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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
December 17, 2004 (December 13, 2004)
AMERICAN TECHNOLOGY CORPORATION
(Exact Name of Registrant as Specified in Charter)
Delaware 87-0361799
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(State or Other Jurisdiction of (IRS Employer Identification No.)
Incorporation)
0-24248
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(Commission File Number)
13114 Evening Creek Drive South, San Diego, California 92128
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(Address of Principal Executive Offices) (Zip Code)
(858) 679-2114
(Registrant's telephone number, including area code)
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ITEM 1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT.
$4.9 MILLION CONTRACT FOR ACOUSTIC DEVICES FOR U.S. ARMY 3RD INFANTRY DIVISION
On December 13, 2004, we received a firm order from ADS, Inc. that includes $4.5
million in LRAD products for use by the U.S. Army 3rd Infantry Division, Fort
Stewart, Georgia and $0.4 million in ancillary products for sale to the same end
user, which we are providing on a value-added reseller basis along with the LRAD
units. The order calls for deliveries in December 2004 and January 2005 and
customary payment terms. A complete copy of the related press release is filed
herewith as Exhibit 99.1.
$25 MILLION COMMITTED EQUITY FINANCING FACILITY WITH KINGSBRIDGE CAPITAL LIMITED
On December 14, 2004, we entered into a Committed Equity Financing Facility
(CEFF) with Kingsbridge Capital Ltd., pursuant to which Kingsbridge committed to
purchase up to $25 million of our common stock to support future growth. As part
of the arrangement, we issued a warrant to Kingsbridge to purchase 275,000
shares of our common stock at a price of $8.60 per share. The warrant is
exercisable beginning six months after the date of grant and for a period of
five years thereafter. Subject to certain conditions and limitations, from time
to time under the CEFF, we may require Kingsbridge to purchase newly-issued
shares of our common stock at a price that is between 88% and 92% of the volume
weighted average price during a 15 day purchase period, and thereby raise
capital as required, at the time, price and in the amounts deemed suitable to
us. For each election to sell shares to Kingsbridge, we will determine the
lowest threshold price at which our stock may be sold, but the threshold price
cannot be lower than $3.00 per share. The CEFF also requires us to use
reasonable efforts to have a resale registration statement filed within 45 days
of entering into the CEFF, and to have such registration statement declared
effective by the Securities and Exchange Commission (SEC) within 45 days or 120
days of filing, depending on whether the SEC elects to review the registration
statement. As of December 17, 2004, we had not filed the required resale
registration statement. Based on such factors as market conditions, financing
needs and the time required for the SEC to declare the resale registration
statement effective, we currently expect that we may begin to utilize the CEFF
during fiscal 2005, in order to fund working capital requirements. However, the
timing and extent of our ability to utilize the CEFF is uncertain. Under the
rules of the NASDAQ Stock Market, the maximum number of shares we may sell to
Kingsbridge without approval of our stockholders is 3,684,782 (exclusive of the
warrant shares), which may further limit the amount of proceeds we are able to
obtain from the CEFF. We agreed to pay to a consultant a fee equal to 4% of the
first $5 million raised under the CEFF, 3% for the second $5 million raised
under the CEFF, 2% for the third $5 million raised under the CEFF, and 1.5% for
any additional amounts raised under the CEFF.
We relied on the exemption from registration contained in Section 4(2) of the
Securities Act, and Regulation D, Rule 506 thereunder, in connection with
obtaining Kingsbridge's commitment under the CEFF, and for the issuance of the
warrant in consideration of such commitment. An appropriate legend has been
placed on the warrant, and appropriate legends will be placed on all securities
purchased under the CEFF or the warrant which are not subject to an effective
registration statement for their resale.
A complete copy of the Common Stock Purchase Agreement, the Warrant, the
Registration Rights Agreement (each executed in connection with the CEFF) and
related press release are filed herewith as Exhibit 10.1, Exhibit 4.1, Exhibit
10.2 and Exhibit 99.2, respectively, and incorporated herein by reference. The
foregoing descriptions of the terms of these agreements are qualified in their
entirety by reference to such exhibits.
ITEM 3.02 UNREGISTERED SALES OF EQUITY SECURITIES
See disclosure in Item 1.01.
ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS
(c) Exhibits
4.1 Warrant dated December 14, 2004 executed by the Company in
favor of Kingsbridge Capital Limited.*
10.1 Common Stock Purchase Agreement dated December 14, 2004
between the Company and Kingsbridge Capital Limited.*
10.2 Registration Rights Agreement dated December 14, 2004 between
the Company and Kingsbridge Capital Limited.*
99.1 Press Release dated December 15, 2004.*
99.2 Press Release dated December 15, 2004.*
*Filed herewith.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
AMERICAN TECHNOLOGY CORPORATION
Date: December 17, 2004 By: /s/ MICHAEL A. RUSSELL
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Michael A. Russell
Chief Financial Officer