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Revenues for the first quarter of fiscal 2002 were $440,000, compared to revenues of $426,000 in the first quarter of fiscal 2001, an increase of 3%.

The company reported net income for the quarter of $21,000, ($0.00) basic and diluted per share, compared with net income of $6,000 ($0.00) basic and fully diluted per share in the comparable period last year, an increase of 250%.

The increase in revenues resulted primarily from royalties from new accounts including SANYO and Sharp which were beginning to come on stream, partially offset by the reduction in royalties from an account which suspended use of our technology in mid-2001.

The increase in net income resulted from increased revenues and a decrease in operating expenses to $389,000 (88% of revenue) in the quarter ended March 31, 2002, from $402,000 (94% of revenue) in the comparable period last year, a decrease of 3%. This increase in net income was partially offset by a reduction in interest income, resulting from declining interest rates.

The Company's cash position improved to $878,000 from the year ended December 31, 2001. Working capital at March 31, 2002 was $1,084,000.

"We're pleased to report another consecutive quarter of profitability," stated Henry R. Mandell, Chairman of the Board and CEO of Spatializer Audio Laboratories, Inc. "The first quarter is typically soft, yet we saw a rebound in comparable quarter running royalties from ongoing accounts. In addition, we were gratified to see the start of royalty income from SANYO and Sharp, which we believe will be important partners in the months ahead."

Henry R. Mandell concluded, "We have spent a good deal of time cultivating DSP and OEM relationships over the past two years. The design wins at SANYO and Sharp are good examples of both the excellence of our technology and our focus on providing timely and relevant audio solutions. However, we cannot rest on our laurels. The business environment is demanding ... but the opportunities have never been greater."

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, Sharp, SANYO, SONICblue, Fisher 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 Logic, Tvia, Genesis 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 executive and marketing offices in Westlake Village, CA and 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 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, the timing and realizable value of the MDT technology, and other risks detailed from time to time in the Company's periodic reports filed with the Securities and Exchange Commission.

Notices: Spatializer is a registered trademark. Desper Products, Inc. is a wholly owned subsidiary of Spatializer Audio Laboratories, Inc. N-2-2 is a trademark of Desper Products, Inc. Copyright (C) 2002 Spatializer Audio Laboratories, Inc.

                     SPATIALIZER AUDIO LABORATORIES, INC.
                               AND SUBSIDIARIES

                    CONSOLIDATED STATEMENTS OF OPERATIONS
                                 (unaudited)

                     For the Three Month Period Ended
                          March 31,     March 31,
                            2002          2001
    Revenues:
      License Revenues         $--           $--
      Royalty Revenues     440,481       425,000
      Product Revenues          --         1,081
                           440,481       426,081

    Cost of Revenues        28,202        27,500
    Gross Profit           412,279       398,581

    Operating Expenses:
      General and
       Administrative      135,335       150,897
      Research and
       Development         123,603       137,322
      Sales and
       Marketing           130,339       113,703
                           389,276       401,922

    Operating Profit
     (loss)                 23,003        (3,341)

    Interest and
     Other Income            3,489        17,857
    Interest and
     Other Expense          (2,813)       (8,481)
                               677         9,376

    Income Before
     Income Taxes           23,680         6,035

    Income Taxes            (2,400)         (500)

    Net Income             $21,280        $5,535

    Basic and Diluted
     Income Per Share        $0.00         $0.00

    Weighted Average
     Shares
     Outstanding        47,406,939    47,203,524

SOURCE: Spatializer Audio Laboratories, Inc.