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Aiwa's New XD-AX1 DVD Player Marks First as a Wholly Owned Subsidiary Of Sony Corporation 

"We're pleased to welcome Aiwa back to the list of users of Spatializer audio enhancement solutions," stated Henry R. Mandell, chairman and chief executive officer of Spatializer Audio Laboratories, Inc. "Spatializer N-2-2 delivers a truly superb virtual surround sound experience. Quality focused OEMs readily hear the difference our solutions make in providing thrilling digital audio from two speakers equal only to the unsurpassed video that DVD delivers. That's why more and more manufacturers like Aiwa are featuring Spatializer N-2-2, the solution of choice for discerning listeners."

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, Sony, Samsung, Sharp, SANYO, Fisher, Aiwa 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. 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 N-2-2 is a trademark of Desper Products Inc. All other trademarks are the property of their respective owners.