American Technology Corp. Announces Expansion of Military Business; Carl Gruenler Appointed Vice President of Military Operations.

Business Editors/High-Tech Writers

SAN DIEGO--(BUSINESS WIRE)--June 30, 2003

American Technology Corp. (NASDAQ:ATCO) today announced the appointment of Carl Gruenler as vice president of military operations to oversee ATC's rapidly expanding military business. The company expects to realize more than $1 million in military sales in calendar year 2003, a 400 percent gain over calendar year 2002.

Gruenler is a member of the United States Naval Reserve, has a strong business background, and has earned both undergraduate and masters degrees in business administration. In his seventeen years of business experience, Gruenler has served as president of Thomas D. Mangelsen Inc., a national retail, manufacturing and distribution company; chief financial officer of Automated Monitoring and Control International Inc., a railroad systems technology company; and a project manager/financial analyst at Union Pacific Railroad. He returned to active duty in 1999 for special work as the Smart Wing program manager tasked with identifying and developing new "tip of the spear" integrated systems for physical security/access control, waterside force protection and mobile computing. He is stepping out of active duty to accept this position with ATC.

"After working on the military side with these unique and revolutionary sound technologies, I am very excited to be heading ATC's rapidly expanding military business," said Gruenler. "With the invaluable assistance of General Dynamics, approximately 60% of ATC's military business this year is proprietary LRAD(TM) high intensity hailing and warning systems. LRAD makes possible intelligible long-distance audio communication with minimal distraction to persons near the system in a lightweight, hardened, all-inclusive design."

Gruenler continued, "LRAD changes the dynamics of force protection against threats posed by small boats, vehicles and crowds by positively determining intent. When intent is known, our armed services can confidently act to protect U.S. assets and lives. LRAD is an exciting new tool for both the warrior and the peacekeeper, for all services, and many government agencies. Other ATC sound technologies also show significant promise for resolving force protection and emergency response communication challenges."

"Three naval vessels and two fleet concentration areas are now outfitted with at least one LRAD system each. Applications are expected to expand to wheeled and tracked vehicles throughout the military. Eventually, I expect all the military branches as well as many government agencies and allied forces to employ LRAD systems for long range hailing and warning. Our aim is nothing less than having LRAD identified as The Sound of Force Protection(TM) worldwide," concluded Gruenler.

Along with the appointment of Gruenler, Terry Conrad has accepted the newly created position of director of military sales -- Western region with shared account responsibility with national accounts reporting to Gruenler.

"This month, we received our first NeoPlanar(R) order for large land-based hangar use," announced Conrad. "NeoPlanar provides high intelligibility in poor acoustic environments and should become the standard for large-venue military sound installations. In addition to our rapidly growing sales to Department of Defense agencies, interest is growing in our LRAD systems among law enforcement agencies as a tool in situations involving barricaded suspects, hostages, mob control, and emergency announcements to distant crowds."

James Irish, CEO of ATC, commented, "Mr. Gruenler will continue to lead the significant revenue growth we are experiencing in our Military Operations division. His rich military background and support of our patented sound technologies for multiple Navy applications will provide substantial insight and direction to our forward-looking strategies across all market channels. Mr. Conrad will expand our drive for revenue and open new markets for our military operations. Mr. Croft's oversight of R&D and Engineering will streamline operations and speed new products to multiple markets."

James Croft is taking on an expanded role heading both Research and Development (R&D) and Engineering. Under this new structure, R&D and Engineering will work more closely in the product flow and project process of bringing to market products based on HSS(R) Generation II, NeoPlanar, PureBass(R), LRAD, HIDA(TM) and other proprietary sound technologies and products currently under development.

Speaking on the company's HSS technology progress, Croft said, "Our HSS(R) Generation II offers significant improvements in performance and packaging by combining the sonic performance advancements of our next generation Modulation Amplifier, monolithic film emitter, and improved signal processing into a highly flexible, miniaturized package for a wide variety of applications. Sound quality is dramatically improved as a result of more than a 60 percent reduction in distortion, and the electronics package is 1/4 the size of our first generation devices."

James Irish added, "HSS Generation II products are expected to debut later this summer with in-wall and in-ceiling mounting for commercial, industrial and retail applications. HSS Generation II provides improved sound quality and cost efficiencies broadening the portfolio of HSS-enabled products. Later this year, we will begin a major campaign to introduce HSS to all branches of the military and key government agencies."

About American Technology Corp.

American Technology Corp. is Shaping the Future of Sound(R) by developing and licensing its technology and intellectual property portfolio which includes: the award-winning HSS(R) (HyperSonic(R) Sound Technology); NeoPlanar(R) Technology; PureBass(R) Sub-Woofer Technology; HIDA(TM) (High Intensity Directed Acoustics), LRAD(TM) (Long Range Acoustic Device) and Stratified Field(R) Technology. The company is establishing a strong portfolio of patents, trademarks, and know-how including over 138 U.S. and Foreign patents and patent filings to date. 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 document contains forward-looking statements relating to future transactions, performance, technology and product development which may affect 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 risks and uncertainties, including the ability of the company to continue as a going concern, development of future products, technological shifts, potential technical or manufacturing difficulties that could delay new products, competition, general economic factors, pricing pressures, the uncertainty of market acceptance of new products and services by OEMs and end-user customers, and other factors identified and discussed in the company's most recent filings with the Securities and Exchange Commission. These forward-looking statements are based on information and management's expectations as of the date hereof. Future results may differ materially from the company's current expectations. American Technology Corp. disclaims any intent or obligation to update those forward-looking statements, except as otherwise specifically stated by it.