8-K

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 8-K

CURRENT REPORT PURSUANT
TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934

Date of report (Date of earliest event reported) November 14, 2006

Spatializer Audio Laboratories, Inc.

(Exact Name of Registrant as Specified in Its Charter)

Delaware

(State or Other Jurisdiction of Incorporation)

000-26460	95-4484725
(Commission File Number)	(IRS Employer Identification No.)
2025 Gateway Place, Suite 365, San Jose, California 95110
(Address of Principal Executive Offices)	(Zip Code)

408-453-4180

(Registrant’s Telephone Number, Including Area Code)

(Former Name or Former Address, if Changed Since Last Report)

     Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

     o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

     o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

     o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

     o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

TABLE OF CONTENTS

EXHIBIT 99.1

Section 2 — Financial Information

Item 2.02. Results of Operation and Financial Condition.

On November 14, 2006 the Registrant issued a press release announcing its operating results for the quarter ended September 30, 2006. A copy of the press release is furnished as Exhibit 99.1 to this report.

The information contained in this Current Report shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the Exchange Act), or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.

Section 9 — Financial Statements and Exhibits

Item 9.01. Financial Statements and Exhibits

(c) Exhibits

The following exhibit is furnished as part of this Current Report on Form 8-K:

Exhibit No.	Description
99.1	Press Release

SIGNATURES

     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.

Spatializer Audio Laboratories, Inc.
By:	/s/ Henry R. Mandell
Henry R. Mandell, Chairman

Date: November 15, 2006

Exhibit Index

Exhibit No.	Description
99.1	Press Release

EX-99.1

CONTACT: INVESTOR RELATIONS

Henry R. Mandell, Chairman
Spatializer Audio Laboratories, Inc.

investor@spatializer.com

SPATIALIZER AUDIO LABORATORIES, INC. REPORTS
THIRD QUARTER OPERATING RESULTS

          San Jose, Calif., November 14, 2006- Spatializer Audio Laboratories, Inc. (OTC Bulletin Board: SPAZ) today announced financial results for the third quarter ended September 30, 2006.

     Revenues decreased to $68,000 for the quarter ended September 30, 2006 compared to $271,000 for the quarter ended September 30, 2005, a decrease of 75%. Revenues were comprised of royalties pertaining to the licensing of Spatializer audio signal processing algorithms and circuit designs. Revenues in the nine months ended September 30, 2006 were $261,000, compared to revenues of $1,032,000 in the comparable period last year, a decrease of 75%. Revenues in the three and nine months ended September 30, 2006 decreased due to end of life of a mobile telephone license and the recognition, earlier in 2005, of deferred revenue on a royalty prepayment received in the third quarter of 2004.

     Net Loss was ($62,000) for the quarter ended September 30, 2006, $0.00 basic per share, compared to net income of $37,000, $0.00 basic and diluted per share, for the quarter ended September 30, 2005. Net loss in the nine months ended September 30, 2006 was ($297,000), ($0.01) basic per share, compared with net income of $104,000, $0.00 basic and diluted per share in the comparable period last year. The net loss in the three month and nine month periods resulted from decreased revenues and a general wind down of operations.

     At September 30, 2006, the Company had $273,000 in cash and cash equivalents as compared to $551,000 at December 31, 2005. The decrease in cash resulted primarily from the net loss. The Company had working capital of $277,000 at September 30, 2006 as compared with working capital of $560,000 at December 31, 2005.

     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

CONDENSED CONSOLIDATED BALANCE SHEETS

	September 30,			December 31,
	2006			2005
	(unaudited)
ASSETS
Current Assets:
Cash and Cash Equivalents	$	272,985		$	550,633
Accounts Receivable, net		69,572			155,233
Prepaid Expenses and Deposits		46,937			34,104
Total Current Assets		389,494			739,970
Property and Equipment, net		6,205			18,403
Intangible Assets, net		136,833			138,548
Total Assets	$	532,532		$	896,921
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current Liabilities:
Note Payable		24,176			10,443
Accounts Payable		18,367			14,195
Accrued Wages and Benefits		2,341			48,095
Accrued Professional Fees		22,500			34,000
Accrued Commissions		42,202			31,917
Accrued Expenses		2,998			40,869
Total Current Liabilties		112,584			179,519
Commitments and Contingencies
Shareholders’ Equity:
Common shares, $.01 par value, 65,000,000 shares authorized, 46,975,365 shares issued and outstanding at September 30, 2006 and December 31, 2005.		469,772			469,772
Additional Paid-In Capital		46,430,030			46,430,030
Accumulated Deficit		(46,479,854	)		(46,182,400	)
Total Shareholders’ Equity		419,948			717,402
	$	532,532		$	896,921

See notes to consolidated financial statements

SPATIALIZER AUDIO LABORATORIES, INC.
AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)

	For the Three Month Period Ended						For the Nine Month Period Ended
	September 30,			September 30,			September 30,			September 30,
	2006			2005			2006			2005
Revenues:
Royalty Revenues	$	67,744		$	270,914		$	261,100		$	1,031,777
		67,744			270,914			261,100			1,031,777
Cost of Revenues		6,774			12,752			26,251			89,514
Gross Profit		60,970			258,162			234,849			942,263
Operating Expenses:
General and Administrative		122,210			116,539			371,343			457,463
Research and Development		—			62,068			157,740			244,717
Sales and Marketing		—			45,356			1,241			140,810
		122,210			223,963			530,324			842,990
Operating (Loss)		(61,240	)		34,199			(295,475	)		99,273
Interest and Other Income		1,442			3,376			7,087			9,992
Interest and Other Expense		(2,000	)		(1,030	)		(4,266	)		(5,140	)
		(558	)		2,346			2,821			4,852
Income (Loss) Before Income Taxes		(61,798	)		36,545			(292,654	)		104,125
Income Taxes		—			—			(4,800	)		—
Net Income (Loss)	$	(61,798	)	$	36,545		$	(297,454	)	$	104,125
Basic and Diluted Earnings Per Share	$	(0.00	)	$	0.00		$	(0.01	)	$	0.00
Weighted Average Shares Outstanding		48,763,383			46,975,365			48,763,383			46,975,365

See notes to consolidated financial statements

###