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DSP-based Audio Enhancement Algorithm Delivers Full Cinematic Audio Experience, Lowers Costs, Speeds Time to Market

Recognized worldwide as the de facto standard for virtual surround sound in the digital audio market, Spatializer N-2-2 achieves virtual surround sound by utilizing a series of proprietary real-time algorithms. Spatial cues are created that convince the listener's ear and brain that the sound is coming from locations other than the two speakers. Because Spatializer's DSP-based audio enhancement technology is delivered as an integrated software solution, development costs and implementation times are lowered. C-Cube integrates the Spatializer N-2-2 audio enhancement software with the ZiVA-5 via one of the DSP extensions on its high-performance 32-bit SPARC CPU.

Acclaimed as the industry's most advanced DVD solution, ZiVA-5, builds on the company's proven ZiVA architecture. C-Cube has sold more than 10 million DVD ICs worldwide -- and integrates a number of new features, including the industry's only full DVD-Audio solution, an MP3 audio codec, progressive-scan output, 2D-multiplane graphics engine, Internet applications, and more.

``Analysts are projecting that DVD player sales will reach 28 million units annually within three years,'' said Henry R. Mandell, Chairman and Chief Executive Officer of Spatializer Audio Laboratories. ``The feature set of ZiVA-5 will no doubt be an important force in driving this growth. The new ZiVA-5 225 MIPs dual-audio-DSP architecture offers us the processing power to allow our engineers to enhance our existing algorithms to harness this power to provide an unparalleled virtual surround sound experience compared to what is offered in the market today. C-Cube Microsystems is clearly the acknowledged leader in the DVD chip market and we are pleased to be incorporated as a prominent solution in their entire ZiVA DVD chip product line.''

About Spatializer

Spatializer Audio Laboratories, Inc. is a leading developer, licensor and marketer of next-generation technologies for the consumer electronics, computing and entertainment industries. The company's advanced audio technology is incorporated into consumer electronics audio, video and DVD products from global brand leaders including Toshiba, JVC, Panasonic, Hitachi, Samsung, Acer, Sharp, Sanyo, Goldstar, Emerson, Zenith and Proton, in PC multimedia systems and peripherals from Apple, Dell, Gateway, Hewlett Packard, Sony, Fujitsu, Seiko-Epson, NEC, Micron and Labtec, in silicon from Matsushita, New Japan Radio Corporation, ESS, Zoran, Motorola, C-Cube, OnChip Systems, and Acer Laboratories Inc, and in software compatible with MP3 players such as WinAmp and embedded with RISC cores from MIPS Technologies.

Spatializer stock is traded on the OTC Bulletin Board under the symbol ``SPAZ.'' The company is headquartered in Woodland Hills, Calif. and has marketing, engineering and R&D facilities in Santa Clara, Calif. and Tokyo. Further information may be obtained from Spatializer's SEC filings, and by contacting the Company's Investor Relations Department toll-free at 888-825-0743 or by writing to spaz@mdcgroup.com. For Media inquiries please contact Marken Communications at 408-986-0100 or by writing to Andy@MarkenCom.com.

Safe Harbor Act Statement Under the Private Securities Litigation Reform Act of 1995: Certain information in this news release, including the comments by Mr. Mandell in paragraph four, are forward looking statements that are based on management's belief, as well as assumptions made by, and information currently available to management.

While the Company believes that its expectations are based upon reasonable assumptions, there can be no assurances that the Company's financial goals will be realized. Numerous uncertainties and risk factors may affect the Company's actual results and may cause results to differ materially from those expressed in forward-looking statements made by or on behalf of the Company. These uncertainties and risk factors include, but are not limited to dependence on new technology and intellectual property, dependence on the PC and consumer electronics industries, dependence on product shipments of third- party licensees, competition and pricing pressures, and other risks detailed from time to time in the Company's periodic reports filed with the Securities and Exchange Commission.

Notices: Desper Products, Inc. is a wholly owned subsidiary of Spatializer Audio Laboratories, Inc. Spatializer® is a registered trademark and Spatializer N-2-2(TM) is a trademark of Desper Products, Inc. ZiVA-5 is a registered trademark of C-Cube Microsystems. 

SOURCE: Spatializer Audio Laboratories Inc.