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<SEC-DOCUMENT>0000950148-03-001978.txt : 20030812
<SEC-HEADER>0000950148-03-001978.hdr.sgml : 20030812
<ACCEPTANCE-DATETIME>20030812122540
ACCESSION NUMBER:		0000950148-03-001978
CONFORMED SUBMISSION TYPE:	8-K
PUBLIC DOCUMENT COUNT:		2
CONFORMED PERIOD OF REPORT:	20030812
ITEM INFORMATION:		
ITEM INFORMATION:		Financial statements and exhibits
ITEM INFORMATION:		Regulation FD Disclosure
FILED AS OF DATE:		20030812

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			SPATIALIZER AUDIO LABORATORIES INC
		CENTRAL INDEX KEY:			0000890821
		STANDARD INDUSTRIAL CLASSIFICATION:	SEMICONDUCTORS & RELATED DEVICES [3674]
		IRS NUMBER:				954484725
		STATE OF INCORPORATION:			DE
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		8-K
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	000-26460
		FILM NUMBER:		03836655

	BUSINESS ADDRESS:	
		STREET 1:		20700 VENTURA BOULEVARD SUITE 140
		CITY:			WOODLAND HILLS
		STATE:			CA
		ZIP:			91364
		BUSINESS PHONE:		3102273370

	MAIL ADDRESS:	
		STREET 1:		20700 VENTURA BLVD SUITE 140
		CITY:			WOODLAND HILLS
		STATE:			CA
		ZIP:			91364
</SEC-HEADER>
<DOCUMENT>
<TYPE>8-K
<SEQUENCE>1
<FILENAME>v92358e8vk.htm
<DESCRIPTION>8-K
<TEXT>
<HTML>
<HEAD>
<TITLE>8-K DATED 8-12-2003 SPATIALIZER AUDIO LAB., INC.</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF">
<!-- PAGEBREAK -->
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>
<P align="center"><FONT size="2"><B>UNITED STATES<BR>
SECURITIES AND EXCHANGE COMMISSION<BR>
Washington, DC 20549</B></FONT>

<P align="center"><FONT size="2"><B>FORM 8-K<BR>
<BR>
CURRENT REPORT<BR>
Pursuant to Section&nbsp;13 OR 15(d) of the Securities Exchange Act of 1934</B></FONT>

<P align="center"><FONT size="2">Date of Report (Date of earliest event reported): August&nbsp;12, 2003</FONT>

<P align="center"><FONT size="4"><B>SPATIALIZER AUDIO LABORATORIES, INC.</B></FONT>

<DIV align="center"><FONT size="2">(Exact name of registrant as specified in its charter)</FONT></DIV>

<TABLE cellspacing="0" border="0" cellpadding="0" width="100%">
<TR valign="bottom">
    <TD width="36%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="27%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="27%">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top"><FONT size="2"><B>Delaware</B><BR>
(State or other jurisdiction<BR>
of incorporation)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top"><FONT size="2">
<B>000-26460</B><BR>
(Commission File Number)
</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top"><FONT size="2"><B>95-4484725</B><BR>
(IRS Employer<BR>
Identification No.)</FONT></TD>
</TR>
</TABLE>
<P align="center"><FONT size="2"><B>920 Hampshire Road,
Suite&nbsp;A-34, Westlake Village, California 91361</B></FONT><BR>
<FONT size="2">(Address of Principal executive offices)</FONT>

<P align="center"><FONT size="2">Registrant&#146;s telephone number,
including area code: (408) 296-0600</FONT>

<P align="center"><FONT size="2">&nbsp;
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>
<!-- link2 "ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS" -->
<P align="left"><FONT size="2">ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS</FONT>


<TABLE cellspacing="0" border="0" cellpadding="0" width="100%">
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    <TD width="8%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="87%">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD valign="top"><FONT size="2">(c)&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Exhibits. The following exhibit is furnished in accordance with the
provisions of Item&nbsp;601 of Regulation&nbsp;S-K:</FONT></TD>
</TR>

<TR><TD>&nbsp;</TD></TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
99.1: Spatializer Audio Laboratories, Inc. press release dated August&nbsp;12, 2003</FONT></TD>
</TR>
</TABLE>
<!-- link2 "ITEM 9. REGULATION FD DISCLOSURE (FURNISHED UNDER ITEM 12)" -->
<P align="left"><FONT size="2">ITEM 9. REGULATION FD DISCLOSURE (FURNISHED UNDER ITEM 12)</FONT>

<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Spatializer Audio Laboratories, Inc. (&#147;Spatializer&#148;) is furnishing the
information in this section under &#147;Item&nbsp;9. Regulation&nbsp;FD Disclosure&#148; and &#147;Item
12. Results of Operations and Financial Condition&#148; of this Current Report in
accordance with SEC Release No.&nbsp;33-8216.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On August&nbsp;12, 2003, Spatializer issued a press release announcing its
operating results for the second quarter ended June&nbsp;30, 2003. A copy of the
press release is furnished as Exhibit&nbsp;99.1 to this report and is hereby
incorporated to this Item&nbsp;9 by reference.
</FONT>

<P align="center"><FONT size="2">2
</FONT>

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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>


<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The information in this report (including exhibits hereto) shall not be
deemed &#147;filed&#148; for purposes of Section&nbsp;18 of the Securities Exchange Act of
1934 or the Securities and Exchange Commission&#146;s rules and regulations, nor
shall it be deemed incorporated by reference in any filing under the Securities
Act of 1933.
</FONT>

<P align="center"><FONT size="2">3
</FONT>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>


<!-- link1 "SIGNATURES" -->
<P align="center"><FONT size="2"><B>SIGNATURES</B></FONT>

<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
</FONT>
<TABLE cellspacing="0" border="0" cellpadding="0" width="100%">
<TR valign="bottom">
    <TD width="50%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="49%">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top"><FONT size="2">Spatializer Audio Laboratories, Inc.</FONT></TD>
</TR>

<TR><TD>&nbsp;</TD></TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">Date: August&nbsp;12, 2003</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">By:&nbsp;&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">/s/ Henry R. Mandell</FONT></TD>
</TR>
<TR>
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">Name:&nbsp;&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">Henry R. Mandell</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">Title:&nbsp;&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">Chief Executive Officer and CFO</FONT></TD>
</TR>
</TABLE>

<P align="center"><FONT size="2">4
</FONT>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>


<!-- link1 "Exhibit&nbsp;Index" -->
<P align="center"><FONT size="2"><B>Exhibit&nbsp;Index</B></FONT>

<TABLE cellspacing="0" border="0" cellpadding="0" width="100%">
<TR valign="bottom">
    <TD width="8%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="87%">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="center"><FONT size="1"><B>Exhibit</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center"><FONT size="1"><B>Description of Exhibit</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="center"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="center"><FONT size="2">99.1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Spatializer Audio Laboratories, Inc. press release dated August&nbsp;12, 2003</FONT></TD>
</TR>
</TABLE>

<P align="center"><FONT size="2">&nbsp;</FONT>


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</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.1
<SEQUENCE>3
<FILENAME>v92358exv99w1.txt
<DESCRIPTION>EX-99.1
<TEXT>
<PAGE>
                               [SPATIALIZER LOGO]


                                                     CONTACT: INVESTOR RELATIONS
                                            Spatializer Audio Laboratories, Inc.
                                                                    408-296-0600
                                                E-mail: INVESTOR@SPATIALIZER.COM
FOR RELEASE AUGUST 12, 2003:

                 SPATIALIZER AUDIO LABORATORIES, INC. ANNOUNCES
                        SECOND QUARTER OPERATING RESULTS

     Transitioning Accounts and Licensee Product Schedules Puts Drag on Q2
Performance Which is Expected to Continue Before Improvement Begins at Year End


        Santa Clara, Calif., August 12, 2003 - Spatializer Audio Laboratories,
Inc. (OTC Bulletin Board: SPAZ) today announced its financial results for the
second quarter ended June 30, 2003.

        Revenue decreased to $251,000 in the three months ended June 30, 2003
from $471,000 in the comparable period last year, a decrease of 47%. Revenue in
the six-months ended June 30, 2003 decreased to $583,000 from $911,000 in the
comparable period last year.

        The Company reported a net loss of ($212,000) (-84% of revenues), $0.00
per share, in the three months ended June 30, 2003, compared to net income of
$3,000 (1% of revenues), $0.00 per share in the comparable period last year. Net
loss increased to ($287,000) (0% of revenue), $0.00 per share, in the six-months
ended June 30, 2003 from net income of $24,000 (3% of revenue), $0.00 per share
in the comparable period last year.

        The decline in revenue resulted from the expiration of a licensing
agreement with a major computer account in January 2003 and the effects of
outsourcing by our existing DVD player accounts to manufacturers in China and
other manufacturers who decline to pay for such software or with whom we do not
have licensing arrangements. In addition, replacement revenues from new
licensing arrangements were delayed due to licensee rescheduling of certain new
product introductions with Spatializer technology due to supply-chain issues,
one of which was the disruption to engineering development at customer sites in
China by the SARS epidemic.

        The increased net loss for the three and six month periods are primarily
the result of the decrease in revenue. In addition, additional legal and
reporting burdens imposed by the Sarbanes-Oxley Act resulted in higher public
company related expenses over the prior year.

        At June 30, 2003, the Company had $788,000 in cash and cash equivalents
as compared to $859,000 at December 31, 2002, a decrease of 8%. The decrease in
cash and cash equivalents is attributed to the net loss,


<PAGE>
partially offset by collections of accounts receivable. Working capital was
$891,000 at June 30, 2003 as compared with working capital of $1,125,000 at
December 31, 2002.

        "We anticipated, and reported last quarter, a wind down in early 2003 of
our licensing program with a large computer account as that customer completes
its migration to its latest operating system and a general downturn in our
business in the first half of the year", stated Henry R. Mandell, Chairman and
Chief Executive Officer of Spatializer Audio Laboratories. "As also previously
reported, our performance this year is negatively impacted by the effects of
outsourcing by one of our major DVD player accounts to manufacturers in China
and other manufacturers who decline to pay for such software or with whom we do
not have licensing arrangements. While we expect to replace a portion of this
business by entering into direct licensing agreements with some third party
manufacturers, and with other new business development opportunities in the
latter stages of negotiation, design cycle times can be lengthy and subject to
unforeseen delays. As such, although we currently expect some of these new
opportunities to begin generating new revenues in the fourth quarter of 2003,
our ability to generate additional short-term revenues, and our visibility,
remains limited, due to the design cycle lead times and unforeseen delays
outlined above."

        Mandell continued, "We are currently experiencing a bubble in our
royalty revenue pipeline that we are aggressively working on rectifying, but
will take time to replenish. We clearly realize that if these conditions
continue, this would negatively impact our cash flow, which if constrained into
2004, will require further reductions in overhead expense and impair our ability
to most effectively compete in the marketplace. We are currently exploring ways
to more efficiently structure our organization while at the same time forging
ahead on revenue generating opportunities that can be fast tracked to revenue
generation. Spatializer Audio Alchemy(TM) and Spatializer Interactive TM are two
such initiatives to generate short-term revenue."

        Mandell concluded, "We compete in a highly competitive industry and from
time to time, business gets more difficult and less predictable. We are
prudently confident that new deals that we cannot yet announce due to licensee
product schedules will provide a degree of traction toward year end. Further, we
are making excellent progress rolling-out and evangelizing both Spatializer
Natural Headphone(TM) and Spatializer Audio Alchemy. Our value propositions for
these products strongly resonate with our customers as does our service-oriented
business approach. Indeed, the response has been so positive that we are
optimistic that we to carve out a significant position in several market
segments going forward."

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 and video products from global
brand leaders including Toshiba, JVC, Panasonic, Sony, Samsung, Sharp and Sanyo,
among others. Spatializer common stock is traded on the OTC Bulletin Board under
the symbol: SPAZ. The company is headquartered in Santa Clara, CA, with
executive offices in Westlake Village, CA and marketing offices in Tokyo, Japan.
Further information may be obtained from the company's web site,
www.spatializer.com, Spatializer SEC filings, and by contacting the company's
Investor Relations Department at 408-296-0600 or by writing to
investor@spatializer.com.


<PAGE>
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 competition and pricing pressures,
delays in new product development, dependence on new technology and intellectual
property, the continued need for additional capital, dependence on the PC and
consumer electronics industries, dependence on product shipments of third-party
licensees, and other risks detailed from time to time in the company's periodic
reports and other filings with the Securities and Exchange Commission. The
company undertakes no obligation to publicly update or revise any
forward-looking statements, whether as a result of new information, future
events or otherwise.

NOTE: Desper Products Inc. is a wholly owned subsidiary of Spatializer Audio
Laboratories Inc. Spatializer(R) is a registered trademark and Spatializer
Natural Headphone(TM), Spatializer Interactive(TM) and Spatializer Audio
Alchemy(TM) are trademarks of Desper Products Inc. All other trademarks are the
property of their respective owners. Copyright (C) 2003 Spatializer Audio
Laboratories, Inc.



<PAGE>
                      SPATIALIZER AUDIO LABORATORIES, INC.
                                AND SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEETS


<TABLE>
<CAPTION>
                                                                                   JUNE 30,          DECEMBER 31,
                                                                                     2003                2002
                                                                                 ------------        ------------
                                                                                 (unaudited)
<S>                                                                              <C>                 <C>
                                     ASSETS

Current Assets:
        Cash and Cash Equivalents                                                $    788,012        $    858,725
        Accounts Receivable                                                           246,248             499,023
     Prepaid and Deposits                                                             127,490              82,920
                                                                                 ------------        ------------

Total Current Assets                                                                1,161,750           1,440,668
  Property and Equipment, net                                                          51,642              70,842
  Intangible Assets, Net                                                              200,790             225,859
Other Assets                                                                               --               8,471

                                                                                 ------------        ------------
Total Assets                                                                     $  1,414,182        $  1,745,840
                                                                                 ============        ============


                      LIABILITIES AND SHAREHOLDERS' EQUITY

 Current Liabilities:
        Notes Payable to Related Parties                                              112,500             112,500
        Note Payable                                                                   54,992                  --
        Accrued Wages and Benefits                                                     41,328             108,771
        Accrued Expenses and Taxes                                                     62,412              94,709
                                                                                 ------------        ------------

       Total Current Liabilities

       Commitments and Contingencies                                                  271,232             315,980

 Series B-1, Redeemable Convertible Preferred shares, $.01 par
   value, 1,000,000 shares authorized, 102,762
   shares issued and outstanding at June 30, 2003
   and December 31, 2002                                                                1,028               1,028
                                                                                 ------------        ------------
 Shareholders' Equity:
  Common shares, $.01 par value, 65,000,000 shares authorized,
  47,406,939 shares issued and outstanding at June 30,
  2003 and December 31, 2002                                                          474,070             474,070
      Additional Paid-In Capital                                                   46,402,704          46,402,704
      Accumulated Deficit                                                         (45,734,852)        (45,447,942)
 Total Shareholders' Equity                                                         1,141,922           1,428,832
 Total Liabilities and Shareholder's Equity                                      $  1,414,182        $  1,745,840
                                                                                 ============        ============
</TABLE>


<PAGE>
                      SPATIALIZER AUDIO LABORATORIES, INC.
                                AND SUBSIDIARIES

                      CONSOLIDATED STATEMENT OF OPERATIONS
                                   (UNAUDITED)


<TABLE>
<CAPTION>
                                       FOR THE THREE MONTH PERIOD ENDED     FOR THE SIX MONTH PERIOD ENDED
                                       --------------------------------     ------------------------------
                                           JUNE 30,         JUNE 30,           JUNE 30,         JUNE 30,
                                            2003              2002              2003              2002
                                       -------------      -------------     ------------      ------------
<S>                                    <C>                <C>               <C>               <C>
 Revenues:
   Royalty and Product
    Revenues                                 250,902           470,631           583,280           911,112
                                        ------------      ------------      ------------      ------------

                                             250,902           470,631           583,280           911,112
 Cost of Revenues                             22,497            39,719            58,439            67,921
                                        ------------      ------------      ------------      ------------

     Gross Profit                            228,405           430,912           524,841           843,191
     Operating Expenses:
       General and
         Administrative                      236,135           182,710           392,537           318,044
       Research and
         Development                         102,141           119,437           211,144           243,040
     Sales and Marketing                      99,553           125,986           201,692           256,325
                                        ------------      ------------      ------------      ------------
                                             437,829           428,133           805,373           817,409

      Operating Profit
        (Loss)                              (209,424)            2,779          (280,532)           25,782
        Interest Income                        1,972             3,079             4,464             6,569
        Interest Expense                      (5,009)           (2,812)           (7,822)           (5,624)
                                        ------------      ------------      ------------      ------------

                                              (3,037)              267            (3,358)              945
                                        ------------      ------------      ------------      ------------

      Income (Loss) Before
        Income Taxes                        (212,461)            3,046          (283,890)           26,727
      Income Taxes                                --                --            (3,020)           (2,400)
                                                                            ------------      ------------

      Net Income (Loss)                 $   (212,461)     $      3,046      $   (286,910)     $     24,327
                                        ============      ============      ============      ============

      Basic/Diluted Earnings
        (Loss) Per Share                $      (0.00)     $       0.00      $      (0.01)     $      (0.00)
                                        ============      ============      ============      ============

      Weighted Average
        Shares Outstanding                47,406,939        47,406,939        47,406,939        47,406,939
                                        ============      ============      ============      ============
</TABLE>





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