technologies or products do not and will not infringe the patents or
proprietary rights of third parties. Problems with patents or other rights could
potentially increase the cost of our products, or delay or preclude our new
product development and commercialization. If infringement claims against us are
deemed valid, we may seek licenses which might not be available on acceptable
terms or at all. Litigation could be costly and time-consuming but may be
necessary to protect our future patent and/or technology license positions, or
to defend against infringement claims. A successful challenge to the SFT(TM) or
HSS(TM) technology could have a materially adverse effect on our business
prospects. Moreover, we cannot guarantee that the application of any of our
technologies will not infringe upon the proprietary rights of others or that
licenses required by us from others will be available on commercially reasonable
terms, if at all.
PRODUCT SALES DEPENDENT ON OUTSIDE CONTRACTORS; POSSIBLE DISRUPTIONS IN
SUPPLY. Consumer electronic product sales accounts for substantially all of our
revenues. However, we are dependent on contract suppliers for our finished
consumer electronics products. We source products developed by others from a
variety of suppliers. The loss of a supply of a high selling product could have
a material adverse effect on our operations. For example, we intend to rely on a
single supplier for one of our new products, the HeadGear product. Disruption of
our supply could cause additional costs and delays and could also have an
adverse impact on our operations.
The manufacturers of our consumer electronic products are also
dependent upon the availability of electronic components. We believe there are
secondary suppliers of components and subassemblies for our manufacturers so
that the products they manufacture are not reliant on one supplier, although
delays could result should there be a change in suppliers of longer lead time
components or subassemblies. Any significant delays in obtaining components from
existing or secondary suppliers through supplier changes or from component
shortages, which are common to the electronics industry, could have a material
adverse effect on our financial condition and results of operations.
PERFORMANCE DEPENDENT ON KEY PERSONNEL; LIMITED KEY PERSON LIFE
INSURANCE; SUCCESS DEPENDENT ON FUTURE PERSONNEL. Our performance is
substantially dependent on the performance of our executive officers and key
technical employees. Given our early stage of development, we are dependent on
our ability to retain and motivate high quality personnel, especially our
management and highly skilled technical personnel.
Other than a $2 million life insurance policy on Elwood G. Norris,
inventor of our technologies, we do not maintain any "key person" life insurance
policies. The loss of the services of Mr. Norris could have a material adverse
effect on our business, operating results or financial condition.
7.
<PAGE> 10
Our future success and growth also depends on our continuing ability to
identify, hire, train and retain other highly qualified technical, managerial
and sales personnel. Since competition for such personnel is intense, we cannot
guarantee that we will be able to attract, assimilate or retain other
highly-qualified technical, managerial or sales personnel in the future. If we
cannot attract and retain the necessary technical, managerial or sales personnel
our business, operating results or financial condition could be adversely
effected.
GENERAL CONFLICTS OF INTEREST DUE TO PART-TIME MANAGEMENT AND
RELATIONSHIPS. Certain of our officers, including Mr. Norris, the inventor of
our technologies, devote only part-time services to us and have other employment
and business interests to which they devote attention and will continue to do
so, resulting in certain conflicts of interest.
YEAR 2000 COMPLIANCE. We are aware of the issues associated with the
programming code in existing computer systems as the Year 2000 approaches. The
"Year 2000" problem is concerned with whether computer systems will properly
recognize date sensitive information when the year changes to 2000. Systems that
do not properly recognize date sensitive information could generate erroneous
data or cause a system to fail. The Year 2000 problem is pervasive and complex
as the computer operation of virtually every company will be affected in some
way.
Like most owners of computer software, we will be required to modify
significant portions of our software so that it will function properly in the
Year 2000. Preliminary estimates of the total costs that we will incur to
resolve this problem range from $10,000 to $20,000. Maintenance or modification
costs will be expensed as incurred, while the costs of new software will be
capitalized and amortized over the software's useful life.
Since we mainly use third party "off-the-shelf" software, we do not
anticipate a problem in resolving the Year 2000 problem in a timely manner. We
are currently taking steps to ensure that our computer systems and services will
continue to operate on or after January 1, 2000. However, we cannot guarantee
that Year 2000 problems will not occur with respect to our computer systems.
Furthermore, the Year 2000 problem may impact other entities with which we
transact business, and we cannot predict the effect of the Year 2000 problem on
such entities or the resulting effect on us. For such externally maintained
systems, we have begun to work with our vendors to ensure that each such system
is currently Year 2000 compliant or will be Year 2000 compliant during 1999.
8.
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SELLING STOCKHOLDERS
The following table sets forth the names of the selling stockholders,
and the number of shares of common stock owned beneficially by them as of
January 27, 1999 which may be offered pursuant to this prospectus. This
information is based upon information provided by each selling stockholder.
Because the selling stockholders may offer all, some or none of their respective
shares of common stock, no definitive estimate as to the number of shares
thereof that will be held by the selling stockholders after such offering can be
provided. The term "selling stockholder" includes the stockholders listed below
and their transferees, pledgees, donees or other successors.
<TABLE>
<CAPTION>
SHARES BENEFICIALLY OWNED NUMBER OF SHARES BENEFICIALLY
BEFORE OFFERING SHARES OWNED AFTER OFFERING(3)
SELLING STOCKHOLDER (1) NUMBER PERCENT(2) BEING OFFERED NUMBER PERCENT (2)
- ----------------------- ------ ---------- ------------- ------ -----------
<S> <C> <C> <C> <C> <C>
Carlisle Jones 43,606 * 43,606 0 0
Neo Optics Ltd. 43,606 * 43,606 0 0
Canusa Trading Ltd. 43,606 * 43,606 0 0
Strategic Restructuring 87,213 * 87,213 0 0
Partnership
Granite Capital LP 436,063 3.54% 436,063 0 0
Granite Capital LP II 15,960 * 15,960 0 0
Granite Capital Overseas 69,770 * 69,770 0 0
Ermitage Granite Fund Ltd., 1,526 * 1,526 0 0
International Group
Granum Value Mutual Fund 125,723 1.03% 125,723 0 0
Congress Street Associates, 11,948 * 11,948 0 0
LP, PNC Bank
Terry C. Graves 43,508 * 43,508 0 0
Sunrise Management, Inc. 14,775 * 14,775 0 0
Profit Sharing Plan
PaineWebber Inc., 43,447 * 43,447 0 0
Cust, Michael Gayner IRA
Hull Overseas, Ltd. 54,308 * 54,308 0 0
J.M. Hull Associates, L.P. 54,308 * 54,308 0 0
</TABLE>
* Less than 1%
(1) To our knowledge, the selling stockholders have sole voting and
investment power with respect to all common stock shown as beneficially
owned by them, subject to community property laws where applicable. The
table includes shares of common stock that the selling stockholders
have the right to acquire pursuant to the exercise of warrants and
shares of common stock issuable to the selling stockholders upon the
conversion of Series B Preferred Stock held by them.
9.
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(2) Percentage ownership is based on: (i) 12,236,633 shares of common stock
outstanding as of January 27, 1999, assuming conversion of all
outstanding shares of our preferred stock.
(3) Assumes the sale of all shares offered in this prospectus, should each
respective selling stockholder elect to do so.
None of the selling stockholders has, or within the past three years
has had, any position, office or other material relationship with American
Technology Corporation or any of its predecessors or affiliates.
PLAN OF DISTRIBUTION
The shares of common stock may be sold from time to time by the selling
stockholders in one or more transactions at fixed prices, at market prices at
the time of sale, at varying prices determined at the time of sale or at
negotiated prices. The selling stockholders may offer their shares of common
stock in one or more of the following transactions:
- on any national securities exchange or quotation service at
which the common stock may be listed or quoted at the time of
sale, including the over-the-counter market on the National
Association of Securities Dealers OTC Electronic Bulletin
Board System,
- in private transactions,
- through options,
- by pledge to secure debts and other obligations, or a
combination of any of the above transactions.
If required, we will distribute a supplement to this prospectus to
describe material changes in the terms of the offering.
The shares of common stock described in this prospectus may be sold
from time to time directly by the selling stockholders. Alternatively, the
selling stockholders may from time to time offer shares of common stock to or
through underwriters, broker/dealers or agents. The selling stockholders and any
underwriters, broker/dealers or agents that participate in the distribution of
the shares of common stock may be deemed to be "underwriters" within the meaning
of the Securities Act of 1933. Any profits on the resale of shares of common
stock and any compensation received by any underwriter, broker/dealer or agent
may be deemed to be underwriting discounts and commissions under the Securities
Act of 1933.
Any shares covered by this prospectus which qualify for sale pursuant
to Rule 144 under the Securities Act of 1933 may be sold under rule 144 rather
than pursuant to this prospectus. The selling stockholders may not sell all of
the
10.
<PAGE> 13
shares. The selling stockholders may transfer, devise or gift such shares by
other means not described in this prospectus.
To comply with the securities laws of certain jurisdictions, the common
stock must be offered or sold only through registered or licensed brokers or
dealers. In addition, in certain jurisdictions, the common stock may not be
offered or sold unless they have been registered or qualified for sale or an
exemption is available and complied with.
Under the Securities Exchange Act of 1934, any person engaged in a
distribution of the common stock may not simultaneously engage in market-making
activities with respect to the common stock for nine business days prior to the
start of the distribution. In addition, each selling stockholder and any other
person participating in a distribution will be subject to the Securities
Exchange Act of 1934 which may limit the timing of purchases and sales of common
stock by the selling stockholders or any such other person. These factors may
affect the marketability of the common stock and the ability of brokers or
dealers to engage in market-making activities.
We will pay all expenses of this registration. These expenses include
the SEC's filing fees and fees under state securities or "blue sky" laws. We
estimate that our expenses in connection with this offering will be
approximately $10,638. All expenses for the issuance of a supplement to this
prospectus, when requested by selling stockholder(s), will be paid by the
requesting stockholder(s).
LEGAL MATTERS
Cooley Godward LLP will give its opinion that the shares offered in
this prospectus have been validly issued and are fully paid and non-assessable,
and that the shares which will be issued upon the exercise of certain warrants
will be validly issued, fully paid and nonassessable.
EXPERTS
The financial statements of the registrant as of September 30, 1998
incorporated by reference in this Prospectus have been audited by BDO Seidman,
LLP, independent certified public accountants, to the extent and for the periods
set forth in their report thereon included in American Technology Corporation's
Annual Report on Form 10-KSB for the year ended September 30, 1998 incorporated
herein by reference, and are incorporated herein in reliance upon such report
given upon the authority of said firm as experts in auditing and accounting.
11.
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DISCLOSURE OF COMMISSION POSITION ON INDEMNIFICATION
FOR SECURITIES ACT LIABILITIES
As permitted by Delaware law, our Certificate of Incorporation provides
that the we will indemnify our officers, directors, employees and agents against
attorneys' fees and other expenses and liabilities they incur to defend, settle
or satisfy any civil or criminal action brought against them arising out of
their association with or activities on behalf of us unless, in any such action,
the are adjudged to have acted with gross negligence or to have engaged in
willful misconduct. We may also bear the expenses of such litigation for any
such persons upon their promise to repay such sums if it is ultimately
determined that they are not entitled to indemnification. Such expenditures
could be substantial and may not be recouped, even if we are so entitled.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933, as amended (the "Securities Act") may be permitted to directors,
officers or persons controlling us pursuant to the foregoing provisions, we have
been informed that, in the opinion of the Securities and Exchange Commission,
such indemnification is against public policy as expressed in the Securities Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by us of expenses incurred or
paid by a director, officer or controlling person of American Technology
Corporation in the successful defense of any action, suit or proceeding) is
asserted by such director, officer or controlling person in connection with the
securities being registered hereunder, we will, unless in the opinion of its
counsel the matter has been settled by controlling precedent, submit to a court
of appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act and will be governed by
the final adjudication of such issue.
Pursuant to the General Corporation Law of Delaware, our Certificate of
Incorporation excludes personal liability on the part of its directors to the
Company for monetary damages based upon any violation of their fiduciary duties
as directors, except as to liability for any breach of the duty of loyalty, acts
or omissions not in good faith or which involve intentional misconduct or a
knowing violation of law, acts in violation of Section 174 of the General
Corporation Law of Delaware, or any transaction from which a director receives
an improper personal benefit. This exclusion of liability does not limit any
right which a director may have to be indemnified and does not affect any
director's liability under federal or applicable state securities laws.
12.
<PAGE> 15
WE HAVE NOT AUTHORIZED ANY DEALER, SALESPERSON OR OTHER PERSON TO GIVE
ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS NOT CONTAINED IN THIS PROSPECTUS
OR ANY PROSPECTUS SUPPLEMENT. YOU MUST NOT RELY ON ANY UNAUTHORIZED INFORMATION.
THIS PROSPECTUS IS NOT AN OFFER OF THESE SECURITIES IN ANY STATE WHERE AN OFFER
IS NOT PERMITTED. THE INFORMATION IN THIS PROSPECTUS IS CURRENT AS OF JANUARY
28, 1999. YOU SHOULD NOT ASSUME THAT THIS PROSPECTUS IS ACCURATE AS OF ANY OTHER
DATE.
1,089,367 SHARES
AMERICAN TECHNOLOGY CORPORATION
COMMON STOCK
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
Where You Can Get More Information 2.
The Company 3.
Use of Proceeds 3.
Risk Factors 4.
Selling Stockholders 9.
Plan of Distribution 10.
Legal Matters 11.
Experts 11.
Disclosure of Commission Position on Indemnification 12.
for Securities Act Liabilities
</TABLE>
13.
<PAGE> 16
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The expenses in connection with the issuance and distribution of the
securities being registered are set forth in the following table (all amounts
except the registration fee are estimated):
<TABLE>
<S> <C>
SEC Registration Fee .............. $ 1,638
Legal fees and expenses ........... $ 5,000
Accounting fees and expenses ...... $ 3,500
Printing & Engraving................ $ 500
Total ..................... $ 10,638
=========
</TABLE>
ITEM 15 INDEMNIFICATION OF OFFICERS AND DIRECTORS.
As permitted by Delaware law, our Certificate of Incorporation provides
that the we will indemnify our officers, directors, employees and agents against
attorneys' fees and other expenses and liabilities they incur to defend, settle
or satisfy any civil or criminal action brought against them arising out of
their association with or activities on behalf of us unless, in any such action,
the are adjudged to have acted with gross negligence or to have engaged in
willful misconduct. We may also bear the expenses of such litigation for any
such persons upon their promise to repay such sums if it is ultimately
determined that they are not entitled to indemnification. Such expenditures
could be substantial and may not be recouped, even if we are so entitled.
Insofar as indemnification for liabilities arising under the Securities Act may
be permitted to directors, officers or persons controlling us pursuant to the
foregoing provisions, we have been informed that, in the opinion of the
Securities and Exchange Commission, such indemnification is against public
policy as expressed in the Securities Act and is, therefore, unenforceable.
Pursuant to the General Corporation Law of Delaware, our Certificate of
Incorporation excludes personal liability on the part of its directors to the
Company for monetary damages based upon any violation of their fiduciary duties
as directors, except as to liability for any breach of the duty of loyalty, acts
or omissions not in good faith or which involve intentional misconduct or a
knowing violation of law, acts in violation of Section 174 of the General
Corporation Law of Delaware, or any transaction from which a director receives
an improper personal benefit. This exclusion of liability does not limit any
right which a director may have to be indemnified and does not affect any
director's liability under federal or applicable state securities laws.
II-1
<PAGE> 17
ITEM 16. EXHIBITS.
(a) Exhibits.
<TABLE>
<CAPTION>
Exhibit No. Description
----------- -----------
<S> <C>
5.1 Opinion of Cooley Godward LLP.
23.1 Consent of BDO Seidman, LLP, independent certified public accountants
23.2 Consent of Cooley Godward LLP. Reference is made to Exhibit 5.1.
24.1 Power of Attorney. Reference is made to page II-4.
</TABLE>
ITEM 17. UNDERTAKINGS.
Insofar as indemnification by us for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of American Technology Corporation pursuant to the provisions referenced above
or otherwise, we have been advised that in the opinion of the Commission such
indemnification is against public policy as expressed in the Securities Act of
1933, as amended, and is, therefore unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by us of
expenses incurred or paid by a director, officer or controlling person of
American Technology Corporation in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered hereunder, we will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Securities
Act of 1933, as amended, and will be governed by the final adjudication of such
issue.
We hereby undertake:
(1) To file, during any period in which offers or sales are being made
pursuant to this registration statement, a post-effective amendment to this
registration statement to include any material information with respect to the
plan of distribution not previously disclosed in the registration statement or
any material change to such information in the registration statement;
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof; and
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination of
the offering.
II-2
<PAGE> 18
We hereby undertake that, for purposes of determining any liability
under the Securities Act of 1933, each filing of the registrant's annual report
pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (and,
where applicable, each filing of an employee benefit plan's annual report
pursuant to Section 15(d) of the Securities Exchange Act of 1934) that is
incorporated by reference in the registration statement shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
II-3
<PAGE> 19
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of San Diego, State of California, on January 28, 1999.
AMERICAN TECHNOLOGY CORPORATION
By: /s/ Cornelius J. Brosnan
-------------------------------
Cornelius J. Brosnan
Chairman, Chief Executive Officer
and President
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Cornelius J. Brosnan and Robert Putnam
and each of them, his true and lawful attorney-in-fact and agent, with full
power of substitution and resubstitution, for him and in his name, place and
stead, in any and all capacities, to sign any and all amendments (including
post-effective amendments) to this registration statement, and to file the same,
with all exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in connection therewith,
as fully to all intents and purposes as he might or could do in person, hereby
ratifying and confirming all that said attorney-in-fact and agent, or any of
them, or his substitutes or substitute, may lawfully do or cause to be done by
virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Cornelius J. Brosnan Chairman, President and Chief Executive January 28, 1999
- ------------------------- Officer (Principal Executive Officer)
Cornelius J. Brosnan
/s/ Robert Putnam Vice President, Treasurer and Assistant January 28, 1999
- --------------------------
Robert Putnam Secretary (Principal Financial and
Accounting Officer)
/s/ Elwood G. Norris Chief Technology Officer and Director January 28, 1999
- --------------------------
Elwood G. Norris
/s/ Richard M. Wager Secretary and Director January 28, 1999
- --------------------------
Richard M. Wagner
/s/ David J. Carter Director January 28, 1999
- --------------------------
David J. Carter
/s/ O'Connell J. Benjamin Director January 28, 1999
- --------------------------
O'Connell J. Benjamin
</TABLE>
II-4
<PAGE> 20
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
- ----------- -----------
<S> <C>
5.1 Opinion of Cooley Godward LLP.
23.1 Consent of BDO Seidman, LLP, independent certified public accountants
23.2 Consent of Cooley Godward LLP. Reference is made
to Exhibit 5.1.
24.1 Power of Attorney. Reference is made to Page II-4.
</TABLE>
- ----------
<PAGE> 1
EXHIBIT 5.1
OPINION OF COOLEY GODWARD LLP
[COOLEY GODWARD LLP LETTERHEAD}
January 28, 1999
American Technology Corporation
13114 Evening Creek Drive South
San Diego, CA 92128
Ladies and Gentlemen:
You have requested our opinion with respect to certain matters in connection
with the filing by AMERICAN TECHNOLOGY CORPORATION (the "Company") of a Form S-3
Registration Statement (the "Registration Statement"), including a related
prospectus filed with the Registration Statement (the "Prospectus"), covering
the registration of an aggregate of 1,089,367 shares of the Company's Common
Stock, $.00001 par value, by certain selling stockholders, including 839,367
shares of the Company's Common Stock (the "Shares") and 250,000 shares of the
Company's Common Stock (the "Warrant Shares") issuable upon the exercise of
certain warrants (the "Warrants").
In connection with this opinion, we have examined the Registration Statement and
related Prospectus, your Corrected Certificate of Designations of Series B
Preferred Stock (the "Certificate of Designations") and Bylaws, as amended, the
Warrants and related agreements, and such other documents, records,
certificates, memoranda and other instruments as we deem necessary as a basis
for this opinion. We have assumed the genuineness and authenticity of all
documents submitted to us as originals, the conformity to originals of all
documents submitted to us as copies thereof and the due execution and delivery
of all documents where due execution and delivery are a prerequisite to the
effectiveness thereof.
On the basis of the foregoing, and in reliance thereon, we are of the opinion
(i) that the Shares are validly issued, fully paid and nonassessable, and (ii)
that the Warrant Shares, when issued and sold in accordance with the terms of
the Warrants, will be validly issued, fully paid and nonassessable.
<PAGE> 2
COOLEY GODWARD LLP
American Technology Corporation
January 28, 1999
Page Two
We consent to the reference to our firm under the caption "Legal Matters" in the
Prospectus included in the Registration Statement and to the filing of this
opinion as an exhibit to the Registration Statement.
Very truly yours,
Cooley Godward LLP
Jeremy D. Glaser
<PAGE> 1
EXHIBIT 23.1
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
American Technology Corporation
San Diego, California
We hereby consent to the incorporation by reference in the Prospectus
constituting a part of this Registration Statement on Form S-3 of our report
dated November 6, 1998, except for Note 13, which is as of December 28, 1998,
relating to the financial statements of American Technology Corporation
appearing in the Company's Annual Report on Form 10-KSB for the year ended
September 30, 1998.
We also consent to the reference to us under the caption "Experts" in
the Prospectus.
/s/ BDO Seidman, LLP
Denver, Colorado
January 27, 1999
