Spatializer Audio Laboratories and MIPS Technologies Align to Provide MIPS32 And MIPS64-based Designers With Advanced Audio Enhancement Technologies

Embedded Spatializer Virtual Audio Solutions Enhance a Dazzling Array Of Digital Consumer Products

SANTA CLARA, Calif., Oct. 3  -- Spatializer Audio Laboratories Inc., developer and marketer of the de facto standard for virtual surround sound, announced today that it has entered into an agreement with MIPS Technologies, Inc., a leading provider of industry standard processor architectures and cores for digital consumer and network applications. Under the agreement, Spatializer will port its embedded audio enhancement technologies to the MIPS32(TM) and MIPS64(TM) architecture platforms that are being designed into a growing number of consumer and networking products. The agreement also provides Spatializer with membership in the MIPS Alliance Program -- a select group of the industry's leading vendors.

As a member of the MIPS Alliance Program, Spatializer gains access to MIPS' OEMs and licensees with applications such as video game consoles, MP3 player devices, Personal Data Assistants (PDAs), and digital set-top boxes. MIPS-based(TM) technology is currently utilized in a dazzling array of consumer electronics devices, including PlayStation®, PlayStation2®, Nintendo64®, ReplayTV®, EchostarDish®, Cassiopeia® and WebTV®, among others. By having Spatializer audio enhancement technology pre-ported to the MIPS® RISC processors, manufacturers are provided with a fast, cost- effective solution for delivering rich, multi-channel audio enhancement from just two speakers or headphones.

``We're most enthusiastic about our relationship with MIPS Technologies, especially since it will open doors for us to new markets,'' said Henry R. Mandell, chairman and chief executive officer of Spatializer Audio Laboratories, Inc.`` The MIPS architecture provides a versatile, high- performance solution for delivering our feature-rich audio enhancement technologies to an extended customer base. By aligning with MIPS Technologies, we are now positioned at the very heart of the digital audio revolution, since these processors are rapidly becoming the backbone and solution of choice for a vast array of consumer electronic devices. MIPS is an enabling technology, and our alliance will allow us to penetrate multiple markets more efficiently by being embedded at the very source, while at the same time offering MIPS licensees a fast and comprehensive turn-key audio solution.

``One of the features that makes MIPS high-performance RISC processors ideal for advanced consumer products is the ability to efficiently process audio-compression and decompression algorithms,'' Brian Knowles, MIPS Vice President of Marketing, noted.`` Through the MIPS Alliance Program, we look forward to providing Spatializer the tools to optimize and verify their audio products, and to working with them to offer this solution to the rapidly growing consumer market.''

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, 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 from Matsushita, New Japan Radio Corporation, ESS, Zoran, Motorola, C-Cube, OnChip Systems, and Acer Laboratories Inc, and in software compatible with MP3 players such as WinAmp 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 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, and by contacting the Company's Investor Relations Department toll-free at 888-825-0743 or by writing to spaz@mdcgroup.com. For Media inquiries please contact Marken Communications at 408-986-0100 or by writing to Andy@MarkenCom.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 paragraph three, 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 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.

Notices: Desper Products, Inc. is a wholly owned subsidiary of Spatializer Audio Laboratories, Inc. Spatializer® is a registered trademark of Desper Products, Inc. MIPS® is a registered trademark and MIPS-Based, MIPS32, MIPS64, are trademarks of MIPS Technologies, Inc All other trademarks mentioned herein are the property of their respective owners.