American Technology Corporation Awarded $723,000 in New LRAD Orders; ATC Receives First Major Commercial Maritime Order For LRADs.

SAN DIEGO -- American Technology Corporation (ATC) (NASDAQ:ATCO) announced today it has been awarded two new orders totaling $723,000 for its proprietary Long Range Acoustic Devices (LRAD(TM)). ATC has been awarded a $128,000 contract by the U.S. Army 44th Engineering Battalion deployed in and around central Iraq.

Additionally, ATC has been awarded a $595,000 contract by a major commercial maritime company. This contract represents ATC's largest commercial LRAD order to date.

LRAD is a breakthrough long-range hailing and warning, directed acoustic device designed to communicate with authority and exceptionally high intelligibility in a 15-30(degree) beam. LRAD can issue a verbal challenge with instructions in excess of 500 meters and has the capability of following up with a warning tone to influence behavior or determine intent. The "hailing and warning" application for commercial shipping is similar to the successful LRAD deployments by the U.S. Navy on patrol craft in and around the port of Basra, Iraq to communicate with vessels in shipping lanes and around oil terminals.

"LRAD was originally conceived to support the protection and exclusion zones around U.S. Navy warships. The challenge of interdicting small boats approaching commercial maritime assets is quite similar," remarked Carl Gruenler, ATC's vice president of government and force protection systems. "LRAD's warning tones command attention at ranges in excess of 500 meters while its directional and highly intelligible voice instructions can unquestionably be heard. LRAD's ability to positively communicate with authority on land or at sea is proving highly effective in creating safe situations out of uncertain ones."

ATC has also delivered two remotely operated pan/tilt LRADs equipped with sighting cameras to the Port Authority of New York and New Jersey (The delivery order was announced in the company's August 26, 2004 business update). The units are being installed to communicate at long distance with unauthorized personnel approaching either entrance of the critical Hackensack rail bridge and to influence behavior if verbal warnings go unheeded. The units are being linked to the Port's infrastructure and can be monitored and controlled remotely.

Added Gruenler, "To our knowledge, this installation will represent the first remotely operated, instant escalating non-lethal hailing and warning capability for critical infrastructure protection in the U.S."

Gruenler concluded, "Our proprietary long range hailing and warning device is expanding its worldwide leadership position by enabling superior communications and commercial asset protection as well as providing The Sound of Force Protection(TM) for military and government customers."

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 140 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.

About Non-Executive Compensation

In accordance with NASDAQ Marketplace Rule 4350, as amended, American Technology Corporation granted inducement stock options to certain of its employees on October 26, 2004.

These options were granted without stockholder approval pursuant to NASDAQ Marketplace Rule 4350(i)(1)(A)(iv) under the following terms: An aggregate of 20,000 non-qualified stock options were granted to five non-executive employees with an exercise price equal to the fair market value on the grant date. The options have five-year terms with vesting of 25% on the first anniversary of the grant date and then equal vesting each quarter thereafter for the next 12 quarters, subject to continued employment and other conditions.

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 changes in the sound reproduction industry, the need for market acceptance of our sound reproduction technologies, entry of competitors in the sound reproduction market, the possibility our intellectual property protections will not prevent others from marketing products similar to or competitive with our products, our ability to develop future products which maintain a competitive advantage over competing products, pricing pressures, technology shifts, potential technical or manufacturing difficulties that could delay products, possible government regulations, warranty or other claims, the outcome of pending or future litigation, general economic and political factors which influence buying decisions, and other risks identified and discussed in the 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.