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 7, 2005

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.)

2625 Townsgate Road, Suite 330, Westlake Village, CA	91361
(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

	Section 2 — Financial Information
	Item 2.02. Results of Operation and Financial Condition.
	Section 9 — Financial Statements and Exhibits
	Item 9.01. Financial Statements and Exhibits
SIGNATURES
Exhibit Index
Exhibit 99.1

Section 2 — Financial Information

Item 2.02.        Results of Operation and Financial Condition.

On November 7, 2005, the Registrant issued a press release announcing its operating results for the quarter ended September 30, 2005. 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, Chief Executive Officer

Date: November 7, 2005

Exhibit Index

Exhibit No.	Description
99.1	Press Release

EX-99.1

Exhibit 99.1

CONTACT: INVESTOR RELATIONS

Henry R. Mandell, CEO
Spatializer Audio Laboratories, Inc.
408-453-4180 Ext.201
investor@spatializer.com

For release at 8 a.m. EST

SPATIALIZER AUDIO LABORATORIES, INC. REPORTS
CONTINUED GROWTH AND PROFITABILITY

Revenues Increase 32% Over the Prior Year

     San Jose, Calif., November 7, 2005 - Spatializer Audio Laboratories, Inc. (OTC Bulletin Board: SPAZ) today announced financial results for the third quarter ended September 30, 2005.

     Revenues increased to $271,000 for the quarter ended September 30, 2005 compared to $205,000 for the quarter ended September 30, 2004, an increase of 32%. Revenues in the nine months ended September 30, 2005 were $1,032,000, compared to revenues of $611,000 in the comparable period last year, an increase of 69%.

     Net Income was $37,000 for the quarter ended September 30, 2005; $0.00 basic and diluted per share, compared to net loss of $81,000, ($0.00) per share basic, for the quarter ended September 30, 2004. Net income in the nine months ended September 30, 2005 was $104,000, $0.00 basic and diluted per share, compared with net loss of ($328,000) ($0.01) basic per share in the comparable period last year.

     At September 30, 2005, the Company had $674,000 in cash and cash equivalents as compared to $871,000 at December 31, 2004. Working capital was $739,000 at September 30, 2005 as compared with working capital of $603,000 at December 31, 2004

     The increase in revenue for the three and nine month periods resulted from the greater usage of our technology in cellular phones and expansion of revenue from a key consumer electronics manufacturer. However, current operating results are not indicative of future performance.

     “We are gratified to have generated revenue growth and profitability in a rough operating environment,” stated Henry R. Mandell, chairman and chief executive officer. “Revenue traction remains difficult to achieve and we remain dependent upon our licensees’ marketing plans, timing of licensees’ new product launches as well as market acceptance of their products. For example, the launch of a new portable audio player by a new licensee, which we expected to be shipping now, has been delayed until the first

quarter of 2006. Revenue from the initial Samsung license pre-payment has been fully recognized in the third quarter of 2005 and future revenue from this license will be based on the sales volume of these chips by Samsung, the timing of such shipments and the marketing strategy employed by Samsung. As such, we do not foresee additional revenue, which comprised 21% of our third quarter revenue, from this license in the fourth quarter, at the very least.”

     Mandell concluded, “The fourth quarter is traditionally a relatively stronger quarter than others and our lean organization structure is designed to allow us to operate in dynamic environments. We’ve made changes to and expanded our international sales organization throughout the year and we expect to see the benefits of this initiative. Interest in our technology remains high and the challenge now is to convert this interest into action, in the form of revenue generating licenses, with the resources we have at our disposal.”

About Spatializer

Spatializer Audio Laboratories Inc. is a leading developer, licensor and marketer of next-generation technologies for the consumer electronics, computing and mobile handset markets. The company’s advanced audio technology is incorporated into products from global brand leaders including Toshiba, Sanyo and Sharp , among others. Spatializer stock is traded on the OTC Bulletin Board under the symbol: SPAZ. The company is headquartered in San Jose, CA, with executive offices in Westlake Village, CA and representative offices throughout the Asia Pacific region. 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 408-453-4180 or by writing to investor@spatializer.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 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 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 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(r) and the circle-in-the-square device are registered trademarks of Desper Products Inc. All other trademarks are the property of their respective owners. Copyright (c) 2005 Spatializer Audio Laboratories, Inc.

(more)

SPATIALIZER AUDIO LABORATORIES, INC.
AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

	September 30,			December 31,
	2005			2004
	(unaudited)
ASSETS
Current Assets:
Cash and Cash Equivalents	$	674,427		$	871,155
Accounts Receivable, net		187,353			325,712
Prepaid Expenses and Deposits		42,280			70,940
Total Current Assets		904,060			1,267,807
Property and Equipment, net		22,469			29,527
Intangible Assets, net		141,256			166,710
Total Assets	$	1,067,785		$	1,464,044
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current Liabilities:
Note Payable		36,361			66,252
Accounts Payable		25,703			71,873
Accrued Wages and Benefits		44,940			50,446
Accrued Professional Fees		22,500			20,000
Accrued Commissions		34,255			32,182
Accrued Expenses		984			32,979
Deferred Revenue					391,395
Total Current Liabilties		164,743			665,127
Commitments and Contingencies
Series B-1, Redeemable Convertible Preferred shares, $.01 par value, 1,000,000 shares authorized, 118,351 shares issued and outstanding at September 30, 2005 and December 31, 2004		1,182			1,182
Shareholders’ Equity:
Common shares, $.01 par value, 65,000,000 shares authorized, 46,975,365 shares issued and outstanding at September 30, 2005 and December 31, 2004.		469,754			469,754
Additional Paid-In Capital		46,428,866			46,428,866
Accumulated Deficit		(45,996,760	)		(46,100,885	)
Total Shareholders’ Equity		901,860			797,735
	$	1,067,785		$	1,464,044

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,
	2005			2004			2005			2004
Revenues:
Royalty Revenues	$	270,914		$	205,324		$	1,031,777		$	610,863
		270,914			205,324			1,031,777			610,863
Cost of Revenues		12,752			26,114			89,514			61,252
Gross Profit		258,162			179,210			942,263			549,611
Operating Expenses:
General and Administrative		116,539			155,268			457,463			528,181
Research and Development		62,068			93,842			244,717			295,630
Sales and Marketing		45,356			11,484			140,810			46,962
		223,963			260,594			842,990			870,773
Operating (Loss)		34,199			(81,384	)		99,273			(321,162	)
Interest and Other Income		3,376			744			9,992			2,633
Interest and Other Expense		(1,030	)		(1,936	)		(5,140	)		(8,702	)
		2,346			(1,192	)		4,852			(6,069	)
Income (Loss) Before Income Taxes		36,545			(82,576	)		104,125			(327,231	)
Income Taxes		—			2,000			—			(400	)
Net Income (Loss)	$	36,545		$	(80,576	)	$	104,125		$	(327,631	)
Basic and Diluted Earnings Per Share	$	0.00		$	(0.00	)	$	0.00		$	(0.01	)
Weighted Average Shares Outstanding		46,975,365			46,975,365			46,975,365			46,975,365

See notes to consolidated financial statements

See notes to the financial statements

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