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Exhibit 99.1
FOR IMMEDIATE RELEASE
LETTER TO SHAREHOLDERS
October 25, 2000
To the Shareholders of American Technology Corporation:
This letter is a direct communication from the Chairman/CEO and the President of
American Technology Corporation (NASDAQ: ATCO). The purpose of this letter is to
provide Shareholders with an update on ATC's business strategy and schedules,
and to summarize developments at the company since our annual shareholder
meeting in April.
HSS(TM)
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HSS is our main corporate focus and is ready for certain target markets. The
design of our first generation electronics hardware package using DSP (digital
signal processing) techniques is now complete and being delivered in limited
numbers to licensees and other interested customers. The proprietary ultrasonic
emitter is fully functioning. This is the component that is similar in
appearance to a thin speaker and actually transmits the incredibly focused beam
of ultrasound to create audible sound in air. The first of these have been
delivered to OEM customers Bath Iron Works, SOUNDideas, and to certain other
prospective licensees. These evaluation samples have performed very well and by
year-end we expect to have built and delivered approximately 50 fully functional
developers' kits to major consumer and commercial electronics companies. We
expect significant licensing and sales activity to follow this rollout. In
anticipation of requirements in 2001, we are working with three manufacturers
who will provide parts for our customers to use in their various mass-produced
systems.
Our HSS revenue will be generated from sales of the emitters, sales of
electronics packages, and from licenses to manufacture devices that incorporate
our patented modulation methods and other proprietary intellectual property. Our
present strategy is to use outside contract manufacturing sources exclusively so
as not to acquire the burden of infrastructure that production facilities would
entail. We expect to have the capability of producing complete HSS solutions at
the same time applications are being developed and tested by our customers.
Following this plan we believe the time to actual revenue will be minimized, and
in the case of "box-stock" standard systems it can be immediate.
At this time we are aware of no significant threats to our domination of this
new market. Statements from academia and industry regarding parametric speakers
indicate that we are ahead of others' development efforts. We believe our issued
and pending patents are broad in scope and provide us with a powerful
intellectual property base that will serve us for the foreseeable future. In
December we will publish the details regarding many of our patented and patent-
pending transduction methods. In so doing we hope to clear up any
misunderstanding about the methods we are using.
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Stratified Field(TM) Technology (SFT(TM)) and PureBass(TM)
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Thomson multimedia is continuing the development of speakers using our
Stratified Field technology. THOMSON is #2 in the United States audio market and
sells products worldwide under brand names including RCA, GE, THOMSON, SABA, and
Telefunken. We expect Thomson to make announcements about products using
Stratified Field technology scheduled to be marketed in early 2001.
JAMO is in the final stages of their evaluation process per our Letter of
Intent. We continue to work with them on their proposed integration of SFT into
their consumer audio products. Jamo markets a line of high-end surround sound,
home theater, and multimedia speakers in more than 80 countries worldwide.
HST Inc., a new licensee announced in September, is also working toward
implementing their composite materials skills in the production of Stratified
Field thin speakers and PureBass low-frequency subwoofers for themselves and
other prospective licensees.
SFT samples are under evaluation by other potential customers including
government entities. Based on our current information and discussions with these
companies and entities, we expect to close additional royalty-bearing
agreements. We consider expenditures made to capture and nurture Stratified
Field and PureBass licensees to be an important long-term investment. The market
for these technologies continues to grow. The Consumer Electronics Association
(CEA) estimated that 1999 sales for home theater systems approached $2 billion
in the United States alone. This is expected to be one of the principal consumer
applications for both SFT and PureBass technologies.
Planar Magnetic(TM) Technology
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At our shareholder meeting in April, we unveiled a new small thin speaker
technology that achieved levels of sound pressure and fidelity previously
unavailable in a thickness down to 3 millimeters (1/8 inch) or less. This
transducer has undergone complete testing, patent documents have been filed, and
multiple samples have been shipped to prospective licensees for use in specific
markets. We expect to announce developments regarding this technology before the
end of the year that are expected to lead to the significant deployment of this
technology in 2001.
Retail Products Division
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The retail products division of ATC, whose product line includes FM Sounds(TM)
brand radios and other consumer electronics, booked (unaudited) sales of greater
than 1.3 million dollars in the fiscal year that ended September 30. This is an
increase of approximately 60% over the previous fiscal year. FM Sounds radios
and other items are available through general merchandise retailers as well as
many stores and catalogs specializing in sporting goods and consumer
electronics.
While we will continue to focus on our audio technologies and our portfolio of
intellectual property, we will work to continue growing
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our retail products division with unique new products that fit the sales
channels established over the last three years.
Facilities and Operations
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Over the past three months we have added approximately 3,500 square feet to our
corporate headquarters. We have improved our model-making capabilities, enlarged
our technology research center and most importantly, added space for ongoing HSS
testing and applications research.
While the company has undergone management changes as announced previously, the
core of our technical staff remains unchanged. We are proud of our expertise in
advanced materials, signal processing, physics, and mechanical, electrical, and
audio engineering. We look forward to our research and marketing efforts
yielding products that will be seen and heard by consumers throughout the world
in 2001.
Sincerely,
Elwood G. Norris Terry Conrad
Chairman & CEO President
About American Technology Corporation
American Technology is shaping the future of sound by developing and licensing
its patented and patents-pending technology portfolio which includes: the award-
winning HSS(TM) (HyperSonic(TM) Sound Technology); SFT(TM) (Stratified Field(TM)
Technology); PMT(TM) (Planar Magnetic(TM) Technology); MFW(TM) (Magnified
Force(TM) Woofer); PureBass(TM) Sub-Woofer Technology; and FM Sounds(TM)
consumer radio products. For more information on the Company and its
technologies and products visit our web site at www.atcsd.com.
Safe Harbor statement under the Private Securities Litigation Reform Act of
1995: This press release contains forward-looking statements relating to future
performance, sales, and product development that may impact on future results
and the future viability of the company. Actual results could be affected or
differ materially from those projected in the forward-looking statements as a
result of risk factors such as: future products and results; technological
shifts; competition; changes in retail distribution; general economic conditions
in the markets in which the company operates; the ability of the company, its
customers, and suppliers to solve latent Year 2000 compliance issues; pricing
pressures; and the uncertainty of market acceptance of new products by
distributors and customers.
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FOR FURTHER INFORMATION CONTACT:
Robert Putnam
(858) 679-3168
[email protected]
