8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20459

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): May 10, 2007

Spatializer Audio Laboratories, Inc.

(Exact name of Registrant as specified in its charter)

Delaware
(State or other jurisdiction
of incorporation) 000-26460
(Commission File Number) 95-4484725
(IRS Employer Identification No.)

2060 East Avenida de Los Arboles, # D190, Thousand Oaks, California
(Address of principal corporate offices) 91362-1376
(Zip Code)

Registrant’s telephone number, including area code: (408) 453-4180

     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))

     Item 2.02. Results of Operations and Financial Condition.

     On May 10, 2007, Registrant issued a press release announcing its financial results for the fiscal quarter ended March 31, 2007. A copy of the press release is attached as Exhibit 99.1.

     The information in this Current Report, including the exhibit hereto, is being furnished and shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that Section. The information in this Current Report, including the exhibit hereto, shall not be incorporated by reference into any filings under the Securities Act of 1933, as amended, or the Exchange Act, regardless of any general incorporation language in such filing.

     Forward Looking Statements. The statements in this Form 8-K Current Report contain certain “forward looking statements” within the meaning of Section 27A of the Securities and Exchange Act of 1993, as amended, and Section 21E of the Securities and Exchange Act of 1934, as amended, that involve risks and uncertainties. Any statements contained herein (including, without limitation, statements to the effect that Registrant or management “estimates,” “expects,” “intends,” “continues,” “may,” or “will” or statements concerning “potential” or variations thereof or comparable terminology or the negative thereof), that are not statements of historical fact should be construed as forward looking statements. These forward-looking statements are based on our management’s current views and assumptions and information currently available to management. While Registrant believes that its expectations are based upon reasonable assumptions, there can be no assurances that Registrant’s financial goals or the transactions described herein will be realized. Numerous uncertainties and risk factors may affect Registrant’s actual results and may cause results to differ materially from those expressed in forward-looking statements made by or on behalf of Registrant. These uncertainties and risk factors include, but are not limited to, intense competition and pricing pressure, complete dependence on product shipments of third-party licensees and the timing and execution of their marketing plans, delay in revenue streams due to delays in new product development, fluctuating operating results and its effect on sustainable operations, the availability of additional capital, and other risks detailed from time to time in Registrant’s periodic reports filed with the Securities and Exchange Commission.

     Item 9.01 Financial Statements and Exhibits.

     (d) Exhibits

     99.1 Press release of Spatializer Audio Laboratories, Inc. dated May 10, 2007

SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, the Company has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	Spatializer Audio Laboratories, Inc.
Date: May 10, 2007	By:	/s/ Henry R. Mandell
		Henry R. Mandell
		Chairman of the Board and Secretary

EXHIBIT LIST

99.1 Press release dated May 10, 2007

EX-99.1

Exhibit 99.1

CONTACT: INVESTOR RELATIONS

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

investor@spatializer.com

SPATIALIZER AUDIO LABORATORIES ANNOUNCES
FIRST QUARTER FINANCIAL RESULTS

Los Angeles, Calif., May 10, 2007- Spatializer Audio Laboratories, Inc. (OTC Bulletin Board: SPAZ) (the “Company”) announced its financial results for the first quarter ended March 31, 2007.

     Revenues increased to $360,000 for the quarter ended March 31, 2007 compared to $100,000 for the quarter ended March 31, 2006, an increase of 260%. Revenues were comprised of royalties pertaining to the licensing of Spatializer^® audio signal processing algorithms and circuit designs. Revenues in the current quarter reflect the extension of a prior year licensing agreement that was renewed in the first quarter of 2007, revenues from which are recognized in the first and will be fully recognized in the second quarter, based on projected life. Other existing revenues are derived from legacy licensing programs and are expected to wind down.

     Net income was $234,000 for the quarter ended March 31, 2007, $0.00 basic and diluted per share, compared to a net loss of ($185,000), ($0.00) per share for the quarter ended March 31, 2006. The increased net income for the current period is primarily the result of the recognition of half the payment received from a major customer to license additional usage rights which had expired in the first quarter of 2007. The remaining cash received was classified as deferred revenue and will be recognized in its entirety next quarter.

     At March 31, 2007, the Company had $726,000 in cash and cash equivalents as compared to $229,000 at December 31, 2006. The increase in cash resulted primarily from the afore-mentioned transaction involving the license of additional units by one licensee. We had working capital of $481,000 at March 31, 2007 as compared with working capital of $242,000 at December 31, 2006

     About Spatializer

     Spatializer Audio Laboratories Inc. was a developer, licensor and marketer of next-generation audio technologies for the consumer electronics, computing and mobile communication markets. The company’s advanced audio technology has been incorporated into consumer electronics audio and video products, PC and mobile phone handsets from several global brand leaders. The Company has ceased operations and is

awaiting stockholder approval for the sale of its assets. Spatializer stock is traded on the OTC Bulletin Board under the symbol: SPAZ. The company is headquartered in Thousand Oaks, CA. Further information may be obtained from 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.

more

PART I. FINANCIAL INFORMATION

ITEM I. FINANCIAL STATEMENTS

SPATIALIZER AUDIO LABORATORIES, INC.
AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS

ASSETS

	March 31,			December 31,
	2007			2006
	(unaudited)
Current Assets:
Cash and Cash Equivalents	$	726,275		$	228,940
Accounts Receivable, net		45,551			74,828
Prepaid Expenses and Deposits		41,135			25,073
Total Current Assets		812,961			328,841
Property and Equipment, net		3,213			3,477
Intangible Assets, net		125,682			131,258
Total Assets	$	941,856		$	463,576
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current Liabilities:
Note Payable		—			9,670
Accounts Payable		—			32,136
Accrued Wages and Benefits		2,483			3,169
Accrued Professional Fees		15,000			41,900
Accrued Commissions		100			200
Accrued Expenses		1,000			—
Deferred Revenue		313,116			—
Total Current Liabilties		331,699			87,075
Commitments and Contingencies
Shareholders’ Equity:
Common shares, $.01 par value, 48,763,383 shares authorized, 48,763,383 shares issued and outstanding at March 31, 2007 and December 31, 2006.		469,772			469,772
Additional Paid-In Capital		46,441,755			46,441,755
Accumulated Deficit		(46,301,370	)		(46,535,026	)
Total Shareholders’ Equity		610,157			376,501
	$	941,856		$	463,576

See notes to consolidated financial statements

SPATIALIZER AUDIO LABORATORIES, INC.
AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)

	For the Three Month Period Ended
	March 31,			March 31,
	2007			2006
Revenues:
Royalty Revenues	$	359,684		$	100,488
		359,684			100,488
Cost of Revenues		31,493			10,189
Gross Profit		328,191			90,299
Operating Expenses:
General and Administrative		97,157			130,092
Research and Development		—			144,901
Sales and Marketing		—			1,241
		97,157			276,234
Operating Profit(Loss)		231,034			(185,935	)
Interest and Other Income		3,041			3,219
Interest and Other Expense		—			—
		3,041			3,219
Income (Loss) Before Income Taxes		234,075			(182,716	)
Income Taxes		(418	)		(2,400	)
Net Income (Loss)	$	233,657		$	(185,116	)
Basic and Diluted Earnings Per Share	$	0.00		$	(0.00	)
Weighted Average Shares Outstanding		48,763,383			48,763,383

See notes to consolidated financial statements

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