Looking for who said what in the sound world? Well there is no better place to find every audio related press release than 3DsoundSurge.!

Growth in Fourth Quarter Revenues and Net Income Provides Momentum As Spatializer Emerges From Turnaround to Growth Mode

Year End Financials Highlight Enhanced Cash Position and Significantly Improved Balance Sheet Resulting From Recent Financing and Debt Conversion

CEO Mandell Outlines Growth Initiatives, Including Emphasis on Research To Develop New Audio and Voice Over IP Technologies

Revenues for the year ended December 31, 1999 were $1,660,000, compared to $1,680,000 in the prior year, a decrease of 1%. Net Income for the year ended December 31, 1999 was $355,000, $0.01 per share compared to a net loss of ($5,792,000), ($0.29) per share in the prior year.

Working Capital increased to $395,000 at December 31, 1999 as compared to a working capital deficit of ($1,975,000) at December 31, 1998. Shareholders' Equity at December 31, 1999 increased to $768,000 compared to a shareholders' deficit of ($1,553,000) at December 31, 1998. Cash at December 31,1999 increased to $1,022,000 compared to $264,000 at December 31, 1998. The improvement in the Company's liquidity result from the private placement of $1,050,000 of common stock, at no discount to market, profitable operating results and the conversion of $1 million of short term debt to Series B Redeemable Convertible Preferred Stock in December 1999.

``Last year at this time, we outlined our plan to refocus Spatializer on its core competency as a leading provider of audio technology for the consumer electronics and PC markets and to make the Company profitable. I am pleased to report in announcing these profitable operating results that we have successfully achieved our objectives, which sets us apart from our nearest competitors,'' stated Henry R. Mandell, Chairman of the Board and Chief Executive Officer. ``In addition to these achievements, we have made fundamental changes to our business model and corporate culture, expanded the breadth of our technology offerings and business relationships, and procured the financial resources to leverage our 1999 success to provide momentum to aggressively grow our business.''

``Specifically,'' Mr. Mandell continued, ``We set out to aggressively exploit our existing technology to generate immediate new revenue streams. Technology licensing deals with Apple Computer, Inc., who have incorporated our suite of technologies across their hardware platforms, Acer Labs, Inc. and several DVD player design wins with Samsung, LG Electronics, Zenith, Hitachi and Marantz, among others, were the result of these efforts. Indeed, based on our success in the DVD player market, we believe that Spatializer N-2-2(TM) is positioned as the leading virtual surround sound technology in that market with approximately a 40% market share based on industry reported sales. We streamlined our overhead structure. In doing so, we were able to restore profitablity and generate a 21% return on sales. At the same time, we have transitioned from flat fee licenses, which limited revenue growth, to a running royalty business model that provides the Company with upside in the fast growing DVD player and digital audio markets. We laid the ground work to capitalize on emerging market opportunities, by launching StreamFX(TM), our streaming audio enhancement product for the Internet, Vi.B.E(TM), our virtual bass enhancement technology, and by aligning ourselves with VM Labs and their revolutionary NUON(TM) digital signal processor, targeted at the computer gaming market. Lastly, we put the Company's liquidity crisis behind us by obtaining financing, with minimal dilution to the stockholders, to provide the resources to vigorously pursue growth.''

Mr. Mandell concluded, ``While we are pleased with the extent of our turnaround and the resultant profitable operating results, we will not be satisfied with the status quo. The digital audio revolution is here and Spatializer's technology portfolio and relationships with world class manufacturers strategically positions us to capitalize on this revolution. We have four objectives over the next twelve months. First, to secure the position of Spatializer N-2-2 as the de facto standard for virtual surround sound in not only the global DVD player market, but in a wide range of applications including set top boxes, internet appliances and gaming. Second, to penetrate the market for audio enhancement in portable music devices, including MP3 players. Third, to significantly expand the E-commerce opportunities for StreamFX and the use and distribution of our technology over the Internet. Lastly, we intend to develop new applications and technology to comprehensively embrace audio and voice enhancement for emerging markets such as internet telephony, satellite radio, voice over IP and cellular communications. Quite simply, we intend to emphasize the laboratories aspect of our corporate name and commit substantial resources in this effort. Knowing what we have achieved this past year under difficult circumstances, and now that we are financially unshackled, we are optimistic for achieving greater success. We look forward to the next twelve months and to reporting on the Company's progress.''

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 with Matsushita, ESS, Zoran, Motorola, C-Cube, Acer Laboratories Inc., VM Labs, Inc. and OnChip Systems, and in software compatible with MP3 players such as WinAmp and XingMP3.

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, Web-site (www.spatializer.com) or by contacting the company directly.

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 paragraphs four, five and six 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: Desper Products, Inc. is a wholly owned subsidiary of Spatializer Audio Laboratories, Inc. Spatializer® is a registered trademark and N-2-2(TM), Vi.B.E(TM) and StreamFX(TM) are trademarks of Desper Products, Inc. NUON(TM) is a trademark of VM Labs, Inc.

                       SPATIALIZER AUDIO LABORATORIES, INC.
                                 AND SUBSIDIARIES

                           Consolidated Balance Sheets

    Assets                                  December 31,    December 31,
                                                1999            1998
    Current Assets:
      Cash and Cash Equivalents              $1,021,998       $264,054
      Accounts Receivable,
       net of allowance for doubtful
       accounts of $-0- and $190,000
       at December 31, 1999 and 1998,
       respectively                             687,595        134,633
      Inventory                                  12,993          7,993
      Prepaid Expenses and Deposits              22,640         65,718

        Total Current Assets                  1,745,226        472,398
    Property and Equipment, Net                 132,803        184,140
    Intangible Assets, Net                      207,793        236,913
    Other Assets                                 32,177             --
                                             $2,117,999       $893,451

    Liabilities and Shareholders' Equity (Deficit)

    Current Liabilities:
      Notes Payable                             $14,149        $14,795
      Notes Payable to Related Party            337,742        857,500
      Accounts Payable                          234,117        335,784
      Accrued Wages and Benefits                 53,136         84,423
      Accrued Expenses                          291,117        370,548
      Deferred Income                                --        250,000
      Net Liabilities of
       Discontinued Operation                   419,600        533,891
                                              1,349,861      2,446,941
    Commitments and Contingencies

    Shareholders' Equity (Deficit):
      Series A 7% Convertible Preferred
       shares, 100,000 shares authorized,
       0 and 52,900 shares issued and
       outstanding at December 31, 1999
       and 1998, respectively.                       --            529
      Series B 10% Convertible Redeemable
       Preferred shares, 1,000,000 shares
       authorized, 102,967 and 0 shares
       issued and outstanding at
       December 31, 1999 and 1998,
       respectively.                              1,030             --
      Common shares, $.01 par value,
       50,000,000 shares authorized,
       46,174,970 and 25,841,867 shares
       issued and outstanding at
       December 31, 1999 and 1998,
       respectively.                            461,750        258,418
      Additional Paid-In Capital             45,913,503     44,150,501
      Accumulated Deficit                   (45,608,145)   (45,962,938)

        Total Shareholders'
         Equity (Deficit)                       768,138     (1,553,490)
                                             $2,117,999       $893,451


                   SPATIALIZER AUDIO LABORATORIES, INC.
                             AND SUBSIDIARIES

                   Consolidated Statements of Operations

                                           Year Ended December 31,
                                    1999            1998           1997

    Revenues:
      Product Revenues, net              --         $39,496      $336,703
      Licensing Revenues                 --         663,522       880,000
      Royalty Revenues           $1,660,371         976,697     1,564,530
                                  1,660,371       1,679,715     2,781,233

        Cost of Revenues             48,780         134,190       229,736
                                  1,611,591       1,545,525     2,551,497
    Operating Expenses:
      General and Administrative    515,843       1,732,097     2,173,717
      Research and Development      383,176         755,899     3,707,995
      Sales and Marketing           257,017       1,001,747     1,356,196
                                  1,156,036       3,489,743     7,237,908

        Operating Income (Loss)     455,555      (1,944,218)   (4,686,411)

    Interest Income                   3,401          27,672        57,305
    Interest Expense               (102,468)        (84,723)      (21,063)
    Other Income (Expense), net       4,804         (50,955)       (8,949)
                                    (94,263)       (108,006)       27,293

        Income (Loss) From
         Continuing Operations      361,292      (2,052,224)   (4,659,118)

        Loss From Discontinued
         Operation                       --      (3,701,599)           --

        Income (Loss) Before
         Income Taxes               361,292      (5,753,823)   (4,659,118)

        Income Taxes                 (6,500)        (38,238)      (60,703)

        Net Income (Loss)          $354,792     $(5,792,061)  $(4,719,821)

        Basic and Diluted
         Income (Loss) Per Share:
          Continuing Operations        $.01          $(.12)         $(.23)
          Discontinued Operation         --           (.17)            --
         Net Income (Loss)             $.01          $(.29)         $(.23)

         Weighted-average
          shares outstanding     33,805,512      22,180,180    20,604,095


                     Spatializer Audio Laboratories, Inc.
                    Consolidated Statements of Operations

                   
			For the Three Month Period     For the Twelve Month Period
                                   Ended                     Ended
                           Dec. 31,      Dec. 31,   Dec. 31,       Dec. 31,
                             1999         1998         1999          1998

                        (unaudited)   (unaudited)
    Revenues:
      Product Revenues          --       $22,578           --       $39,496
      Licensing Revenues        --        47,395           --       663,522
      Royalty Revenues     683,846        21,375   $1,660,371       976,697
                           683,846        91,348    1,660,371     1,679,715

        Cost of Revenues    20,161        98,344       48,780       134,190
                           663,685        (6,996)   1,611,591     1,545,525

    Operating Expenses:
      General and
       Administrative      205,181       158,921      515,843     1,732,097
      Research and
       Development          59,247       231,444      383,176       755,899
      Sales and Marketing   67,926       224,906      257,017     1,001,747
                           332,354       615,271    1,156,036     3,489,743

        Operating Income
         (Loss)            331,331      (622,267)     455,555    (1,944,218)

    Interest Income          3,804         2,254        3,401        27,672
    Interest Expense       (25,318)      (73,822)    (102,468)      (84,723)
    Other Income and
     Expense, net               --            --        4,804       (50,955)
                           (21,514)      (71,568)     (94,263)     (108,006)

        Income (Loss)
         From Continuing
         Operations        309,817      (693,835)     361,292    (2,052,224)

        Loss From
         Discontinued
         Operations             --    (1,951,599)          --    (3,701,599)

        Income (Loss)
         Before Income
         Taxes             309,817    (2,645,434)     361,292    (5,753,823)

        Income Taxes        (2,000)       (9,802)      (6,500)      (38,238)

        Net Income (Loss)  307,817   $(2,655,236)    $354,792   $(5,792,061)

        Basic and Diluted
         Income (Loss)
         Per Share:           $.01         $(.11)        $.01         $(.29)

    Weighted Average
     Common Shares
     Outstanding        42,137,608    22,180,180   33,803,512    22,180,180

SOURCE: Spatializer Audio Laboratories, Inc.