HElllOO, What's this..the silence is broken..Letter from ATCO.
(Applies to: ATCO)
This Letter is a Direct Communication From the Chairman/CEO and the
President of American Technology Corp.
LETTER TO SHAREHOLDERS
SAN DIEGO, Feb 27, 2001 (BUSINESS WIRE) --
To the Shareholders of American Technology Corp.:
As we approach our Annual Meeting on April 5, we are pleased to provide you with
an update on ATC's technologies, business activities, marketing strategies, and
new developments.
HyperSonic(TM) Sound (HSS(TM)) Technology
Fully functional HSS evaluation kits have reached prospective licensees in the
entertainment, government, consumer and commercial electronics fields. Responses
have been positive, and based on information from several prospective licensees,
we expect to announce additional HSS licensing agreements within the next two
months.
Among the many new patents we were granted in 2000 were six in particular that
provide strong protection for the core of our HSS emitter and circuit
technology. These patents also protect the methods by which we have brought
parametric loudspeakers to a level that can be commercialized. Additional
patents will be filed as new methods, materials, and techniques are tested and
proven in research and development.
This year we have added techniques and improvements that dramatically simplify
production of HSS. We believe these techniques will result in a cost reduction
of nearly 80 percent, even in small volume applications. We have also succeeded
in addressing cost-sensitive markets by making refinements to our HSS transducer
packaging. This opens new markets for HSS in low-cost, mass-produced items for
point-of-sale and entertainment applications.
StratifiedField(TM) Technology
Our two current licensees for StratifiedField, Thomson Multimedia and HST Inc.,
are working toward the production and marketing of a variety of products
containing our high fidelity, thin-panel speaker technology. In January, HST
Inc., increased their staff specifically to focus more resources on developing
their StratifiedField-based products. They have also retained Nissan Design
International to perform certain design tasks relating to taking
StratifiedField-based products to market through their own branding and through
additional prospective licensees.
We are working with several companies interested in taking StratifiedField-based
consumer products to market through their consumer and commercial sound
reproduction product lines.
NeoPlanar(TM) Technology
We have focused the NeoPlanar team on the work of technology disclosure,
environmental testing, manufacturing support, and intellectual property (IP)
protection. Patent filings on key attributes of this remarkable, thin-panel,
high-fidelity loudspeaker technology have been completed.
Based on information from prospective licensees, we expect the first agreements
for the manufacture and use of NeoPlanar technology in high volume,
consumer-branded applications and OEM licensing to close during the second
calendar quarter of this year. Potential applications for NeoPlanar technology
include incorporation into automobiles, commercial and home theater,
professional sound reinforcement, multimedia, and high-fidelity sound systems.
Government and Military Interest
Government agencies and subcontractors are considering both HSS and NeoPlanar
for use in various projects. After presenting HSS and NeoPlanar technologies at
the SPAWAR (Space and Naval Warfare Systems Command) Interior Communications
Symposium on November 29, we have been invited to make further presentations of
our technologies to interested groups at military bases and the Pentagon. These
visits will be completed in March. We expect licensing and/or development
agreements in the area of government intercommunications and public address in
the future. Local government agencies such as emergency medical response,
police, and fire departments are also enthusiastic about applying HSS to public
address, crowd control, and safety communications systems.
Retail Products Division
The retail products division of ATC introduced three new radio products at the
International Consumer Electronics Show (CES) in January. Early indications are
strong that our new hands-free cell phone adapter with integrated FM radio,
life-size "golf ball" FM radio, and AM/FM "cell phone" radio will sell well with
improved gross margins. Sporting goods and personal electronics stores remain
our foremost retailers for our product line, which includes FM Sounds(TM) brand
radios and other consumer electronics.
Corporate Branding and Marketing
We are improving the public's awareness of our company and our technologies. In
March the American Business Review public television series will be filming and
producing a short segment on HSS. This series, hosted by Morley Safer, is
scheduled to air our segment several times beginning this summer.
We have also retained the services of Digital Asylum (recently purchased by
Stellcom Inc.) a multimedia and graphic design firm for corporate identity
development including a new Web site and refined corporate and technology logos.
Their experience includes developing web sites and/or multimedia projects for
Rokenbok Toys, Indicast, PeopleFirst and Qualcomm. Our new Web site is scheduled
to come online in April.
Intellectual Property
The foundation upon which our future business is built is the quality and
strength of our patent portfolio and intellectual property relating to sound
reproduction technologies. We continue to make technological breakthroughs and
will continue to patent those breakthroughs to insure that we will have value to
offer licensees for years to come. As we continue focusing on sound reproduction
technologies, we will realize revenue from licensing our core technologies and
from selling rights to unrelated intellectual property that has value but that
we do not intend to develop or use. Where appropriate, we will also acquire
technologies and intellectual property that will augment or strengthen our sound
reproduction technology portfolio. Licensees and prospective licensees are
recognizing the depth and breadth of our IP and patent portfolio, which is
advancing and expanding our licensing relationships.
Summary
We are confident that our unique sound reproduction technologies will be
incorporated into a wide variety of commercial and consumer products. This
quarter, and going forward, we expect increasing revenue based on our sound
reproduction and other core technologies. In addition, we are close to
finalizing manufacturing and use agreements with additional licensees and OEM
customers. As products containing our sound reproduction technologies gain
market acceptance, we will realize revenues not only from up-front licensing
fees but also from recurring royalties that will provide revenue for many years.
We look forward to the coming financial rewards and recognition we expect when
sound reproduction products containing our technologies begin to reach the
commercial and consumer markets, and to sharing the latest news and developments
with you at our upcoming annual meeting.
Sincerely,
Elwood G. Norris Terry Conrad Chairman & CEO President
About American Technology Corp.
American Technology Corp. is shaping the future of sound by developing and
licensing its technology and intellectual property portfolio which includes: the
award-winning HSS(TM) (HyperSonic(TM) Sound Technology); Stratified Field(TM)
Technology; NeoPlanar(TM); PureBass(TM) Sub-Woofer Technology; and FM Sounds(TM)
consumer radio products. The Company is establishing a strong portfolio of
patents, trademarks, and know-how including over 100 U.S. and Foreign patents
and patent filings to date. For more information on the company and its
technologies and products please 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.
CONTACT: American Technology Corp.
Robert Putnam, 858/679-3168
robert@atcsd.com
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