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Spatializer VSP-11 Delivers a Complete Suite of Spatializer Audio Technology Which Enhances All Leading Media Players, Soft DVD Players and File Sharing Programs in a Single, Cost Effective and Entertaining Package for Desktop And Notebook Applications

Spatializer VSP-11 is designed to provide PC product engineers and marketing managers with maximum flexibility by facilitating the use of the renowned Spatializer audio enhancement technology on all leading media players, soft DVD players and file sharing programs, without the need for any special engineering. Spatializer VSP-11 provides system wide virtual sound processing on all Windows® based operating environments. It intercepts the audio signal output of the Wave or DirectSound APIs, processes it and then sends it on to the sound card used by the PC. Spatializer VSP-11 will also process the audio signal delivered through USB speakers or other devices connected through a USB port. This means that Spatializer VSP-11 is truly a universal audio enhancement software package that will enhance output from the Microsoft Media Player, Real Player®, Real Jukebox®, WinAmp®, WinDVD®, PowerDVD®, among others, without any special modification or engineering effort. It will run in conjunction with any sound card.

Licensees of the Spatializer VSP-11 will enjoy a complete array of Spatializer audio technology, which has been licensed to many of the world's leading PC and consumer electronics manufacturers, such as Panasonic, Toshiba, Samsung and Apple Computer. Spatializer VSP-11 includes four of the leading Spatializer technologies in one comprehensive package:

     Spatializer(R) 3-D Stereo provides a dramatic, surround sound effect with
     just two speakers.  A patented technology, Spatializer 3-D Stereo
     compensates for the limitations of computer audio, by making small,
     inexpensive speakers produce more realistic and dramatic sound.
     Spatializer 3-D Stereo also makes 2-speaker home systems sound like there
     are speakers all around, providing the end-user with the intensity and
     drama of surround sound.

     Spatializer Natural Headphone(TM) is the ideal solution for all stereo
     headphone applications.  A two channel enhanced algorithm provides
     natural quality sound effects over headphones as well as a realistic
     mobile theater experience while avoiding the cost of multi-channel
     royalties.  Extensive modeling of both Head Related Transfer Functions
     (HRTF) and room reverberation provides a low cost solution that is both
     effective and innovative.

     Spatializer Vi.B.E.(TM) provides a dramatic bass enhancement experience
     through even the most inexpensive "frequency response challenged"
     speakers or headphones.  Spatializer Vi.B.E is no mere bass boost.  It
     uses Spatializer's proprietary psycho-acoustic and harmonics techniques
     to generate the impression of realistic bass frequencies that would
     ordinarily be difficult to discern in small PC, laptop or portable
     headphone devices.  The result for the consumer is a richer and warmer
     listening experience.

     Spatializer PCE(TM) delivers high frequencies that are clearer, crisper
     and more brilliant while low frequencies are more dramatic, tighter and
     have more impact.  Spatializer PCE is ideal for improving the quality of
     Internet audio, which can sound rather lackluster and dull due to
     compression or low bit rates.  Spatializer PCE gives the manufacturer an
     inexpensive way to dramatically improve the sound of low-end
     loudspeakers, such as the kind found in monitors, notebook and desktop
     computers.

These technologies are combined into a striking full color GUI that features a whimsical retro radio design with an animated ``glass bubble'' effect. The GUI can also be customized for the PC manufacturer to incorporate its brand or other desired design elements.

``We had the product engineer in mind when we developed the specs for Spatializer VSP-11,'' stated Henry R. Mandell, Chairman and CEO of Spatializer Audio Laboratories, Inc. ``We've always felt we have the best sounding audio enhancement technology in the business. The challenge has been that with shrinking margins in the PC market and the overwhelming workload placed on today's design engineers, we were all between a rock and a hard place with regard to delivering outstanding audio enhancements to the PC consumer. Spatializer VSP-11 changes this paradigm altogether. We have made incorporation of our outstanding technology suite easy .... a 'no brainer'. Spatializer VSP-11 works with any Windows based operating system and any media player or soft DVD player that runs in the Windows environment .... with no additional engineering work or modifications. If an OEM switches to another soft DVD player, for instance, the Spatializer VSP-11 will continue to operate perfectly well with no additional engineering changes. It is truly a turnkey, off the shelf solution. We know PC design engineers will appreciate that.''

Mandell continued, ``We wanted to make life easier for the marketing managers ... so we are offering them four separate technologies ... four separate selling features in one integrated, reasonably priced package. There's no longer the need to license a headphone algorithm from one company and license surround sound from someone else. We understand the margin realities of the PC market and are delivering the means to provide a world-class audio experience to consumers at a cost that makes economic sense. I think OEMs will be surprised to learn that for nearly the price of a single technology from others, they can offer their customers a far wider array of features with Spatializer VSP-11. Add to this the ability of the OEM to co-brand or customize the Spatializer VSP-11 and to realize royalty savings with a two channel solution, one can readily see that this is a dynamite product.''

Spatializer is demonstrating Spatializer VSP-11 at COMDEX, Main Hall, LV5555 in the RDVDC Pavilion. Further information may be obtained by calling Randy Roscoe, Vice President, Sales and Marketing at (408) 296-0600 ext. 202 or by e-mail at randyr@spatializer.com

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, SONICblue, Zenith and Kenwood, in PC multimedia systems and peripherals from Apple and Labtec, in silicon from Matsushita, Texas Instruments, Cirrus Logic, New Japan Radio Corporation, Zoran, Motorola, LSI/C-Cube, Tvia, VM Labs, LinkUp and Acer Laboratories Inc, and in MP3 players such as Sanyo 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 Santa Clara, CA, with marketing offices in Tokyo, Japan. Further information may be obtained from the company's web site, www.spatializer.com , Spatializer's SEC filings, and by contacting the company's Investor Relations Department at 408-296-0600 or by writing to investor@spatializer.com.

Safe Harbor Act Statement Under the Private Securities Litigation Reform Act of 1995: Certain information in this background news release, including the comments by Mr. Mandell in this press release 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 the continued need for additional capital, 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.

NOTE: Desper Products Inc. is a wholly owned subsidiary of Spatializer Audio Laboratories Inc. Spatializer® is a registered trademark and Spatializer Vi.B.E.(TM), Spatializer Natural Headphone(TM) and Spatializer PCE(TM) and the ``retro radio design with bubble window'' are trademarks of Desper Products Inc. All other trademarks are the property of their respective owners. Copyright (C) 2001 Spatializer Audio Laboratories, Inc.

For further information, please contact: investor relations, Henry R. Mandell, CEO of Spatializer Audio Laboratories, Inc., +1-408-296-0600, ext. 4, investor@spatializer.com.

SOURCE: Spatializer Audio Laboratories Inc.