ATCO)
The Following is a Direct Communication From the Chairman, CEO, and
President of American Technology Corp.
SAN DIEGO, Aug 10, 2001 (BUSINESS WIRE) -- American Technology Corp.
(Nasdaq:ATCO):
Dear Shareholder:
Over the past three months, American Technology Corp. has achieved several
important objectives toward taking our sound reproduction technologies into the
commercial and consumer markets. This letter will highlight recent activities,
update you on new business developments, and outline corporate progress at your
company.
We were issued an extremely valuable patent protecting our use of HSS(TM) for
surround-sound and other effects, capitalizing on its ability to create a
virtual speaker on surfaces remote from the emitter. This patented application
does away with the need to wire and install rear speakers in home theater and
cinema surround-sound systems.
International Robotics Inc., a leader in special effects and marketing
environments whose list of "Techno-Marketing(TM)" clients includes several
Fortune-500 companies, has licensed our HSS, Stratified Field(R) and
PureBass(TM) technologies. They have reported to us that the response from their
customers to HSS has been extremely positive and they are moving forward with
plans to incorporate our technologies into unique special effects products for
business, promotion, entertainment, and communication for their customers.
Dolby Laboratories licensed our HSS technology as we entered into an HSS
collaboration and licensing agreement with them. Under the collaboration
agreement, ATC and Dolby are jointly exploring and developing cinema sound and
other applications for HSS. Dolby is the largest licensor of audio processing
technologies in the world, and we are very excited about this project and the
many business opportunities it represents for your company.
We are vigorously pursuing licensing agreements with major consumer and
commercial product brands with the capability to brand and manufacture their own
HSS devices. In addition, there are many HSS applications such as drive-through
restaurants and point-of-purchase displays, where consumer electronics branding
is less essential. Music stores, restaurants, museums, amusement parks, and
public transportation are just a few areas of application being tested by
potential customers right now.
To support our HSS customers' various needs, we are pleased to announce that we
have entered into a manufacturing agreement with HST Inc. of San Diego. Working
with HST, we can provide fully-qualified manufacturing services, personnel, and
facilities to those OEM customers who need them. Under the agreement, ATC and
certain OEM customers and licensees have access to HST's new 108,000 square foot
factory in Tijuana for the manufacture of HSS products. This agreement creates a
new profit center for your company and allows us to control quality, costs, and
production timelines for HSS products. We expect large-scale production
facilities for HSS products to be ready and pilot production to begin this fall
to meet demand for our revolutionary directional audio technology.
Last month, Bath Iron Works, a General Dynamics company, installed our
Stratified Field(TM), HSS and NeoPlanar(TM) technologies aboard the Guided
Missile Destroyer USS Winston S. Churchill. The ship is now at sea and we are
happy to report that the audio systems based on our technologies are performing
very well.
At this time we are engaged with the Army, Navy, and major government
contractors and we will continue to work with them on military applications for
our sound reproduction technologies. We expect to realize significant revenue
from these efforts in the coming fiscal year.
Substantial progress has been made in our intensive negotiations and licensing
efforts with major audio companies. We are working with world-class audio
manufacturers toward their licensing of our intellectual property, and expect to
close royalty-bearing agreements for several different consumer and commercial
audio applications. We firmly believe that the real value of our intellectual
property far outweighs our past and present investments in patent applications
and prosecution.
Per our business plan, we are generating revenue from our intellectual property
portfolio. In the nine months ended June 30, contract and license revenue
doubled compared to the same period last year. Shareholders can expect this
intellectual-property-based revenue from licensing fees and royalties to
continue to grow. This growth will come from all of our major sound reproduction
technologies including PureBass, Stratified Field, NeoPlanar planar magnetic
technology, and HSS. In particular, HSS, Stratified Field, and PureBass products
are scheduled to enter the market and produce significant revenue in the next
fiscal year. This income and cash flow growth will come with little or no
increase in expense.
We appreciate your support and know that you share our enthusiasm for the audio
and electronics frontier. We continue to be energized by the response to our
unique sound reproduction technologies, and look forward to sharing our growth
with you.
Sincerely,
Elwood G. Norris Terry Conrad Chairman & CEO President |
