American Technology Corporation Announces Licensing Agreement with ECCO Group; ATC Licenses New SoundVector(TM) Technology to World's Largest Manufacturer of Backup Alarms for Commercial Vehicles.

SAN DIEGO -- American Technology Corporation (ATC) (NASDAQ:ATCO), a leading innovator of proprietary sound reproduction technologies and products, today announced that it has signed a design and manufacturing licensing agreement with ECCO Group (ECCO), the world's largest manufacturer of backup alarms for commercial vehicles. The agreement covers the initial licensing and product development of ATC's SoundVector technology to ECCO and its affiliates for backup vehicle alarms and similar uses. The agreement includes technology transfer, product development assistance and upfront licensing fees, with royalties payable, based on unit volume production. The agreement is renewable on an annual basis after an initial three-year term, with further fees due upon each renewal. For competitive reasons, financial terms of the agreement are not being disclosed at this time. ATC expects to recognize revenue from this agreement this quarter and on-going revenues in fiscal 2006 and beyond.

SoundVector is a patent-pending, directional sound technology for replacing today's noisy omni-directional alarm signals such as backup alarms, sirens, hazard signals, and train whistles. SoundVector is the latest audio technology innovation from ATC's advanced development group headed by James Croft. In addition to SoundVector, ATC is Shaping the Future of Sound(R) by offering an extensive line of directed sound solutions including award-winning HSS(R), NeoPlanar(R), and LRAD(TM) technologies and products.

"We are pleased to be partnering with industry leader, ECCO, on our recently developed SoundVector technology," said Bruce Gray, vice president of ATC's commercial business group. "SoundVector provides very directional sonic focus to backup alarms, alerting only those individuals behind vehicles that are enabled with its unique capabilities."

"We are very excited to be working with ATC to bring their unique sound shaping technology into the automotive market," said Ed Zimmer, president and chief executive officer of ECCO Group. "Our first product together will focus the backup alarm sound to the hazard zone at the rear of the vehicle, greatly reducing jobsite noise and driver irritations. Other vehicle sound shaping applications are expected to quickly follow.

"SoundVector will be the biggest innovation to backup alarms since ECCO introduced the Smart Alarm(R) over 20 years ago," concluded Zimmer. "The Smart Alarm(R) measures ambient noise and automatically adjusts the sound output to the appropriate level. We feel SoundVector will be the next generation Smart Alarm(R)."

About ECCO Group

ECCO Group is the world's largest manufacturer of backup alarms and amber warning lights for commercial vehicles. ECCO supplies over 1500 distributors and 500 vehicle manufacturers worldwide. Headquartered in Boise, Idaho, ECCO has manufacturing plants in Boise, England, Australia, and China. All plants are registered to ISO 9001:2000. ECCO is employee owned. For more information on ECCO and its products, please visit www.eccolink.com.

About American Technology Corporation

American Technology Corporation is Shaping the Future of Sound(R) by developing, manufacturing and globally distributing its proprietary sound technologies and products which include: the award-winning HSS(R) (HyperSonic(R) Sound technology), LRAD(TM) (Long Range Acoustic Device), NeoPlanar(R) planar magnetic technology, and others. The Company is establishing a strong portfolio of patents, trademarks, and intellectual property including over 215 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: Except for historical information contained herein, the matters discussed are forward-looking statements within the meaning of Section 21E of the Securities Exchange Act. You should not place undue reliance on these statements. We base these statements on particular assumptions that we have made in light of our industry experience, the stage of product and market development as well as our perception of historical trends, current market conditions, current economic data, expected future developments and other factors that we believe are appropriate under the circumstances. These statements involve risks and uncertainties that could cause actual results to differ materially from those suggested in the forward-looking statements, including but not limited to ECCO's efforts to develop and market products under the agreement, market acceptance of the SoundVector technology in the vehicle-mounted alarm marketplace, entry of competitors, the possibility our intellectual property protections will not prevent others from marketing products similar to or competitive with the SoundVector technology, potential technical or manufacturing difficulties that could delay products to be sold under the agreement, possible government regulations, general economic and political factors which influence buying decisions, and other risks identified and discussed in our 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 our current expectations. American Technology Corporation disclaims any intent or obligation to update those forward-looking statements, except as otherwise specifically stated.