<PAGE>   1


                                                                   Exhibit 3.1.4



                                    CORRECTED

                           CERTIFICATE OF DESIGNATIONS

                                       OF

                            SERIES B PREFERRED STOCK

                                       OF

                        AMERICAN TECHNOLOGY CORPORATION,

                             A DELAWARE CORPORATION

                            -------------------------

                         PURSUANT TO SECTION 151 OF THE
                GENERAL CORPORATION LAW OF THE STATE OF DELAWARE

                            -------------------------

        AMERICAN TECHNOLOGY CORPORATION, a Delaware corporation (the
"Corporation"), does hereby certify:

I. The name of the Corporation is American Technology Corporation.

II. The instrument being corrected is entitled: Certificate of Designations of
Series B Preferred Stock, which was filed with the Secretary of State of the
State of Delaware on December 14, 1998.

III. The inaccuracies or defects of said Certificate to be corrected are several
typographical errors contained in Section 4(a), 4(b), 5(d) and 5(k) of said
Certificate.

IV. The Corporation has not issued any Series B Preferred Stock as of the date
of this correction.

V. The Corporation certifies that pursuant to the authority contained in its
Certificate of Incorporation (the "Certificate of Incorporation") and in
accordance with the provisions of Section 151 of the General Corporation Law of
the State of Delaware, the Board of Directors of the Corporation adopted the
following resolution, which resolution remains in full force and effect on the
date hereof, and which as corrected should read in its entirety as follows:

        RESOLVED, that there is hereby established a series of authorized
preferred stock having a par value of $.00001 per share, which series shall be
designated as "Series B Preferred Stock," shall consist of 250,000 shares and
shall have the following voting powers, preferences and relative, participating,
optional and other special rights, and qualifications, limitations and
restrictions thereof as follows:




                                       1.
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1.       DESIGNATION AND AMOUNT. The designation of the series of Preferred
Stock shall be "Series B Preferred Stock," par value $.00001 per share (the
"Series B Preferred Stock"). The number of authorized shares of Series B
Preferred Stock shall be 250,000. The Series B Preferred Stock shall have an
initial issue price of $10.00 per share (the "Original Issue Price"). The date
on which any shares of Series B Preferred Stock are first issued is referred to
herein as the "Original Issue Date."

2.       DIVIDENDS. The holders of shares of Series B Preferred Stock shall be
entitled to receive, on an as-if-converted to Common Stock basis, when, as and
if a cash dividend on the Corporation's common stock, par value $.00001 per
share (the "Common Stock"), is declared by the Board of Directors out of funds
legally available therefor, a cash dividend in a per share amount per share of
Series B Preferred Stock equal to the amount of the cash dividend declared on
the number of shares of Common Stock into which such Series B Preferred Stock is
convertible (as adjusted for any stock splits, reverse stock splits,
reorganizations, stock dividends, recapitalizations and the like for such
shares).

3.       LIQUIDATION.

         (a) PREFERENCE UPON LIQUIDATION, DISSOLUTION OR WINDING UP. In the
event of any liquidation, dissolution or winding up of the affairs of the
Corporation (any or all of such events, a "liquidation"), whether voluntary or
involuntary, subject to the prior preferences and other rights of any Senior
Stock (as defined below), if any, the holders of shares of Series B Preferred
Stock then outstanding shall be entitled pari passu as if members of a single
class of securities with the holders of any Parity Stock (as defined below), if
any, to be paid out of the assets of the Corporation before any payment shall be
made to the holders of Junior Stock (as defined below) an amount per share equal
to the Conversion Value (as defined in Section 5(a) below), plus any declared
but unpaid dividends (the "Liquidation Amount"). Except as provided in this
Section 3(a), holders of Series B Preferred Stock shall not be entitled to any
distribution in the event of liquidation, dissolution or winding up of the
affairs of the Corporation. The term "Junior Stock" shall mean Common Stock or
any other class or series of stock ranking junior to the Series B Preferred
Stock in respect of the right to receive dividends or the right to participate
in any distribution upon liquidation, the term "Senior Stock" shall mean any
class or series of stock of the Corporation authorized after the date of
issuance of the Series B Preferred Stock ranking senior to the Series B
Preferred Stock in respect of the right to receive dividends or the right to
participate in any distribution upon liquidation, and the term "Parity Stock"
shall mean any class or series of stock of the Corporation authorized after the
date of issuance of the Series B Preferred Stock ranking on a parity with the
Series B Preferred Stock in respect of the right to receive dividends or the
right to participate in any distribution upon liquidation.

         (b) MERGER OR SALE OF ASSETS. A merger of the Corporation in which
holders of more than 50% of the outstanding Common Stock of the Corporation
before the merger do not hold more than 50% of the outstanding Common Stock of
the Corporation after the merger, or a sale of all or substantially all of the
Corporation's assets, shall be deemed to be a liquidation for purposes of this
Section 3; provided, however, that a merger, consolidation or reorganization
where the Corporation is the surviving entity, or a merger of the Corporation
into a wholly-owned subsidiary shall not be deemed a liquidation.





                                       2.
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         (c) INSUFFICIENT ASSETS. If, upon any liquidation of the Corporation,
the assets of the Corporation are insufficient to pay the holders of shares of
the Series B Preferred Stock and any Parity Stock, if any, then outstanding the
full amount to which they shall be entitled, such assets shall be distributed to
each holder of the Series B Preferred Stock and Parity Stock, if any, pro rata
based on the number of shares of Common Stock into which the Series B Preferred
Stock and Parity Stock, if any, held by each is convertible.

         (d) RIGHTS OF OTHER HOLDERS. In the event of any liquidation, after
payment shall have been made to the holders of the Series B Preferred Stock and
Parity Stock, if any, of all preferential amounts to which they shall be
entitled, the holders of shares of Junior Stock and other capital stock of the
Corporation shall receive such amounts as to which they are entitled by the
terms thereof.

4.      VOTING RIGHTS.

         (a) VOTING. Each holder of shares of Series B Preferred Stock shall be
entitled to one (1) vote for each share of Common Stock then issuable upon
conversion of each share of Series B Preferred Stock thereof held on any matter
submitted to the Corporation's stockholders for their approval or consent.
Except as otherwise required by law or expressly provided herein, the holders of
the Series B Preferred Stock shall vote equally with the shares of Common Stock
of the Company and not as a separate class on any matter to voted upon by the
stockholders of the Company.

         (b) CERTIFICATE OF INCORPORATION; CERTAIN STOCK. The affirmative vote
or consent of the holders of a majority of the outstanding shares of Series B
Preferred Stock, voting separately as a class, will be required for (i) any
amendment, alteration, or repeal, whether by merger or consolidation or
otherwise, of the Corporation's Certificate of Incorporation if the amendment,
alteration, or repeal materially and adversely affects the powers, preferences,
or special rights of the Series B Preferred Stock, (ii) any amendment,
alteration, or repeal of this Certificate of Designations, or (iii) the creation
or issuance of any Senior Stock; provided, however, that any increase in the
authorized preferred stock of the Corporation or the creation and issuance of
any Junior Stock shall not be deemed to affect materially and adversely such
powers, preferences or special rights and any such increase or creation and
issuance may be made without any such vote by the holders of the Series B
Preferred Stock, except as otherwise required by law.

5.       CONVERSION RIGHTS.

         (a) OPTIONAL CONVERSION OF SERIES B PREFERRED STOCK. The holder of any
shares of Series B Preferred Stock shall have the right, at such holder's
option, at any time or from time to time to convert any or all of such holder's
shares of Series B Preferred Stock into such number of fully paid and
nonassessable shares of Common Stock (the "Conversion Shares") as determined for
each share of Series B Preferred Stock by dividing the Conversion Value (as
defined below) by the Conversion Price (as defined below). The "Conversion
Value" per share means, as of any date, the sum of (i) $10.00; provided,
however, that if the registration statement (the "Registration Statement")
required to be filed by the Company pursuant to Section 6.2 of that certain
Series B Preferred Stock and Warrant Purchase Agreement between the Corporation
and the original holders of shares of Series B Preferred Stock is not declared
effective by the



                                       3.
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Securities and Exchange Commission (the "SEC") by May 1, 1999, then such $10.00
amount shall be increased by one percent (1%) for the first thirty (30) day
period after May 1, 1999 (pro-rated for any period less than 30 days) and by an
additional three percent (3%) for each thirty (30) day period after May 1, 1999
(pro-rated for any period less than 30 days) until either such Registration
Statement is declared effective by the SEC or until December 31, 1999 (whichever
occurs earlier), plus (ii) an amount which accrues from the Original Issue Date
at a rate of $0.60 per annum, computed on the basis of a 360-day year to the
date of conversion. The "Conversion Price" shall be the lesser of (i) $5.00 per
share (as adjusted for any stock splits, reorganizations, dividends,
recapitalizations and the like), or (ii) ninety-two percent (92%) of the average
closing bid price of the Corporation's Common Stock as quoted on the principal
exchange or market on which such securities are traded (the "Market Price") for
the five (5) trading days immediately preceding the date of conversion;
provided, however, that in no event shall the Conversion Price be less than
$3.50 per share; and provided, further, that no such conversion shall be made
prior to May 31, 1999 at a Conversion Price of less than $5.00 per share (as
adjusted for any stock splits, reorganizations, dividends, recapitalizations and
the like). For purposes of this Section 5(a) if on any date there shall be no
reported closing bid price, the Market Price on such date shall be the closing
bid price on the date next preceding such date on which a closing bid price for
such security has been reported. Notwithstanding anything to the contrary set
forth above, each such conversion at the option of the holder pursuant to this
Section 5(a) shall cover at least the total number of shares of Series B
Preferred Stock then held by such holder or a number of shares of Series B
Preferred Stock having an aggregate Conversion Value of at least $100,000. The
Conversion Shares and the Conversion Price are subject to certain adjustments as
set forth herein, and the terms Conversion Shares and Conversion Price as used
herein shall as of any time be deemed to include all such adjustments to be
given effect as of such time in accordance with the terms hereof.

         Upon the exercise of the option of the holder of any shares of Series B
Preferred Stock to convert Series B Preferred Stock into Common Stock, the
holder of such shares of Series B Preferred Stock to be converted shall
surrender the certificates representing the shares of Series B Preferred Stock
so to be converted in the manner provided in Section 5(d) below. Immediately
following such conversion, the rights of the holders of the Series B Preferred
Stock that has been converted (other than the right to receive dividends unpaid
as of the date of such conversion) shall cease and the persons entitled to
receive the Common Stock upon the conversion of Series B Preferred Stock shall
be treated for all purposes (other than the right to receive dividends unpaid as
of the date of such conversion) as having become the owners of such Common
Stock.

         (b) AUTOMATIC CONVERSION. Each remaining outstanding share of Series B
Preferred Stock shall be automatically converted into shares of Common Stock on
November 30, 2001 in accordance with the provisions of Section 5(a) hereof.
Pursuant to this Section 5(b), on the Conversion Date (as defined below), all
outstanding shares of Series B Preferred Stock shall be converted into that
number of shares of Common Stock as determined in accordance with Section 5(a)
hereof as if the conversion of such number of shares of Series B Preferred Stock
were made by the holders thereof in accordance therewith without any further
action on the part of such holders.



                                       4.
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         (c) CONVERSION AT OPTION OF CORPORATION. If for any ten (10)
consecutive trading days the Market Price of the Corporation's Common Stock is
at least $12.00 per share (as adjusted for stock splits, reorganizations,
dividends, recapitalizations and the like), then at any time within ten (10)
business days after the end of such ten (10) trading day period, the Corporation
shall have the right to require the conversion of all outstanding shares of
Series B Preferred Stock into shares of Common Stock in accordance with the
provisions of Section 5(a) hereof; provided, however, in the event that the
Corporation elects to convert shares of Series B Preferred Stock to Common Stock
pursuant to the terms of this Section 5(c) prior to December 31, 1999, the
Corporation shall only be able to require such conversion if a Registration
Statement (as defined in Section 5(a)) filed with the SEC is then effective. For
purposes of this Section 5(c), if on any date there shall be no reported closing
bid price, the "Market Price" on such date shall be the closing bid price on the
date next preceding such date on which a closing bid price for such security has
been reported. Pursuant to this Section 5(c), on the Conversion Date (as defined
below), all outstanding shares of Series B Preferred Stock shall be converted
into that number of shares of Common Stock as determined in accordance with
Section 5(a) hereof as if the conversion of such number of shares of Series B
Preferred Stock were made by the holders thereof in accordance therewith without
any further action on the part of such holders.

         (d) DELIVERY OF STOCK CERTIFICATES. The holder of any shares of Series
B Preferred Stock may exercise the optional conversion right pursuant to Section
5(a) above by delivering to the Corporation or its duly authorized transfer
agent during regular business hours at the office of the Corporation the
certificate or certificates for the shares of Series B Preferred Stock to be
converted, duly endorsed or assigned either in blank or to the Corporation (if
required by it), accompanied by written notice (the "Conversion Notice") stating
that such holder elects to convert such shares of Series B Preferred Stock and
shall provide a certificate to the Corporation or its duly authorized transfer
agent as to the date of such conversion. Upon the occurrence of an automatic
conversion pursuant to Section 5(b) above or conversion at the option of the
Corporation pursuant to Section 5(c) above, the Corporation shall deliver notice
to each holder of Series B Preferred Stock and the holder of any shares of
Series B Preferred Stock shall deliver to the Corporation at the office of the
Corporation the certificate or certificates for all shares of Series B Preferred
Stock then held by such holder, duly endorsed or assigned either in blank or to
the Corporation (if requested by it). Conversion shall be deemed to have been
effected (1) in the case of an optional conversion pursuant to Section 5(a), on
the date when the aforesaid delivery of the Conversion Notice is made if such
day is a business day and otherwise on the business day following the date of
the aforesaid delivery, and (2) in the case of an automatic conversion pursuant
to Section 5(b) on November 30, 2001, or (3) in the case of conversion at the
option of the Corporation pursuant to Section 5(c), upon the date of the notice,
and in each case such date is referred to herein as the "Conversion Date."
Within five (5) business days, the Corporation, through its transfer agent, if
any, shall issue and deliver to or upon the written order of such holder, to the
place designated by such holder, a certificate or certificates for the number of
full shares of Common Stock to which such holder is entitled and a check or cash
in respect of any fractional interest in a share of Common Stock, as provided
below; provided, however, that in the case of a conversion in connection with
liquidation, no such certificates need be issued. The person in whose name the
certificate or certificates for Common Stock are to be issued shall be deemed to
have become the stockholder of record in respect of such Common Stock on the
applicable Conversion Date unless the transfer books of the Corporation are
closed on that date,



                                       5.
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in which event such holder shall be deemed to have become the stockholder of
record in respect of such Common Stock on the next succeeding date on which the
transfer books are open, but the Conversion Value and the Conversion Price shall
be that in effect on the Conversion Date. Upon conversion of only a portion of
the number of shares covered by a stock certificate representing shares of
Series B Preferred Stock surrendered for conversion, the Corporation shall issue
and deliver to or upon the written order of the holder of the stock certificate
so surrendered for conversion, at the expense of the Corporation, a new stock
certificate covering the number of shares of Series B Preferred Stock
representing the unconverted portion of the certificate so surrendered. Any
transfer taxes applicable to the above described transactions shall be paid by
such transferee. The Corporation shall not be required to pay any tax which may
be payable in respect of any transfer involved in the issuance and delivery of
Common Stock or the reissuance of the Preferred Stock in a name other than that
in which the shares of Series B Preferred Stock so converted were registered,
and no such issuance or delivery shall be made unless and until the person
requesting such issuance has paid to the Corporation the amount of any such tax
or has established to the satisfaction of the Corporation that such tax has been
paid.

         (e) NO FRACTIONAL SHARES OF COMMON STOCK.

             (i) No fractional shares of Common Stock shall be issued upon
conversion of shares of Series B Preferred Stock and in lieu thereof, the
Corporation shall pay to the holder of such fractional share interest cash in
respect of such fractional interest in an amount equal to the Market Price on
the Conversion Date multiplied by such fractional interest. The holders of
fractional interests shall not be entitled to any rights as stockholders of the
Corporation in respect of such fractional interests. In determining the number
of shares of Common Stock and the payment, if any, in lieu of fractional shares
that a holder of Series B Preferred Stock shall receive, the total number of
shares of Series B Preferred Stock surrendered for conversion by such holder
shall be aggregated.

             (ii) On the date, if any, on which dividends are paid in full to
all holders of Series B Preferred Stock following the optional conversion
pursuant to Section 5(a) of all or any portion of the Series B Preferred Stock,
the Corporation shall pay any dividends on such converted Series B Preferred
Stock to the date of such conversion. Dividends, if any, with respect to all
shares converted pursuant to Section 5(b) or 5(c) hereof shall be paid in full
on the Conversion Date out of funds legally available therefor.

         (f) CHANGES IN COMMON STOCK. If any capital reorganization or
reclassification of the capital stock of the Corporation, or consolidation or
merger of the Corporation with another corporation, or the sale, transfer or
other disposition of all or substantially all of its assets to another
corporation for cash or stock of such other corporation, shall be effected,
then, as a condition of such reorganization, reclassification, consolidation,
merger, sale, transfer or other disposition, lawful and adequate provision shall
be made whereby each holder of Series B Preferred Stock shall thereafter have
the right to purchase and receive upon the basis and upon the terms and
conditions herein specified and in lieu of the shares of the Common Stock of the
Corporation immediately theretofore issuable upon conversion of the Series B
Preferred Stock, such shares of stock, securities or properties as may be
issuable or payable with respect to or in exchange for a number of outstanding
shares of such Common Stock equal to the number of shares of such Common Stock
immediately theretofore issuable upon conversion of the Series B



                                       6.
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Preferred Stock had such reorganization, reclassification, consolidation,
merger, sale, transfer or other disposition not taken place, and in any such
case appropriate provisions shall be made with respect to the rights and
interests of each holder of Series B Preferred Stock to the end that the
provisions hereof (including without limitation provisions for adjustment of the
Conversion Price) shall thereafter be applicable, as nearly equivalent as may be
practicable in relation to any shares of stock, securities or properties
thereafter deliverable upon the exercise thereof. The Corporation shall not
effect any such consolidation, merger, sale, transfer or other disposition,
unless prior to or simultaneously with the consummation thereof the successor
corporation (if other than the Corporation) resulting from such consolidation or
merger or the corporation purchasing or otherwise acquiring such properties
shall assume, by written instrument executed and mailed or delivered to the
holders of Series B Preferred Stock at the last address of such holders
appearing on the books of the Corporation, the obligation to deliver to such
holders such shares of stock, securities or properties as, in accordance with
the foregoing provisions, such holders may be entitled to acquire. The above
provisions of this subparagraph shall similarly apply to successive
reorganizations, reclassifications, consolidations, mergers, sales, transfers,
or other dispositions.

         (g) STOCK TO BE RESERVED. The Corporation will at all times reserve and
keep available out of its authorized Common Stock, solely for the purpose of
issue upon the conversion of Series B Preferred Stock as herein provided, such
number of shares of Common Stock as shall then be issuable upon the conversion
of all outstanding Series B Preferred Stock. The Corporation covenants that all
shares of Common Stock which shall be so issuable shall, upon issuance, be duly
authorized, validly issued, fully paid and nonassessable, free from preemptive
or similar rights on the part of the holders of any shares of capital stock or
securities of the Corporation, and free from all liens and charges with respect
to the issue thereof; and without limiting the generality of the foregoing, the
Corporation covenants that it will from time to time take all such action as may
be requisite to assure that the par value, if any, per share of the Common Stock
is at all times equal to or less than the then effective Conversion Price. The
Corporation will take all such action as may be necessary to assure that such
shares of Common Stock may be so issued without violation by the Corporation of
any applicable law or regulation or agreement, or of any requirements of any
domestic securities exchange upon which the Common Stock may be listed. Without
limiting the foregoing, the Corporation will take all such action as may be
necessary to assure that, upon conversion of any of the Series B Preferred
Stock, an amount equal to the lesser of (i) the par value of each share of
Common Stock outstanding immediately prior to such conversion, or (ii) the
Conversion Price shall be credited to the Corporation's stated capital account
for each share of Common Stock issued upon such conversion, and that, if clause
(i) above is applicable, the balance of the Conversion Price of Series B
Preferred Stock converted shall be credited to the Corporation's capital surplus
account.

         (h) CLOSING OF BOOKS. The Corporation will at no time close its
transfer books against the transfer of any Series B Preferred Stock or of any
shares of Common Stock issued or issuable upon the conversion of any Series B
Preferred Stock in any manner which interferes with the timely conversion of
such Series B Preferred Stock.

         (i) TAXES. The Corporation shall pay all documentary, stamp or other
transactional taxes attributable to the issuance or delivery of shares of
capital stock of the Corporation upon conversion of any shares of Series B
Preferred Stock. The Corporation shall not, however, be



                                       7.
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required to pay any tax which may be payable in respect of any transfer involved
in the issuance and delivery of Common Stock or the reissuance of the Series B
Preferred Stock in a name other than that in which the shares of Series B
Preferred Stock so converted were registered, and no such issuance or delivery
shall be made unless and until the person requesting such issuance has paid to
the Corporation the amount of any such tax or has established to the
satisfaction of the Corporation that such tax has been paid.

         (j) EXCLUSION OF OTHER RIGHTS. Except as may otherwise be required by
law, the shares of Series B Preferred Stock shall not have any voting powers,
preferences and relative, participating, optional or other special rights, other
than those specifically set forth in this Certificate of Designations and in the
Certificate of Incorporation.

         (k) LIMITATION ON ISSUANCE OF CONVERSION SHARES; REDEMPTION.
Notwithstanding any adjustment of the Conversion Price made under this Section
5, and except as provided below, the Corporation shall not be obligated to issue
upon conversion of the Series B Preferred Stock, in the aggregate, more than
that number of shares of Common Stock equal to 19.99% of the number of shares of
Common Stock of the Corporation outstanding on the Original Issue Date (such
amount to be proportionately and equitably adjusted from time to time in the
event of stock splits, stock dividends, combinations, reverse stock splits,
reclassifications, capital reorganization and similar events relating to the
Common Stock) (the "Maximum Share Amount") if the issuance of shares of Common
Stock in excess of the Maximum Share Amount (such number of excess shares
referred to in the aggregate as the "Excess Shares") would constitute a breach
or violation of the Corporation's obligations under the rules or regulations of
Nasdaq or any other principal securities exchange or market upon which the
Common Stock is or becomes traded (the "Exchange Rules"). To the extent the
Corporation will be required, or it appears likely to the Board of Directors of
the Corporation that it will be required, to issue any Excess Shares as a result
of an adjustment to the Conversion Price, the Corporation shall, at its option,
either (i) promptly take such action that would enable it to issue such Excess
Shares without breaching or violating any Exchange Rules, including without
limitation, obtaining stockholder approval, or (ii) redeem the Excess Shares at
a redemption price equal to the Conversion Price. The number of shares
comprising the Maximum Share Amount (and if applicable, any Excess Shares to be
issued) shall be allocated among the holders of the shares of Series B Preferred
Stock pro rata based on the total number of shares of Series B Preferred Stock
then outstanding.

6.       NO REDEMPTION. The Series B Preferred Stock shall not be redeemable by
the Corporation.





                                       8.
<PAGE>   9


IN WITNESS WHEREOF, this Certificate has been subscribed this 22nd day of
December, 1998, by the undersigned who affirms that the statements made herein
are true and correct.

                                         AMERICAN TECHNOLOGY CORPORATION



                                         By: /s/ ROBERT PUTNAM
                                             ------------------------------
                                             Name:   Robert Putnam
                                             Title:  Assistant Secretary






                                       9.