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Spatializer Virtual Digital Theater Economically Helps Ease the Transition Of the PC and Notebook Into an Entertainment Platform

A limitation of PCs and notebooks has been that they were never designed as an entertainment platform. Use of small, frequency response challenged speakers has been the norm, rather than the exception, in the case of notebooks due to space limitations. However, the rapid convergence of entertainment content with PCs and notebooks has created increased consumer expectations for high quality audio. Spatializer Virtual Digital Theater helps ease this convergence by drawing upon Spatializer's years of audio expertise in virtual surround and speaker/headphone enhancement technologies to deliver a seamless yet effective application. Its "set and forget" functionality makes the superior audio experience it delivers simple and easy for the customer.

Spatializer Virtual Digital Theater processes sound in real-time and enables the OEM to custom tailor the effect not only to the hardware but also the audio environment. Eliminating all traces of reverb, the experience is robust, theater-like and completely personalized. The algorithm runs automatically in the background when the PC or notebook is booted. It seamlessly integrates to the Windows XP environment and is easily accessed though a system tray icon on the taskbar for added convenience. Spatializer Virtual Digital Theater enhances all audio on the PC by working outside of the typical multimedia applications.

"Excellent audio is a key to an outstanding entertainment experience," stated Michael Wood, Executive Vice President and Chief Operating Officer. "Whether playing a video game or watching a DVD, Spatializer Virtual Digital Theater automatically compensates for the limitations of generic PC/Notebook speakers and headphones by providing a fuller and more natural sound. It enhances audio from any digital entertainment source. Spatializer is proud to be able to offer this product under licensing arrangements that make sense."

Hear the difference at Spatializer's booth #7064 in the Recording DVD Council (RDVDC) pavilion at the Las Vegas Convention Center November 18th through 22nd.

Availability

Spatializer Virtual Digital Theater will be available for third party incorporation into consumer electronics Q1/2003.

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 products from Toshiba, JVC, Panasonic, Hitachi, Samsung, Sharp, SANYO, Fisher and Kenwood and in PC multimedia systems from Apple. 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 background news release, including the comments by Mr. Wood 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(R) is a registered trademark and Spatializer Virtual Digital Theater(TM) is a trademark of Desper Products Inc. All other trademarks are the property of their respective owners.

Source: Spatializer Audio Laboratories Inc.

CONTACT: Tracy Laidlaw, +1-623-878-8878, or Tracy@bwllc.com, for
Spatializer Audio Laboratories Inc.; or Michael Wood of Spatializer Audio
Laboratories Inc., +1-408-296-0600, ext. 204, or MichaelW@spatializer.com

Web site: http://www.spatializer.com/