Exhibit 99.1


The following is a direct communication from the President of American
Technology Corporation.

October 3, 2001

Dear Shareholder,

I am pleased to announce today that we have entered into a long-term royalty
bearing license agreement with Thomson multimedia and its subsidiaries for ATC's
patent-pending PureBass(TM) Technology. PureBass technology will be featured in
selected new Thomson Home Theater Systems scheduled for introduction in 2002.
Thomson multimedia systems are sold throughout the world under several brand
names including RCA in the U.S., and Thomson in Europe. With sales of 9.1
billion Euros (U.S. $ 8.3 billion)in 2000 and 73,000 employees in more than 30
countries, Thomson multimedia Paris Euroclear: 18453) (NYSE: TMS), provides a
wide range of video (and enabling) technologies, systems, finished products and
services to consumers and professionals in the entertainment and media
industries. Thomson's worldwide audio product unit sales increased 25% in 2000.

We are very excited to be working with Thomson multimedia on their scheduled
introduction of both our Stratified Field and PureBass technologies in their
Home Theater Systems. Due to the distortion of `prior art' woofer technologies,
it has been very difficult to achieve accurate, seamless transitions from those
woofer systems to high performance, upper range speakers particularly if the
crossover frequency is much above 100 Hz. Due to the reduced distortion,
PureBass not only has superior sound quality and output capability, it also has
the attribute of allowing for higher crossover frequencies than other
sub-woofers without degrading the sound quality. This creates the opportunity to
reduce the size and cost while increasing the dynamic range of the entire Home
Theater system.

PureBass technology utilizes unique cabinet construction and vent configurations
along with multiple acoustic filters to deliver the world's finest sub-woofer
for use with applications requiring superior low frequency performance and/or
higher crossover frequencies. It has tremendous potential for use in Home
Theater systems, multi-media, surround sound configurations, executive bookshelf
systems, TV, professional sound systems, and many more. We are pleased that
Thomson multimedia will incorporate our technology into their branded line of
systems worldwide under this non-exclusive license agreement. We are
distributing this Shareholder Communication to American Technology Corporation
Shareholders with Thomson's approval and honoring their request that this
information not be released over news wire services at this time.

Sincerely,
/s/ TERRY CONRAD
Terry Conrad, President

About American Technology Corporation

American Technology Corporation is Shaping the Future of Sound(R) by developing
and licensing its technology and intellectual property portfolio which includes:
the award-winning HSS(TM) (HyperSonic(TM) Sound) and StratifiedField(TM)
Technologies; NeoPlanar(TM); PureBass(TM) and Magnified Force(TM) Sub-Woofer
Technologies; and FM Sounds(TM) consumer radio products. The Company is
establishing a strong portfolio of patents, trademarks, and know-how including
over 100 U.S. and Foreign patents and patent filings to date. For more
information on the Company and its technologies and products please visit our
web site at www.atcsd.com.

# # #

Safe Harbor statement under the Private Securities Litigation Reform of 1995:
This document contains forward-looking statements relating to future
performance, technology and product development that may affect future results
and the future viability of the company. Actual results could be affected or
differ



                                                                    Exhibit 99.1

materially from those projected in the forward-looking statements as a result of
risks and uncertainties, including future products and results, technological
shifts, potential technical difficulties that could delay new products,
competition, general economic factors, and conditions in the markets in which
the company operates, pricing pressures, the uncertainty of market acceptance of
new products and services by OEM's and end-user customers, and other factors
identified and discussed in the Company's most recent 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.

FOR FURTHER INFORMATION CONTACT:

American Technology Corp.
Robert Putnam
(858) 679-3168
Robert@atcsd.com