-----BEGIN PRIVACY-ENHANCED MESSAGE-----
Proc-Type: 2001,MIC-CLEAR
Originator-Name: webmaster@www.sec.gov
Originator-Key-Asymmetric:
 MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen
 TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB
MIC-Info: RSA-MD5,RSA,
 KK7IG3DMkMi9DIPyz14snoNd3gy13joGdPljgNBRG+kSVtcLoiwMqST++lPZT/Kd
 SryUY5RxbCcRYyEmsmv5Uw==

<SEC-DOCUMENT>0001019687-04-000168.txt : 20040128
<SEC-HEADER>0001019687-04-000168.hdr.sgml : 20040128
<ACCEPTANCE-DATETIME>20040128161212
ACCESSION NUMBER:		0001019687-04-000168
CONFORMED SUBMISSION TYPE:	10-K/A
PUBLIC DOCUMENT COUNT:		4
CONFORMED PERIOD OF REPORT:	20030930
FILED AS OF DATE:		20040128

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			AMERICAN TECHNOLOGY CORP /DE/
		CENTRAL INDEX KEY:			0000924383
		STANDARD INDUSTRIAL CLASSIFICATION:	HOUSEHOLD AUDIO & VIDEO EQUIPMENT [3651]
		IRS NUMBER:				870361799
		STATE OF INCORPORATION:			DE
		FISCAL YEAR END:			0930

	FILING VALUES:
		FORM TYPE:		10-K/A
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	000-24248
		FILM NUMBER:		04549397

	BUSINESS ADDRESS:	
		STREET 1:		13114 EVENING CREEK DRIVE SOUTH
		CITY:			SAN DIEGO
		STATE:			CA
		ZIP:			92128
		BUSINESS PHONE:		6196792114
</SEC-HEADER>
<DOCUMENT>
<TYPE>10-K/A
<SEQUENCE>1
<FILENAME>atc_10ka1-093003.htm
<TEXT>
<html>
<head><meta content="text/html; charset=iso-8859-1">
<title>UNITED STATES</title>
</head>

<body >
<ul>
</ul>

<hr color="#000000" size="4">

<p>
<p align="center">
<b><font size="2">UNITED STATES</font></b><font size="2"><br><b>SECURITIES AND EXCHANGE COMMISSION</b><br>Washington,
D.C. 20549<br></font><font size="4"><b>FORM 10-K/A</b><br></font><b>(Amendment No.
1)</b><br><p align="center">
<font size="2">ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)<br>OF THE SECURITIES EXCHANGE ACT
OF 1934<br><b>For the fiscal year ended September 30, 2003</b><br>Commission
File Number</font><u><font size="2"> 0-24248</font></u><p align="center">
<b>AMERICAN TECHNOLOGY CORPORATION</b><br><font size="2">(Exact name of registrant as specified
in its charter)<br></font></p align="center">
<div align="center" style="position:relative; left: 0"><table border=0 cellpadding=0 cellspacing =0 >
<tr valign="top">
<td width="342.666581" colspan="1" rowspan="1" >
<p align="center">
<u><font size="2">Delaware</font></u></p align="center">
</td>
<td width="41.333323" colspan="1" rowspan="1" >
<p align="center">
<font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></p align="center">
</td>
<td width="271.999932" colspan="1" rowspan="1" >
<p align="center">
<u><font size="2">87-0361799</font></u></p align="center">
</td>
</tr>
<tr valign="top">
<td width="342.666581" colspan="1" rowspan="1" >
<p align="center">
<font size="2">(State or other jurisdiction of incorporation or
organization)</font></p align="center">
</td>
<td width="41.333323" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="271.999932" colspan="1" rowspan="1" >
<p align="center">
<font size="2">(I.R.S. Employer Identification Number)</font></p align="center">
</td>
</tr>
<tr valign="top">
<td width="657.333169" colspan="3" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="342.666581" colspan="1" rowspan="1" >
<p align="center">
<u><font size="2">13114 Evening Creek Drive South, San Diego, California</font></u></p align="center">
</td>
<td width="41.333323" colspan="1" rowspan="1" >
<p align="center">
&nbsp;</p align="center">
</td>
<td width="271.999932" colspan="1" rowspan="1" >
<p align="center">
<u><font size="2">92128</font></u></p align="center">
</td>
</tr>
<tr valign="top">
<td width="342.666581" colspan="1" rowspan="1" >
<p align="center">
<font size="2">(Address of principal executive offices)</font></p align="center">
</td>
<td width="41.333323" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="271.999932" colspan="1" rowspan="1" >
<p align="center">
<font size="2">(Zip Code)</font></p align="center">
</td>
</tr>
</table></div>
<p align="center">
<u> <font size="2">(858) 679-2114</font></u><font size="2"><br>(Registrant's telephone number, including area
code)</font><p>
<b><font size="2">Securities registered pursuant to Section 12(b) of the Act:
</font>
</b><font size="2">NONE<br></font><b><font size="2">Securities registered pursuant to Section 12(g) of the Act:
</font>
</b><p align="center">
<u><font size="2">Common Stock, $.00001 par value</font></u><font size="2"><br>(Title of Class)</font><p>
<font size="2">Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding in 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes [X] No [&nbsp;&nbsp;]</font></p>
<p><font size="2">Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [&nbsp;&nbsp;] </font></p>
<p><font size="2">Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Act) Yes [&nbsp;&nbsp;] NO [X]</font></p>
<p><font size="2">State the aggregate market value of the voting and non-voting common equity held
by non-affiliates computed by reference to the price at which the common equity
was last sold, or the average bid and asked prices of such common equity, as of
the last business day of the registrant's most recently completed second fiscal
quarter.</font></p>
<p><font size="2">The aggregate market value of the voting and non-voting common equity held by
non-affiliates of the registrant (based on the closing price as reported on the
NASDAQ SmallCap Market on March 31, 2003) was $41,118,484.*</font></p>
<p><font size="2">The number of shares of Common Stock, $.00001 par value, outstanding on January
15, 2004, was 19,450,157.</font></p>
<p><font size="2">*  Excludes the Common Stock held by executive officers, directors and
stockholders whose ownership exceeds 5% of the Common Stock outstanding at March
31, 2003. This calculation does not reflect a determination that such persons
are affiliates for any other purpose.</font></p align="center">
<hr color="#000000" size="4">
<p>
&nbsp;</p align="center">
<div align="center" color="#000080" style="position:relative; left: -5"><hr size="3" color="#999999" STYLE="page-break-after: always">
  <font size="2">&nbsp; </font> </div><p>
<p align="center">
<b><font size="2">EXPLANATORY NOTES</font></b></p>
<p><font size="2">This Amendment No. 1 on Form 10-K/A is being filed by American Technology
Corporation ("we" or "us") as an amendment to our Annual Report on Form 10-K for
the fiscal year ended September 30, 2003 to amend and restate Part III, Items
10-14, and Part IV, Item 15, in their entirety.</font></p>
<p align="center">
<b><font size="4">PART III</font></b><p>
<b>Item 10. Directors and Executive Officers of the Registrant </b> <p>
<font size="2">The directors and executive officers, their ages, positions held and duration as
director, are as follows:</font></p>
<div style="position:relative; left: 13"><table border=0 cellpadding=0 cellspacing =0 >
<tr valign="top">
<td width="179.999955" valign="bottom" >
<p>
<p>
<u><b><font size="2">Name</font></b></u></p>
</td>
<td width="47.999988" valign="bottom" align="center" >
<p>
<p>
<u><b><font size="2">Age</font></b></u></p>
</td>
<td width="239.999940" valign="bottom" >
<p align="center">
<b><font size="2">Position<br>
</font><u><font size="2">and Offices</font></u></b></td>
<td width="89.333311" valign="bottom" >
<p align="center">
<b><font size="2">Director<br>
<u>Since</u></font></b></td>
</tr>
<tr valign="top">
<td width="179.999955" bgcolor="#FFF3CE" >
<p>
<font size="2">Elwood G. Norris</font></p>
</td>
<td width="47.999988" align="center" bgcolor="#FFF3CE" >
<p align="center">
<font size="2">65</font></p align="center">
</td>
<td width="239.999940" bgcolor="#FFF3CE" >
<p>
<font size="2">Chairman and Director</font></p>
</td>
<td width="89.333311" bgcolor="#FFF3CE" >
<p align="center">


<font size="2">1980</font></p align="center">
</td>
</tr>
<tr valign="top">
<td width="179.999955" colspan="1" rowspan="1" >
<p>
<font size="2">Richard M. Wagner</font></p>
</td>
<td width="47.999988" align="center" >
<p align="center">
<font size="2">58</font></p align="center">
</td>
<td width="239.999940" colspan="1" rowspan="1" >
<p>
<font size="2">Director</font></p>
</td>
<td width="89.333311" colspan="1" rowspan="1" >
<p align="center">
<font size="2">1986</font></p align="center">
</td>
</tr>
<tr valign="top">
<td width="179.999955" bgcolor="#FFF3CE" >
<p>
<font size="2">David J. Carter</font></p>
</td>
<td width="47.999988" align="center" bgcolor="#FFF3CE" >
<p align="center">
<font size="2">55</font></p align="center">
</td>
<td width="239.999940" bgcolor="#FFF3CE" >
<p>
<font size="2">Director</font></p>
</td>
<td width="89.333311" bgcolor="#FFF3CE" >
<p align="center">
<font size="2">1998</font></p align="center">
</td>
</tr>
<tr valign="top">
<td width="179.999955" colspan="1" rowspan="1" >
<p>
<font size="2">Daniel Hunter</font></p>
</td>
<td width="47.999988" align="center" >
<p align="center">
<font size="2">53</font></p align="center">
</td>
<td width="239.999940" colspan="1" rowspan="1" >
<p>
<font size="2">Director</font></p>
</td>
<td width="89.333311" colspan="1" rowspan="1" >
<p align="center">
<font size="2">2001</font></p align="center">
</td>
</tr>
<tr valign="top">
<td width="179.999955" bgcolor="#FFF3CE" >
<p>
<font size="2">Kalani Jones</font></p>
</td>
<td width="47.999988" align="center" bgcolor="#FFF3CE" >
<p align="center">
<font size="2">40</font></p align="center">
</td>
<td width="239.999940" bgcolor="#FFF3CE" >
<p>
<font size="2">Chief Operating Officer</font></p>
</td>
<td width="89.333311" bgcolor="#FFF3CE" >
<p align="center">
<font size="2">n/a</font></p align="center">
</td>
</tr>
<tr valign="top">
<td width="179.999955" colspan="1" rowspan="1" >
<p>
<font size="2">Carl Gruenler</font></p>
</td>
<td width="47.999988" align="center" >
<p align="center">
<font size="2">50</font></p align="center">
</td>
<td width="239.999940" colspan="1" rowspan="1" >
<p>
<font size="2">Vice President, Military Operations and Interim Chief Financial Officer</font></p>
</td>
<td width="89.333311" colspan="1" rowspan="1" >
<p align="center">
<font size="2">n/a</font></p align="center">
</td>
</tr>
<tr valign="top">
<td width="179.999955" bgcolor="#FFF3CE" >
<p>
<font size="2">Bruce Ehlers</font></p>
</td>
<td width="47.999988" align="center" bgcolor="#FFF3CE" >
<p align="center">
<font size="2">45</font></p align="center">
</td>
<td width="239.999940" bgcolor="#FFF3CE" >
<p>
<font size="2">Vice President Engineering</font></p>
</td>
<td width="89.333311" bgcolor="#FFF3CE" >
<p align="center">
<font size="2">n/a</font></p align="center">
</td>
</tr>
<tr valign="top">
<td width="179.999955" colspan="1" rowspan="1" >
<p>
<font size="2">Joseph A. Zerucha</font></p>
</td>
<td width="47.999988" align="center" >
<p align="center">
<font size="2">40</font></p align="center">
</td>
<td width="239.999940" colspan="1" rowspan="1" >
<p>
<font size="2">Vice President Sales and Marketing</font></p>
</td>
<td width="89.333311" colspan="1" rowspan="1" >
<p align="center">
<font size="2">n/a</font></p align="center">
</td>
</tr>
</table></div>
<p>
<font size="2">The terms of all directors will expire at the next annual meeting of
stockholders, or when their successors are elected and qualified. Directors are
elected each year, and all directors serve one-year terms. Officers serve at the
pleasure of the Board of Directors. There are no arrangements or understandings
between us and any other person pursuant to which he was or is to be selected as a director, executive officer or
nominee.  We have however entered into employment agreements with each of our
executive officers, which are described in Part III, Item 11 below under the
heading "Employment Agreements."</font></p>
<p><b><font size="2">Biographical Information</font></b><p>
<font size="2">Biographical information on Mr. Norris, Mr. Jones, Mr. Gruenler, Mr. Ehlers and
Mr. Zerucha is contained in Part I, Item 1 above under the heading "Executive
Officers."</font></p>
<p><b><font size="2">Richard M. Wagner</font></b><font size="2"> has served as a director since 1986 and served as
Secretary from February 1994 to March 1999. Since 1986, Mr. Wagner has been
President and CEO of Eidon Inc., a San Diego based company involved
in the manufacturing and distribution of liquid mineral supplements. Eidon Inc.
is the parent company of The Mortgage Company, a residential and commercial
mortgage brokerage firm. Mr. Wagner obtained a B.S. in Business in 1968 and an
M.S. in Finance in 1976 from the San Diego State University.</font></p>
<p><b><font size="2">David J. Carter</font></b><font size="2"> was appointed as a director in September 1998. From
January 1999 to January 2000, he was Vice President of Copyright Clearance
Center, a copyright licensing service. From 1983 until April 1998, he was
employed by AT&amp;T, with his last position as General Manager and Product
Development Vice President. He previously served in other positions at AT&amp;T
including Business Development Vice President and Consumer Products Marketing
Vice President. Prior to his employment with AT&amp;T, he served as a Marketing
Research Consultant and Managing Consultant--Marketing and Business Strategy for
General Electric Company. His career has included technical positions at Temple
Barker &amp; Sloane, Inc., Decision Research Corp. and Johnson &amp; Johnson. He
obtained a B.A. in Mathematics in 1970 and a M.S. in Mathematical Statistics in
1973 from the University of Massachusetts.</font></p>
<p><b><font size="2">Daniel Hunter</font></b><font size="2"> was appointed as a director in May 2001. Mr. Hunter has
been a licensed certified public accountant for the past twenty-five years. He
obtained his accounting degree from the University of Utah in 1975. For the past
twenty years, Mr. Hunter has operated his own law offices specializing in
business and tax law. He obtained his Juris Doctor degree from the University of
Seattle in 1978.</font></p align="center">
<div align="center" color="#000080" style="position:relative; left: -5">
  <font size="2">2</font><hr size="3" color="#999999" STYLE="page-break-after: always">
  <font size="2">&nbsp; </font> </div><p>
<p><b><font size="2">Section 16(a) Beneficial Ownership Reporting Compliance</font></b></p>
<p><font size="2">Section 16(a) of the Securities Exchange Act of 1934 (the "Act") requires our
officers, directors and persons who own more than 10% of any class of our
securities registered under Section 12(g) of the Act to file reports of
ownership and changes in ownership with the SEC. Officers, directors and greater
than 10% stockholders are required by SEC regulation to furnish us with copies
of all Section 16(a) forms they file.</font></p>
<p><font size="2">Based solely on a review of copies of such reports furnished to us and written
representations that no other reports were required during the fiscal year ended
September 30, 2003, we believe that all persons subject to the reporting
requirements pursuant to Section 16(a) filed the required reports on a timely
basis with the SEC, except that Renee Warden, Elwood G. Norris, James Irish and
James Croft each filed late one Form 4 report each disclosing one
transaction.</font></p>
<p><b><font size="2">Audit Committee Financial Expert</font></b><p>
<font size="2">The board of directors has determined that Daniel Hunter is an "audit committee
financial expert" and "independent" as defined under applicable SEC and NASDAQ
rules. The board's affirmative determination was based, among other things, upon
his over 25 years as a certified public accountant.</font></p>
<p><b><font size="2">Code of Business Conduct and Ethics</font></b></p>
<p><font size="2">We have adopted a "Code of Business Conduct and Ethics", a code of ethics that
applies to all employees, including our executive officers. A copy of the Code
of Business Conduct and Ethics is posted on our Internet site at www.atcsd.com.
In the event we make any amendments to, or grant any waivers of, a provision of
the Code of Business Conduct and Ethics that applies to the principal executive
officer, principal financial officer, or principal accounting officer that
requires disclosure under applicable SEC rules, we intend to disclose such
amendment or waiver and the reasons therefor on a Form 8-K or on our next
periodic report.</font></p>
<p>
<b>Item 11. Executive Compensation</b></p>
<p><b><font size="2">Compensation of Directors</font></b></p>
<p><font size="2">No direct or indirect remuneration was paid or became payable by us to the
directors in their capacity as directors during fiscal 2003. We do not
anticipate paying during the fiscal year ending September 30, 2004 any direct or
indirect remuneration to any director in his capacity as director other than in
the form of reimbursement of expenses of attending directors' or committee
meetings. However, directors have received in the past, and may receive in the
future, stock option grants.</font></p>
<p><b><font size="2">Summary Compensation Table</font></b></p>
<p><font size="2">There is shown below information concerning the compensation of each person who
served as our Chief Executive Officer ("CEO") during the fiscal year ended
September 30, 2003 and two additional individuals that served as executive
officers during the fiscal year ended September 30, 2003 but were no longer
serving at the end of the fiscal year (each a "named executive officer"). None
of our other executive officers serving at the end of the fiscal year ended
September 30, 2003 earned more than $100,000 in salary and bonus in such
year.</font></p align="center">
<div align="center" color="#000080" style="position:relative; left: -5">
  <font size="2">3</font><hr size="3" color="#999999" STYLE="page-break-after: always">
  <font size="2">&nbsp; </font> </div><p>
<p align="center">
<b>Summary Compensation Table</b><p align="center">
<b><u><font size="2">Annual Compensation</font></u></b></p align="center">
<div style="position:relative; left: -0">
  <table border=0 cellpadding=0 cellspacing =0 width="658" >
<tr valign="top">
<td width="171" bgcolor=#FFF3CE valign="bottom" align="center">
<p align="center">
<p align="center">
<b><font size="2">Name and</font></b><font size="2"><br></font><u><b>
<font size="2">Principal Position</font></b></u></p align="center">
</td>
<td width="54" bgcolor=#FFF3CE valign="bottom" align="center">
<p>
<p align="center">
<b><font size="2">Fiscal</font></b><font size="2"><br></font><b><u>
<font size="2">Year</font></u></b></p align="center">
</td>
<td width="80" bgcolor=#FFF3CE valign="bottom" align="center">
<p>
<p>
<u>
<b><font size="2">Salary</font></b></u></p>
</td>
<td width="69" bgcolor=#FFF3CE valign="bottom" align="center">
<p>
<p>
<u>
<b><font size="2">Bonus</font></b></u></p>
</td>
<td width="94" bgcolor=#FFF3CE valign="bottom" align="center">
<p>
<p align="center">
<b><font size="2">Other Annual</font></b><font size="2"><br></font><b><u>
<font size="2">Compensation</font></u></b></p align="center">
</td>
<td width="93" bgcolor=#FFF3CE valign="bottom" align="center">
<p align="center">
<b><font size="2">Long
Term</font></b><font size="2"><br><b>Compensation</b><br><b>Securities</b><br><b>Underlying</b><br>
</font><b><u><font size="2">Options
(#)</font></u></b></p align="center">
</td>
<td width="97" bgcolor=#FFF3CE valign="bottom" align="center">
<p>
<p align="center">
<b><font size="2">All Other</font></b><font size="2"><br></font><b><u>
<font size="2">Compensation</font></u></b></p align="center">
</td>
</tr>
<tr valign="top">
<td width="171" colspan="1" rowspan="1" >
<p>
<b><font size="2">Elwood G. Norris</font></b><font size="2">,</font></p>
</td>
<td width="54" colspan="1" rowspan="1" >
<p align="center">
<font size="2">2003</font></p align="center">
</td>
<td width="80" colspan="1" rowspan="1" >
<p align="center">
<font size="2">$132,308</font></p align="center">
</td>
<td width="69" colspan="1" rowspan="1" >
<p align="center">
<font size="2">-</font></p align="center">
</td>
<td width="94" colspan="1" rowspan="1" >
<p align="center">
<font size="2">-</font></p align="center">
</td>
<td width="93" colspan="1" rowspan="1" >
<p align="center">
<font size="2">100,000</font></p align="center">
</td>
<td width="97" colspan="1" rowspan="1" >
<p align="center">
<font size="2">$2,054&nbsp;(1)</font></p align="center">
</td>
</tr>
<tr valign="top">
<td width="171" colspan="1" rowspan="1" bgcolor=#FFF3CE>
<p>
<font size="2">Chairman</font></p>
</td>
<td width="54" colspan="1" rowspan="1" bgcolor=#FFF3CE>
<p align="center">
<font size="2">2002</font></p align="center">
</td>
<td width="80" colspan="1" rowspan="1" bgcolor=#FFF3CE>
<p align="center">
<font size="2">$124,615</font></p align="center">
</td>
<td width="69" colspan="1" rowspan="1" bgcolor=#FFF3CE>
<p align="center">
<font size="2">-</font></p align="center">
</td>
<td width="94" colspan="1" rowspan="1" bgcolor=#FFF3CE>
<p align="center">
<font size="2">-</font></p align="center">
</td>
<td width="93" colspan="1" rowspan="1" bgcolor=#FFF3CE>
<p align="center">
<font size="2">-</font></p align="center">
</td>
<td width="97" colspan="1" rowspan="1" bgcolor=#FFF3CE>
<p align="center">
<font size="2">$1,800 (1)</font></p align="center">
</td>
</tr>
<tr valign="top">
<td width="171" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="54" colspan="1" rowspan="1" >
<p align="center">
<font size="2">2001</font></p align="center">
</td>
<td width="80" colspan="1" rowspan="1" >
<p align="center">
<font size="2">$124,615</font></p align="center">
</td>
<td width="69" colspan="1" rowspan="1" >
<p align="center">
<font size="2">-</font></p align="center">
</td>
<td width="94" colspan="1" rowspan="1" >
<p align="center">
<font size="2">-</font></p align="center">
</td>
<td width="93" colspan="1" rowspan="1" >
<p align="center">
<font size="2">75,000</font></p align="center">
</td>
<td width="97" colspan="1" rowspan="1" >
<p align="center">
<font size="2">$1,800 (1)</font></p align="center">
</td>
</tr>
<tr valign="top">
<td width="171" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="54" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="80" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="69" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="94" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="93" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="97" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
</tr>
<tr valign="top">
<td width="171" colspan="1" rowspan="1" >
<p>
<b><font size="2">James M. Irish</font></b><font size="2">,</font></p>
</td>
<td width="54" colspan="1" rowspan="1" >
<p align="center">
<font size="2">2003</font></p align="center">
</td>
<td width="80" colspan="1" rowspan="1" >
<p align="center">
<font size="2">$94,548</font></p align="center">
</td>
<td width="69" colspan="1" rowspan="1" >
<p align="center">
<font size="2">-</font></p align="center">
</td>
<td width="94" colspan="1" rowspan="1" >
<p align="center">
<font size="2">-</font></p align="center">
</td>
<td width="93" colspan="1" rowspan="1" >
<p align="center">
<font size="2">200,000</font></p align="center">
</td>
<td width="97" colspan="1" rowspan="1" >
<p align="center">
<font size="2">$293,148 (2)</font></p align="center">
</td>
</tr>
<tr valign="top">
<td width="171" colspan="1" rowspan="1" bgcolor=#FFF3CE>
<p>
<font size="2">Former Chief Executive Officer</font></p>
</td>
<td width="54" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="80" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="69" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="94" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="93" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="97" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
</tr>
<tr valign="top">
<td width="171" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="54" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="80" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="69" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="94" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="93" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="97" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="171" colspan="1" rowspan="1" bgcolor=#FFF3CE>
<p>
<b><font size="2">Terry Conrad</font></b><font size="2">,</font></p>
</td>
<td width="54" colspan="1" rowspan="1" bgcolor=#FFF3CE>
<p align="center">
<font size="2">2003</font></p align="center">
</td>
<td width="80" colspan="1" rowspan="1" bgcolor=#FFF3CE>
<p align="center">
<font size="2">$138,269</font></p align="center">
</td>
<td width="69" colspan="1" rowspan="1" bgcolor=#FFF3CE>
<p align="center">
<font size="2">-</font></p align="center">
</td>
<td width="94" colspan="1" rowspan="1" bgcolor=#FFF3CE>
<p align="center">
<font size="2">-</font></p align="center">
</td>
<td width="93" colspan="1" rowspan="1" bgcolor=#FFF3CE>
<p align="center">
<font size="2">-</font></p align="center">
</td>
<td width="97" colspan="1" rowspan="1" bgcolor=#FFF3CE>
<p align="center">
<font size="2">$1,301 (1)</font></p align="center">
</td>
</tr>
<tr valign="top">
<td width="171" colspan="1" rowspan="1" >
<p>
<font size="2">Former President (3)</font></p>
</td>
<td width="54" colspan="1" rowspan="1" >
<p align="center">
<font size="2">2002</font></p align="center">
</td>
<td width="80" colspan="1" rowspan="1" >
<p align="center">
<font size="2">$129,007</font></p align="center">
</td>
<td width="69" colspan="1" rowspan="1" >
<p align="center">
<font size="2">$19,000</font></p align="center">
</td>
<td width="94" colspan="1" rowspan="1" >
<p align="center">
<font size="2">-</font></p align="center">
</td>
<td width="93" colspan="1" rowspan="1" >
<p align="center">
<font size="2">-</font></p align="center">
</td>
<td width="97" colspan="1" rowspan="1" >
<p align="center">
<font size="2">-</font></p align="center">
</td>
</tr>
<tr valign="top">
<td width="171" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="54" colspan="1" rowspan="1" bgcolor=#FFF3CE>
<p align="center">
<font size="2">2001</font></p align="center">
</td>
<td width="80" colspan="1" rowspan="1" bgcolor=#FFF3CE>
<p align="center">
<font size="2">$129,808</font></p align="center">
</td>
<td width="69" colspan="1" rowspan="1" bgcolor=#FFF3CE>
<p align="center">
<font size="2">$40,000(4)</font></p align="center">
</td>
<td width="94" colspan="1" rowspan="1" bgcolor=#FFF3CE>
<p align="center">
<font size="2">-</font></p align="center">
</td>
<td width="93" colspan="1" rowspan="1" bgcolor=#FFF3CE>
<p align="center">
<font size="2">-</font></p align="center">
</td>
<td width="97" colspan="1" rowspan="1" bgcolor=#FFF3CE>
<p align="center">
<font size="2">-</font></p align="center">
</td>
</tr>
<tr valign="top">
<td width="171" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="54" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="80" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="69" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="94" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="93" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="97" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="171" colspan="1" rowspan="1" bgcolor=#FFF3CE>
<p>
<b><font size="2">James Croft III</font></b><font size="2">,</font></p>
</td>
<td width="54" colspan="1" rowspan="1" bgcolor=#FFF3CE>
<p align="center">
<font size="2">2003</font></p align="center">
</td>
<td width="80" colspan="1" rowspan="1" bgcolor=#FFF3CE>
<p align="center">
<font size="2">$122,000</font></p align="center">
</td>
<td width="69" colspan="1" rowspan="1" bgcolor=#FFF3CE>
<p align="center">
<font size="2">-</font></p align="center">
</td>
<td width="94" colspan="1" rowspan="1" bgcolor=#FFF3CE>
<p align="center">
<font size="2">$22,638 (6)</font></p align="center">
</td>
<td width="93" colspan="1" rowspan="1" bgcolor=#FFF3CE>
<p align="center">
<font size="2">91,000</font></p align="center">
</td>
<td width="97" colspan="1" rowspan="1" bgcolor=#FFF3CE>
<p align="center">
<font size="2">$1,892 (1)</font></p align="center">
</td>
</tr>
<tr valign="top">
<td width="171" colspan="1" rowspan="1" >
<p>
<font size="2">Former Senior VP of Research </font></p>
</td>
<td width="54" colspan="1" rowspan="1" >
<p align="center">
<font size="2">2002</font></p align="center">
</td>
<td width="80" colspan="1" rowspan="1" >
<p align="center">
<font size="2">$122,000</font></p align="center">
</td>
<td width="69" colspan="1" rowspan="1" >
<p align="center">
<font size="2">-</font></p align="center">
</td>
<td width="94" colspan="1" rowspan="1" >
<p align="center">
<font size="2">$19,200 (6)</font></p align="center">
</td>
<td width="93" colspan="1" rowspan="1" >
<p align="center">
<font size="2">20,000</font></p align="center">
</td>
<td width="97" colspan="1" rowspan="1" >
<p align="center">
<font size="2">$1,821 (1)</font></p align="center">
</td>
</tr>
<tr valign="top">
<td width="171" colspan="1" rowspan="1" bgcolor=#FFF3CE>
<font size="2">and Development (5)</font></td>
<td width="54" colspan="1" rowspan="1" bgcolor=#FFF3CE>
<p align="center">
<font size="2">2001</font></p align="center">
</td>
<td width="80" colspan="1" rowspan="1" bgcolor=#FFF3CE>
<p align="center">
<font size="2">$111,120</font></p align="center">
</td>
<td width="69" colspan="1" rowspan="1" bgcolor=#FFF3CE>
<p align="center">
<font size="2">-</font></p align="center">
</td>
<td width="94" colspan="1" rowspan="1" bgcolor=#FFF3CE>
<p align="center">
<font size="2">$10,338 (6)</font></p align="center">
</td>
<td width="93" colspan="1" rowspan="1" bgcolor=#FFF3CE>
<p align="center">
<font size="2">55,000</font></p align="center">
</td>
<td width="97" colspan="1" rowspan="1" bgcolor=#FFF3CE>
<p align="center">
<font size="2">$1,667 (1)</font></p align="center">
</td>
</tr>
</table></div>
<p>
</p>
<div style="position:relative; left: 0"><table border=0 cellpadding=0 cellspacing =0 >
<tr valign="top">
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="35.999991" colspan="1" rowspan="1" >
<p>
<font size="2">(1)</font></p>
</td>
<td width="595.999851" colspan="1" rowspan="1" >
<p>
<font size="2">Represents matching 401(k) contributions.</font></p>
</td>
</tr>
<tr valign="top">
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="35.999991" colspan="1" rowspan="1" >
<p>
<font size="2">(2)</font></p>
</td>
<td width="595.999851" colspan="1" rowspan="1" >
<p>
<font size="2">Represents separation compensation paid on termination of employment of $258,423
and moving and temporary living expenses of $34,725.</font></p>
</td>
</tr>
<tr valign="top">
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="35.999991" colspan="1" rowspan="1" >
<p>
<font size="2">(3)</font></p>
</td>
<td width="595.999851" colspan="1" rowspan="1" >
<p>
<font size="2">Mr. Conrad served as President from October 2000 until his resignation as an
executive officer in June 2003. Amounts include compensation for each full year.
Mr. Conrad's employment with us ceased in January 2004.</font></p>
</td>
</tr>
<tr valign="top">
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="35.999991" colspan="1" rowspan="1" >
<p>
<font size="2">(4)</font></p>
</td>
<td width="595.999851" colspan="1" rowspan="1" >
<p>
<font size="2">Applied to cancel note.</font></p>
</td>
</tr>
<tr valign="top">
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="35.999991" colspan="1" rowspan="1" >
<p>
<font size="2">(5)</font></p>
</td>
<td width="595.999851" colspan="1" rowspan="1" >
<p>
<font size="2">Mr. Croft was appointed as an executive officer (Senior VP of Research and
Development) in March 2003 and served as an executive officer until September
2003 when he assumed the duties of Chief Technology Officer, which is deemed a
non-executive position. Amounts include compensation for the entire fiscal
year.</font></p>
</td>
</tr>
<tr valign="top">
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="35.999991" colspan="1" rowspan="1" >
<p>
<font size="2">(6)</font></p>
</td>
<td width="595.999851" colspan="1" rowspan="1" >
<p>
<font size="2">Represents royalties paid.</font></p>
</td>
</tr>
</table></div>
<p><font size="2">No named executive officer received any form of non-cash compensation from us in
the fiscal years ended September 30, 2003, 2002, or 2001, or currently receives
any such compensation, in excess of 10% of the total amount of annual salary and
bonus reported for the named executive officer above.</font></p>
<p><b>Option Grants</b></p>
<p><font size="2">Shown below is further information on grants of stock options in fiscal 2003 to
the named executive officers reflected in the Summary Compensation Table shown
above for fiscal 2003.</font></p align="center">
<div align="center" color="#000080" style="position:relative; left: -5">
  <font size="2">4</font><hr size="3" color="#999999" STYLE="page-break-after: always">
  <font size="2">&nbsp; </font> </div><p>
<p align="center">
<b>Option Grants for Fiscal Year Ended September 30, 2003</b></p>
<div style="position:relative; left: -0"><table border=0 cellpadding=0 cellspacing =0 >
<tr valign="top">
<td width="162.666626" bgcolor=#FFF3CE valign="bottom">
&nbsp;</td>
<td width="91.999977" bgcolor=#FFF3CE valign="bottom">
&nbsp;</td>
<td width="93.333310" bgcolor=#FFF3CE valign="bottom">
&nbsp;</td>
<td width="70.666649" bgcolor=#FFF3CE valign="bottom">
&nbsp;</td>
<td width="53.333320" bgcolor=#FFF3CE valign="bottom">
&nbsp;</td>
<td width="17.333329" bgcolor=#FFF3CE valign="bottom">
&nbsp;</td>
<td width="167.999958" colspan="3" bgcolor=#FFF3CE valign="bottom">
<p align="center">
<b><font size="2">Potential Realizable</font></b><font size="2"><br><b>Value at Assumed</b><br><b>Annual Rates
of</b><br><b>Stock Price</b><br><b>Appreciation for</b><br></font><b><u>
<font size="2">Option Term
(3)</font></u></b></p align="center">
</td>
</tr>
<tr valign="top">
<td width="162.666626" valign="bottom" >
<p>
<p>
<b><u><font size="2">Name</font></u></b></p>
</td>
<td width="91.999977" valign="bottom" >
<p>
<p align="center">
<b><font size="2">Number of</font></b><font size="2"><br><b>Options</b><br>
</font><b><u><font size="2">Granted
(1)</font></u></b></p align="center">
</td>
<td width="93.333310" valign="bottom" >
<p align="center">
<b><font size="2">Percent of</font></b><font size="2"><br><b>Total Options</b><br><b>Granted to</b><br><b>Employees
in</b><br></font><b><u><font size="2">Fiscal Year</font></u></b></p align="center">
</td>
<td width="70.666649" valign="bottom" >
<p>
<p align="center">
<b><font size="2">Exercise</font></b><font size="2"><br></font><b><u>
<font size="2">Price</font></u></b></p align="center">
</td>
<td width="71.999982" colspan="3" valign="bottom" >
<p>
<p align="center">
<b><font size="2">Expiration</font></b><font size="2"><br></font><b><u>
<font size="2">Date</font></u></b></p align="center">
</td>
<td width="77.333314" valign="bottom" >
<p>
<p align="center">
<b><u><font size="2">5%</font></u></b></p align="center">
</td>
<td width="89.333311" valign="bottom" >
<p>
<p align="center">
<b><u><font size="2">10%</font></u></b></p align="center">
</td>
</tr>
<tr valign="top">
<td width="162.666626" colspan="1" rowspan="1" bgcolor=#FFF3CE>
<p>
<b><font size="2">Elwood G. Norris</font></b></p>
</td>
<td width="91.999977" colspan="1" rowspan="1" bgcolor=#FFF3CE>
<p align="center">
<font size="2">55,096</font></p align="center">
</td>
<td width="93.333310" colspan="1" rowspan="1" bgcolor=#FFF3CE>
<p align="center">
<font size="2">5.6%</font></p align="center">
</td>
<td width="70.666649" colspan="1" rowspan="1" bgcolor=#FFF3CE>
<p align="center">
<font size="2">$3.63</font></p align="center">
</td>
<td width="71.999982" colspan="3" rowspan="1" bgcolor=#FFF3CE>
<p align="center">
<font size="2">5/9/08</font></p align="center">
</td>
<td width="77.333314" colspan="1" rowspan="1" bgcolor=#FFF3CE>
<p align="center">
<font size="2">$32,051</font></p align="center">
</td>
<td width="89.333311" colspan="1" rowspan="1" bgcolor=#FFF3CE>
<p align="center">
<font size="2">$  92,819</font></p align="center">
</td>
</tr>
<tr valign="top">
<td width="162.666626" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="91.999977" colspan="1" rowspan="1" >
<p align="center">
<font size="2">44,904</font></p align="center">
</td>
<td width="93.333310" colspan="1" rowspan="1" >
<p align="center">
<font size="2">4.6%</font></p align="center">
</td>
<td width="70.666649" colspan="1" rowspan="1" >
<p align="center">
<font size="2">$3.30</font></p align="center">
</td>
<td width="71.999982" colspan="3" rowspan="1" >
<p align="center">
<font size="2">5/9/08</font></p align="center">
</td>
<td width="77.333314" colspan="1" rowspan="1" >
<p align="center">
<font size="2">$40,940</font></p align="center">
</td>
<td width="89.333311" colspan="1" rowspan="1" >
<p align="center">
<font size="2">$  90,467</font></p align="center">
</td>
</tr>
<tr valign="top">
<td width="162.666626" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="91.999977" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="93.333310" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="70.666649" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="71.999982" colspan="3" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="77.333314" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="89.333311" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
</tr>
<tr valign="top">
<td width="162.666626" colspan="1" rowspan="1" >
<p>
<b><font size="2">James M. Irish</font></b></p>
</td>
<td width="91.999977" colspan="1" rowspan="1" >
<p align="center">
<font size="2">100,000 (2)</font></p align="center">
</td>
<td width="93.333310" colspan="1" rowspan="1" >
<p align="center">
<font size="2">10.2%</font></p align="center">
</td>
<td width="70.666649" colspan="1" rowspan="1" >
<p align="center">
<font size="2">$3.30</font></p align="center">
</td>
<td width="71.999982" colspan="3" rowspan="1" >
<p align="center">
<font size="2">5/9/08</font></p align="center">
</td>
<td width="77.333314" colspan="1" rowspan="1" >
<p align="center">
<font size="2">$91,173</font></p align="center">
</td>
<td width="89.333311" colspan="1" rowspan="1" >
<p align="center">
<font size="2">$201,468</font></p align="center">
</td>
</tr>
<tr valign="top">
<td width="162.666626" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="91.999977" colspan="1" rowspan="1" bgcolor=#FFF3CE>
<p align="center">
<font size="2">100,000 (2)</font></p align="center">
</td>
<td width="93.333310" colspan="1" rowspan="1" bgcolor=#FFF3CE>
<p align="center">
<font size="2">10.2%</font></p align="center">
</td>
<td width="70.666649" colspan="1" rowspan="1" bgcolor=#FFF3CE>
<p align="center">
<font size="2">$3.43</font></p align="center">
</td>
<td width="71.999982" colspan="3" rowspan="1" bgcolor=#FFF3CE>
<p align="center">
<font size="2">2/10/08</font></p align="center">
</td>
<td width="77.333314" colspan="1" rowspan="1" bgcolor=#FFF3CE>
<p align="center">
<font size="2">$94,765</font></p align="center">
</td>
<td width="89.333311" colspan="1" rowspan="1" bgcolor=#FFF3CE>
<p align="center">
<font size="2">$209,405</font></p align="center">
</td>
</tr>
<tr valign="top">
<td width="162.666626" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="91.999977" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="93.333310" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="70.666649" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="71.999982" colspan="3" rowspan="1" >
&nbsp;</td>
<td width="77.333314" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="89.333311" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="162.666626" colspan="1" rowspan="1" bgcolor=#FFF3CE>
<p>
<b><font size="2">James Croft III</font></b></p>
</td>
<td width="91.999977" colspan="1" rowspan="1" bgcolor=#FFF3CE>
<p align="center">
<font size="2">51,000</font></p align="center">
</td>
<td width="93.333310" colspan="1" rowspan="1" bgcolor=#FFF3CE>
<p align="center">
<font size="2">5.1%</font></p align="center">
</td>
<td width="70.666649" colspan="1" rowspan="1" bgcolor=#FFF3CE>
<p align="center">
<font size="2">$3.18</font></p align="center">
</td>
<td width="71.999982" colspan="3" rowspan="1" bgcolor=#FFF3CE>
<p align="center">
<font size="2">1/27/08</font></p align="center">
</td>
<td width="77.333314" colspan="1" rowspan="1" bgcolor=#FFF3CE>
<p align="center">
<font size="2">$44,807</font></p align="center">
</td>
<td width="89.333311" colspan="1" rowspan="1" bgcolor=#FFF3CE>
<p align="center">
<font size="2">$99,013</font></p align="center">
</td>
</tr>
<tr valign="top">
<td width="162.666626" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="91.999977" colspan="1" rowspan="1" >
<p align="center">
<font size="2">40,000</font></p align="center">
</td>
<td width="93.333310" colspan="1" rowspan="1" >
<p align="center">
<font size="2">4.0%</font></p align="center">
</td>
<td width="70.666649" colspan="1" rowspan="1" >
<p align="center">
<font size="2">$3.30</font></p align="center">
</td>
<td width="71.999982" colspan="3" rowspan="1" >
<p align="center">
<font size="2">5/9/08</font></p align="center">
</td>
<td width="77.333314" colspan="1" rowspan="1" >
<p align="center">
<font size="2">$36,469</font></p align="center">
</td>
<td width="89.333311" colspan="1" rowspan="1" >
<p align="center">
<font size="2">$80,587</font></p align="center">
</td>
</tr>
</table></div>
<p>
&nbsp;<table border="0" cellpadding="0" cellspacing="0" style="border-collapse: collapse" bordercolor="#111111" width="100%">
  <tr>
    <td width="7%" valign="top"><font size="2">(1)</font></td>
    <td width="93%"><font size="2">These options were granted under our 2002
    Stock Option Plan. These options have an exercise price that was equal to or
    greater than the fair market value on the date of grant. Such options vest
    according to terms of option agreement, with vesting being contingent upon
    continued service with our company.</font></td>
  </tr>
  <tr>
    <td width="7%" valign="top"><font size="2">(2)</font></td>
    <td width="93%"><font size="2">These options were cancelled in September
    2003 in connection with termination of Mr. Irish's employment.</font></td>
  </tr>
  <tr>
    <td width="7%" valign="top"><font size="2">(3)</font></td>
    <td width="93%"><font size="2">Potential gains are net of exercise price,
    but before taxes associated with exercise. These amounts represent certain
    assumed rates of appreciation only, in accordance with the SEC's rules.
    Actual gains, if any, on stock option exercises are dependent on the future
    performance of the common stock, overall market conditions and the option
    holder's continued employment through the vesting period. The amounts
    reflected in this table may not necessarily be achieved.</font></td>
  </tr>
</table>
<p align="center">
<b>Aggregated Option Exercises and Fiscal Year-End Values</b></p>
<div style="position:relative; left: 4"><table border=0 cellpadding=0 cellspacing =0 >
<tr valign="top">
<td width="85.333312" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="89.333311" bgcolor=#FFF3CE valign="bottom">
&nbsp;</td>
<td width="57.333319" bgcolor=#FFF3CE valign="bottom">
&nbsp;</td>
<td width="71.999982" bgcolor=#FFF3CE valign="bottom">
&nbsp;</td>
<td width="185.333287" bgcolor=#FFF3CE valign="bottom">
<p align="center">
<b><font size="2">Number of Unexercised</font></b><font size="2"><br><b>Options Held At</b><br>
</font><u><b><font size="2">September 30,
2003</font></b></u></p align="center">
</td>
<td width="185.333287" bgcolor=#FFF3CE valign="bottom">
<p align="center">
<b><font size="2">Value of Unexercised</font></b><font size="2"><br><b>In-The-Money Options At</b><br>
</font><b><u><font size="2">September
30, 2003 (1)</font></u></b></p align="center">
</td>
<td width="14.666663" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
</tr>
</table></div>
<div style="position:relative; left: 4"><table border=0 cellpadding=0 cellspacing =0 >
<tr valign="top">
<td width="143.999964" valign="bottom" >
<p align="center">
<p align="center">
<u>
<b><font size="2">Name</font></b></u></p align="center">
</td>
<td width="81.333313" valign="bottom" >
<p align="center">
<b><font size="2">Shares</font></b><font size="2"><br><b>Acquired</b><br></font><b><u>
<font size="2">on Exercise</font></u></b></p align="center">
</td>
<td width="79.999980" valign="bottom" >
<p align="center">
<p align="center">
<b><font size="2">Value</font></b><font size="2"><br></font><b><u>
<font size="2">Realized</font></u></b></p align="center">
</td>
<td width="89.333311" valign="bottom" >
<p align="center">
<p align="center">
<b><u><font size="2">Exercisable</font></u></b></p align="center">
</td>
<td width="95.999976" colspan="2" valign="bottom" >
<p align="center">
<p align="center">
<u>
<b><font size="2">Unexercisable</font></b></u></p align="center">
</td>
<td width="89.333311" valign="bottom" >
<p align="center">
<p align="center">
<u>
<b><font size="2">Exercisable</font></b></u></p align="center">
</td>
<td width="95.999976" valign="bottom" >
<p align="center">
<p align="center">
<u>
<b><font size="2">Unexercisable</font></b></u></p align="center">
</td>
</tr>
<tr valign="top">
<td width="143.999964" colspan="1" rowspan="1" bgcolor=#FFF3CE>
<p>
<b><font size="2">Elwood G. Norris</font></b></p>
</td>
<td width="81.333313" colspan="1" rowspan="1" bgcolor=#FFF3CE>
<p align="center">
<font size="2">-</font></p align="center">
</td>
<td width="79.999980" colspan="1" rowspan="1" bgcolor=#FFF3CE>
<p align="center">
<font size="2">-</font></p align="center">
</td>
<td width="95.999976" colspan="2" rowspan="1" bgcolor=#FFF3CE>
<p align="center">
<font size="2">121,000</font></p align="center">
</td>
<td width="89.333311" colspan="1" rowspan="1" bgcolor=#FFF3CE>
<p align="center">
<font size="2">75,000</font></p align="center">
</td>
<td width="89.333311" colspan="1" rowspan="1" bgcolor=#FFF3CE>
<p align="center">
<font size="2">$299,505</font></p align="center">
</td>
<td width="95.999976" colspan="1" rowspan="1" bgcolor=#FFF3CE>
<p align="center">
<font size="2">$192,614</font></p align="center">
</td>
</tr>
<tr valign="top">
<td width="143.999964" colspan="1" rowspan="1" >
<p>
<b><font size="2">James M. Irish</font></b></p>
</td>
<td width="81.333313" colspan="1" rowspan="1" >
<p align="center">
<font size="2">(2)</font></p align="center">
</td>
<td width="79.999980" colspan="1" rowspan="1" >
<p align="center">
<font size="2">(2)</font></p align="center">
</td>
<td width="95.999976" colspan="2" rowspan="1" >
<p align="center">
<font size="2">-</font></p align="center">
</td>
<td width="89.333311" colspan="1" rowspan="1" >
<p align="center">
<font size="2">-</font></p align="center">
</td>
<td width="89.333311" colspan="1" rowspan="1" >
<p align="center">
<font size="2">-</font></p align="center">
</td>
<td width="95.999976" colspan="1" rowspan="1" >
<p align="center">
<font size="2">-</font></p align="center">
</td>
</tr>
<tr valign="top">
<td width="143.999964" colspan="1" rowspan="1" bgcolor=#FFF3CE>
<p>
<b><font size="2">Terry Conrad</font></b></p>
</td>
<td width="81.333313" colspan="1" rowspan="1" bgcolor=#FFF3CE>
<p align="center">
<font size="2">50,000</font></p align="center">
</td>
<td width="79.999980" colspan="1" rowspan="1" bgcolor=#FFF3CE>
<p align="center">
<font size="2">$143,500</font></p align="center">
</td>
<td width="95.999976" colspan="2" rowspan="1" bgcolor=#FFF3CE>
<p align="center">
<font size="2">98,250</font></p align="center">
</td>
<td width="89.333311" colspan="1" rowspan="1" bgcolor=#FFF3CE>
<p align="center">
<font size="2">28,750</font></p align="center">
</td>
<td width="89.333311" colspan="1" rowspan="1" bgcolor=#FFF3CE>
<p align="center">
<font size="2">$209,788</font></p align="center">
</td>
<td width="95.999976" colspan="1" rowspan="1" bgcolor=#FFF3CE>
<p align="center">
<font size="2">$66,562</font></p align="center">
</td>
</tr>
<tr valign="top">
<td width="143.999964" colspan="1" rowspan="1" >
<p>
<b><font size="2">James Croft III</font></b></p>
</td>
<td width="81.333313" colspan="1" rowspan="1" >
<p align="center">
<font size="2">-</font></p align="center">
</td>
<td width="79.999980" colspan="1" rowspan="1" >
<p align="center">
<font size="2">-</font></p align="center">
</td>
<td width="95.999976" colspan="2" rowspan="1" >
<p align="center">
<font size="2">128,500</font></p align="center">
</td>
<td width="89.333311" colspan="1" rowspan="1" >
<p align="center">
<font size="2">37,500</font></p align="center">
</td>
<td width="89.333311" colspan="1" rowspan="1" >
<p align="center">
<font size="2">$335,995</font></p align="center">
</td>
<td width="95.999976" colspan="1" rowspan="1" >
<p align="center">
<font size="2">$94,125</font></p align="center">
</td>
</tr>
</table></div>
<p>
</p>
<div style="position:relative; left: 0"><table border=0 cellpadding=0 cellspacing =0 >
<tr valign="top">
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="35.999991" colspan="1" rowspan="1" >
<p>
<font size="2">(1)</font></p>
</td>
<td width="595.999851" colspan="1" rowspan="1" >
<p>
<font size="2">Based on the last sale price at the close of business on September 30, 2003 of
$6.05 per share.</font></p>
</td>
</tr>
<tr valign="top">
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="35.999991" colspan="1" rowspan="1" >
<p>
<font size="2">(2)</font></p>
</td>
<td width="595.999851" colspan="1" rowspan="1" >
<p>
<font size="2">As a part of Mr. Irish severance agreement his 200,000 options, of which 50,000
had vested, were cancelled in September 2003.  $202,750 of Mr. Irish's severance
compensation was allocated to compensation for termination of stock options.
See "Employment Arrangements" below.</font></p>
</td>
</tr>
</table></div>
<div align="center" color="#000080" style="position:relative; left: -5">
  <font size="2">5</font><hr size="3" color="#999999" STYLE="page-break-after: always">
  <font size="2">&nbsp; </font> </div><p>
<p><font size="2">We do not have any stock appreciation rights plans in effect and we have no
long-term incentive plans, as those terms are defined in SEC regulations. During
the fiscal year ended September 30, 2003, we did not adjust or amend the
exercise price of stock options awarded to the named executive officers. We have
no defined benefit or actuarial plans covering any named executive officer.</font></p>
<p><b>Employment Arrangements</b></p>
<p><b><font size="2">Mr. Elwood G. Norris </font> </b><font size="2">- Effective September 1, 1997, we entered into a
three year employment contract with Mr. Norris, for his services as Chief
Technology Officer. The three-year term expired on August 31, 2000, but the
agreement remains in effect until one party gives thirty days advance notice of
termination to the other. Mr. Norris now serves as Chairman under the term of
this agreement. The agreement, as amended by the Compensation Committee,
provides for a base salary to $16,667 per month. The agreement provides that Mr.
Norris will participate in bonus, benefit and other incentives at the discretion
of the Board of Directors. Mr. Norris has agreed not to disclose trade secrets
and has agreed to assign certain inventions to us during employment. We are also
obligated to pay Mr. Norris certain royalties. See Item 13 -- "Certain
Relationships and Related Transactions" below.</font></p>
<p><b><font size="2">Mr. James Irish</font></b><font size="2"> - Effective February 10, 2003, we entered into a 90-day
engagement letter with Mr. Irish to serve as Chief Executive Officer. Upon
completion of the 90-day term we expected to enter into a three-year employment
contract. The engagement letter provided for a base salary of $12,500 per month,
subject to review by the Board of Directors from time to time in its discretion.
The engagement letter also provided that Mr. Irish would participate in bonus,
benefit and other incentives at the discretion of the Board of Directors. Mr.
Irish agreed not to disclose trade secrets and agreed to assign certain
inventions to us during employment. No employment agreement was executed and Mr.
Irish resigned in September 2003. Under the terms of the separation agreement,
Mr. Irish received total severance payments of $258,423, which included $202,750
as the in-the-money value of vested stock options for 50,000 shares.  All of Mr.
Irish's stock options, representing a total of 200,000 shares, were cancelled.
The separation agreement also contained mutual releases of claims.</font></p>
<p><b><font size="2">Mr. Terry Conrad</font></b><font size="2"> - Effective October 15, 2002, we entered into an
employment contract with Mr. Conrad for a two-year term. Mr. Conrad resigned as
President in March 2003 and resigned as an officer of our company in June 2003
and voluntarily terminated the employment agreement, and worked on an at-will
basis until January 2004. The agreement, prior to its termination, provided for
a base salary of $10,917 per month, subject to review by the Board of Directors
from time to time in its discretion. The agreement provided that Mr. Conrad
would participate in bonus, benefit and other incentives at the discretion of
the Board of Directors. The agreement provided that if we terminated the
agreement during its term without cause, Mr. Conrad would be entitled to
severance payments equal to three months salary and any bonus on an as if
perfected basis. Mr. Conrad agreed not to disclose trade secrets and agreed to
assign certain inventions to us during his employment.</font></p>
<p><b><font size="2">Mr. James Croft III</font></b><font size="2"> - Effective as of June&nbsp;1, 1998, we entered into
a three-year employment contract with Mr. Croft to serve as Vice President of
Engineering. The three-year term expired September&nbsp;30, 2001, but the
agreement automatically renews for additional one year terms unless one party
gives notice to the other of non-renewal thirty days in advance of the annual
renewal date. Mr. Croft now serves as Chief Technology Officer under the terms
of this agreement. The agreement, as amended, provides for a base salary
of $10,167 per month, as may be adjusted by the Chief Executive Officer. The
agreement provides that Mr. Croft will participate in bonus, benefit and other
incentives at the discretion of the Board of Directors. If we terminate the
agreement without cause, Mr. Croft will be entitled to severance payments equal
to six months' salary and any bonus on an as if perfected basis. Mr. Croft has
agreed not to disclose trade secrets and has agreed to assign certain inventions
to us during employment. Under our employee intellectual property policy, we are
obligated to pay Mr. Croft royalties for certain of his inventions prior to his
employment with us which are licensed or assigned to us.  Mr. Croft currently
receives $1,600 per month as royalties for his pre-employment inventions related
to our PureBass technology.</font></p>
<p><b><font size="2">Compensation Committee Interlocks and Insider Participation</font></b></p>
<p><font size="2">Messrs. Wagner, Hunter and Carter served on the Compensation Committee during
fiscal 2003. Mr. Wagner served as our Secretary from February 1994 to March
1999. No executive officer of our company served as a member of a compensation
committee, or a board of directors performing equivalent functions, of any
entity that had one or more of its executive officers serving as a member of our
company's Compensation Committee.</font></p align="center">
<div align="center" color="#000080" style="position:relative; left: -5">
  <font size="2">6</font><hr size="3" color="#999999" STYLE="page-break-after: always">
  <font size="2">&nbsp; </font> </div><p>
<p>
<b>Item 12. Security Ownership of Certain Beneficial Owners and Management and
Related Stockholder Matters</b><p>
<font size="2">The following table sets forth certain information regarding the ownership of
our stock as of December 31, 2003 by:  (i)&nbsp;each director; (ii)&nbsp;each of
the named executive officers; (iii)&nbsp;all our executive officers and
directors as a group; and (iv)&nbsp;all those known by us to be beneficial
owners of more than five percent of any class of our voting stock. </font>
</p align="center">
  <table border="0" style="border-collapse: collapse" bordercolor="#111111" cellpadding="0" cellspacing="0" width="664">
<tr valign="top">
<td width="192" bgcolor=#FFF3CE valign="bottom" style="border-bottom-style: solid; border-bottom-width: 1">
<p align="center">
<b><font size="2">Title of Class</font></b></p align="center">
</td>
<td width="15" bgcolor=#FFF3CE valign="bottom">
&nbsp;</td>
<td width="199" bgcolor=#FFF3CE valign="bottom" style="border-bottom-style: solid; border-bottom-width: 1">
<p align="center">
<b><font size="2">Name and Address of</font></b><font size="2"><br></font><b>
<font size="2">Beneficial Owner</font></b></p align="center">
</td>
<td width="27" bgcolor=#FFF3CE valign="bottom">
&nbsp;</td>
<td width="137" colspan="2" bgcolor=#FFF3CE valign="bottom" style="border-bottom-style: solid; border-bottom-width: 1">
<p align="center">
<b><font size="2">Amount &amp; Nature
of</font></b><font size="2"><br></font><b><font size="2">Beneficial&nbsp;Ownership&nbsp;(1)</font></b></p align="center">
</td>
<td width="12" bgcolor=#FFF3CE valign="bottom">
&nbsp;</td>
<td width="82" bgcolor=#FFF3CE valign="bottom" style="border-bottom-style: solid; border-bottom-width: 1">
<p align="center">
<b><font size="2">Percent</font></b><font size="2"><br></font><b><font size="2">of&nbsp;Class&nbsp;(1)</font></b></p align="center">
</td>
</tr>
<tr valign="top">
<td width="192" rowspan="1" style="border-top-style: solid; border-top-width: 1" >
<p>
<font size="2">Common Stock</font></p>
</td>
<td width="15" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="199" colspan="1" rowspan="1" style="border-top-style: solid; border-top-width: 1" >
<p>
<font size="2">Elwood G. Norris<br>13114 Evening Creek Drive South<br>San Diego, California
92128</font></p>
</td>
<td width="27" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="137" colspan="2" rowspan="1" style="border-top-style: solid; border-top-width: 1" >
<p align="center">
<font size="2">3,917,736 (2)</font></p align="center">
</td>
<td width="12" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="82" colspan="1" rowspan="1" style="border-top-style: solid; border-top-width: 1" >
<p align="center">
<font size="2">19.9%</font></p align="center">
</td>
</tr>
<tr valign="top">
<td width="192" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="15" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="199" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="27" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="137" colspan="2" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="12" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="82" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
</tr>
<tr valign="top">
<td width="192" rowspan="1" >
<p>
<font size="2">Common Stock</font></p>
</td>
<td width="15" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="199" colspan="1" rowspan="1" >
<p>
<font size="2">James M. Irish<br>14637 Via Bettma<br>San Diego, California 92127</font></p>
</td>
<td width="27" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="137" colspan="2" rowspan="1" >
<p align="center">
<font size="2">-- (3)</font></p align="center">
</td>
<td width="12" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="82" colspan="1" rowspan="1" >
<p align="center">
<font size="2">--&nbsp;%</font></p align="center">
</td>
</tr>
<tr valign="top">
<td width="192" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="15" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="199" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="27" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="137" colspan="2" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="12" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="82" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
</tr>
<tr valign="top">
<td width="192" rowspan="1" >
<p>
<font size="2">Common Stock</font></p>
</td>
<td width="15" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="199" colspan="1" rowspan="1" >
<p>
<font size="2">Terry Conrad<br>6790 N.E. Woodbay Lane<br>Poulsbo, Washington 98370</font></p>
</td>
<td width="27" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="137" colspan="2" rowspan="1" >
<p align="center">
<font size="2">125,750 (4)</font></p align="center">
</td>
<td width="12" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="82" colspan="1" rowspan="1" >
<p align="center">
<font size="2">*&nbsp;%</font></p align="center">
</td>
</tr>
<tr valign="top">
<td width="192" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="15" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="199" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="27" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="137" colspan="2" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="12" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="82" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
</tr>
<tr valign="top">
<td width="192" rowspan="1" >
<p>
<font size="2">Common Stock</font></p>
</td>
<td width="15" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="199" colspan="1" rowspan="1" >
<p>
<font size="2">James Croft III<br>13114 Evening Creek Drive South<br>San Diego, California
92128</font></p>
</td>
<td width="27" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="137" colspan="2" rowspan="1" >
<p align="center">
<font size="2">146,100 (5)</font></p align="center">
</td>
<td width="12" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="82" colspan="1" rowspan="1" >
<p align="center">
<font size="2">*&nbsp;%</font></p align="center">
</td>
</tr>
<tr valign="top">
<td width="192" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="15" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="199" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="27" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="24" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="113" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="12" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="82" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
</tr>
<tr valign="top">
<td width="192" rowspan="1" >
<p>
<font size="2">Common Stock</font></p>
</td>
<td width="15" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="199" colspan="1" rowspan="1" >
<p>
<font size="2">Richard M. Wagner<br>13114 Evening Creek Drive South<br>San Diego, California
92128</font></p>
</td>
<td width="27" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="137" colspan="2" rowspan="1" >
<p align="center">
<font size="2">120,000 (6)</font></p align="center">
</td>
<td width="12" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="82" colspan="1" rowspan="1" >
<p align="center">
<font size="2">*&nbsp;%</font></p align="center">
</td>
</tr>
<tr valign="top">
<td width="192" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="15" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="199" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="27" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="137" colspan="2" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="12" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="82" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
</tr>
<tr valign="top">
<td width="192" rowspan="1" >
<p>
<font size="2">Common Stock</font></p>
</td>
<td width="15" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="199" colspan="1" rowspan="1" >
<p>
<font size="2">David J. Carter<br>13114 Evening Creek Drive South<br>San Diego, California
92128</font></p>
</td>
<td width="27" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="137" colspan="2" rowspan="1" >
<p align="center">
<font size="2">78,750 (7)</font></p align="center">
</td>
<td width="12" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="82" colspan="1" rowspan="1" >
<p align="center">
<font size="2">*&nbsp;%</font></p align="center">
</td>
</tr>
<tr valign="top">
<td width="192" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="15" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="199" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="27" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="137" colspan="2" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="12" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="82" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
</tr>
<tr valign="top">
<td width="192" rowspan="1" >
<p>
<font size="2">Common Stock</font></p>
</td>
<td width="15" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="199" colspan="1" rowspan="1" >
<p>
<font size="2">Daniel Hunter<br>13114 Evening Creek Drive South<br>San Diego, California
92128</font></p>
</td>
<td width="27" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="137" colspan="2" rowspan="1" >
<p align="center">
<font size="2">110,250 (8)</font></p align="center">
</td>
<td width="12" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="82" colspan="1" rowspan="1" >
<p align="center">
<font size="2">*&nbsp;%</font></p align="center">
</td>
</tr>
<tr valign="top">
<td width="192" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="15" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="199" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="27" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="137" colspan="2" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="12" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="82" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
</tr>
<tr valign="top">
<td width="192" rowspan="1" >
<p>
<font size="2">All directors &amp; executive officers<br>As a group (8&nbsp;persons)</font></p>
</td>
<p>
<td width="15" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="199" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="27" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="137" colspan="2" rowspan="1" >
<p align="center">
<font size="2">4,262,986 (9)</font></p align="center">
</td>
<td width="12" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="82" colspan="1" rowspan="1" >
<p align="center">
<font size="2">21.4%</font></p align="center">
</td>
</tr>
<tr valign="top">
<td width="192" rowspan="1" bgcolor=#FFF3CE style="border-bottom-style: solid; border-bottom-width: 1">
&nbsp;</td>
<td width="15" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="199" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="27" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="137" colspan="2" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="12" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="82" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
</tr>
<p></p>
</table>
  <table border="0" style="border-collapse: collapse" bordercolor="#111111" cellpadding="0" cellspacing="0" width="664">
<tr valign="top">
<td width="38" colspan="1" rowspan="1" >
<font size="1">*</font></td>
<td width="624" rowspan="1" >
<p>
<font size="1">Less than 1%. </font> </p>
</td>
</tr>
<tr valign="top">
<td width="38" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="624" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
</tr>
<tr valign="top">
<td width="38" colspan="1" rowspan="1" >
<p>
<font size="1">(1)</font></p>
</td>
<td width="624" rowspan="1" >
<p>
<font size="1">Beneficial ownership is determined in accordance with the rules
of the SEC and generally includes voting or investment power with respect to
securities. Except as otherwise indicated below, this table is based on
information supplied by officers, directors and principal stockholders. The
inclusion in this table of such shares does not constitute an admission that the
named stockholder is a direct or indirect beneficial owner of, or receives the
economic benefit of, such shares. Percentage of class is based on 19,439,157
shares of common stock outstanding on December 31, 2003. Except as otherwise
stated below, each of the named persons has sole voting and investment power
with respect to the shares shown (subject to community property laws). </font> </p>
</td>
</tr>
</table>
  <table border="0" style="border-collapse: collapse" bordercolor="#111111" cellpadding="0" cellspacing="0" width="664">
<tr valign="top">
<td width="36" bgcolor="#FFF3CE" >
&nbsp;</td>
<td width="626" bgcolor="#FFF3CE" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="36" colspan="1" rowspan="1" >
<p>
<font size="1">(2)</font></p>
</td>
<td width="626" rowspan="1" >
<p>
<font size="1">Includes 3,621,736 shares held by a family trust for which Mr.
Norris serves as trustee, 125,000 shares issuable upon exercise of a warrant
held by such trust, and 171,000 shares issuable upon the exercise of outstanding
stock options within 60 days of December 31, 2003. </font>  </p>
</td>
</tr>
<tr valign="top">
<td width="36" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="626" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
</tr>
<tr valign="top">
<td width="36" colspan="1" rowspan="1" >
<p>
<font size="1">(3)</font></p>
</td>
<td width="626" rowspan="1" >
<p>
<font size="1">Mr. Irish did not provide share ownership information. To our
knowledge, Mr. Irish does not beneficially own any shares of our common stock.</font></p>
</td>
</tr>
<tr valign="top">
<td width="36" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="626" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
</tr>
<tr valign="top">
<td width="36" colspan="1" rowspan="1" >
<p>
<font size="1">(4)</font></p>
</td>
<td width="626" rowspan="1" >
<p>
<font size="1">Consists of 125,750 shares issuable upon the exercise of
outstanding stock options within 60 days of December 31, 2003.</font></p>
</td>
</tr>
<tr valign="top">
<td width="36" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="626" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
</tr>
<tr valign="top">
<td width="36" colspan="1" rowspan="1" >
<p>
<font size="1">(5)</font></p>
</td>
<td width="626" rowspan="1" >
<p>
<font size="1">Includes 146,000 shares issuable upon the exercise of outstanding
stock options within 60 days of December 31, 2003.</font></p>
</td>
</tr>
</table>
  <table border="0" style="border-collapse: collapse" bordercolor="#111111" cellpadding="0" cellspacing="0" width="664">
<tr valign="top">
<td width="36" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="626" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
</tr>
<tr valign="top">
<td width="36" colspan="1" rowspan="1" >
<p>
<font size="1">(6)</font></p>
</td>
<td width="626" rowspan="1" >
<p>
<font size="1">Includes 75,000 shares issuable upon the exercise of outstanding
stock options within 60 days of December 31, 2003. </font>  </p>
</td>
</tr>
<tr valign="top">
<td width="36" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="626" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
</tr>
<tr valign="top">
<td width="36" colspan="1" rowspan="1" >
<p>
<font size="1">(7)</font></p>
</td>
<td width="626" rowspan="1" >
<p>
<font size="1">Includes 55,000 shares issuable upon the exercise of outstanding
stock options within 60 days of December 31, 2003. </font> </p>
</td>
</tr>
<tr valign="top">
<td width="36" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="626" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
</tr>
<tr valign="top">
<td width="36" colspan="1" rowspan="1" >
<p>
<font size="1">(8)</font></p>
</td>
<td width="626" rowspan="1" >
<p>
<font size="1">Includes 43,750 shares issuable upon the exercise of outstanding
stock options within 60 days of December 31, 2003. </font> </p>
</td>
</tr>
<tr valign="top">
<td width="36" colspan="1" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
<td width="626" rowspan="1" bgcolor=#FFF3CE>
&nbsp;</td>
</tr>
<tr valign="top">
<td width="36" colspan="1" rowspan="1" >
<p>
<font size="1">(9)</font></p>
</td>
<td width="626" rowspan="1" >
<p>
<font size="1">Includes 381,000 shares issuable upon the exercise of outstanding
stock options within 60 days of December 31, 2003 and 125,000 shares issuable
upon exercise of a warrant. </font> </p>
</td>
</tr>
</table>
<p></p>
<div align="center" color="#000080" style="position:relative; left: -5">
  <font size="2">7</font><hr size="3" color="#999999" STYLE="page-break-after: always">
  <font size="2">&nbsp; </font> </div>
<p>
<b><font size="2">Other Voting Stock</font></b><p>
<i><font size="2">Preferred Stock</font></i><p>
<font size="2">The following security ownership information is set forth as of December 31,
2003, with respect to certain persons or groups known by us to be beneficial
owners of more than 5% of any outstanding series of our Preferred
Stock.</font></p align="center">
<div style="position:relative; left: 0">
  <table border=0 cellpadding=0 cellspacing =0 style="border-collapse: collapse" bordercolor="#111111" >
<tr valign="top">
<td width="635.999841" colspan="7" rowspan="1" >
<p align="center">
<b><u><font size="2">Series&nbsp;D Preferred Stock</font></u></b></p align="center">
</td>
</tr>
<tr valign="top">
<td width="143.999964" rowspan="2" valign="bottom" style="border-bottom-style: solid; border-bottom-width: 1" >
<p align="center">
<b><font size="2">Title of Class</font></b></p align="center">
</td>
<td width="13.333330" rowspan="2" valign="bottom" >
&nbsp;</td>
<td width="287.999928" rowspan="2" valign="bottom" style="border-bottom-style: solid; border-bottom-width: 1" >
<p align="center">
<b><font size="2">Name and address of Beneficial Owner</font></b></p align="center">
</td>
<td width="11.999997" rowspan="2" valign="bottom" >
&nbsp;</td>
<td width="77.333314" rowspan="2" valign="bottom" style="border-bottom-style: solid; border-bottom-width: 1" >
<p align="center">
<b><font size="2">Amount and</font></b><font size="2"><br><b>Nature
of</b><br><b>Beneficial</b><br><b>Ownership</b><br></font><b><font size="2">Series D
(1)</font></b></p align="center">
</td>
<td width="23.999994" valign="bottom" >
&nbsp;</td>
<td width="71.999982" rowspan="2" valign="bottom" style="border-bottom-style: solid; border-bottom-width: 1" >
<p align="center">
<b><font size="2">Percent of</font></b><font size="2"><br><b>Class</b><br>
</font><b><font size="2">Series D (1)</font></b></p align="center">
</td>
</tr>
<tr valign="top">
<td width="23.999994" valign="bottom" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="143.999964" bgcolor="#FFF3CE" style="border-top-style: solid; border-top-width: 1" >
<p>
<font size="2">Series D Preferred Stock</font></p>
</td>
<td width="13.333330" bgcolor="#FFF3CE" >
&nbsp;</td>
<td width="287.999928" bgcolor="#FFF3CE" style="border-top-style: solid; border-top-width: 1" >
<p>
<font size="2">Ehrens Family Trust<br>
Gerald L &amp; Wilma S<br>
8912 Canyon Springs Dr.<br>
Las Vegas, CA  89117</font></p>
</td>
<td width="11.999997" bgcolor="#FFF3CE" >
&nbsp;</td>
<td width="77.333314" bgcolor="#FFF3CE" style="border-top-style: solid; border-top-width: 1" >
<p align="center">
<font size="2">5,000 (2)</font></p align="center">
</td>
<td width="23.999994" bgcolor="#FFF3CE" >
&nbsp;</td>
<td width="71.999982" bgcolor="#FFF3CE" style="border-top-style: solid; border-top-width: 1" >
<p align="center">
<font size="2">10.0%</font></p align="center">
</td>
</tr>
<tr valign="top">
<td width="143.999964" bgcolor="#FFF3CE" >
&nbsp;</td>
<td width="13.333330" bgcolor="#FFF3CE" >
&nbsp;</td>
<td width="287.999928" bgcolor="#FFF3CE" >
&nbsp;</td>
<td width="11.999997" bgcolor="#FFF3CE" >
&nbsp;</td>
<td width="77.333314" bgcolor="#FFF3CE" >
&nbsp;</td>
<td width="23.999994" bgcolor="#FFF3CE" >
&nbsp;</td>
<td width="71.999982" bgcolor="#FFF3CE" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="143.999964" colspan="1" rowspan="1" >
<p>
<font size="2">Series D Preferred Stock</font></p>
</td>
<td width="13.333330" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="287.999928" colspan="1" rowspan="1" >
<p>
<font size="2">Granite Capital LP<br>
126 East 56th Street Flr 25<br>
New York, NY 10022</font></p>
</td>
<td width="11.999997" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="77.333314" colspan="1" rowspan="1" >
<p align="center">
<font size="2">40,000 (3)</font></p align="center">
</td>
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="71.999982" colspan="1" rowspan="1" >
<p align="center">
<font size="2">80.0%</font></p align="center">
</td>
</tr>
<tr valign="top">
<td width="143.999964" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="13.333330" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="287.999928" colspan="1" rowspan="1" >
<p>
&nbsp;</p>
</td>
<td width="11.999997" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="77.333314" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="71.999982" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="143.999964" bgcolor="#FFF3CE" >
<p>
<font size="2">Series D Preferred Stock</font></p>
</td>
<td width="13.333330" bgcolor="#FFF3CE" >
&nbsp;</td>
<td width="287.999928" bgcolor="#FFF3CE" >
<p>
<font size="2">Granite Capital II LP<br>
126 East 56th Street Flr 25<br>
New York, NY 10022</font></p>
</td>
<td width="11.999997" bgcolor="#FFF3CE" >
&nbsp;</td>
<td width="77.333314" bgcolor="#FFF3CE" >
<p align="center">
<font size="2">40,000 (3)</font></p align="center">
</td>
<td width="23.999994" bgcolor="#FFF3CE" >
&nbsp;</td>
<td width="71.999982" bgcolor="#FFF3CE" >
<p align="center">
<font size="2">80.0%</font></p align="center">
</td>
</tr>
<tr valign="top">
<td width="143.999964" bgcolor="#FFF3CE" >
&nbsp;</td>
<td width="13.333330" bgcolor="#FFF3CE" >
&nbsp;</td>
<td width="287.999928" bgcolor="#FFF3CE" >
<p>
&nbsp;</p>
</td>
<td width="11.999997" bgcolor="#FFF3CE" >
&nbsp;</td>
<td width="77.333314" bgcolor="#FFF3CE" >
&nbsp;</td>
<td width="23.999994" bgcolor="#FFF3CE" >
&nbsp;</td>
<td width="71.999982" bgcolor="#FFF3CE" >
&nbsp;</td>
</tr>
</table></div>
<p>
<font size="2">See footnotes on following page.</font></p align="center">
<div style="position:relative; left: 0">
  <table border=0 cellpadding=0 cellspacing =0 style="border-collapse: collapse" bordercolor="#111111" >
<tr valign="top">
<td width="635.999841" colspan="7" rowspan="1" >
<p align="center">
<b><u><font size="2">Series&nbsp;E Preferred Stock</font></u></b></p align="center">
</td>
</tr>
<tr valign="top">
<td width="143.999964" valign="bottom" style="border-bottom-style: solid; border-bottom-width: 1" >
<p align="center">
<b><font size="2">Title of Class</font></b></p align="center">
</td>
<td width="13.333330" valign="bottom" >
&nbsp;</td>
<td width="287.999928" valign="bottom" style="border-bottom-style: solid; border-bottom-width: 1" >
<p align="center">
<b><font size="2">Name and address of Beneficial Owner</font></b></p align="center">
</td>
<td width="11.999997" valign="bottom" >
&nbsp;</td>
<td width="77.333314" valign="bottom" style="border-bottom-style: solid; border-bottom-width: 1" >
<p align="center">
<b><font size="2">Amount and</font></b><font size="2"><br><b>Nature
of</b><br><b>Beneficial</b><br><b>Ownership</b><br></font><b><font size="2">Series E
(4)</font></b></p align="center">
</td>
<td width="25.333327" valign="bottom" >
&nbsp;</td>
<td width="71.999982" valign="bottom" style="border-bottom-style: solid; border-bottom-width: 1" >
<p align="center">
<b><font size="2">Percent of</font></b><font size="2"><br><b>Class</b><br>
</font><b><font size="2">Series E (4)</font></b></p align="center">
</td>
</tr>
<tr valign="top">
<td width="143.999964" style="border-top-style: solid; border-top-width: 1" bgcolor="#FFF3CE" >
<p align="center">
<font size="2">Series E Preferred Stock</font></p align="center">
</td>
<td width="13.333330" bgcolor="#FFF3CE" >
&nbsp;</td>
<td width="287.999928" style="border-top-style: solid; border-top-width: 1" bgcolor="#FFF3CE" >
<p align="left">
<font size="2">Granite Capital LP<br>
126 East 56th Street Flr 25<br>
New York, NY 10022</font></p align="center">
</td>
<td width="11.999997" bgcolor="#FFF3CE" >
&nbsp;</td>
<td width="77.333314" style="border-top-style: solid; border-top-width: 1" bgcolor="#FFF3CE" >
<p align="center">
<font size="2">25,000 (5)</font></p align="center">
</td>
<td width="25.333327" bgcolor="#FFF3CE" >
&nbsp;</td>
<td width="71.999982" style="border-top-style: solid; border-top-width: 1" bgcolor="#FFF3CE" >
<p align="center">
<font size="2">9.5%</font></p align="center">
</td>
</tr>
<tr valign="top">
<td width="143.999964" bgcolor="#FFF3CE" >
&nbsp;</td>
<td width="13.333330" bgcolor="#FFF3CE" >
&nbsp;</td>
<td width="287.999928" bgcolor="#FFF3CE" >
&nbsp;</td>
<td width="11.999997" bgcolor="#FFF3CE" >
&nbsp;</td>
<td width="77.333314" bgcolor="#FFF3CE" >
&nbsp;</td>
<td width="25.333327" bgcolor="#FFF3CE" >
&nbsp;</td>
<td width="71.999982" bgcolor="#FFF3CE" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="143.999964" bgcolor="#FFFFFF" >
<p>
<font size="2">Series E Preferred Stock</font></p>
</td>
<td width="13.333330" bgcolor="#FFFFFF" >
&nbsp;</td>
<td width="287.999928" bgcolor="#FFFFFF" >
<p>
<font size="2">Granite Capital II LP<br>
126 East 56th Street Flr 25<br>
New York, NY 10022</font></p>
</td>
<td width="11.999997" bgcolor="#FFFFFF" >
&nbsp;</td>
<td width="77.333314" bgcolor="#FFFFFF" >
<p align="center">
<font size="2">25,000 (5)</font></p align="center">
</td>
<td width="25.333327" bgcolor="#FFFFFF" >
&nbsp;</td>
<td width="71.999982" bgcolor="#FFFFFF" >
<p align="center">
<font size="2">9.5%</font></p align="center">
</td>
</tr>
<tr valign="top">
<td width="143.999964" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="13.333330" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="287.999928" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="11.999997" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="77.333314" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="25.333327" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="71.999982" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="143.999964" bgcolor="#FFF3CE" >
<p>
<font size="2">Series E Preferred Stock</font></p>
</td>
<td width="13.333330" bgcolor="#FFF3CE" >
&nbsp;</td>
<td width="287.999928" bgcolor="#FFF3CE" >
<p>
<font size="2">Canusa Trading Ltd.<br>
PO Box HM 279<br>
Hamilton HMAX, Bermuda</font></p>
</td>
<td width="11.999997" bgcolor="#FFF3CE" >
&nbsp;</td>
<td width="77.333314" bgcolor="#FFF3CE" >
<p align="center">
<font size="2">50,000 (6)</font></p align="center">
</td>
<td width="25.333327" bgcolor="#FFF3CE" >
&nbsp;</td>
<td width="71.999982" bgcolor="#FFF3CE" >
<p align="center">
<font size="2">19.0%</font></p align="center">
</td>
</tr>
<tr valign="top">
<td width="143.999964" bgcolor="#FFF3CE" >
&nbsp;</td>
<td width="13.333330" bgcolor="#FFF3CE" >
&nbsp;</td>
<td width="287.999928" bgcolor="#FFF3CE" >
<p>
&nbsp;</p>
</td>
<td width="11.999997" bgcolor="#FFF3CE" >
&nbsp;</td>
<td width="77.333314" bgcolor="#FFF3CE" >
&nbsp;</td>
<td width="25.333327" bgcolor="#FFF3CE" >
&nbsp;</td>
<td width="71.999982" bgcolor="#FFF3CE" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="143.999964" colspan="1" rowspan="1" >
<p>
<font size="2">Series E Preferred Stock</font></p>
</td>
<td width="13.333330" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="287.999928" colspan="1" rowspan="1" >
<p>
<font size="2">K. Tucker Anderson<br>
61 Above All Rd.<br>
Warren, CT  06754-1710</font></p>
</td>
<td width="11.999997" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="77.333314" colspan="1" rowspan="1" >
<p align="center">
<font size="2">25,000</font></p align="center">
</td>
<td width="25.333327" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="71.999982" colspan="1" rowspan="1" >
<p align="center">
<font size="2">9.5%</font></p align="center">
</td>
</tr>
<tr valign="top">
<td width="143.999964" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="13.333330" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="287.999928" colspan="1" rowspan="1" >
<p>
&nbsp;</p>
</td>
<td width="11.999997" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="77.333314" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="25.333327" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="71.999982" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="143.999964" bgcolor="#FFF3CE" >
<p>
<font size="2">Series E Preferred Stock</font></p>
</td>
<td width="13.333330" bgcolor="#FFF3CE" >
&nbsp;</td>
<td width="287.999928" bgcolor="#FFF3CE" >
<p>
<font size="2">Leonard M. Teninbaum Keogh Account<br>
1900 St. James Place Ste. 150<br>
Houston, TX 77056</font></p>
</td>
<td width="11.999997" bgcolor="#FFF3CE" >
&nbsp;</td>
<td width="77.333314" bgcolor="#FFF3CE" >
<p align="center">
<font size="2">42,500 (7)</font></p align="center">
</td>
<td width="25.333327" bgcolor="#FFF3CE" >
&nbsp;</td>
<td width="71.999982" bgcolor="#FFF3CE" >
<p align="center">
<font size="2">16.1%</font></p align="center">
</td>
</tr>
<tr valign="top">
<td width="143.999964" bgcolor="#FFF3CE" >
&nbsp;</td>
<td width="13.333330" bgcolor="#FFF3CE" >
&nbsp;</td>
<td width="287.999928" bgcolor="#FFF3CE" >
<p>
&nbsp;</p>
</td>
<td width="11.999997" bgcolor="#FFF3CE" >
&nbsp;</td>
<td width="77.333314" bgcolor="#FFF3CE" >
&nbsp;</td>
<td width="25.333327" bgcolor="#FFF3CE" >
&nbsp;</td>
<td width="71.999982" bgcolor="#FFF3CE" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="143.999964" colspan="1" rowspan="1" >
<p>
<font size="2">Series E Preferred Stock</font></p>
</td>
<td width="13.333330" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="287.999928" colspan="1" rowspan="1" >
<p>
<font size="2">Vandoon Partners<br>
7 Hanover Sq. 8<sup>th</sup> Floor<br>
New York, NY 10004</font></p>
</td>
<td width="11.999997" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="77.333314" colspan="1" rowspan="1" >
<p align="center">
<font size="2">20,000 (8)</font></p align="center">
</td>
<td width="25.333327" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="71.999982" colspan="1" rowspan="1" >
<p align="center">
<font size="2">7.6%</font></p align="center">
</td>
</tr>
<tr valign="top">
<td width="143.999964" colspan="1" rowspan="1" style="border-bottom-style: solid; border-bottom-width: 1" >
&nbsp;</td>
<td width="13.333330" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="287.999928" colspan="1" rowspan="1" >
<p>
&nbsp;</p>
</td>
<td width="11.999997" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="77.333314" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="25.333327" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="71.999982" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
</table></div>
<div align="center" color="#000080" style="position:relative; left: -5">
  <font size="2">8</font><hr size="3" color="#999999" STYLE="page-break-after: always">
  <font size="2">&nbsp; </font> </div><p>
</p>
<div style="position:relative; left: 0"><table border=0 cellpadding=0 cellspacing =0 >
<tr valign="top">
<td width="18.666662" colspan="1" rowspan="1" >
<p>
<font size="2">(1)</font></p>
</td>
<td width="5.333332" colspan="1" rowspan="1" >
<p>
&nbsp;</p>
</td>
<td width="599.999850" colspan="1" rowspan="1" >
<p>
<font size="2">Represents number of shares of Series D Preferred Stock, held as of December 31,
2003. At such date an aggregate of 50,000 shares of Series D Preferred Stock
were issued and outstanding convertible into an aggregate of 122,260 shares of
common stock. </font> </p>
</td>
</tr>
</table></div>
<div style="position:relative; left: 0"><table border=0 cellpadding=0 cellspacing =0 >
<tr valign="top">
<td width="18.666662" colspan="1" >
&nbsp;</td>
<td width="5.333332" colspan="1" >
&nbsp;</td>
<td width="599.999850" colspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="18.666662" colspan="1" rowspan="1" >
<p>
<font size="2">(2)</font></p>
</td>
<td width="5.333332" colspan="1" rowspan="1" >
<p>
&nbsp;</p>
</td>
<td width="599.999850" colspan="1" rowspan="1" >
<p>
<font size="2">Gerald L. Ehrens and Wilma S. Ehrens are believed by us to have shared voting
and investment power with respect to the Series D Preferred Stock held.</font></p>
</td>
</tr>
</table></div>
<div style="position:relative; left: 0"><table border=0 cellpadding=0 cellspacing =0 >
<tr valign="top">
<td width="18.666662" colspan="1" >
&nbsp;</td>
<td width="5.333332" colspan="1" >
&nbsp;</td>
<td width="599.999850" colspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="18.666662" colspan="1" rowspan="1" >
<p>
<font size="2">(3)</font></p>
</td>
<td width="5.333332" colspan="1" rowspan="1" >
<p>
&nbsp;</p>
</td>
<td width="599.999850" colspan="1" rowspan="1" >
<p>
<font size="2">Includes 35,263 shares of Series D Preferred Stock held by Granite Capital LP,
and 4,737 shares of Series D Preferred Stock held by Granite Capital II LP.
Granite Capital LLC is the general partner of each of Granite Capital LP and
Granite Capital II LP.  Mr. Walter F. Harrison, III and Lewis M. Eisenberg are
co-managing members of Granite Capital LLC, and are believed by us to have
shared voting and investment power with respect to the Series D Preferred Stock
held. Granite Capital LP and Granite Capital II LP disclaim beneficial ownership
in these securities except to the extent of such person's pecuniary interest in
these securities and disclaim membership in a group with any other entity or
person within the meaning of Rule 13d-5(b)(1) under the Securities Exchange Act
of 1934.</font></p>
</td>
</tr>
</table></div>
<div style="position:relative; left: 0"><table border=0 cellpadding=0 cellspacing =0 >
<tr valign="top">
<td width="18.666662" colspan="1" >
&nbsp;</td>
<td width="5.333332" colspan="1" >
&nbsp;</td>
<td width="599.999850" colspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="18.666662" colspan="1" rowspan="1" >
<p>
<font size="2">(4)</font></p>
</td>
<td width="5.333332" colspan="1" rowspan="1" >
<p>
&nbsp;</p>
</td>
<td width="599.999850" colspan="1" rowspan="1" >
<p>
<font size="2">Represents number of shares of Series E Preferred Stock, held as of December 31,
2003. At such date an aggregate of 263,250 shares of Series E Preferred Stock
were issued and outstanding convertible into an aggregate of 851,307 shares of
common stock.</font></p>
</td>
</tr>
</table></div>
<div style="position:relative; left: 0"><table border=0 cellpadding=0 cellspacing =0 >
<tr valign="top">
<td width="22.666661" colspan="1" >
&nbsp;</td>
<td width="3.999999" colspan="1" >
</td>
<td width="595.999851" colspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="22.666661" colspan="1" rowspan="1" >
<p>
<font size="2">(5)</font></p>
</td>
<td width="3.999999" colspan="1" rowspan="1" >
<p>
<font size="2">&nbsp;</font></p>
</td>
<td width="595.999851" colspan="1" rowspan="1" >
<p>
<font size="2">Includes 22,500 shares of Series E Preferred Stock held by Granite Capital LP,
and 2,500 shares of Series E Preferred Stock held by Granite Capital II LP.
Granite Capital LLC is the general partner of each of Granite Capital LP and
Granite Capital II LP. Mr. Walter F. Harrison, III and Lewis M. Eisenberg are
co-managing members of Granite Capital LLC, and are believed by us to have
shared voting and investment power with respect to the Series&nbsp;E Preferred
Stock held. Granite Capital LP and Granite Capital II LP disclaim beneficial
ownership in these securities except to the extent of such person's pecuniary
interest in these securities and disclaim membership in a group with any other
entity or person within the meaning of Rule 13d-5(b)(1) under the Securities
Exchange Act of 1934.</font></p>
</td>
</tr>
<tr valign="top">
<td width="22.666661" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="3.999999" colspan="1" rowspan="1" >
<font size="2">&nbsp;</font></td>
<td width="595.999851" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="22.666661" colspan="1" rowspan="1" >
<p>
<font size="2">(6)</font></p>
</td>
<td width="3.999999" colspan="1" rowspan="1" >
<p>
<font size="2">&nbsp;</font></p>
</td>
<td width="595.999851" colspan="1" rowspan="1" >
<p>
<font size="2">Mr. W.A. Manuel is President of Canusa Trading Ltd., and is believed by us to
have sole voting and investment power with respect to the Series E Preferred
Stock held. </font>  </p>
</td>
</tr>
<tr valign="top">
<td width="22.666661" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="3.999999" colspan="1" rowspan="1" >
<font size="2">&nbsp;</font></td>
<td width="595.999851" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="22.666661" colspan="1" rowspan="1" >
<p>
<font size="2">(7)</font></p>
</td>
<td width="3.999999" colspan="1" rowspan="1" >
<p>
<font size="2">&nbsp;</font></p>
</td>
<td width="595.999851" colspan="1" rowspan="1" >
<p>
<font size="2">Mr. Leonard M. Teninbaum is trustee of Leonard M. Teninbaum Keogh Account, and
is believed by us to have sole voting and investment power with respect to the
Series E Preferred Stock held. </font>  </p>
</td>
</tr>
<tr valign="top">
<td width="22.666661" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="3.999999" colspan="1" rowspan="1" >
<font size="2">&nbsp;</font></td>
<td width="595.999851" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="22.666661" colspan="1" rowspan="1" >
<p>
<font size="2">(8)</font></p>
</td>
<td width="3.999999" colspan="1" rowspan="1" >
<p>
<font size="2">&nbsp;</font></p>
</td>
<td width="595.999851" colspan="1" rowspan="1" >
<p>
<font size="2">Vandoon Partner  is believed by us to have sole voting and investment power with
respect to the Series E Preferred Stock held. </font>  </p>
</td>
</tr>
</table></div>
<p>
<p>
<b><font size="2">Equity Incentive Plans</font></b><p>
<font size="2">Certain information concerning our equity incentive plans is contained in Part
II, Item 5 above under the heading "Market Information."</font></p>
<p><b>Item 13. Certain Relationships and Related Transactions</b></p>
<p><font size="2">In September 2001, a family trust for which Mr. Elwood G. Norris serves as
trustee purchased $250,000 in principal amount of our 12% Convertible
Subordinated Promissory Notes, and in connection with such purchase, received a
warrant to purchase 125,000 shares of common stock. The purchase by such trust
was on the same terms as those offered to the other purchasers in the same
financing. In November 2002, we and a majority of the holders of such notes
agreed to extend the maturity date of the notes, including the note held by Mr.
Norris' trust, from December 31, 2002 to December 31, 2003.  All of such notes
were redeemed by us in accordance with their terms in June 2003, and Mr. Norris'
family trust received 150,602 shares upon redemption.</font></p align="center">
<div align="center" color="#000080" style="position:relative; left: -5">
  <font size="2">9</font><hr size="3" color="#999999" STYLE="page-break-after: always">
  <font size="2">&nbsp; </font> </div><p>
<p>
<font size="2">Certain beneficial owners of more than 5% of our then outstanding shares of
Series D Preferred Stock also held 12% Convertible Subordinates Notes whose
maturity dates were extended on the same terms as those described above, and
which were redeemed as described above. These holders were: Canusa Trading, Ltd.
($200,000 principal amount, 120,482 shares issued on redemption), Jerry E. Polis
Family Trust ($250,000 principal amount, 150,602 shares issued on redemption),
Leonard M. Teninbaum Keogh Account ($300,000 principal amount, 180,033 shares
issued on redemption), NGHK Holdings, LLC ($250,000 principal amount, 150,602
shares issued on redemption), Stifel, Nicolaus Custodian for Jonathan A. Berg
($50,000 principal amount, 30,120 shares issued on redemption), and James C.
Zolin and Josephine M. Zolin (aggregate $150,000 principal amount, aggregate
90,015 shares issued on redemption).</font></p>
<p><font size="2">Under the terms of an Assignment of Technology Agreement dated March 2, 1993 and
an Addendum Agreement dated December 2, 1996, we are obligated to pay Mr. Norris
a 2% royalty on net sales from certain of our technologies, including HyperSonic
Sound. The royalty obligation continues until at least March 1, 2007, and for
any longer period during which we sell products or license technologies subject
to any patent assigned to us by Mr. Norris under this agreement. We have no
present plans to market any of the technologies subject to such agreement other
than HyperSonic Sound. Mr. Norris waived royalties payable under this agreement
in the fiscal year ended September 30, 2003. It is expected that royalties will
be paid to Mr. Norris during fiscal 2004. The amount of such royalties will
depend on actual sales.</font></p>
<p><font size="2">Mark Norris, the son of Elwood G. Norris, is a full-time non-executive employee
of our company. In his role as a Mechanical Engineer, Mark Norris was paid
$80,000 in salary for the fiscal year ended September 30, 2003. Mark Norris was
also granted 19,000 common shares valued at $78,280 as a bonus in recognition of
his key role in the invention and development of our vacuum-less HSS emitter.
During fiscal 2003 Mark Norris was also awarded one stock option grant for
15,000 common shares vesting quarterly over two years and exercisable for five
years at $3.30 per share. He exercised previously granted options for 17,500
common shares during fiscal 2003 realizing a value of $42,052. No other family
member of any executive officer, director or 5% stockholder received
compensation of more than $60,000 during the year ended September 30, 2003.</font></p>
<p><font size="2">Certain beneficial owners of more than 5% of our then outstanding shares of
Series D Preferred Stock purchased our 8% Senior Secured Promissory Notes on
September 30, 2002. These holders were: NGHK Holdings, LLC ($1,500,000 principal
amount), Sunrise Management Profit Sharing Plan ($50,000 principal amount),
Sunrise Capital, Inc. ($100,000 principal amount), and Canusa Trading Ltd.
($350,000 principal amount). These notes were originally due December 31, 2003.
The notes were secured by our accounts receivable, equipment, goods, instruments
and inventory. The notes plus two months' additional accrued interest were
subject to mandatory redemption upon the closing of a sale of equity securities
in an amount exceeding $3,000,000. In February 2003, these notes were amended
with the consent of the holders of a majority of the outstanding principal
amount to extend the maturity date to December 31, 2004. The notes were further
amended to permit the then-applicable amount payable by us on redemption to be
converted into equity securities. Each of Canusa Trading Ltd., Sunrise
Management Profit Sharing Plan and Sunrise Capital, Inc. converted their entire
principal amounts to Series E Preferred Stock, and NGHK Holdings, LLC converted
$500,000 of its principal amount to Series E Preferred Stock. Each converting
holder was paid in cash the amount of accrued interest through April 2003. In
June 2003 a total of $681,845 of the balance of the notes, all held by NGHK
Holdings, LLC, was applied to exercise warrants and in July 2003 the balance of
$318,155 was redeemed by us.</font></p>
<p><font size="2">Certain beneficial owners of more than 5% of our then outstanding shares of
Series D Preferred Stock purchased the shares of our Series E Preferred Stock
and associated warrants. Each such purchase was on the same terms as those
offered to other investors in the Series E round. The $10.00 purchase price of
each share of Series E Preferred Stock, increased by $0.60 per share per year,
may be converted at the election of a holder one or more times into common stock
at a conversion price of $3.25. If after September 30, 2003, 90% of the volume
weighted average price of the common stock for the five trading days prior to
conversion (the discount market price) is less than $3.25, the conversion price
will be reduced to the discount market price; provided, however, that the
conversion price cannot be below $2.00 per share. The Series E Preferred Stock
may be called by us for conversion if the market price of our common shares
exceeds $9.50 per share for ten consecutive trading days and certain conditions
are met. The Series E Preferred Stock will be subject to mandatory conversion on
December 31, 2006. Each purchaser of Series E Preferred Stock was also granted a
warrant to purchase one and one half shares of common stock for each share of
Series E Preferred Stock purchased, exercisable until December 31, 2007 at a
price of $3.25 per share. Granite Capital LP and Granite Capital II LP purchased
22,500 and 2,500 shares of Series E Preferred Stock, and obtained warrants to
purchase 33,750 and 3,750 shares of common stock, respectively; and Stifel
Nicolaus Custodian for Jonathan Berg IRA purchased 10,000 shares of Series E
Preferred Stock and obtained warrants to purchase 15,000 shares of common stock.
NGHK Holdings LLC, Canusa Trading, Ltd, Sunrise Management Profit Sharing Plan
and Sunrise Capital, Inc. also purchased Series E Preferred Stock and associated
warrants via conversion of principal of 8% Senior Secured Notes, as discussed
above.</font></p align="center">
<div align="center" color="#000080" style="position:relative; left: -5">
  <font size="2">10</font><hr size="3" color="#999999" STYLE="page-break-after: always">
  <font size="2">&nbsp; </font> </div><p>
<p>
<b>Item 14. Principal Accounting Fees and Services</b><p>
<b><font size="2">Principal Accountant Audit Fees and Services Fees</font></b><font size="2">
</font> <p>
<font size="2">The following table describes fees for professional audit services rendered by
BDO Seidman, LLP, our principal accountant, for the audit of our annual
financial statements for the years ended September 30, 2003 and September 30,
2002 and fees billed for other services rendered by BDO Seidman, LLP during
those periods. These amounts include fees paid to BDO Seidman, LLP and Anton
Collins Mitchell LLP, members of the BDO alliance network of firms.</font></p>
<div style="position:relative; left: 0">
  <table border=0 cellpadding=0 cellspacing =0 style="border-collapse: collapse" bordercolor="#111111" width="512" >
<tr valign="top">
<td width="353" colspan="1" rowspan="1" bgcolor=#FFF3CE style="border-bottom-style: solid; border-bottom-width: 1">
<p>
<font size="2">Type of Fee </font> </p>
</td>
<td width="77" colspan="1" rowspan="1" bgcolor=#FFF3CE style="border-bottom-style: solid; border-bottom-width: 1">
<p align="right">
<font size="2">2003 </font> </p align="right">
</td>
<td width="82" colspan="1" rowspan="1" bgcolor=#FFF3CE style="border-bottom-style: solid; border-bottom-width: 1">
<p align="right">
<font size="2">2002</font></p align="center">
</td>
</tr>
</table></div>
<div style="position:relative; left: 0">
  <table border=0 cellpadding=0 cellspacing =0 style="border-collapse: collapse" bordercolor="#111111" width="513" >
<tr valign="top">
<td width="299" colspan="1" rowspan="1" >
<p>
<font size="2">Audit Fees (1) </font> </p>
</td>
<td width="131" colspan="1" rowspan="1" >
<p align="right">


<font size="2">$93,013</font></p align="right">
</td>
<td width="83" colspan="1" rowspan="1" >
<p align="right">
<font size="2">$55,962</font></p align="right">
</td>
</tr>
<tr valign="top">
<td width="299" colspan="1" rowspan="1" bgcolor=#FFF3CE>
<p>
<font size="2">Audit Related Fees (2) </font> </p>
</td>
<td width="131" colspan="1" rowspan="1" bgcolor=#FFF3CE>
<p align="right">
<font size="2">29,700</font></p align="right">
</td>
<td width="83" colspan="1" rowspan="1" bgcolor=#FFF3CE>
<p align="right">
<font size="2">27,911</font></p align="right">
</td>
</tr>
<tr valign="top">
<td width="299" colspan="1" rowspan="1" >
<p>
<font size="2">Tax Fees (3) </font> </p>
</td>
<td width="131" colspan="1" rowspan="1" >
<p align="right">
<font size="2">&#150;</font></p align="right">
</td>
<td width="83" colspan="1" rowspan="1" >
<p align="right">
<font size="2">5,000</font></p align="right">
</td>
</tr>
<tr valign="top">
<td width="299" colspan="1" rowspan="1" bgcolor=#FFF3CE>
<p>
<font size="2">All Other Fees (4) </font> </p>
</td>
<td width="131" colspan="1" rowspan="1" bgcolor=#FFF3CE>
<p align="right">
<font size="2">&#150;</font></p align="right">
</td>
<td width="83" colspan="1" rowspan="1" bgcolor=#FFF3CE>
<p align="right">
<font size="2">&#150;</font></p align="right">
</td>
</tr>
<tr valign="top">
<td width="299" colspan="1" rowspan="1" >
<p>
<font size="2">Total </font> </p>
</td>
<td width="131" colspan="1" rowspan="1" >
<p align="right">
<font size="2">$122,713</font></p align="right">
</td>
<td width="83" colspan="1" rowspan="1" >
<p align="right">
<font size="2">$88,873</font></p align="right">
</td>
</tr>
</table></div>
<p>
</p>
<div style="position:relative; left: 0"><table border=0 cellpadding=0 cellspacing =0 >
<tr valign="top">
<td width="35.999991" colspan="1" rowspan="1" >
<p>
<font size="2">(1)</font></p>
</td>
<td width="619.999845" colspan="1" rowspan="1" >
<p>
<font size="2">Audit Fees include the aggregate fees paid by us during the fiscal year
indicated for professional services rendered by BDO Seidman, LLP for the audit
of our annual financial statements and review of financial statements included
in our Forms 10-Q. </font> </p>
</td>
</tr>
<tr valign="top">
<td width="35.999991" colspan="1" rowspan="1" >
<p>
<font size="2">(2)</font></p>
</td>
<td width="619.999845" colspan="1" rowspan="1" >
<p>
<font size="2">Audit Related Fees include the aggregate fees paid by us during the fiscal year
indicated for assurance and related services by BDO Seidman, LLP that are
reasonably related to the performance of the audit or review of our financial
statements and not included in Audit Fees. Also included in Audit Related Fees
are fees for accounting advice. </font> </p>
</td>
</tr>
<tr valign="top">
<td width="35.999991" colspan="1" rowspan="1" >
<p>
<font size="2">(3)</font></p>
</td>
<td width="619.999845" colspan="1" rowspan="1" >
<p>
<font size="2">Tax Fees include the aggregate fees paid by us during the fiscal year indicated
for professional services rendered by BDO Seidman, LLP for tax compliance, tax
advice and tax planning. </font> </p>
</td>
</tr>
<tr valign="top">
<td width="35.999991" colspan="1" rowspan="1" >
<p>
<font size="2">(4)</font></p>
</td>
<td width="619.999845" colspan="1" rowspan="1" >
<p>
<font size="2">All Other Fees include the aggregate fees paid by us during the fiscal year
indicated for products and services provided by BDO Seidman, LLP, other than the
services reported above. </font> </p>
</td>
</tr>
</table></div>
<p>
<p>
<font size="2">Approximately 59% of the total hours to complete the audit of our financial
statements for the year ended September 30, 2002 were incurred by Anton Collins
Mitchell LLP, members of the BDO alliance network of firms. Such members are not
full time, permanent employees of BDO Seidman, LLP.</font></p>
<p><b><font size="2">Audit Committee Pre-Approval Policies and Procedures</font></b></p>
<p><font size="2">The Audit Committee on an annual basis reviews audit and non-audit services
performed by the independent auditor. All audit and non-audit services are
pre-approved by the Audit Committee, which considers, among other things, the
possible effect of the performance of such services on the auditors'
independence. The Audit Committee has considered the role of BDO Seidman, LLP in
providing services to us for the fiscal year ended September 30, 2003 and has
concluded that such services are compatible with their independence as our
company's auditors. The Audit Committee has established its pre-approval
policies and procedures, pursuant to which the Audit Committee approved the
foregoing audit services provided by BDO Seidman, LLP in fiscal 2003. </font>
</p align="center">
<div align="center" color="#000080" style="position:relative; left: -5">
  <font size="2">11</font><hr size="3" color="#999999" STYLE="page-break-after: always">
  <font size="2">&nbsp; </font> </div><p>
<p align="center">
<b><font size="4">PART IV</font></b><p>
<b>Item 15. Exhibits, Financial Statement Schedules and Reports on Form
8-K</b></p>
<div style="position:relative; left: 0"><table border=0 cellpadding=0 cellspacing =0 >
<tr valign="top">
<td width="35.999991" colspan="1" rowspan="1" >
<p>
<font size="2">(a)</font></p>
</td>
<td width="621.333178" colspan="1" rowspan="1" >
<p>
<font size="2">The following documents are filed as part of this report: </font> </p>
</td>
</tr>
</table></div>
<p>
<p>
<b><font size="2">Financial Statements:</font></b></p>
<div style="position:relative; left: 0"><table border=0 cellpadding=0 cellspacing =0 >
<tr valign="top">
<td width="581.333188" colspan="1" rowspan="1" >
<p>
<font size="2">Report of Independent Certified Public Accountants</font></p>
</td>
<td width="74.666648" colspan="1" rowspan="1" >
<p>
<font size="2">F-2</font></p>
</td>
</tr>
<tr valign="top">
<td width="657.333169" colspan="2" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="581.333188" bgcolor="#FFF3CE" >
<p>
<font size="2">Balance Sheets as of September 30, 2003 and 2002</font></p>
</td>
<td width="74.666648" bgcolor="#FFF3CE" >
<p>
<font size="2">F-3</font></p>
</td>
</tr>
<tr valign="top">
<td width="657.333169" colspan="2" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="657.333169" colspan="2" rowspan="1" >
<p>
<font size="2">Statements of Operations for the Years Ended</font></p>
</td>
</tr>
<tr valign="top">
<td width="581.333188" colspan="1" rowspan="1" >
<p>
<font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;September 30, 2003, 2002 and 2001</font></p>
</td>
<td width="74.666648" colspan="1" rowspan="1" >
<p>
<font size="2">F-4</font></p>
</td>
</tr>
<tr valign="top">
<td width="657.333169" colspan="2" rowspan="1" >
&nbsp;</td>

</tr>
<tr valign="top">
<td width="657.333169" colspan="2" bgcolor="#FFF3CE" >
<p>
<font size="2">Statements of Stockholders' Equity for the Years Ended</font></p>
</td>
</tr>
<tr valign="top">
<td width="581.333188" bgcolor="#FFF3CE" >
<p>
<font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;September 30, 2003, 2002 and 2001</font></p>
</td>
<td width="74.666648" bgcolor="#FFF3CE" >
<p>
<font size="2">F-5</font></p>
</td>
</tr>
<tr valign="top">
<td width="657.333169" colspan="2" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="657.333169" colspan="2" rowspan="1" >
<p>
<font size="2">Statements of Cash Flows for the Years Ended</font></p>
</td>
</tr>
<tr valign="top">
<td width="581.333188" colspan="1" rowspan="1" >
<p>
<font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;September 30, 2003, 2002 and 2001</font></p>
</td>
<td width="74.666648" colspan="1" rowspan="1" >
<p>
<font size="2">F-6</font></p>
</td>
</tr>
<tr valign="top">
<td width="657.333169" colspan="2" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="581.333188" bgcolor="#FFF3CE" >
<p>
<font size="2">Summary of Accounting Policies</font></p>
</td>
<td width="74.666648" bgcolor="#FFF3CE" >
<p>
<font size="2">F-7 - F-12</font></p>
</td>
</tr>
<tr valign="top">
<td width="657.333169" colspan="2" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="581.333188" colspan="1" rowspan="1" >
<p>
<font size="2">Notes to Financial Statements</font></p>
</td>
<td width="74.666648" colspan="1" rowspan="1" >
<p>
<font size="2">F-13- F-26</font></p>
</td>
</tr>
<tr valign="top">
<td width="657.333169" colspan="2" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="581.333188" bgcolor="#FFF3CE" >
<p>
<font size="2">Schedule II - Valuation and Qualifying Accounts</font></p>
</td>
<td width="74.666648" bgcolor="#FFF3CE" >
<p>
<font size="2">F-27</font></p>
</td>
</tr>
</table></div>
<p>
<p>
<b>Exhibit Index</b><p>
<b><font size="2">3. Articles and Bylaws</font></b></p>
<div style="position:relative; left: 0"><table border=0 cellpadding=0 cellspacing =0 >
<tr valign="top">
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="50.666654" colspan="1" rowspan="1" >
<p>
<font size="2">3.1</font></p>
</td>
<td width="581.333188" colspan="1" rowspan="1" >
<p>
<font size="2">Certificate of Incorporation of American Technology Corporation (Delaware) dated
March 1, 1992. Filed as Exhibit 2.1 on Form 10-SB effective August 1, 1994.</font></p>
</td>
</tr>
<tr valign="top">
<td width="657.333169" colspan="3" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="50.666654" colspan="1" rowspan="1" >
<p>
<font size="2">3.1.1 </font> </p>
</td>
<td width="581.333188" colspan="1" rowspan="1" >
<p>
<font size="2">Amendment to Certificate of Incorporation of American Technology Corporation
dated March 24, 1997 and filed with Delaware on April 22, 1997. Filed as Exhibit
3.1.1 on Form 10-QSB for March 31, 1997.</font></p>
</td>
</tr>
<tr valign="top">
<td width="657.333169" colspan="3" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="50.666654" colspan="1" rowspan="1" >
<p>
<font size="2">3.1.2 </font> </p>
</td>
<td width="581.333188" colspan="1" rowspan="1" >
<p>
<font size="2">Corrected Certificate of Designations of Series A Convertible Preferred Stock
dated and filed with Delaware on August 25, 1997. Filed as Exhibit 3.1.3 on Form
8-K dated August 29, 1997.</font></p>
</td>
</tr>
<tr valign="top">
<td width="657.333169" colspan="3" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="50.666654" colspan="1" rowspan="1" >
<p>
<font size="2">3.1.3</font></p>
</td>
<td width="581.333188" colspan="1" rowspan="1" >
<p>
<font size="2">Corrected Certificate of Designations of Series B Convertible Preferred Stock
filed with Delaware on December 23, 1998. Filed as Exhibit 3.1.4 on Form 10-KSB
dated December 29, 1998.</font></p>
</td>
</tr>
<tr valign="top">
<td width="657.333169" colspan="3" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="50.666654" colspan="1" rowspan="1" >
<p>
<font size="2">3.1.4</font></p>
</td>
<td width="581.333188" colspan="1" rowspan="1" >
<p>
<font size="2">Corrected Certificate of Designation of Series C Preferred Stock filed with
Delaware on April 19, 2000. Filed as exhibit 3.1.5 on Form 8-K dated April 19,
2000.</font></p>
</td>
</tr>
<tr valign="top">
<td width="657.333169" colspan="3" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="50.666654" colspan="1" rowspan="1" >
<p>
<font size="2">3.1.5</font></p>
</td>
<td width="581.333188" colspan="1" rowspan="1" >
<p>
<font size="2">Certificate of Designation of Series D Preferred Stock filed with Delaware on
May 3, 2002. Filed as exhibit 3.1 on Form 10-Q for the quarter ended March 31,
2002.</font></p>
</td>
</tr>
<tr valign="top">
<td width="657.333169" colspan="3" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="50.666654" colspan="1" rowspan="1" >
<p>
<font size="2">3.1.6</font></p>
</td>
<td width="581.333188" colspan="1" rowspan="1" >
<p>
<font size="2">Certificate of Amendment to Certificate of Incorporation filed with Delaware on
September 26, 2002. Filed as exhibit 3.1.6 on Form 10-K for the year ended
September 30, 2002.</font></p>
</td>
</tr>
<tr valign="top">
<td width="657.333169" colspan="3" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="50.666654" colspan="1" rowspan="1" >
<p>
<font size="2">3.1.7</font></p>
</td>
<td width="581.333188" colspan="1" rowspan="1" >
<p>
<font size="2">Certificate of Designation of Series E Preferred Stock filed with Delaware on
February 28, 2003. Filed as exhibit 4.2 on Form 8-K dated March 6, 2003.</font></p>
</td>
</tr>
<tr valign="top">
<td width="657.333169" colspan="3" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="50.666654" colspan="1" rowspan="1" >
<p>
<font size="2">3.2</font></p>
</td>
<td width="581.333188" colspan="1" rowspan="1" >
<p>
<font size="2">Bylaws of American Technology Corporation. Filed as Exhibit 2.3 on Form 10-SB
effective August 1, 1994.</font></p>
</td>
</tr>
</table></div>
<div align="center" color="#000080" style="position:relative; left: -5">
  <font size="2">12</font><hr size="3" color="#999999" STYLE="page-break-after: always">
  <font size="2">&nbsp; </font> </div><p>
<p>
<b><font size="2">10. Material Contracts</font></b></p>
<div style="position:relative; left: 0"><table border=0 cellpadding=0 cellspacing =0 >
<tr valign="top">
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="61.333318" colspan="1" rowspan="1" >
<p>
<font size="2">10.1</font></p>
</td>
<td width="571.999857" colspan="1" rowspan="1" >
<p>
<font size="2">Royalty Agreement between ATC and Elwood G. Norris dated September 3, 1985 filed
as Exhibit 6.2 on Form 10-SB effective August 1, 1994.</font></p>
</td>
</tr>
<tr valign="top">
<td width="657.333169" colspan="3" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="61.333318" colspan="1" rowspan="1" >
<p>
<font size="2">10.2</font></p>
</td>
<td width="571.999857" colspan="1" rowspan="1" >
<p>
<font size="2">Assignment of Technology Agreement between ATC and Elwood G. Norris dated March
2, 1992. Filed as Exhibit 6.3 on Form 10-SB effective August 1, 1994.</font></p>
</td>
</tr>
<tr valign="top">
<td width="657.333169" colspan="3" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="61.333318" colspan="1" rowspan="1" >
<p>
<font size="2">10.2.1</font></p>
</td>
<td width="571.999857" colspan="1" rowspan="1" >
<p>
<font size="2">Addendum Agreement to Assignment of Technology Agreement between ATC and Elwood
G. Norris dated December 2, 1996. Filed as Exhibit 10.3.1 on Form 10-KSB for
September 30, 1996.</font></p>
</td>
</tr>
<tr valign="top">
<td width="657.333169" colspan="3" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="61.333318" colspan="1" rowspan="1" >
<p>
<font size="2">10.3</font></p>
</td>
<td width="571.999857" colspan="1" rowspan="1" >
<p>
<font size="2">1992 Incentive Stock Option Plan adopted by the Board of Directors on March 2,
1992 and approved by the shareholders on June 19, 1992. Filed as Exhibit 6.8 on
Form 10-SB effective August 1, 1994.</font></p>
</td>
</tr>
<tr valign="top">
<td width="657.333169" colspan="3" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="61.333318" colspan="1" rowspan="1" >
<p>
<font size="2">10.3.1</font></p>
</td>
<td width="571.999857" colspan="1" rowspan="1" >
<p>
<font size="2">Standard form of Incentive Stock Option Plan Agreement. Filed as Exhibit 6.8.1
on Form 10-SB effective August 1, 1994.</font></p>
</td>
</tr>
<tr valign="top">
<td width="657.333169" colspan="3" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="61.333318" colspan="1" rowspan="1" >
<p>
<font size="2">10.4</font></p>
</td>
<td width="571.999857" colspan="1" rowspan="1" >
<p>
<font size="2">1992 Non-Statutory Stock Option Plan. Filed as Exhibit 6.9 on Form 10-SB
effective August 1, 1994.</font></p>
</td>
</tr>
<tr valign="top">
<td width="657.333169" colspan="3" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="61.333318" colspan="1" rowspan="1" >
<p>
<font size="2">10.5</font></p>
</td>
<td width="571.999857" colspan="1" rowspan="1" >
<p>
<font size="2">Sublease agreement between ATC and Smiths Industries Aerospace &amp; Defense
Systems, Inc. as amended, dated September 1, 2000.</font></p>
</td>
</tr>
<tr valign="top">
<td width="657.333169" colspan="3" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="61.333318" colspan="1" rowspan="1" >
<p>
<font size="2">10.6</font></p>
</td>
<td width="571.999857" colspan="1" rowspan="1" >
<p>
<font size="2">1997 Employee Stock Compensation Plan of ATC dated March 10, 1997 filed as
Exhibit 10.11 on Form S-8 dated March 24, 1997.</font></p>
</td>
</tr>
<tr valign="top">
<td width="657.333169" colspan="3" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="61.333318" colspan="1" rowspan="1" >
<p>
<font size="2">10.7</font></p>
</td>
<td width="571.999857" colspan="1" rowspan="1" >
<p>
<font size="2">Employment Agreement dated as of September 1, 1997 between ATC and Elwood G.
Norris filed as Exhibit 10.16 on Form 10-KSB for September 30, 1997.</font></p>
</td>
</tr>
<tr valign="top">
<td width="657.333169" colspan="3" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="61.333318" colspan="1" rowspan="1" >
<p>
<font size="2">10.8</font></p>
</td>
<td width="571.999857" colspan="1" rowspan="1" >
<p>
<font size="2">1997 Stock Option Plan as adopted on January 23, 1998 filed as Exhibit 10.1 on
Form S-8 dated July 27, 1998.</font></p>
</td>
</tr>
<tr valign="top">
<td width="657.333169" colspan="3" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="61.333318" colspan="1" rowspan="1" >
<p>


<font size="2">10.9</font></p>
</td>
<td width="571.999857" colspan="1" rowspan="1" >
<p>
<font size="2">Employment Agreement dated July 8, 1998 between ATC and James Croft. Filed as
Exhibit 10.14 on Form 10-KSB dated December 29, 1998.</font></p>
</td>
</tr>
<tr valign="top">
<td width="657.333169" colspan="3" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="61.333318" colspan="1" rowspan="1" >
<p>
<font size="2">10.10</font></p>
</td>
<td width="571.999857" colspan="1" rowspan="1" >
<p>
<font size="2">Employment Agreement effective as of October 15, 2002 between the Company and
Terry Conrad. Filed as exhibit 10.10 to Form 10-K for the year ended September
30, 2002.</font></p>
</td>
</tr>
<tr valign="top">
<td width="657.333169" colspan="3" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="61.333318" colspan="1" rowspan="1" >
<p>
<font size="2">10.11</font></p>
</td>
<td width="571.999857" colspan="1" rowspan="1" >
<p>
<font size="2">2002 Stock Option Plan.  Filed as Exhibit 99.1 on Form S-8 dated November 18,
2002.</font></p>
</td>
</tr>
<tr valign="top">
<td width="657.333169" colspan="3" rowspan="1" >
&nbsp;</td>
</tr>


<tr valign="top">
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="61.333318" colspan="1" rowspan="1" >
<p>
<font size="2">10.12 </font> </p>
</td>
<td width="571.999857" colspan="1" rowspan="1" >
<p>
<font size="2">Form of 12% Convertible Subordinated Promissory Note due December 31, 2002
aggregating $2,025,000 granted to accredited investors (individual notes differ
as to holder, amount and issuance date). Filed as Exhibit 4.11 on Form 8-K dated
October 12, 2001.</font></p>
</td>
</tr>
<tr valign="top">
<td width="657.333169" colspan="3" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="61.333318" colspan="1" rowspan="1" >
<p>
<font size="2">10.12.1</font></p>
</td>
<td width="571.999857" colspan="1" rowspan="1" >
<p>
<font size="2">Amendment to 12% Convertible Subordinated Promissory Note dated November 19,
2002. Filed as Exhibit 10.12.1 to Form 10-K for the year ended September 30,
2002.</font></p>
</td>
</tr>
<tr valign="top">
<td width="657.333169" colspan="3" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="61.333318" colspan="1" rowspan="1" >
<p>
<font size="2">10.13 </font> </p>
</td>
<td width="571.999857" colspan="1" rowspan="1" >
<p>
<font size="2">Form of Stock Purchase Warrant exercisable until September 30, 2006 granted to
accredited investors for an aggregate of 1,012,500 common shares (individual
warrants differ as to holder, number of shares and issuance date).  Filed as
Exhibit 4.12 on Form 8-K dated October 12, 2001.</font></p>
</td>
</tr>
<tr valign="top">
<td width="657.333169" colspan="3" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="61.333318" colspan="1" rowspan="1" >
<p>
<font size="2">10.14</font></p>
</td>
<td width="571.999857" colspan="1" rowspan="1" >
<p>
<font size="2">Series D Stock and Warrant Purchase Agreement dated May 3, 2002.  Filed as
Exhibit 10.1 to Form 10-Q for the quarter ended March 31, 2002.</font></p>
</td>
</tr>
<tr valign="top">
<td width="657.333169" colspan="3" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="61.333318" colspan="1" rowspan="1" >
<p>
<font size="2">10.14.1</font></p>
</td>
<td width="571.999857" colspan="1" rowspan="1" >
<p>
<font size="2">Amendment No. 1 to Series D Preferred Stock and Warrant Purchase Agreement dated
July 3, 2002.  Filed as Exhibit 10.3 to Form 10-Q for the quarter ended June 30,
2002.</font></p>
</td>
</tr>
</table></div>
<p>
</p align="center">
<div align="center" color="#000080" style="position:relative; left: -5">
  <font size="2">13</font><hr size="3" color="#999999" STYLE="page-break-after: always">
  <font size="2">&nbsp; </font> </div><p>
</p>
<div style="position:relative; left: 0"><table border=0 cellpadding=0 cellspacing =0 >
<tr valign="top">
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="61.333318" colspan="1" rowspan="1" >
<p>
<font size="2">10.15</font></p>
</td>
<td width="570.666524" colspan="1" rowspan="1" >
<p>
<font size="2">Form of Stock Purchase Warrant exercisable until March 31, 2007 granted to
investors for an aggregate of 517,880 common shares (individual warrants differ
as to holder, number of shares and issuance date). Filed as Exhibit 10.2 to Form
10-Q for the quarter ended March 31, 2002.</font></p>
</td>
</tr>
<tr valign="top">
<td width="657.333169" colspan="3" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="61.333318" colspan="1" rowspan="1" >
<p>
<font size="2">10.16</font></p>
</td>
<td width="570.666524" colspan="1" rowspan="1" >
<p>
<font size="2">Form of 8% Senior Secured Promissory Note due December 31, 2003 aggregating
$1,500,000 granted to accredited investors (individual notes differ as to holder
and amount). Filed as Exhibit 4.1 on Form 8-K dated October 7, 2002.</font></p>
</td>
</tr>
<tr valign="top">
<td width="657.333169" colspan="3" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="61.333318" colspan="1" rowspan="1" >
<p>
<font size="2">10.16.1</font></p>
</td>
<td width="570.666524" colspan="1" rowspan="1" >
<p>
<font size="2">Form of Amendment to 8% Senior Secured Promissory Note. Filed as exhibit 4.6 to
Form 8-K dated March 6, 2003.</font></p>
</td>
</tr>
<tr valign="top">
<td width="657.333169" colspan="3" rowspan="1" >
<p>
&nbsp;</p>
</td>
</tr>
<tr valign="top">
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="61.333318" colspan="1" rowspan="1" >
<p>
<font size="2">10.17</font></p>
</td>
<td width="570.666524" colspan="1" rowspan="1" >
<p>
<font size="2">Form of Security Agreement. Filed as Exhibit 4.2 on Form 8-K dated October 7,
2002.</font></p>
</td>
</tr>
<tr valign="top">
<td width="657.333169" colspan="3" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="61.333318" colspan="1" rowspan="1" >
<p>
<font size="2">10.18</font></p>
</td>
<td width="570.666524" colspan="1" rowspan="1" >
<p>
<font size="2">License Agreement between ATC and Harman International Industries, Inc. dated
August 24, 2001. Portions of this exhibit (indicated by asterisks) have been
omitted pursuant to a request for confidential treatment pursuant to Rule 24b-2
of the Securities Exchange Act of 1934. Filed as exhibit 10.19 to Form 10-K for
the year ended September 30, 2002.</font></p>
</td>
</tr>
<tr valign="top">
<td width="657.333169" colspan="3" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="61.333318" colspan="1" rowspan="1" >
<p>
<font size="2">10.19</font></p>
</td>
<td width="570.666524" colspan="1" rowspan="1" >
<p>
<font size="2">Series E Preferred Stock and Warrant Purchase Agreement dated February 28, 2003.
Filed as Exhibit 4.1 to Form 8-K filed on March 6, 2003.</font></p>
</td>
</tr>
<tr valign="top">
<td width="657.333169" colspan="3" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="61.333318" colspan="1" rowspan="1" >
<p>
<font size="2">10.20</font></p>
</td>
<td width="570.666524" colspan="1" rowspan="1" >
<p>
<font size="2">Form of Stock Purchase Warrant exercisable until December 31, 2007 granted to
accredited investors for an aggregate of 514,875 common shares (individual
warrants differ as to holder, number of shares and issuance date).  Filed as
Exhibit 4.3 on Form 8-K dated March 6, 2003.</font></p>
</td>
</tr>
<tr valign="top">
<td width="657.333169" colspan="3" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="61.333318" colspan="1" rowspan="1" >
<p>
<font size="2">10.21</font></p>
</td>
<td width="570.666524" colspan="1" rowspan="1" >
<p>
<font size="2">Employment agreement/offer letter of James M. Irish dated January 27, 2003.
Filed as exhibit 10.5 to Form 10-Q for the quarter ended March 31, 2003.</font></p>
</td>
</tr>
<tr valign="top">
<td width="657.333169" colspan="3" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="61.333318" colspan="1" rowspan="1" >
<p>
<font size="2">10.22</font></p>
</td>
<td width="570.666524" colspan="1" rowspan="1" >
<p>
<font size="2">Stock Purchase Warrant exercisable until September 30, 2007 granted to Sunrise
Capital, Inc. for 100,000 common shares. Filed as exhibit 4.4 to Form S-3 dated
May 29, 2003. </font> </p>
</td>
</tr>
<tr valign="top">
<td width="657.333169" colspan="3" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="61.333318" colspan="1" rowspan="1" >
<p>
<font size="2">10.23</font></p>
</td>
<td width="570.666524" colspan="1" rowspan="1" >
<p>
<font size="2">Stock Purchase Warrant exercisable until April 4, 2008 granted to Jonathan Berg
for 50,000 common shares. Filed as exhibit 4.5 to Form S-3 dated May 29, 2003.
</font>
</p>
</td>
</tr>
<tr valign="top">
<td width="657.333169" colspan="3" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="61.333318" colspan="1" rowspan="1" >
<p>
<font size="2">10.24</font></p>
</td>
<td width="570.666524" colspan="1" rowspan="1" >
<p>
<font size="2">Securities Purchase Agreement dated July 11, 2003. Filed as Exhibit 4.1 to Form
8-K dated July 17, 2003. </font> </p>
</td>
</tr>
<tr valign="top">
<td width="657.333169" colspan="3" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="61.333318" colspan="1" rowspan="1" >
<p>
<font size="2">10.25</font></p>
</td>
<td width="570.666524" colspan="1" rowspan="1" >
<p>
<font size="2">Registration Rights Agreement dated July 11, 2003. Filed as Exhibit 4.2 to Form
8-K dated July 17, 2003. </font> </p>
</td>
</tr>
<tr valign="top">
<td width="657.333169" colspan="3" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="61.333318" colspan="1" rowspan="1" >
<p>
<font size="2">10.26</font></p>
</td>
<td width="570.666524" colspan="1" rowspan="1" >
<p>
<font size="2">Form of Common Stock Warrant exercisable until July 10, 2007 granted to
accredited investors for an aggregate of 454,547 common shares (individual
warrants differ as to holder, number of shares and issuance date). Filed as
Exhibit 4.3 to Form 8-K dated July 17, 2003. </font> </p>
</td>
</tr>
<tr valign="top">
<td width="657.333169" colspan="3" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="61.333318" colspan="1" rowspan="1" >
<p>
<font size="2">10.27</font></p>
</td>
<td width="570.666524" colspan="1" rowspan="1" >
<p>
<font size="2">License and Remarketer Agreement between ATC and General Dynamics Armament and
Technical Products, Inc. dated February 14, 2003.*  Portions of this exhibit
(indicated by asterisks) have been omitted pursuant to a request for
confidential treatment pursuant to Rule 24b-2 of the Securities Exchange Act of
1934. </font> </p>
</td>
</tr>
</table></div>
<p>
</p align="center">
<div align="center" color="#000080" style="position:relative; left: -5">
  <font size="2">14</font><hr size="3" color="#999999" STYLE="page-break-after: always">
  <font size="2">&nbsp; </font> </div><p>
</p>
<div style="position:relative; left: 0"><table border=0 cellpadding=0 cellspacing =0 >
<tr valign="top">
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="61.333318" colspan="1" rowspan="1" >
<p>
<font size="2">10.28.1</font></p>
</td>
<td width="571.999857" colspan="1" rowspan="1" >
<p>
<font size="2">License and Remarketer Agreement between ATC and Bath Iron Works Corporation
dated February 13, 2003. *  Portions of this exhibit (indicated by asterisks)
have been omitted pursuant to a request for confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934.</font></p>
</td>
</tr>
<tr valign="top">
<td width="657.333169" colspan="3" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="61.333318" colspan="1" rowspan="1" >
<p>
<font size="2">10.28.2</font></p>
</td>
<td width="571.999857" colspan="1" rowspan="1" >
<p>
<font size="2">Assignment of License and Remarketer Agreement from Bath Iron Works Corporation
to General Dynamics Armament and Technical Products, Inc., dated September 23,
2003.*</font></p>
</td>
</tr>
<tr valign="top">
<td width="657.333169" colspan="3" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="61.333318" colspan="1" rowspan="1" >
<p>
<font size="2">10.29</font></p>
</td>
<td width="571.999857" colspan="1" rowspan="1" >
<p>
<font size="2">Employment Agreement of Kalani Jones dated August 28, 2003, as amended.*</font></p>
</td>
</tr>
<tr valign="top">
<td width="657.333169" colspan="3" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="61.333318" colspan="1" rowspan="1" >
<p>
<font size="2">10.30</font></p>
</td>
<td width="571.999857" colspan="1" rowspan="1" >
<p>
<font size="2">Employment Agreement of Carl Gruenler, as amended.*</font></p>
</td>
</tr>
</table></div>
<p>
<p>
<b><font size="2">23 Consents of Experts and Council</font></b></p>
<div style="position:relative; left: 0"><table border=0 cellpadding=0 cellspacing =0 >
<tr valign="top">
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="59.999985" colspan="1" rowspan="1" >
<p>
<font size="2">23.1</font></p>
</td>
<td width="571.999857" colspan="1" rowspan="1" >
<p>
<font size="2">Consent of BDO Seidman, LLP.*</font></p>
</td>
</tr>
</table></div>
<p>
<p>
<b><font size="2">24 Power of Attorney</font></b></p>
<div style="position:relative; left: 0"><table border=0 cellpadding=0 cellspacing =0 >
<tr valign="top">
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="59.999985" colspan="1" rowspan="1" >
<p>
<font size="2">24.1</font></p>
</td>
<td width="571.999857" colspan="1" rowspan="1" >
<p>
<font size="2">Power of Attorney.  Reference is made to page 39 of Form 10-K for the year ended
September 30, 2003.</font></p>
</td>
</tr>
</table></div>
<p>
<p>
<b><font size="2">Certifications</font></b></p>
<div style="position:relative; left: 0"><table border=0 cellpadding=0 cellspacing =0 >
<tr valign="top">
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="59.999985" colspan="1" rowspan="1" >
<p>
<font size="2">31.1</font></p>
</td>
<td width="571.999857" colspan="1" rowspan="1" >
<p>
<font size="2">Certification of Elwood G. Norris, Principal Executive Officer, pursuant to Rule
13a-14(a) or 15d-14(a) of the Securities and Exchange Act of 1934, as adopted
pursuant to Section&nbsp;302 of the Sarbanes-Oxley Act of 2002.</font></p>
</td>
</tr>
<tr valign="top">
<td width="657.333169" colspan="3" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="59.999985" colspan="1" rowspan="1" >
<p>
<font size="2">31.2</font></p>
</td>
<td width="571.999857" colspan="1" rowspan="1" >
<p>
<font size="2">Certification of Carl Gruenler, Principal Financial Officer, pursuant to Rule
13a-14(a) or 15d-14(a) of the Securities and Exchange Act of 1934, as adopted
pursuant to Section&nbsp;302 of the Sarbanes-Oxley Act of 2002.</font></p>
</td>
</tr>
<tr valign="top">
<td width="657.333169" colspan="3" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="59.999985" colspan="1" rowspan="1" >
<p>
<font size="2">32.1</font></p>
</td>
<td width="571.999857" colspan="1" rowspan="1" >
<p>
<font size="2">Certification pursuant to 18 U.S.C. Section&nbsp;1350, as adopted pursuant to
Section&nbsp;906 of the Sarbanes-Oxley Act of 2002, executed by Elwood G.
Norris, Principal Executive Officer, and Carl Gruenler, Principal Financial
Officer.</font></p>
</td>
</tr>
</table></div>
<p>
<p>
<font size="2">* Previously filed with Form 10-K for the year ended September 30, 2003.</font><p>
<font size="2">(b) <u>Reports on Form 8-K</u> </font> <p>
<font size="2">We filed a Form 8-K on September 24, 2003 containing disclosure in Item 5, 7 and
12.<br>We filed a Form 8-K on September 22, 2003 containing disclosure in Item 5
and 7.<br>We filed a Form 8-K on July 17, 2003 containing disclosure in Item 5
and 7.</font></p align="center">
<div align="center" color="#000080" style="position:relative; left: -5">
  <font size="2">15</font><hr size="3" color="#999999" STYLE="page-break-after: always">
  <font size="2">&nbsp; </font> </div><p>
<p align="center">
<b><font size="2">SIGNATURES</font></b><p>
<font size="2">Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized. </font> </p>
<div style="position:relative; left: 0">
  <table border=0 cellpadding=0 cellspacing =0 style="border-collapse: collapse" bordercolor="#111111" >
<tr valign="top">
<td width="299.999925" colspan="1" rowspan="1" >
<p>
<b><font size="2">&nbsp;</font></b></p>
</td>
<td width="355.999911" colspan="2" rowspan="1" >
<p>
<b><font size="2">AMERICAN TECHNOLOGY CORPORATION</font></b><font size="2"><br>January 28, 2004</font></p>
</td>
</tr>
<tr valign="top">
<td width="657.333169" colspan="3" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="299.999925" colspan="1" rowspan="1" >
<p>
&nbsp;</p>
</td>
<td width="23.999994" colspan="1" rowspan="1" >
<p>
<font size="2">By:</font></p>
</td>
<td width="331.999917" colspan="1" rowspan="1" style="border-bottom-style: solid; border-bottom-width: 1" >
<p>
<font size="2">/s/ ELWOOD G. NORRIS</font></p>
</td>
</tr>
<tr valign="top">
<td width="299.999925" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="23.999994" colspan="1" rowspan="1" >
<p>
&nbsp;</p>
</td>
<td width="331.999917" colspan="1" rowspan="1" style="border-top-style: solid; border-top-width: 1" >
<p>
<font size="2">Elwood G. Norris<br>(Chairman of the Board)<br>Principal Executive Officer</font></p>
</td>
</tr>
<tr valign="top">
<td width="299.999925" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="23.999994" colspan="1" rowspan="1" >
<p>
&nbsp;</p>
</td>
<td width="331.999917" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
</table></div>
<p>
<p>
<font size="2">Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of registrant in the
capacities and on the dates indicated.</font></p>
<div style="position:relative; left: 0">
  <table border=0 cellpadding=0 cellspacing =0 style="border-collapse: collapse" bordercolor="#111111" >
<tr valign="top">
<td width="299.999925" colspan="1" rowspan="1" >
<p>
<font size="2">&nbsp;Date: January 28, 2004</font></p>
</td>
<td width="23.999994" colspan="1" rowspan="1" >
<p>
<font size="2">By:</font></p>
</td>
<td width="331.999917" colspan="1" rowspan="1" style="border-bottom-style: solid; border-bottom-width: 1" >
<p>
<font size="2">/s/ ELWOOD G. NORRIS</font></p>
</td>
</tr>
<tr valign="top">
<td width="299.999925" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="331.999917" colspan="1" rowspan="1" style="border-top-style: solid; border-top-width: 1" >
<p>
<font size="2">Elwood G. Norris<br>Chairman of the Board and Director<br>(Principal Executive
Officer)</font></p>
</td>
</tr>
<tr valign="top">
<td width="299.999925" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="331.999917" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="299.999925" colspan="1" rowspan="1" >
<p>
<font size="2">Date: January 28, 2004</font></p>
</td>
<td width="23.999994" colspan="1" rowspan="1" >
<p>
<font size="2">By:</font></p>
</td>
<td width="331.999917" colspan="1" rowspan="1" style="border-bottom-style: solid; border-bottom-width: 1" >
<p>
<font size="2">/s/ CARL GRUENLER</font></p>
</td>
</tr>
<tr valign="top">
<td width="299.999925" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="331.999917" colspan="1" rowspan="1" style="border-top-style: solid; border-top-width: 1" >
<p>
<font size="2">Carl Gruenler, Vice President, Military Operations and Interim Chief Financial
Officer<br>(Principal Financial and Accounting Officer)</font></p>
</td>
</tr>
<tr valign="top">
<td width="299.999925" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="331.999917" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="299.999925" colspan="1" rowspan="1" >
<p>
<font size="2">Date: January 28, 2004</font></p>
</td>
<td width="23.999994" colspan="1" rowspan="1" >
<p>
<font size="2">By:</font></p>
</td>
<td width="331.999917" colspan="1" rowspan="1" style="border-bottom-style: solid; border-bottom-width: 1" >
<p>
<font size="2">/s/&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*</font></p>
</td>
</tr>
<tr valign="top">
<td width="299.999925" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="331.999917" colspan="1" rowspan="1" style="border-top-style: solid; border-top-width: 1" >
<p>
<font size="2">Richard M. Wagner<br>Director</font></p>
</td>
</tr>
<tr valign="top">
<td width="299.999925" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="331.999917" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="299.999925" colspan="1" rowspan="1" >
<p>
<font size="2">Date: January 28, 2004</font></p>
</td>
<td width="23.999994" colspan="1" rowspan="1" >
<p>
<font size="2">By:</font></p>
</td>
<td width="331.999917" colspan="1" rowspan="1" style="border-bottom-style: solid; border-bottom-width: 1" >
<p>
<font size="2">/s/&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*</font></p>
</td>
</tr>
<tr valign="top">
<td width="299.999925" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="331.999917" colspan="1" rowspan="1" style="border-top-style: solid; border-top-width: 1" >
<p>
<font size="2">David J. Carter<br>Director</font></p>
</td>
</tr>
<tr valign="top">
<td width="299.999925" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="331.999917" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="299.999925" colspan="1" rowspan="1" >
<p>
<font size="2">Date: January 28, 2004</font></p>
</td>
<td width="23.999994" colspan="1" rowspan="1" >
<p>
<font size="2">By:</font></p>
</td>
<td width="331.999917" colspan="1" rowspan="1" style="border-bottom-style: solid; border-bottom-width: 1" >
<p>
<font size="2">/s/&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*</font></p>
</td>
</tr>
<tr valign="top">
<td width="299.999925" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="331.999917" colspan="1" rowspan="1" style="border-top-style: solid; border-top-width: 1" >
<p>
<font size="2">Daniel Hunter<br>Director</font></p>
</td>
</tr>
</table></div>
<p>
<p>
<font size="2">* By Elwood G. Norris, as attorney in fact.</font></p align="center">
<div align="center" color="#000080" style="position:relative; left: -5">
  <font size="2">16</font><hr size="3" color="#999999" STYLE="page-break-after: always">
  <font size="2">&nbsp; </font> </div>


</body>

</html>

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-31.1
<SEQUENCE>3
<FILENAME>atco_10ka1-ex311.htm
<TEXT>
<html>

<head>
<title>EXHIBIT 31.1</title>
</head>

<body>
<p>
<b><font size="2">Exhibit 31.1</font></b><p align="center">
<b><font size="2">CERTIFICATION</font></b><p>
<font size="2">I, Elwood G. Norris, certify that: </font> <p>
<font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></p>
<div style="position:relative; left: 0"><table border=0 cellpadding=0 cellspacing =0 >
<tr valign="top">
<td width="30.666659" colspan="1" rowspan="1" >
<p>
<font size="2">1.</font></p>
</td>
<td width="625.333177" colspan="2" rowspan="1" >
<p>
<font size="2">I have reviewed this annual report on Form 10-K/A of American Technology
Corporation; </font> </p>
</td>
</tr>
<tr valign="top">
<td width="657.333169" colspan="3" rowspan="1" >
<p>
&nbsp;</p>
</td>
</tr>
<tr valign="top">
<td width="30.666659" colspan="1" rowspan="1" >
<p>
<font size="2">2.</font></p>
</td>
<td width="625.333177" colspan="2" rowspan="1" >
<p>
<font size="2">Based on my knowledge, this annual report does not contain any untrue statement
of a material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such statements were
made, not misleading with respect to the period covered by this annual report;
</font>
</p>
</td>
</tr>
<tr valign="top">
<td width="657.333169" colspan="3" rowspan="1" >
<p>
&nbsp;</p>
</td>
</tr>
<tr valign="top">
<td width="30.666659" colspan="1" rowspan="1" >
<p>
<font size="2">3.</font></p>
</td>
<td width="625.333177" colspan="2" rowspan="1" >
<p>
<font size="2">Based on my knowledge, the financial statements, and other financial information
included in this annual report, fairly present in all material respects the
financial condition, results of operations and cash flows of the registrant as
of, and for, the periods presented in this annual report; </font> </p>
</td>
</tr>
<tr valign="top">
<td width="657.333169" colspan="3" rowspan="1" >
<p>
&nbsp;</p>
</td>
</tr>


<tr valign="top">
<td width="30.666659" colspan="1" rowspan="1" >
<p>
<font size="2">4.</font></p>
</td>
<td width="625.333177" colspan="2" rowspan="1" >
<p>
<font size="2">The registrant's other certifying officer and I are responsible for establishing
and maintaining disclosure controls and procedures (as defined in Exchange Act
Rules 13a-15(e) and 15d-15(e)) for the registrant and have: </font> </p>
</td>
</tr>
<tr valign="top">
<td width="657.333169" colspan="3" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="30.666659" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="29.333326" colspan="1" rowspan="1" >
<p>
<font size="2">a)</font></p>
</td>
<td width="595.999851" colspan="1" rowspan="1" >
<p>
<font size="2">designed such disclosure controls and procedures, or caused such disclosure
controls and procedures to be designed under our supervision, to ensure that
material information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities, particularly
during the period in which this annual report is being prepared; </font> </p>
</td>
</tr>
<tr valign="top">
<td width="657.333169" colspan="3" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="30.666659" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="29.333326" colspan="1" rowspan="1" >
<p>
<font size="2">b)</font></p>
</td>
<td width="595.999851" colspan="1" rowspan="1" >
<p>
<font size="2">[paragraph omitted pursuant to SEC Release Nos. 33-2838 and 34-47986]</font></p>
</td>
</tr>
<tr valign="top">
<td width="657.333169" colspan="3" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="30.666659" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="29.333326" colspan="1" rowspan="1" >
<p>
<font size="2">c)</font></p>
</td>
<td width="595.999851" colspan="1" rowspan="1" >
<p>
<font size="2">evaluated the effectiveness of the registrant's disclosure controls and
procedures and presented in this report our conclusions about the effectiveness
of the disclosure controls and procedures, as of the end of the period covered
by this report based on such evaluation;</font></p>
</td>
</tr>
<tr valign="top">
<td width="657.333169" colspan="3" rowspan="1" >
<p>
&nbsp;</p>
</td>
</tr>
<tr valign="top">
<td width="30.666659" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="29.333326" colspan="1" rowspan="1" >
<p>
<font size="2">d)</font></p>
</td>
<td width="595.999851" colspan="1" rowspan="1" >
<p>
<font size="2">disclosed in this annual report any change in the registrant's internal control
over financial reporting that occurred during the registrant's most recent
fiscal quarter, which is the registrant's forth fiscal quarter, that has
materially affected, or is reasonably likely to materially affect, the
registrant's internal control over financial reporting.</font></p>
</td>
</tr>
<tr valign="top">
<td width="657.333169" colspan="3" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="30.666659" colspan="1" rowspan="1" >
<p>
<font size="2">5.</font></p>
</td>
<td width="625.333177" colspan="2" rowspan="1" >
<p>
<font size="2">The registrant's other certifying officer and I have disclosed, based on our
most recent evaluation of internal control over financial reporting, to the
registrant's auditors and the audit committee of registrant's board of directors
(or persons performing the equivalent functions): </font> </p>
</td>
</tr>
<tr valign="top">
<td width="657.333169" colspan="3" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="30.666659" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="29.333326" colspan="1" rowspan="1" >
<p>
<font size="2">a)</font></p>
</td>
<td width="595.999851" colspan="1" rowspan="1" >
<p>
<font size="2">all significant deficiencies and material weaknesses in the design or operation
of internal controls over financial reporting which are reasonably likely to
adversely affect the registrant's ability to record, process, summarize and
report financial information; and </font> </p>
</td>
</tr>
<tr valign="top">
<td width="657.333169" colspan="3" rowspan="1" >
<p>
&nbsp;</p>
</td>
</tr>
<tr valign="top">
<td width="30.666659" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="29.333326" colspan="1" rowspan="1" >
<p>
<font size="2">b)</font></p>
</td>
<td width="595.999851" colspan="1" rowspan="1" >
<p>
<font size="2">any fraud, whether or not material, that involves management or other employees
who have a significant role in the registrant's internal controls over financial
reporting. </font> </p>
</td>
</tr>
</table></div>
<p>
<p>
<font size="2">Dated: January 28, 2004 </font> </p>
<div style="position:relative; left: 0"><table border=0 cellpadding=0 cellspacing =0 >
<tr valign="top">
<td width="23.999994" colspan="1" rowspan="1" >
<p>
&nbsp;</p>
</td>
<td width="631.999842" colspan="1" rowspan="1" >
<p>
<font size="2">/s/ ELWOOD G. NORRIS</font></p>
</td>
</tr>
<tr valign="top">
<td width="657.333169" colspan="2" rowspan="1" >
<p>
</p>
</td>
</tr>
<tr valign="top">
<td width="23.999994" colspan="1" rowspan="1" >
<p>
&nbsp;</p>
</td>
<td width="631.999842" colspan="1" rowspan="1" >
<p>
<font size="2">Elwood G. Norris,<br>
Chairman of the Board<br>
(Principal Executive Officer)</font></p>
</td>
</tr>
<tr valign="top">
<td width="23.999994" colspan="1" rowspan="1" >
<p>
&nbsp;</p>
</td>
<td width="631.999842" colspan="1" rowspan="1" >
<p>
&nbsp;</p>
</td>
</tr>
<tr valign="top">
<td width="23.999994" colspan="1" rowspan="1" >
<p>
&nbsp;</p>
</td>
<td width="631.999842" colspan="1" rowspan="1" >
<p>
&nbsp;</p>
</td>
</tr>
</table></div>
<p>
</p align="center">
<div align="center" color="#000080" style="position:relative; left: -5"><hr size="3" color="#999999" STYLE="page-break-after: always">
  <font size="2">&nbsp; </font> </div><p>

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-31.2
<SEQUENCE>4
<FILENAME>atco_10ka1-ex312.htm
<TEXT>
<html>

<head>
<title>Exhibit 31.2</title>
</head>

<body>
<p>
<b><font size="2">Exhibit 31.2</font></b><p align="center">
<b><font size="2">CERTIFICATION</font></b><p>
<font size="2">I, Carl Gruenler, certify that: </font> <p>
<font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></p>
<div style="position:relative; left: 0"><table border=0 cellpadding=0 cellspacing =0 >
<tr valign="top">
<td width="30.666659" colspan="1" rowspan="1" >
<p>
<font size="2">1.</font></p>
</td>
<td width="625.333177" colspan="2" rowspan="1" >
<p>
<font size="2">I have reviewed this annual report on Form 10-K/A of American Technology
Corporation; </font> </p>
</td>
</tr>
<tr valign="top">
<td width="657.333169" colspan="3" rowspan="1" >
<p>
&nbsp;</p>
</td>
</tr>
<tr valign="top">
<td width="30.666659" colspan="1" rowspan="1" >
<p>
<font size="2">2.</font></p>
</td>
<td width="625.333177" colspan="2" rowspan="1" >
<p>
<font size="2">Based on my knowledge, this annual report does not contain any untrue statement
of a material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such statements were
made, not misleading with respect to the period covered by this annual report;
</font>
</p>
</td>
</tr>
<tr valign="top">
<td width="657.333169" colspan="3" rowspan="1" >
<p>
&nbsp;</p>
</td>
</tr>
<tr valign="top">
<td width="30.666659" colspan="1" rowspan="1" >
<p>
<font size="2">3.</font></p>
</td>
<td width="625.333177" colspan="2" rowspan="1" >
<p>
<font size="2">Based on my knowledge, the financial statements, and other financial information
included in this annual report, fairly present in all material respects the
financial condition, results of operations and cash flows of the registrant as
of, and for, the periods presented in this annual report; </font> </p>
</td>
</tr>
<tr valign="top">
<td width="657.333169" colspan="3" rowspan="1" >
<p>
&nbsp;</p>
</td>
</tr>
<tr valign="top">
<td width="30.666659" colspan="1" rowspan="1" >
<p>
<font size="2">4.</font></p>
</td>
<td width="625.333177" colspan="2" rowspan="1" >
<p>
<font size="2">The registrant's other certifying officer and I are responsible for establishing
and maintaining disclosure controls and procedures (as defined in Exchange Act
Rules 13a-15(e) and 15d-15(e)) for the registrant and have: </font> </p>
</td>
</tr>
<tr valign="top">
<td width="657.333169" colspan="3" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="30.666659" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="29.333326" colspan="1" rowspan="1" >
<p>
<font size="2">a)</font></p>
</td>
<td width="595.999851" colspan="1" rowspan="1" >
<p>
<font size="2">designed such disclosure controls and procedures, or caused such disclosure
controls and procedures to be designed under our supervision, to ensure that
material information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities, particularly
during the period in which this annual report is being prepared; </font> </p>
</td>
</tr>
<tr valign="top">
<td width="657.333169" colspan="3" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="30.666659" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="29.333326" colspan="1" rowspan="1" >
<p>
<font size="2">b)</font></p>
</td>
<td width="595.999851" colspan="1" rowspan="1" >
<p>
<font size="2">[paragraph omitted pursuant to SEC Release Nos. 33-2838 and 34-47986]</font></p>
</td>
</tr>
<tr valign="top">
<td width="657.333169" colspan="3" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="30.666659" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="29.333326" colspan="1" rowspan="1" >
<p>
<font size="2">c)</font></p>
</td>
<td width="595.999851" colspan="1" rowspan="1" >
<p>
<font size="2">evaluated the effectiveness of the registrant's disclosure controls and
procedures and presented in this report our conclusions about the effectiveness
of the disclosure controls and procedures, as of the end of the period covered
by this report based on such evaluation;</font></p>
</td>
</tr>
<tr valign="top">
<td width="657.333169" colspan="3" rowspan="1" >
<p>
&nbsp;</p>
</td>
</tr>
<tr valign="top">
<td width="30.666659" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="29.333326" colspan="1" rowspan="1" >
<p>
<font size="2">d)</font></p>
</td>
<td width="595.999851" colspan="1" rowspan="1" >
<p>
<font size="2">disclosed in this annual report any change in the registrant's internal control
over financial reporting that occurred during the registrant's most recent
fiscal quarter, which is the registrant's forth fiscal quarter,  that has
materially affected, or is reasonably likely to materially affect, the
registrant's internal control over financial reporting.</font></p>
</td>
</tr>
<tr valign="top">
<td width="657.333169" colspan="3" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="30.666659" colspan="1" rowspan="1" >
<p>
<font size="2">5.</font></p>
</td>
<td width="625.333177" colspan="2" rowspan="1" >
<p>
<font size="2">The registrant's other certifying officer and I have disclosed, based on our
most recent evaluation of internal control over financial reporting, to the
registrant's auditors and the audit committee of registrant's board of directors
(or persons performing the equivalent functions): </font> </p>
</td>
</tr>
<tr valign="top">
<td width="657.333169" colspan="3" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="30.666659" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="29.333326" colspan="1" rowspan="1" >
<p>
<font size="2">a)</font></p>
</td>
<td width="595.999851" colspan="1" rowspan="1" >
<p>
<font size="2">all significant deficiencies and material weaknesses in the design or operation
of internal controls over financial reporting which are reasonably likely to
adversely affect the registrant's ability to record, process, summarize and
report financial information; and </font> </p>
</td>
</tr>
<tr valign="top">
<td width="657.333169" colspan="3" rowspan="1" >
<p>
&nbsp;</p>
</td>
</tr>
<tr valign="top">
<td width="30.666659" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="29.333326" colspan="1" rowspan="1" >
<p>
<font size="2">b)</font></p>
</td>
<td width="595.999851" colspan="1" rowspan="1" >
<p>
<font size="2">any fraud, whether or not material, that involves management or other employees
who have a significant role in the registrant's internal controls over financial
reporting.</font></p>
</td>
</tr>
</table></div>
<p>
<p>
<font size="2">Dated: January 28, 2004 </font> <p>
<font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></p>
<div style="position:relative; left: 0"><table border=0 cellpadding=0 cellspacing =0 >
<tr valign="top">
<td width="23.999994" colspan="1" rowspan="1" >
<p>
&nbsp;</p>
</td>
<td width="631.999842" colspan="1" rowspan="1" >
<p>
<font size="2">/s/ CARL GRUENLER</font></p>
</td>
</tr>
<tr valign="top">
<td width="657.333169" colspan="2" rowspan="1" >
<p>
</p>
</td>
</tr>
<tr valign="top">
<td width="23.999994" colspan="1" rowspan="1" >
<p>
&nbsp;</p>
</td>
<td width="631.999842" colspan="1" rowspan="1" >
<p>
<font size="2">Carl Gruenler<br>
Vice President, Military Operations and Interim Chief Financial Officer<br>
(Principal Financial Officer)</font></p>
</td>
</tr>
<tr valign="top">
<td width="23.999994" colspan="1" rowspan="1" >
<p>
&nbsp;</p>
</td>
<td width="631.999842" colspan="1" rowspan="1" >
<p>
&nbsp;</p>
</td>
</tr>
<tr valign="top">
<td width="23.999994" colspan="1" rowspan="1" >
<p>
&nbsp;</p>
</td>
<td width="631.999842" colspan="1" rowspan="1" >
<p>
&nbsp;</p>
</td>
</tr>
</table></div>
<p>
<p>
</p align="center">
<div align="center" color="#000080" style="position:relative; left: -5"><hr size="3" color="#999999" STYLE="page-break-after: always">
  <p>
  <font size="2">&nbsp; </font> </div><p>
<p>

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-32.1
<SEQUENCE>5
<FILENAME>atco_10ka1-ex321.htm
<TEXT>
<html>

<head>
<title>exhibit 32.1</title>
</head>

<body>
<p>
<b><font size="2">Exhibit 32.1</font></b><p align="center">
<b><font size="2">CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER AND PRINCIPAL FINANCIAL
OFFICER<br>
PURSUANT TO<br>
18 U.S.C. SECTION 1350,<br>
AS ADOPTED PURSUANT TO<br>
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002</font></b><p>
<p>
<font size="2">Each of the undersigned hereby certifies, in accordance with 18 U.S.C. 1350, as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, in his or her
capacity as an officer of American Technology Corporation (the "Company"), that,
to his or knowledge, the Annual Report of the Company on Form 10-K/A, Amendment
No. 1, for the fiscal year ended September 30, 2003 fully complies with the
requirements of Section 13(a) of the Securities Exchange Act of 1934 and that
the information contained in such report fairly presents, in all material
respects, the financial condition and results of operation of the Company as of
the dates and for the periods presented in the financial statements included in
such report.</font></p>
<p>
<p>
<font size="2">Dated: January  28, 2004</font><p>
<font size="2">/s/ ELWOOD G. NORRIS</font><p>
</p>
<div style="position:relative; left: 0"><table border=0 cellpadding=0 cellspacing =0 >
<tr valign="top">
<td width="23.999994" colspan="1" rowspan="1" >
<p>
&nbsp;</p>
</td>
<td width="631.999842" colspan="1" rowspan="1" >
<p>
<font size="2">Elwood G. Norris, <br>
Chairman of the Board<br>
(Principal Executive Officer)</font></p>
</td>
</tr>
<tr valign="top">
<td width="23.999994" colspan="1" rowspan="1" >
<p>
&nbsp;</p>
</td>
<td width="631.999842" colspan="1" rowspan="1" >
<p>
&nbsp;</p>
</td>
</tr>
<tr valign="top">
<td width="23.999994" colspan="1" rowspan="1" >
<p>
&nbsp;</p>
</td>
<td width="631.999842" colspan="1" rowspan="1" >
<p>
&nbsp;</p>
</td>
</tr>
</table></div>
<p>
<font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><p>
<font size="2">Dated: January 28, 2004</font><p>
<font size="2">/s/ CARL GRUENLER</font><p>
</p>
<div style="position:relative; left: 0"><table border=0 cellpadding=0 cellspacing =0 >
<tr valign="top">
<td width="23.999994" colspan="1" rowspan="1" >
<p>
&nbsp;</p>
</td>
<td width="631.999842" colspan="1" rowspan="1" >
<p>
<font size="2">Carl Gruenler<br>
Vice President, Military Operations and Interim Chief Financial Officer<br>
(Principal Financial Officer)</font></p>
</td>
</tr>
<tr valign="top">
<td width="23.999994" colspan="1" rowspan="1" >
<p>
&nbsp;</p>
</td>
<td width="631.999842" colspan="1" rowspan="1" >
<p>
&nbsp;</p>
</td>
</tr>
<tr valign="top">
<td width="23.999994" colspan="1" rowspan="1" >
<p>
&nbsp;</p>
</td>
<td width="631.999842" colspan="1" rowspan="1" >
<p>
&nbsp;</p>
</td>
</tr>
</table></div>
<p>
</p>


</body>

</html>

</body>

</html>

</body>

</html>

</body>

</html>

</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
-----END PRIVACY-ENHANCED MESSAGE-----
