8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of

the Securities Exchange Act of 1934

Date of Report (Date of Earliest Event Reported): September 19, 2006

AMERICAN TECHNOLOGY CORPORATION

(Exact Name of Registrant as Specified in Charter)

Delaware	000-24248	87-0361799
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(IRS Employer Identification No.)

15378 Avenue of Science, Suite 100, San Diego, California	92128
(Address of Principal Executive Offices)	(Zip Code)

Registrant’s Telephone Number, Including Area Code: (858) 676-1112

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 1.02 Termination of a Material Definitive Agreement

On September 19, 2006, our Board of Directors approved a restructuring of senior management of our company, and took the following actions.

• Steven D. Stringer was relieved as our Chief Financial Officer. In connection with such action, Mr. Stringer’s employment arrangement with the company also terminated. Mr. Stringer was employed under the terms of a letter agreement dated as of February 24, 2006. Mr. Stringer’s annual base salary at the time of termination was $195,000, and he participated in bonus, benefit and other incentives at the discretion of the compensation committee of our board of directors. Mr. Stringer’s employment was terminable at-will by us or him for any reason, with our without notice.

• David A. Carnevale was relieved as our Vice President, Marketing. In connection with such action, Mr. Carnevale’s employment arrangement with the company also terminated. Mr. Carnevale was employed under the terms of a letter agreement dated as of January 12, 2006. Mr. Carnevale’s annual base salary at the time of termination was $180,000, and he participated in bonus, benefit and other incentives at the discretion of the compensation committee of our board of directors. Mr. Carnevale’s employment was terminable at-will by us or him for any reason, with our without notice.

• Bruce Gray was relieved as our Vice President, Commercial Products Group. In connection with such action, Mr. Gray’s employment arrangement with the company also terminated. Mr. Gray was employed under the terms of a letter agreement effective as of March 21, 2005. Mr. Gray’s annual base salary at the time of termination was $180,000, and he participated in a bonus plan. Mr. Gray’s employment was terminable at-will by us or him for any reason, with our without notice.

• James T. Taylor III was relieved as our Vice President, General Counsel and Secretary. In connection with such action, Mr. Taylor’s employment arrangement with the company also terminated. Mr. Taylor was employed under the terms of a letter agreement dated as of February 17, 2006. Mr. Taylor’s annual base salary at the time of termination was $170,000, and he participated in bonus, benefit and other incentives at the discretion of the compensation committee of our board of directors. Mr. Taylor’s employment was terminable at-will by us or him for any reason, with our without notice.

• Rose Tomich-Litz was relieved as our Vice President, Operations. In connection with such action, Ms. Tomich-Litz’s employment arrangement with the company also terminated. Ms. Tomich-Litz was employed under the terms of a letter agreement dated as of November 29, 2005. Ms. Tomich-Litz’s annual base salary at the time of termination was $157,500, and she participated in bonus, benefit and other incentives at the discretion of the compensation committee of our board of directors. Ms. Tomich-Litz’s employment was terminable at-will by us or her for any reason, with our without notice.

We offered each of the former employees discussed above severance equal to one month’s salary for each two month period of service, or portion thereof, up to six months’ salary in exchange for a general release of all claims. The former officers will have forty-five days to execute the release of claims, and seven days after execution to revoke the release, after which time the severance provisions will be paid.

Item 5.02 Departure of Director and Principal Officer; Appointment of Principal Officer

As discussed above, on September 19, 2006, Steven D. Stringer’ service as Chief Financial Officer was terminated as part of our restructuring plan.

On the same date, our board appointed Thomas R. Brown, who has served as our President and Chief Executive Officer since September 5, 2006, as Interim Chief Financial Officer effective immediately. Mr. Brown formerly served as an independent director on our board of directors until his resignation on September 5, 2006, and served as a member of the compensation committee and the audit committee until his resignation from those committees on August 20, 2006. As a result of Mr. Brown’s appointment as President and Chief Executive Officer, he no longer qualified as an

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independent director under applicable Nasdaq standards. We intend to reappoint him to the board as soon as we may do so and maintain compliance with the rules of the Nasdaq Stock Market requiring us to have a board consisting of a majority of independent directors.

Mr. Brown, age 55, served as President of BrownThompson Executive Search, a financial executive search firm, from April 2005 until immediately prior to September 5, 2006, the date on which he commenced employment with our company. From April 2001 to September 2004, Mr. Brown was Executive Vice President and Deputy President of the Information Technology division of Sony Electronics, where he was responsible for supply chain operations including Information Technology, Procurement, North American Manufacturing Operations and Finance. He continued to consult with Sony Electronics on its ERP implementation from September 2004 to January 2005. From April 2000 to September 2004, Mr. Brown was concurrently the Executive Vice President and President of Information Technology Division for Sony Electronics, where he was responsible for establishing the North American personal computer division. Mr. Brown is a director of Mad Catz Interactive (AMEX/TSX: MCZ), a provider of video game accessories. Mr. Brown obtained a B.A. in Economics from Rutgers University in 1973. Mr. Brown is also a certified public accountant.

Mr. Brown is employed under the terms of a letter agreement dated as of August 23, 2006. Mr. Brown’s current base salary is $250,000 per year. In connection with his employment, he received a non-statutory stock option to purchase 200,000 shares of common stock under our 2005 Equity Incentive Plan with an exercise price $3.33 per share, the closing price of our common stock on the start date as reported on the Nasdaq Capital Market. Mr. Brown will be eligible for an annual bonus with respect to fiscal years beginning fiscal 2007 as recommended by the compensation committee and approved by the board. The bonus will be based in part on his achievement of detailed annual goals that will be established by the compensation committee. In the event that Mr. Brown’s employment is terminated for any reason other than cause, or if he resigns for good reason, he will be entitled to severance equal to one month’s salary for each two month period of service, or portion thereof, up to six months’ salary. He will also be entitled to continuation of his company-provided health and dental benefits for the same period. The terms of Mr. Brown’s employment will not change in connection with his appointment as Interim Chief Financial Officer.

Item 7.01 Regulation FD Disclosure

On September 20, 2006, we issued a press release announcing the restructuring discussed in this current report, and updating our guidance for the quarter ending September 30, 2006. A copy of the press release is attached as Exhibit 99.1 hereto and incorporated herein by reference.

The information in this Item 7.01 is being furnished and shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section.

Item 8.01 Other Information

On September 19, 2006, in connection with the reorganization discussed above, we determined to close our Maine sales office. Three of the non-executive employees in the office were relieved of their duties.

Item 9.01 Financial Statements and Exhibits

Exhibit No.	Description
99.1	Press Release Dated September 20, 2006

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	AMERICAN TECHNOLOGY CORPORATION
Date: September 20, 2006	By:	/s/ THOMAS R. BROWN
		Thomas R. Brown
		Chief Executive Officer, President and Interim Chief Financial Officer

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EX-99.1

Exhibit 99.1

FOR IMMEDIATE RELEASE

AMERICAN TECHNOLOGY CONSOLIDATES AND

RESTRUCTURES OFFICES AND MANAGEMENT TEAM

Restructuring Expected to Save Company Over $1.5 Million Annually

Company Revises Revenue Guidance

SAN DIEGO, CA, September 20, 2006 – American Technology Corporation (ATC) (NASDAQ: ATCO), a leader in commercial, government and military directed sound products and solutions, today announced that it is revising its revenue guidance from $3 million to $4 million, to $2 million to $2.5 million for the quarter ending September 30, 2006. The revised guidance is due principally to one HSS customer informing the company on September 15^th that it was pushing out HSS orders due to their customer’s digital signage installation rescheduling. Following further diligence into the sales pipeline, management determined that revising previous guidance was appropriate. ATC also announced that it has consolidated and restructured its offices and management team.

Tom Brown, the company’s new president and CEO is now its interim chief financial officer replacing Steve Stringer. Charles Peacock, vice president of the company’s government and military sales group is also taking over leadership of the company’s commercial sales group replacing Bruce Gray. In addition to Stringer and Gray, the company also relieved, David Carnevale (vice president of marketing), James T. Taylor III (vice president, general counsel and secretary), Rose Tomich-Litz (vice president of operations) and three non-executive employees, of their duties. The company is also closing its Maine sales office after having closed its Carson City, Nevada offices earlier this summer. This consolidation and restructuring is expected to save ATC over $1.5 million annually.

“I came to ATC because I strongly believe there are vast, untapped markets for our directed sound products and technologies,” said Tom Brown, ATC’s president, CEO and interim CFO. “While we are confident we have the products and solutions to become successful and profitable, we must take definitive steps to achieve these results. This facility and management consolidation and restructuring is the first of three major initiatives I am implementing to drive us to profitability. The second is to accelerate revenue growth through more direct sales to larger commercial and defense-related companies desiring to utilize our revolutionary directed sound solutions in their integrated products. Third, we are working diligently to cut HSS^®, LRAD™ and NeoPlanar^® product costs in order to capture significantly more product margin while enhancing product performance.”

Brown concluded, “The initiatives we have announced today are focused on getting us to profitability through increasing sales (with greater product margins) to current and prospective customers in large markets with tremendous potential which include the digital signage, public display, public venue, government, military, homeland and

international security, private and commercial maritime, automobile, personalized audio, and alert/alarm industries.”

About American Technology Corporation

American Technology Corporation (ATC) (NASDAQ: ATCO) provides directed audio solutions that place clear, highly intelligible sound exactly where needed. ATC’s HyperSonic^® Sound, NeoPlanar^® and Long Range Acoustic Device (LRAD™) product lines make up the core of an expanding portfolio of directed sound products and technologies. For more information about 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, the performance of Mr. Brown and our restructured management team, market acceptance of our directed sound technologies and products, entry of competitors, the possibility our intellectual property protections will not prevent others from marketing products similar to or competitive with our products, potential technical or manufacturing difficulties that could delay product deliveries or increase warranty costs, 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. For more information regarding other potential risks and uncertainties, see the “Risk Factors” section of the company’s Form 10-K for the year ended September 30, 2005 and the company’s Form 10-Q for the quarter ended June 30, 2006. American Technology Corporation disclaims any intent or obligation to update those forward-looking statements, except as otherwise specifically stated.

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CONTACT:

Investor Relations:

Robert Putnam

(858) 676.0519

robert@atcsd.com