EX-99.1 2 v23077exv99w1.htm EXHIBIT 99.1 exv99w1
 

EXHIBIT 99.1
CONTACT: INVESTOR RELATIONS
Henry R. Mandell, Chairman
Spatializer Audio Laboratories, Inc.
investor@spatializer.com
SPATIALIZER AUDIO LABORATORIES, INC. REPORTS
SECOND QUARTER OPERATING RESULTS
 
     San Jose, Calif., August 14, 2006- Spatializer Audio Laboratories, Inc. (OTC Bulletin Board: SPAZ) today announced financial results for the second quarter ended June 30, 2006.
     Revenues decreased to $93,000 for the quarter ended June 30, 2006 compared to $429,000 for the quarter ended June 30, 2005, a decrease of 78%. Revenues in the six months ended June 30, 2006 were $193,000, compared to revenues of $761,000 in the comparable period last year, a decrease of 75%. Revenues in the three and six months ended June 30, 2006 decreased due to end of life of a mobile telephone license and the recognition, in the prior year, of deferred revenue on a royalty prepayment received in the third quarter of 2004 and the suspension of day-to-day operations during the process of attempting to sell the assets of the company, including cessation of ongoing sales activities.
     Net loss in the three months ended June 30, 2006 was ($63,000), ($0.00) basic per share, compared with net income of $58,000, $0.00 basic per share in the comparable period last year. Net loss in the six months ended June 30, 2006 was ($236,000), ($0.00) basic per share, compared with net loss of $68,000, $0.00 basic per share in the comparable period last year. Net loss resulted from decreased revenues.
     At June 30, 2006, the Company had $297,000 in cash and cash equivalents as compared to $551,000 at December 31, 2005. The decrease in cash and cash equivalents results primarily from the net loss. The Company had working capital of $328,000 at June 30, 2006 as compared with working capital of $560,000 at December 31, 2005. Working capital decreased due to the funding of net operating losses.
     About Spatializer
     Spatializer Audio Laboratories Inc. is developer, licensor and marketer of next-generation audio technologies for the consumer electronics, computing and mobile communication markets. The company’s advanced audio technology is incorporated into consumer electronics audio and video products, PC and mobile phone handsets from several global brand leaders. Spatializer stock is traded on the OTC Bulletin Board under the symbol: SPAZ. The company is headquartered in San Jose, CA, and representative

 

 

offices throughout the Asia Pacific region. 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 investor@spatializer.com.
Safe Harbor Act Statement Under the Private Securities Litigation Reform Act of 1995: Certain information 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, loss of key personnel, dependence on new technology and intellectual property, dependence on the PC and consumer electronics industries, dependence on product shipments of third-party licensees, dependence on third-party technology integrators or chip suppliers, 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 of Desper Products Inc. All other trademarks are the property of their respective owners.

 

 

PART I. FINANCIAL INFORMATION
ITEM I. FINANCIAL STATEMENTS
SPATIALIZER AUDIO LABORATORIES, INC.
AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
ASSETS
                 
    June 30,     December 31,  
    2006     2005  
    (unaudited)          
Current Assets:
                
Cash and Cash Equivalents
   $ 297,247     $ 550,633  
Accounts Receivable, net
     84,020       155,233  
Prepaid Expenses and Deposits
     61,936       34,104  
 
            
Total Current Assets
     443,203       739,970  
 
                
Property and Equipment, net
     10,271       18,403  
Intangible Assets, net
     142,410       138,548  
 
            
Total Assets
   $ 595,884     $ 896,921  
 
            
 
                
LIABILITIES AND SHAREHOLDERS’ EQUITY
 
                
Current Liabilities:
                
Note Payable
     33,846       10,443  
Accounts Payable
     25,158       14,195  
Accrued Wages and Benefits
     3,706       48,095  
Accrued Professional Fees
     10,000       34,000  
Accrued Commissions
     35,428       31,917  
Accrued Expenses
     6,724       40,869  
 
            
Total Current Liabilties
     114,862       179,519  
 
                
Commitments and Contingencies
                
 
                
Shareholders’ Equity:
                
Common shares, $.01 par value, 65,000,000 shares authorized, 48,763,383 shares issued and outstanding at June 30, 2006 and December 31, 2005.
     469,772       469,772  
Additional Paid-In Capital
     46,430,030       46,430,030  
Accumulated Deficit
     (46,418,780 )     (46,182,400 )
 
            
Total Shareholders’ Equity
     481,022       717,402  
 
            
 
   $ 595,884     $ 896,921  
 
            
See notes to consolidated financial statements

 

 

SPATIALIZER AUDIO LABORATORIES, INC.
AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
                                 
    For the Three Month     For the Six Month  
    Period Ended     Period Ended  
    June 30,     June 30,     June 30,     June 30,  
    2006     2005     2006     2005  
Revenues:
                                
Royalty Revenues
   $ 92,868     $ 428,912     $ 193,356     $ 760,863  
Cost of Revenues
     9,288       42,890       19,477       76,762  
 
                        
 
                                
Gross Profit
     83,580       386,022       173,879       684,101  
Operating Expenses:
                                
General and Administrative
     130,766       189,723       249,133       340,924  
Research and Development
     12,839       83,358       157,740       182,649  
Sales and Marketing
     —       56,201       1,241       95,454  
 
                        
 
     143,605       329,282       408,114       619,027  
 
                        
Operating Income (Loss)
     (60,025 )     56,740       (234,235 )     65,074  
 
                                
Interest and Other Income
     1,702       3,696       4,921       6,616  
Interest and Other Expense
     (2,266 )     (2,870 )     (2,266 )     (4,110 )
 
                        
 
     (564 )     826       2,655       2,506  
 
                        
 
                                
Income (Loss) Before Income Taxes
     (60,589 )     57,566       (231,580 )     67,580  
 
                                
Income Taxes
     (2,400 )     —       (4,800 )     —  
 
                        
 
                                
Net Income (Loss)
   $ (62,989 )   $ 57,566     $ (236,380 )   $ 67,580  
 
                        
 
                                
Basic and Diluted Earnings Per Share
   $ (0.00 )   $ 0.00     $ (0.00 )   $ 0.00  
 
                        
 
                                
Weighted Average Shares Outstanding
     48,763,383       46,975,365       48,763,383       46,975,365  
 
                        
See notes to consolidated financial statements
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