-----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,
 Am+1vI56l+RHKv53PHFyXO+6OlwWY4gtOYQlalClca6iCq3vE3dzb/0YO1BUEF3M
 a4117x5BKrGH7wPSHdPjrw==

<SEC-DOCUMENT>0001019687-04-001687.txt : 20040805
<SEC-HEADER>0001019687-04-001687.hdr.sgml : 20040805
<ACCEPTANCE-DATETIME>20040804174852
ACCESSION NUMBER:		0001019687-04-001687
CONFORMED SUBMISSION TYPE:	8-K
PUBLIC DOCUMENT COUNT:		2
CONFORMED PERIOD OF REPORT:	20040804
ITEM INFORMATION:		Results of Operations and Financial Condition
FILED AS OF DATE:		20040805

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:		8-K
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	000-24248
		FILM NUMBER:		04952639

	BUSINESS ADDRESS:	
		STREET 1:		13114 EVENING CREEK DRIVE SOUTH
		CITY:			SAN DIEGO
		STATE:			CA
		ZIP:			92128
		BUSINESS PHONE:		6196792114

	MAIL ADDRESS:	
		STREET 1:		13114 EVENING CREEK DRIVE SOUTH
		CITY:			SAN DIEGO
		STATE:			CA
		ZIP:			92128
</SEC-HEADER>
<DOCUMENT>
<TYPE>8-K
<SEQUENCE>1
<FILENAME>atc_8k-080404.htm
<TEXT>
<html>
<head><meta content="text/html; charset=iso-8859-1">
<title>8k</title>
</head>

<body >
<ul>
</ul>

<hr color="#000000" size="4">
<p>
&nbsp;<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</font><p align="center">
<b><font size="2">FORM 8-K CURRENT REPORT</font></b><p align="center">
<font size="2">Pursuant to Section 13 or 15(d) of the Securities Exchange Act of
1934</font><p align="center">
<font size="2">Date of Report (Date of earliest event reported):<br>August 4, 2004 (August 4,
2004)</font><p align="center">
<b><font size="2">AMERICAN TECHNOLOGY CORPORATION</font></b><font size="2"><br>(Exact Name of Registrant as Specified
in Charter)</font></p align="center">
<div align="right" style="position:relative; left: -5"><table border=0 cellpadding=0 cellspacing =0 >
<tr valign="top">
<td width="227.999943" colspan="1" rowspan="1" >
<p align="center">
<u><font size="2">Delaware</font></u><font size="2"><br>(State or Other Jurisdiction of
Incorporation)</font></p align="center">
</td>
<td width="163.999959" colspan="1" rowspan="1" >
<p align="center">
<u><font size="2">0-24248</font></u><font size="2"><br>(Commission File Number)</font></p align="center">
</td>
<td width="195.999951" colspan="1" rowspan="1" >
<p align="center">
<u><font size="2">87-0361799</font></u><font size="2"><br>(IRS Employer Identification No.)</font></p align="center">
</td>
</tr>
</table></div>
<p>
</p align="center">
<div align="center" style="position:relative; left: -5"><table border=0 cellpadding=0 cellspacing =0 >
<tr valign="top">
<td width="371.999907" colspan="1" rowspan="1" >
<p align="center">
<u><font size="2">13114 Evening Creek Drive South, San Diego, California</font></u><font size="2"><br>(Address of
Principal Executive Offices)</font></p align="center">
</td>
<td width="215.999946" colspan="1" rowspan="1" >
<p align="center">
<u><font size="2">92128</font></u><font size="2"><br>(Zip Code)</font></p align="center">
</td>
</tr>
</table></div>
<p>
<p align="center">
<u><font size="2">(858) 679-2114</font></u><font size="2"><br>(Registrant's telephone number, including area code)</font><hr color="#000000" size="4">
<p>
&nbsp;<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>
<b><font size="2">Item 12. &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Results of Operations and Financial
Condition.</font></b><p>
<font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On August 4, 2004, American Technology
Corporation (the "Company") issued a press release announcing its financial
results for the third fiscal quarter ended June 30, 2004. A copy of the press
release is furnished as Exhibit 99.1.</font><p align="center">
<b><font size="2">SIGNATURES</font></b><p>
<font size="2">Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.</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="341.333248" colspan="1" rowspan="1" >
<p>
&nbsp;</p>
</td>
<td width="313.333255" colspan="2" rowspan="1" >
<p>
<font size="2">AMERICAN TECHNOLOGY CORPORATION</font></p>
</td>
</tr>
<tr valign="top">
<td width="655.999836" colspan="3" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="655.999836" colspan="3" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="341.333248" colspan="1" rowspan="1" >
<p>
<font size="2">Date: August 4, 2004</font></p>
</td>
<td width="23.999994" colspan="1" rowspan="1" >
<p>
<font size="2">By: </font> </p>
</td>
<td width="289.333261" colspan="1" rowspan="1" >
<p style="border-bottom:solid windowtext .5pt">
<font size="2">/s/ MICHAEL A. RUSSELL</font></p>
</td>
</tr>
<tr valign="top">
<td width="341.333248" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="289.333261" colspan="1" rowspan="1" >
<p>
<font size="2">Michael A. Russell<br>Chief Financial Officer</font></p>
</td>
</tr>
</table></div>
<p>
<font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><p>
<font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></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>


</body>

</html>

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.1
<SEQUENCE>2
<FILENAME>atc_8kex99-1.htm
<TEXT>
<html>

<head>
<title>ATC 99.1</title>
</head>

<body>

<p>
<p align="right">
<b><font size="2">EXHIBIT 99.1</font></b><p>
<font size="2">FOR IMMEDIATE RELEASE </font> <p align="center">
<b><font size="2">AMERICAN TECHNOLOGY REPORTS</font></b><p align="center">
<b><font size="2">RECORD THIRD QUARTER REVENUES</font></b><p>
<b><font size="2">(SAN DIEGO, CA., August 4, 2004) - American Technology Corporation (ATC)</font></b><font size="2">
<b>(Nasdaq: ATCO)</b>, an innovator of proprietary sound reproduction
technologies, posted record revenues for the third quarter of fiscal 2004, ended
June 30, 2004. Revenue for the quarter was $2.107 million compared to $0.314
million in the third quarter of fiscal 2003, an increase of 572%. The company's
Government/Force Protection Group and Business Group generated revenues of
$1.837 million and $0.270 million, respectively, in the third quarter. Third
quarter 2004 revenues increased 41% over the most recent second quarter.</font><p>
<font size="2">The company reported a gross profit of $1.101 million in the third quarter
compared to $0.128 million for the same quarter in fiscal 2003. The company also
reported a net loss of $1.390 million for the quarter, a 42% reduction from the
net loss of $2.383 million for the same period in fiscal 2003. Net loss
attributable to common stockholders after deducting non-cash dividends on
preferred stock was $(0.09) per share compared to $(0.19) per share for the same
quarter last year.</font><p>
<font size="2">NINE MONTH RESULTS<br>
For the nine months ended June 30, 2004, total revenue was $4.375 million
compared to $0.975 million for the same period last year, a 349% increase. The
company reported a gross profit of $2.015 million compared to $0.116 million for
the same nine months in fiscal 2003. The company had a net loss of $3.692
million during the nine months, a 38% reduction from the net loss of $5.969
million for the same period in fiscal 2003. Net loss attributable to common
stockholders after deducting non-cash dividends on preferred stock was $(0.24)
per share for the first nine months of fiscal 2004 compared to $(0.51) per share
for the same period last year.</font><p>
<font size="2">MANAGEMENT COMMENTARY<br>
"Three consecutive quarters of record revenues with expected continued revenue
growth this quarter evidence the initial market traction of our
industry-changing sound reproduction technologies," said Elwood G. Norris,
chairman of American Technology Corporation. "While our Government/Force
Protection Systems Group continues to lead the way, we are gaining momentum in
our Business Group following its realignment in the June 30 quarter. We are
pleased to report we have received the first HSS&reg; Gen III units from our
manufacturing partner, Pemstar. These superior devices deliver higher sound
pressure level (SPL) with lower distortion in a slim, sleek profile."</font><p>
<font size="2">"With HSS Gen III scheduled for full production this quarter, we are well
positioned to further address the focused audio requirements of major customers
in the rapidly developing digital signage industry," said Kalani Jones,
president and COO of ATC. "While HSS has significant promise for several
industries including, home theater, automotive and flat panel
televisions/monitors, we are primarily focused on the digital signage industry
for the following reasons:</font></p>
<ul>
<li><font size="2">Digital signage is expected to be a multi-billion dollar market within the
next five years.</font></li>
<li><font size="2">Digital signage is a relatively new market being driven by increasing
availability of flat panel displays and next-generation data networking
equipment.</font></li>
<li><font size="2">Most current and expected digital signage applications require focused sound
to minimize noise pollution and the effect of multiple audio messages in host
installations.</font></li>
<li><font size="2">Major advertisers are turning to digital signage to counter an increasingly
fragmented broadcast, cable, and satellite viewing audience.</font></li></ul>
<p>
<font size="2">"With $10 million to $100 million in total expenditures typically being spent
for the larger digital signage programs, the need for HSS to give these systems
a voice is readily apparent," added Jones. "While the structure of the larger
digital signage programs in which we are engaged are complex, involve several
companies, and require in-depth trials through multiple test installations, the
successful completion of any one of these programs can be worth $1 - $14 million
dollars each in revenue to ATC over the next six to twenty-four
months."</font></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>
<font size="2">Jones continued, "We are pleased to report Carl Gruenler and the
Government/Force Protection Systems Group just completed a successful GOVSEC
2004 (The Government and Security Expo and Conference), and held favorable
product demonstrations for key Department of Defense and Homeland Security
executives in Washington, D.C. last week. GOVSEC 2004, as well as a two-page
inside cover advertisement in the inaugural annual publication of 'The Year in
Homeland Security' currently being sent to over 150,000 federal, state and local
government and law enforcement officials, represent an introduction of ATC to a
much wider audience. These initiatives plus numerous others, are part of our
plan to establish ATC as the new leader in innovative sound reproduction
solutions for force protection, emergency notification and safety systems
throughout government and industry. </font> <p>
<font size="2">"ATC is supporting technology demonstration projects with the Department of
Homeland Security for border protection, law enforcement for crowd and riot
control, the commercial maritime industry for waterside protection, and major
infrastructure force protection projects in various parts of the world.
Additionally, with the recent issuance of 'urgent needs statements' by multiple
services, LRAD&#8482; is positioned as a key force protection tool to compete
for end-of-fiscal-year government funding and 'program of record' contracts."</font><p>
<font size="2">Jones concluded, "We will be giving further revenue guidance, and expect to
announce a new leader of our Business Group, later this quarter."</font><p>
<font size="2">HIGHLIGHTS AND ANNOUNCEMENTS FOR THE THIRD FISCAL QUARTER</font></p>
<ul>
<li><font size="2">Awarded contract to deliver LRAD devices to a U.S. Army Stryker unit for use
in missions in and around Mosul, Iraq. </font> </li>
<li><font size="2">Awarded contract to deliver LRAD devices to the U.S. Navy 5<sup>th</sup>
Fleet for use in and around the Basra, Iraq fueling terminal.</font></li>
<li><font size="2">Completed and delivered LRAD remotely operated pan/tilt units with
integrated camera to Naval Surface Warfare Center Crane for the warship
integrated force protection system. </font> </li>
<li><font size="2">Awarded contract to develop and deliver the next generation aircraft carrier
flight deck speaker system for the U.S. Navy.</font></li>
<li><font size="2">Completed key NeoPlanar&reg; projects on the shipyard waterfront for the
Supervisor of Shipbuilding, Bath, Maine, and inside the new construction
aircraft hangar at Naval Air Station Brunswick, Maine for the Naval Facilities
Command.</font></li>
<li><font size="2">Launched a Government Group new products development initiative to explore
new technology and product opportunities.</font></li>
<li><font size="2">Showcased HSS at Wired Nextfest.2004.</font></li>
<li><font size="2">Held successful showing of HSS at InfoComm 2004 (the largest professional
audio/visual trade show in the U.S.).</font></li>
<li><font size="2">Announced manufacturing partner, PEMSTAR Inc.</font></li>
<li><font size="2">Continued press and media coverage of HSS and LRAD products and applications
</font>
</li>
<li><font size="2">Announced the hiring of Michael A. Russell as chief financial
officer.</font></li></ul><p>
<p>
<b><font size="2">About American Technology Corporation<br>
</font></b>
<font size="2">American Technology Corporation is Shaping the Future of Sound&reg; by
developing, manufacturing and globally distributing its proprietary sound
reproduction technologies and products which include: the award-winning HSS&reg;
(HyperSonic&reg; Sound); LRAD&#8482; (Long Range Acoustic Device);
NeoPlanar&reg;; PureBass&reg; Sub-Woofer; and Stratified Field&reg; (SFT&reg;).
The Company is establishing a strong portfolio of patents, trademarks, and
intellectual property including over 140 U.S. and foreign patents and patent
filings to date.  For more information on the company and its technologies and
products please visit our web site at <font color="#0000FF">www.atcsd.com</font>.</font></p>
<p><b><font size="2">Safe Harbor statement under the Private Securities Litigation Reform Act of
1995:</font></b><font size="2"> Except for historical information contained herein, the matters
discussed are forward-looking statements within the meaning of Section 21E of
the Securities Exchange Act. You should not place undue reliance on these
statements. We base these statements on particular assumptions that we have made
in light of our industry experience, the stage of product and market development
as well as our perception of historical trends, current market conditions,
current economic data, expected future developments and other factors that we
believe are appropriate under the circumstances. These statements involve risks
and uncertainties that could cause actual results to differ materially from
those suggested in the forward-looking statements, including but not limited to
changes in the sound reproduction industry, our ability to develop future
products, technology shifts, potential technical or manufacturing difficulties
that could delay products, competition, pricing pressures, the uncertainty of
market acceptance of new products and services by customers, warranty or other
claims, the outcome of pending or future litigation, general economic factors
and other risks identified and discussed in the Company's filings with the
Securities and Exchange Commission. These forward-looking statements are based
on information and management's expectations as of the date hereof. Future
results may differ materially from the Company's current expectations. American
Technology Corporation disclaims any intent or obligation to update those
forward-looking statements, except as otherwise specifically
stated.</font></p>
<p align="center">
<font size="2"># # #</font></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 align="center">
<p>
<b><font size="2">FOR FURTHER INFORMATION CONTACT: </font> </b></p>
<div style="position:relative; left: 0"><table border=0 cellpadding=0 cellspacing =0 >
<tr valign="top">
<td width="437.333224" colspan="1" rowspan="1" >
<p>
<font size="2">Investor relations:</font></p>
</td>
<td width="217.333279" colspan="1" rowspan="1" >
<p>
<font size="2">Media inquiries:</font></p>
</td>
</tr>
<tr valign="top">
<td width="437.333224" colspan="1" rowspan="1" >
<p>
<font size="2">Robert Putnam</font></p>
</td>
<td width="217.333279" colspan="1" rowspan="1" >
<p>
<font size="2">Don Mathias</font></p>
</td>
</tr>
<tr valign="top">
<td width="437.333224" colspan="1" rowspan="1" >
<p>
<font size="2">(858) 679-3168</font></p>
</td>
<td width="217.333279" colspan="1" rowspan="1" >
<p>
<font size="2">(949) 855-4520</font></p>
</td>
</tr>
<tr valign="top">
<td width="437.333224" colspan="1" rowspan="1" >
<p>
<font size="2">robert@atcsd.com</font></p>
</td>
<td width="217.333279" colspan="1" rowspan="1" >
<p>
<font size="2" color="#0000FF">dwmath@aol.com</font></p>
</td>
</tr>
</table></div>
<p>
</p>
<div style="position:relative; left: 0; border-bottom-style:solid; border-bottom-width:1; padding-bottom:1">
  <table border=0 cellpadding=0 cellspacing =0 style="border-collapse: collapse" bordercolor="#111111" >
<tr valign="top">
<td width="294.666593" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="29.333326" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="143.999964" colspan="2" rowspan="1" >
&nbsp;</td>
<td width="53.333320" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="137.333299" colspan="2" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="522.666536" colspan="5" rowspan="1" >
<p align="center">
<b><font size="2">AMERICAN TECHNOLOGY CORPORATION</font></b></p align="center">
</td>
<td width="137.333299" colspan="2" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="522.666536" colspan="5" rowspan="1" >
<p align="center">
<b><font size="2">Condensed Balance Sheets</font></b></p align="center">
</td>
<td width="137.333299" colspan="2" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="522.666536" colspan="5" rowspan="1" >
<p align="center">
<b><font size="2">(in thousands)</font></b></p align="center">
</td>
<td width="137.333299" colspan="2" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="294.666593" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="29.333326" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="143.999964" colspan="2" rowspan="1" >
&nbsp;</td>
<td width="53.333320" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="137.333299" colspan="2" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="294.666593" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="29.333326" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="143.999964" colspan="2" rowspan="1" >
<p align="center">
<font size="2">June 30, 2004</font></p align="center">
</td>
<td width="53.333320" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="137.333299" colspan="2" rowspan="1" >
<p align="center">
<font size="2">September 30, 2003</font></p align="center">
</td>
</tr>
<tr valign="top">
<td width="294.666593" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="29.333326" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="143.999964" colspan="2" rowspan="1" style="border-bottom-style: solid; border-bottom-width: 1" >
<p align="center">
<font size="2">(unaudited)</font></p align="center">
</td>
<td width="53.333320" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="137.333299" colspan="2" rowspan="1" style="border-bottom-style: solid; border-bottom-width: 1" >
<p align="center">
<font size="2">(a)</font></p align="center">
</td>
</tr>
<tr valign="top">
<td width="294.666593" colspan="1" rowspan="1" >
<p>
<b><font size="2">ASSETS</font></b></p>
</td>
<td width="29.333326" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="143.999964" colspan="2" rowspan="1" style="border-top-style: solid; border-top-width: 1" >
<p align="center">
</p align="center">
</td>
<td width="53.333320" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="137.333299" colspan="2" rowspan="1" style="border-top-style: solid; border-top-width: 1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="294.666593" colspan="1" rowspan="1" >
<p>
<b><font size="2">Current Assets:</font></b></p>
</td>
<td width="29.333326" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="143.999964" colspan="2" rowspan="1" >
&nbsp;</td>
<td width="53.333320" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="137.333299" colspan="2" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="294.666593" colspan="1" rowspan="1" >
<p>
<font size="2">&nbsp;&nbsp;Cash</font></p>
</td>
<td width="29.333326" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="23.999994" colspan="1" rowspan="1" >
<p align="right">
<font size="2">$</font></p align="right">
</td>
<td width="119.999970" colspan="1" rowspan="1" >
<p align="right">
<font size="2">5,486</font></p align="right">
</td>
<td width="53.333320" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="29.333326" colspan="1" rowspan="1" >
<p align="right">
<font size="2">$</font></p align="right">
</td>
<td width="107.999973" colspan="1" rowspan="1" >
<p align="right">
<font size="2">9,850</font></p align="right">
</td>
</tr>
<tr valign="top">
<td width="294.666593" colspan="1" rowspan="1" >
<p>
<font size="2">&nbsp;&nbsp;Accounts receivable</font></p>
</td>
<td width="29.333326" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="143.999964" colspan="2" rowspan="1" >
<p align="right">
<font size="2">1,387</font></p align="right">
</td>
<td width="53.333320" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="137.333299" colspan="2" rowspan="1" >
<p align="right">
<font size="2">184</font></p align="right">
</td>
</tr>
<tr valign="top">
<td width="294.666593" colspan="1" rowspan="1" >
<p>
<font size="2">&nbsp;&nbsp;Inventories</font></p>
</td>
<td width="29.333326" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="143.999964" colspan="2" rowspan="1" >
<p align="right">
<font size="2">898</font></p align="right">
</td>
<td width="53.333320" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="137.333299" colspan="2" rowspan="1" >
<p align="right">
<font size="2">409</font></p align="right">
</td>
</tr>
<tr valign="top">
<td width="294.666593" colspan="1" rowspan="1" >
<p>
<font size="2">&nbsp;&nbsp;Prepaid expenses and other</font></p>
</td>
<td width="29.333326" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="143.999964" colspan="2" rowspan="1" style="border-bottom-style: solid; border-bottom-width: 1" >
<p align="right">
<font size="2">255</font></p align="right">
</td>
<td width="53.333320" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="137.333299" colspan="2" rowspan="1" style="border-bottom-style: solid; border-bottom-width: 1" >
<p align="right">
<font size="2">34</font></p align="right">
</td>
</tr>
<tr valign="top">
<td width="294.666593" colspan="1" rowspan="1" >
<p>
<b><font size="2">Total current assets</font></b></p>
</td>
<td width="29.333326" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="143.999964" colspan="2" rowspan="1" style="border-top-style: solid; border-top-width: 1" >
<p align="right">
<font size="2">8,026</font></p align="right">
</td>
<td width="53.333320" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="137.333299" colspan="2" rowspan="1" style="border-top-style: solid; border-top-width: 1" >
<p align="right">
<font size="2">10,477</font></p align="right">
</td>
</tr>
<tr valign="top">
<td width="294.666593" colspan="1" rowspan="1" >
<p>
<b><font size="2">Equipment</font></b><font size="2">, net</font></p>
</td>
<td width="29.333326" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="143.999964" colspan="2" rowspan="1" >
<p align="right">
<font size="2">407</font></p align="right">
</td>
<td width="53.333320" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="137.333299" colspan="2" rowspan="1" >
<p align="right">
<font size="2">200</font></p align="right">
</td>
</tr>
<tr valign="top">
<td width="294.666593" colspan="1" rowspan="1" >
<p>
<b><font size="2">Patents</font></b><font size="2">, net</font></p>
</td>
<td width="29.333326" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="143.999964" colspan="2" rowspan="1" style="border-bottom-style: solid; border-bottom-width: 1" >
<p align="right">
<font size="2">1,249</font></p align="right">
</td>
<td width="53.333320" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="137.333299" colspan="2" rowspan="1" style="border-bottom-style: solid; border-bottom-width: 1" >
<p align="right">
<font size="2">1,067</font></p align="right">
</td>
</tr>
<tr valign="top">
<td width="294.666593" colspan="1" rowspan="1" >
<p>
<b><font size="2">Total assets</font></b></p>
</td>
<td width="29.333326" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="23.999994" colspan="1" rowspan="1" style="border-bottom: double; border-top-width: 1; border-bottom: double" >
<p align="right">
<font size="2">$</font></p align="right">
</td>
<td width="119.999970" colspan="1" rowspan="1" style="border-bottom: double; border-top-width: 1; border-bottom: double" >
<p align="right">
<font size="2">9,682</font></p align="right">
</td>
<td width="53.333320" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="29.333326" colspan="1" rowspan="1" style="border-top-style: solid; border-top-width: 1; border-bottom: double" >
<p align="right">
<font size="2">$</font></p align="right">
</td>
<td width="107.999973" colspan="1" rowspan="1" style="border-top-style: solid; border-top-width: 1; border-bottom: double" >
<p align="right">
<font size="2">11,744</font></p align="right">
</td>
</tr>
<tr valign="top">
<td width="294.666593" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="29.333326" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="143.999964" colspan="2" rowspan="1" >
&nbsp;</td>
<td width="53.333320" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="137.333299" colspan="2" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="467.999883" colspan="4" rowspan="1" >
<p>
<b><font size="2">LIABILITIES AND STOCKHOLDERS' EQUITY</font></b></p>
</td>
<td width="53.333320" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="137.333299" colspan="2" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="294.666593" colspan="1" rowspan="1" >
<p>
<b><font size="2">Current Liabilities:</font></b></p>
</td>
<td width="29.333326" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="143.999964" colspan="2" rowspan="1" >
&nbsp;</td>
<td width="53.333320" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="137.333299" colspan="2" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="294.666593" colspan="1" rowspan="1" >
<p>
<font size="2">&nbsp;&nbsp;Accounts payable</font></p>
</td>
<td width="29.333326" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="23.999994" colspan="1" rowspan="1" >
<p align="right">
<font size="2">$</font></p align="right">
</td>
<td width="119.999970" colspan="1" rowspan="1" >
<p align="right">
<font size="2">1,034</font></p align="right">
</td>
<td width="53.333320" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="29.333326" colspan="1" rowspan="1" >
<p align="right">
<font size="2">$</font></p align="right">
</td>
<td width="107.999973" colspan="1" rowspan="1" >
<p align="right">
<font size="2">604</font></p align="right">
</td>
</tr>
<tr valign="top">
<td width="294.666593" colspan="1" rowspan="1" >
<p>
<font size="2">&nbsp;&nbsp;Accrued liabilities</font></p>
</td>
<td width="29.333326" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="143.999964" colspan="2" rowspan="1" >
<p align="right">
<font size="2">1,231</font></p align="right">
</td>
<td width="53.333320" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="137.333299" colspan="2" rowspan="1" >
<p align="right">
<font size="2">1,379</font></p align="right">
</td>
</tr>
<tr valign="top">
<td width="294.666593" colspan="1" rowspan="1" >
<p>
<font size="2">&nbsp;&nbsp;Capital lease short-term portion</font></p>
</td>
<td width="29.333326" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="143.999964" colspan="2" rowspan="1" style="border-bottom-style: solid; border-bottom-width: 1" >
<p align="right">
<font size="2">11</font></p align="right">
</td>
<td width="53.333320" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="137.333299" colspan="2" rowspan="1" style="border-bottom-style: solid; border-bottom-width: 1" >


<p align="right">
<font size="2">10</font></p align="right">
</td>
</tr>
<tr valign="top">
<td width="294.666593" colspan="1" rowspan="1" >
<p>
<b><font size="2">Total current liabilities</font></b></p>
</td>
<td width="29.333326" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="143.999964" colspan="2" rowspan="1" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1" >
<p align="right">
<font size="2">2,276</font></p align="right">
</td>
<td width="53.333320" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="137.333299" colspan="2" rowspan="1" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1" >
<p align="right">
<font size="2">1,993</font></p align="right">
</td>
</tr>
<tr valign="top">
<td width="294.666593" colspan="1" rowspan="1" >
<p>
<b><font size="2">Long-Term Liabilities</font></b></p>
</td>
<td width="29.333326" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="143.999964" colspan="2" rowspan="1" style="border-top-style: solid; border-top-width: 1" >
<p align="right">
<font size="2">15</font></p align="right">
</td>
<td width="53.333320" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="137.333299" colspan="2" rowspan="1" style="border-top-style: solid; border-top-width: 1" >
<p align="right">
<font size="2">23</font></p align="right">
</td>
</tr>
<tr valign="top">
<td width="294.666593" colspan="1" rowspan="1" >
<p>
<b><font size="2">Stockholders' equity</font></b></p>
</td>
<td width="29.333326" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="143.999964" colspan="2" rowspan="1" style="border-bottom-style: solid; border-bottom-width: 1" >
<p align="right">
<font size="2">7,391</font></p align="right">
</td>
<td width="53.333320" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="137.333299" colspan="2" rowspan="1" style="border-bottom-style: solid; border-bottom-width: 1" >
<p align="right">
<font size="2">9,728</font></p align="right">
</td>
</tr>
<tr valign="top">
<td width="323.999919" colspan="2" rowspan="1" >
<p>
<b><font size="2">Total liabilities and stockholders' equity</font></b></p>
</td>
<td width="23.999994" colspan="1" rowspan="1" style="border-top-style: solid; border-top-width: 1; border-bottom: double" >
<p align="right">
<font size="2">$</font></p align="right">
</td>
<td width="119.999970" colspan="1" rowspan="1" style="border-top-style: solid; border-top-width: 1; border-bottom: double" >
<p align="right">
<font size="2">9,682</font></p align="right">
</td>
<td width="53.333320" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="29.333326" colspan="1" rowspan="1" style="border-top-style: solid; border-top-width: 1; border-bottom: double" >
<p align="right">
<font size="2">$</font></p align="right">
</td>
<td width="107.999973" colspan="1" rowspan="1" style="border-top-style: solid; border-top-width: 1; border-bottom: double" >
<p align="right">
<font size="2">11,744</font></p align="right">
</td>
</tr>
<tr valign="top">
<td width="294.666593" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="29.333326" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="143.999964" colspan="2" rowspan="1" >
&nbsp;</td>
<td width="53.333320" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="137.333299" colspan="2" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="659.999835" colspan="7" rowspan="1" >
<p>
<font size="2">(a) Derived from audited financial statements as of September 30, 2003.</font></p>
</td>
</tr>
<tr valign="top">
<td width="294.666593" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="29.333326" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="143.999964" colspan="2" rowspan="1" >
&nbsp;</td>
<td width="53.333320" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="137.333299" colspan="2" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="294.666593" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="29.333326" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="143.999964" colspan="2" rowspan="1" >
&nbsp;</td>
<td width="53.333320" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="137.333299" colspan="2" rowspan="1" >
&nbsp;</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">
  <p><font size="2">&nbsp; </font> </div><p>
</p align="center">
<div style="position:relative; left: 0; border-bottom-style:solid; border-bottom-width:1; padding-bottom:1">
  <table border=0 cellpadding=0 cellspacing =0 style="border-collapse: collapse" bordercolor="#111111" >
<tr valign="top">
<td width="577.333189" colspan="12" rowspan="1" >
<p align="center">
<b><font size="2">AMERICAN TECHNOLOGY CORPORATION</font></b></p align="center">
</td>
<td width="26.666660" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="577.333189" colspan="12" rowspan="1" >
<p align="center">
<b><font size="2">Condensed Statements of Operations</font></b></p align="center">
</td>
<td width="26.666660" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="577.333189" colspan="12" rowspan="1" >
<p align="center">
<b><font size="2">(in thousands except per share amounts)</font></b></p align="center">
</td>
<td width="26.666660" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="577.333189" colspan="12" rowspan="1" >
<p align="center">
<b><font size="2">(unaudited)</font></b></p align="center">
</td>
<td width="26.666660" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="218.666612" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="177.333289" colspan="5" rowspan="1" >
<p align="center">
<b><font size="2">For the three months ended</font></b></p align="center">
</td>
<td width="14.666663" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="165.333292" colspan="5" rowspan="1" >
<p align="center">
<b><font size="2">For the nine months ended</font></b></p align="center">
</td>
<td width="26.666660" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="218.666612" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="177.333289" colspan="5" rowspan="1" style="border-bottom-style: solid; border-bottom-width: 1" >
<p align="center">
<b><font size="2">June 30,</font></b></p align="center">
</td>
<td width="14.666663" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="165.333292" colspan="5" rowspan="1" style="border-bottom-style: solid; border-bottom-width: 1" >
<p align="center">
<b><font size="2">June 30,</font></b></p align="center">
</td>
<td width="26.666660" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="218.666612" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="81.333313" colspan="2" rowspan="1" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1" >
<p align="center">
<b><font size="2">2004</font></b></p align="center">
</td>
<td width="14.666663" colspan="1" rowspan="1" style="border-top-style: solid; border-top-width: 1" >
&nbsp;</td>
<td width="78.666647" colspan="2" rowspan="1" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1" >
<p align="center">
<b><font size="2">2003</font></b></p align="center">
</td>
<td width="14.666663" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="77.333314" colspan="2" rowspan="1" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1" >
<p align="center">
<b><font size="2">2004</font></b></p align="center">
</td>
<td width="14.666663" colspan="1" rowspan="1" style="border-top-style: solid; border-top-width: 1" >
&nbsp;</td>
<td width="71.999982" colspan="2" rowspan="1" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1" >
<p align="center">
<b><font size="2">2003</font></b></p align="center">
</td>
<td width="26.666660" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="218.666612" colspan="1" rowspan="1" >
<p>
<b><font size="2">Revenues:</font></b></p>
</td>
<td width="81.333313" colspan="2" rowspan="1" style="border-top-style: solid; border-top-width: 1" >
&nbsp;</td>
<td width="14.666663" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="78.666647" colspan="2" rowspan="1" style="border-top-style: solid; border-top-width: 1" >
&nbsp;</td>
<td width="14.666663" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="77.333314" colspan="2" rowspan="1" style="border-top-style: solid; border-top-width: 1" >
&nbsp;</td>
<td width="14.666663" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="71.999982" colspan="2" rowspan="1" style="border-top-style: solid; border-top-width: 1" >
&nbsp;</td>
<td width="26.666660" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="218.666612" colspan="1" rowspan="1" >
<p>
<font size="2">&nbsp;&nbsp;Product sales</font></p>
</td>
<td width="14.666663" colspan="1" rowspan="1" >
<p align="right">
<font size="2">$</font></p align="right">
</td>
<td width="65.333317" colspan="1" rowspan="1" >
<p align="right">
<font size="2">2,089&nbsp;</font></p align="right">
</td>
<td width="14.666663" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="14.666663" colspan="1" rowspan="1" >
<p align="right">
<font size="2">$</font></p align="right">
</td>
<td width="63.999984" colspan="1" rowspan="1" >
<p align="right">
<font size="2">275&nbsp;</font></p align="right">
</td>
<td width="14.666663" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="14.666663" colspan="1" rowspan="1" >
<p align="right">
<font size="2">$</font></p align="right">
</td>
<td width="61.333318" colspan="1" rowspan="1" >
<p align="right">
<font size="2">4,201&nbsp;</font></p align="right">
</td>
<td width="14.666663" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="17.333329" colspan="1" rowspan="1" >
<p align="right">
<font size="2">$</font></p align="right">
</td>
<td width="54.666653" colspan="1" rowspan="1" >
<p align="right">
<font size="2">808&nbsp;</font></p align="right">
</td>
<td width="26.666660" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="218.666612" colspan="1" rowspan="1" >
<p>
<font size="2">&nbsp;&nbsp;Contract and license </font> </p>
</td>
<td width="81.333313" colspan="2" rowspan="1" style="border-bottom-style: solid; border-bottom-width: 1" >
<p align="right">
<font size="2">18&nbsp;</font></p align="right">
</td>
<td width="14.666663" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="78.666647" colspan="2" rowspan="1" style="border-bottom-style: solid; border-bottom-width: 1" >
<p align="right">
<font size="2">39&nbsp;</font></p align="right">
</td>
<td width="14.666663" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="77.333314" colspan="2" rowspan="1" style="border-bottom-style: solid; border-bottom-width: 1" >
<p align="right">
<font size="2">174&nbsp;</font></p align="right">
</td>
<td width="14.666663" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="71.999982" colspan="2" rowspan="1" style="border-bottom-style: solid; border-bottom-width: 1" >
<p align="right">
<font size="2">167&nbsp;</font></p align="right">
</td>
<td width="26.666660" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="218.666612" colspan="1" rowspan="1" >
<p>
<font size="2">Total revenues</font></p>
</td>
<td width="81.333313" colspan="2" rowspan="1" style="border-top-style: solid; border-top-width: 1" >
<p align="right">
<font size="2">2,107&nbsp;</font></p align="right">
</td>
<td width="14.666663" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="78.666647" colspan="2" rowspan="1" style="border-top-style: solid; border-top-width: 1" >
<p align="right">
<font size="2">314&nbsp;</font></p align="right">
</td>
<td width="14.666663" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="77.333314" colspan="2" rowspan="1" style="border-top-style: solid; border-top-width: 1" >
<p align="right">
<font size="2">4,375&nbsp;</font></p align="right">
</td>
<td width="14.666663" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="71.999982" colspan="2" rowspan="1" style="border-top-style: solid; border-top-width: 1" >
<p align="right">
<font size="2">975&nbsp;</font></p align="right">
</td>
<td width="26.666660" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="218.666612" colspan="1" rowspan="1" >
<p>
<font size="2">Cost of revenues</font></p>
</td>
<td width="81.333313" colspan="2" rowspan="1" style="border-bottom-style: solid; border-bottom-width: 1" >
<p align="right">
<font size="2">1,006&nbsp;</font></p align="right">
</td>
<td width="14.666663" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="78.666647" colspan="2" rowspan="1" style="border-bottom-style: solid; border-bottom-width: 1" >
<p align="right">
<font size="2">186&nbsp;</font></p align="right">
</td>
<td width="14.666663" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="77.333314" colspan="2" rowspan="1" style="border-bottom-style: solid; border-bottom-width: 1" >
<p align="right">
<font size="2">2,360&nbsp;</font></p align="right">
</td>
<td width="14.666663" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="71.999982" colspan="2" rowspan="1" style="border-bottom-style: solid; border-bottom-width: 1" >
<p align="right">
<font size="2">859&nbsp;</font></p align="right">
</td>
<td width="26.666660" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="218.666612" colspan="1" rowspan="1" >
<p>
<b><font size="2">Gross profit </font> </b></p>
</td>
<td width="81.333313" colspan="2" rowspan="1" style="border-top-style: solid; border-top-width: 1" >
<p align="right">
<font size="2">1,101&nbsp;</font></p align="right">
</td>
<td width="14.666663" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="78.666647" colspan="2" rowspan="1" style="border-top-style: solid; border-top-width: 1" >
<p align="right">
<font size="2">128&nbsp;</font></p align="right">
</td>
<td width="14.666663" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="77.333314" colspan="2" rowspan="1" style="border-top-style: solid; border-top-width: 1" >
<p align="right">
<font size="2">2,015&nbsp;</font></p align="right">
</td>
<td width="14.666663" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="71.999982" colspan="2" rowspan="1" style="border-top-style: solid; border-top-width: 1" >
<p align="right">
<font size="2">116&nbsp;</font></p align="right">
</td>
<td width="26.666660" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="218.666612" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="81.333313" colspan="2" rowspan="1" >
&nbsp;</td>
<td width="14.666663" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="78.666647" colspan="2" rowspan="1" >
&nbsp;</td>
<td width="14.666663" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="77.333314" colspan="2" rowspan="1" >
&nbsp;</td>
<td width="14.666663" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="71.999982" colspan="2" rowspan="1" >
&nbsp;</td>
<td width="26.666660" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="218.666612" colspan="1" rowspan="1" >
<p>
<b><font size="2">Operating expenses:</font></b></p>
</td>
<td width="81.333313" colspan="2" rowspan="1" >
&nbsp;</td>
<td width="14.666663" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="78.666647" colspan="2" rowspan="1" >
&nbsp;</td>
<td width="14.666663" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="77.333314" colspan="2" rowspan="1" >
&nbsp;</td>
<td width="14.666663" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="71.999982" colspan="2" rowspan="1" >
&nbsp;</td>
<td width="26.666660" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="218.666612" colspan="1" rowspan="1" >
<p>
<font size="2">&nbsp;&nbsp;Selling, general and administrative</font></p>
</td>
<td width="81.333313" colspan="2" rowspan="1" >
<p align="right">
<font size="2">1,614&nbsp;</font></p align="right">
</td>
<td width="14.666663" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="78.666647" colspan="2" rowspan="1" >
<p align="right">
<font size="2">1,728&nbsp;</font></p align="right">
</td>
<td width="14.666663" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="77.333314" colspan="2" rowspan="1" >
<p align="right">
<font size="2">3,766&nbsp;</font></p align="right">
</td>
<td width="14.666663" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="71.999982" colspan="2" rowspan="1" >
<p align="right">
<font size="2">3,394&nbsp;</font></p align="right">
</td>
<td width="26.666660" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="218.666612" colspan="1" rowspan="1" >
<p>
<font size="2">&nbsp;&nbsp;Research and development</font></p>
</td>
<td width="81.333313" colspan="2" rowspan="1" style="border-bottom-style: solid; border-bottom-width: 1" >
<p align="right">
<font size="2">890&nbsp;</font></p align="right">
</td>
<td width="14.666663" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="78.666647" colspan="2" rowspan="1" style="border-bottom-style: solid; border-bottom-width: 1" >
<p align="right">
<font size="2">714&nbsp;</font></p align="right">
</td>
<td width="14.666663" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="77.333314" colspan="2" rowspan="1" style="border-bottom-style: solid; border-bottom-width: 1" >
<p align="right">
<font size="2">1,984&nbsp;</font></p align="right">
</td>
<td width="14.666663" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="71.999982" colspan="2" rowspan="1" style="border-bottom-style: solid; border-bottom-width: 1" >
<p align="right">
<font size="2">2,023&nbsp;</font></p align="right">
</td>
<td width="26.666660" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="218.666612" colspan="1" rowspan="1" >
<p>
<font size="2">Total operating expenses</font></p>
</td>
<td width="81.333313" colspan="2" rowspan="1" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1" >
<p align="right">
<font size="2">2,504&nbsp;</font></p align="right">
</td>
<td width="14.666663" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="78.666647" colspan="2" rowspan="1" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1" >
<p align="right">
<font size="2">2,442&nbsp;</font></p align="right">
</td>
<td width="14.666663" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="77.333314" colspan="2" rowspan="1" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1" >
<p align="right">
<font size="2">5,750&nbsp;</font></p align="right">
</td>
<td width="14.666663" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="71.999982" colspan="2" rowspan="1" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1" >
<p align="right">
<font size="2">5,417&nbsp;</font></p align="right">
</td>
<td width="26.666660" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="218.666612" colspan="1" rowspan="1" >
<p>
<font size="2">Loss from operations</font></p>
</td>
<td width="81.333313" colspan="2" rowspan="1" style="border-top-style: solid; border-top-width: 1" >
<p align="right">
<font size="2">(1,403)</font></p align="right">
</td>
<td width="14.666663" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="78.666647" colspan="2" rowspan="1" style="border-top-style: solid; border-top-width: 1" >
<p align="right">
<font size="2">(2,314)</font></p align="right">
</td>
<td width="14.666663" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="77.333314" colspan="2" rowspan="1" style="border-top-style: solid; border-top-width: 1" >
<p align="right">
<font size="2">(3,735)</font></p align="right">
</td>
<td width="14.666663" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="71.999982" colspan="2" rowspan="1" style="border-top-style: solid; border-top-width: 1" >
<p align="right">
<font size="2">(5,301)</font></p align="right">
</td>
<td width="26.666660" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="218.666612" colspan="1" rowspan="1" >
<p>
<b><font size="2">Other income (expense):</font></b></p>
</td>
<td width="81.333313" colspan="2" rowspan="1" style="border-bottom-style: solid; border-bottom-width: 1" >
<p align="right">
<font size="2">13&nbsp;</font></p align="right">
</td>
<td width="14.666663" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="78.666647" colspan="2" rowspan="1" style="border-bottom-style: solid; border-bottom-width: 1" >
<p align="right">
<font size="2">(69)</font></p align="right">
</td>
<td width="14.666663" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="77.333314" colspan="2" rowspan="1" style="border-bottom-style: solid; border-bottom-width: 1" >
<p align="right">
<font size="2">43&nbsp;</font></p align="right">
</td>
<td width="14.666663" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="71.999982" colspan="2" rowspan="1" style="border-bottom-style: solid; border-bottom-width: 1" >
<p align="right">
<font size="2">(668)</font></p align="right">
</td>
<td width="26.666660" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="218.666612" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="81.333313" colspan="2" rowspan="1" style="border-top-style: solid; border-top-width: 1" >
&nbsp;</td>
<td width="14.666663" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="78.666647" colspan="2" rowspan="1" style="border-top-style: solid; border-top-width: 1" >
&nbsp;</td>
<td width="14.666663" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="77.333314" colspan="2" rowspan="1" style="border-top-style: solid; border-top-width: 1" >
&nbsp;</td>
<td width="14.666663" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="71.999982" colspan="2" rowspan="1" style="border-top-style: solid; border-top-width: 1" >
&nbsp;</td>
<td width="26.666660" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="218.666612" colspan="1" rowspan="1" >
<p>
<b><font size="2">Net loss</font></b></p>
</td>
<td width="81.333313" colspan="2" rowspan="1" >
<p align="right">
<font size="2">(1,390)</font></p align="right">
</td>
<td width="14.666663" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="78.666647" colspan="2" rowspan="1" >
<p align="right">
<font size="2">(2,383)</font></p align="right">
</td>
<td width="14.666663" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="77.333314" colspan="2" rowspan="1" >
<p align="right">
<font size="2">(3,692)</font></p align="right">
</td>
<td width="14.666663" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="71.999982" colspan="2" rowspan="1" >
<p align="right">
<font size="2">(5,969)</font></p align="right">
</td>
<td width="26.666660" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="218.666612" colspan="1" rowspan="1" >
<p>
<font size="2">Dividend requirements on convertible preferred stock</font></p>
</td>
<td width="81.333313" colspan="2" rowspan="1" style="border-bottom-style: solid; border-bottom-width: 1" >
<p align="right">
<font size="2"><br>
387&nbsp;</font></p align="right">
</td>
<td width="14.666663" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="78.666647" colspan="2" rowspan="1" style="border-bottom-style: solid; border-bottom-width: 1" >
<p align="right">
<br>
<font size="2">628&nbsp;</font></p align="right">
</td>
<td width="14.666663" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="77.333314" colspan="2" rowspan="1" style="border-bottom-style: solid; border-bottom-width: 1" >
<p align="right">
<br>
<font size="2">1,088&nbsp;</font></p align="right">
</td>
<td width="14.666663" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="71.999982" colspan="2" rowspan="1" style="border-bottom-style: solid; border-bottom-width: 1" >
<p align="right">
<br>
<font size="2">1,594&nbsp;</font></p align="right">
</td>
<td width="26.666660" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="218.666612" colspan="1" rowspan="1" >
<p>
<b><font size="2">Net loss available to common<br>
&nbsp;stockholders </font> </b></p>
</td>
<td width="14.666663" colspan="1" rowspan="1" style="border-top-style: solid; border-top-width: 1; border-bottom: double" >
<p align="right">
<font size="2"><br>
$</font></p align="right">
</td>
<td width="65.333317" colspan="1" rowspan="1" style="border-top-style: solid; border-top-width: 1; border-bottom: double" >
<p align="right">
<br>
<font size="2">(1,777)</font></p align="right">
</td>
<td width="14.666663" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="14.666663" colspan="1" rowspan="1" style="border-top-style: solid; border-top-width: 1; border-bottom: double" >
<p align="right">
<br>
<font size="2">$</font></p align="right">
</td>
<td width="63.999984" colspan="1" rowspan="1" style="border-top-style: solid; border-top-width: 1; border-bottom: double" >
<p align="right">
<br>
<font size="2">(3,011)</font></p align="right">
</td>
<td width="14.666663" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="14.666663" colspan="1" rowspan="1" style="border-top-style: solid; border-top-width: 1; border-bottom: double" >
<p align="right">
<br>
<font size="2">$</font></p align="right">
</td>
<td width="61.333318" colspan="1" rowspan="1" style="border-top-style: solid; border-top-width: 1; border-bottom: double" >
<p align="right">
<br>
<font size="2">(4,780)</font></p align="right">
</td>
<td width="14.666663" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="17.333329" colspan="1" rowspan="1" style="border-top-style: solid; border-top-width: 1; border-bottom: double" >
<p align="right">
<br>
<font size="2">$</font></p align="right">
</td>
<td width="54.666653" colspan="1" rowspan="1" style="border-top-style: solid; border-top-width: 1; border-bottom: double" >
<p align="right">
<br>
<font size="2">(7,563)</font></p align="right">
</td>
<td width="26.666660" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="218.666612" colspan="1" rowspan="1" >
<p>
<b><font size="2">Net loss per share of common stock<br>
&nbsp;- basic and diluted</font></b></p>
</td>
<td width="14.666663" colspan="1" rowspan="1" style="border-top-style: solid; border-top-width: 1; border-bottom: double" >
<p align="right">
<font size="2"><br>
$</font></p align="right">
</td>
<td width="65.333317" colspan="1" rowspan="1" style="border-top-style: solid; border-top-width: 1; border-bottom: double" >
<p align="right">
<br>
<font size="2">(0.09)</font></p align="right">
</td>
<td width="14.666663" colspan="1" rowspan="1" >
<p>
</p>
</td>
<td width="14.666663" colspan="1" rowspan="1" style="border-top-style: solid; border-top-width: 1; border-bottom: double" >
<p align="right">
<br>
<font size="2">$</font></p align="right">
</td>
<td width="63.999984" colspan="1" rowspan="1" style="border-top-style: solid; border-top-width: 1; border-bottom: double" >
<p align="right">
<br>
<font size="2">(0.19)</font></p align="right">
</td>
<td width="14.666663" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="14.666663" colspan="1" rowspan="1" style="border-top-style: solid; border-top-width: 1; border-bottom: double" >
<p align="right">
<br>
<font size="2">$</font></p align="right">
</td>
<td width="61.333318" colspan="1" rowspan="1" style="border-top-style: solid; border-top-width: 1; border-bottom: double" >
<p align="right">
<br>
<font size="2">(0.24)</font></p align="right">
</td>
<td width="14.666663" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="17.333329" colspan="1" rowspan="1" style="border-top-style: solid; border-top-width: 1; border-bottom: double" >
<p align="right">
<br>
<font size="2">$</font></p align="right">
</td>
<td width="54.666653" colspan="1" rowspan="1" style="border-top-style: solid; border-top-width: 1; border-bottom: double" >
<p align="right">
<br>
<font size="2">(0.51)</font></p align="right">
</td>
<td width="26.666660" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="218.666612" colspan="1" rowspan="1" >
<p>
<b><font size="2">Average weighted number of common<br>
&nbsp;shares outstanding</font></b></p>
</td>
<td width="81.333313" colspan="2" style="border-bottom: double" valign="bottom" >
<p align="right">
<font size="2"><br>
19,720&nbsp;</font></p align="right">
</td>
<td width="14.666663" valign="bottom" >
&nbsp;</td>
<td width="78.666647" colspan="2" style="border-bottom: double" valign="bottom" >
<p align="right">
<font size="2"><br>
15,447&nbsp;</font></p align="right">
</td>
<td width="14.666663" valign="bottom" >
&nbsp;</td>
<td width="77.333314" colspan="2" style="border-bottom: double" valign="bottom" >
<p align="right">
<br>
<font size="2">19,534&nbsp;</font></p align="right">
</td>
<td width="14.666663" valign="bottom" >
&nbsp;</td>
<td width="71.999982" colspan="2" style="border-bottom: double" valign="bottom" >
<p align="right">
<br>
<font size="2">14,903&nbsp;</font></p align="right">
</td>
<td width="26.666660" valign="bottom" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="218.666612" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="81.333313" colspan="2" rowspan="1" style="border-top-style: solid; border-top-width: 1" >
&nbsp;</td>
<td width="14.666663" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="78.666647" colspan="2" rowspan="1" style="border-top-style: solid; border-top-width: 1" >
&nbsp;</td>
<td width="14.666663" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="77.333314" colspan="2" rowspan="1" style="border-top-style: solid; border-top-width: 1" >
&nbsp;</td>
<td width="14.666663" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="71.999982" colspan="2" rowspan="1" style="border-top-style: solid; border-top-width: 1" >
&nbsp;</td>
<td width="26.666660" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="218.666612" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="81.333313" colspan="2" rowspan="1" >
&nbsp;</td>
<td width="14.666663" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="78.666647" colspan="2" rowspan="1" >
&nbsp;</td>
<td width="14.666663" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="77.333314" colspan="2" rowspan="1" >
&nbsp;</td>
<td width="14.666663" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="71.999982" colspan="2" rowspan="1" >
&nbsp;</td>
<td width="26.666660" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
</table></div>
<p>
</p>


</body>

</html>

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