8-K

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                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549


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                                    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): September 25, 1998


                      SPATIALIZER AUDIO LABORATORIES, INC.
               (Exact Name of Registrant as Specified in Charter)



          Delaware                   33-90532                   95-4484725
(State or Other Jurisdiction       (Commission                 (IRS Employer
     of Incorporation)              File Number)            Identification No.)



20700 Ventura Boulevard, Suite 134, Woodland Hills, California     91364
                  (Address of Principal Executive Offices)       (Zip Code)



Registrant's telephone number, including area code   (818) 227-3370



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Item 1.  CHANGES IN CONTROL OF REGISTRANT.

         Not applicable.

Item 2.  ACQUISITION OR DISPOSITION OF ASSETS.

         Not applicable.

Item 3.  BANKRUPTCY OR RECEIVERSHIP.

         Not applicable.

Item 4.  CHANGES IN REGISTRANT'S CERTIFYING ACCOUNTANT.

         Effective September 28, 1998, by mutual agreement between the
Registrant and KPMG Peat Marwick LLP ("KPMG"), the Registrant accepted KPMG's
resignation as its auditor. The Executive Committee of the Board of Directors
received such resignation and approved the mutual termination. The resignation
did not arise from any disagreements between the Registrant and KPMG on any
matter of accounting principles or practices, financial disclosure or auditing
scope or procedures. The audit reports of KPMG on the consolidated financial
statements of Spatializer Audio Laboratories, Inc. and subsidiaries as of
December 31, 1997 and 1996 and for each of the years in the three-year period
ended December 31, 1997, did not contain any adverse or disclaimer of opinion,
nor were they qualified as to uncertainty, audit scope or accounting principles.
In light of the reduction in business staffing and curtailment of costs by the
Registrant, as described in Item 5 below, the Registrant is undertaking to
engage a new independent accountant on a fee structure that is compatible with
the reduced operations. A copy of the letter from KPMG is attached as Exhibit A.

Item 5.  OTHER EVENTS.

         As reported in a press release dated September 25, 1998, the Registrant
announced that it has decided to refocus its business on the exploitation of its
core audio technologies and to properly position the MultiDisc Technologies,
Inc., asset for sale. In addition, the Registrant is streamlining its operations
and implementing cost reductions in each of the Registrant's facilities to
preserve the Registrant's limited cash resources. Effective immediately, Steven
D. Gershick resigned as chief executive officer of the Registrant and as
president of MultiDisc Technologies, Inc. but will continue to serve as chairman
of the board of the Registrant. Henry R. Mandell, who joined the Registrant in
March, 1998 as senior vice president of finance has been designated as interim
chief executive officer to oversee all of the corporate activities. Michael
Bolcerek has resigned as president of Desper Products, Inc. A copy of the press
release dated September 25, 1998 is attached as Exhibit B.



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Item 6.  RESIGNATIONS OF REGISTRANT'S DIRECTORS.

         Not applicable.

Item 7.  FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.

         Not applicable.

Item 8.  CHANGE IN FISCAL YEAR.

         Not applicable.



                                   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.
                                           Registrant

Date:    September 29, 1998                By: /s/ Henry R. Mandell
                                               ---------------------------------
                                               Henry R. Mandell, Interim Chief 
                                               Executive Officer



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EX-99.A

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                                    EXHIBIT A

(KPMG Peat Marwick LLP letterhead) 
KPMG Peat Marwick LLP 
21700 Oxnard Street, Suite 1200 
Woodland Hills, CA 91367 
Telephone 818 227-6900 
Telefax 818 702-0802

Mr. Henry R. Mandell
Chief Financial Officer
Spatializer Audio Laboratories, Inc., Inc.
Woodland Hills, California

September 28, 1998

Dear Mr. Mandell:

This to confirm that the client-auditor relationship between Spatializer Audio
Laboratories, Inc. and KPMG Peat Marwick LLP has ceased.

Very truly yours,

/s/ KPMG Peat Marwick LLP


cc:  Chief Accountant, Securities and Exchange Commission

EX-99.B

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                                    EXHIBIT B


FOR IMMEDIATE RELEASE

SPATIALIZER AUDIO LABORATORIES, INC.
Corporate Contact:         Henry R. Mandell, Acting CEO
                           Tel 818.227.3370
                           Email: henrym@spatializer.com

WWW Site:                  http://www.spatializer.com


                   SPATIALIZER TO FOCUS ON CORE AUDIO BUSINESS

                    BOARD TO PURSUE SALE OF MULTIDISC ASSETS
                           AND STREAMLINED OPERATIONS

Woodland Hills, CA. September 25, 1998. Spatializer Audio Laboratories, Inc.
(NASDAQ: SPAZ), announced today that its Board of Directors has decided to
refocus its business on the exploitation of its core audio technologies and to
properly position the MultiDisc assets for sale.

The Board of Directors have retained Kibel Green Issa, Inc., which specializes
in transition management and turn-around restructuring, to assist the company in
streamlining its operations, and in structuring an appropriate transaction to
provide value to the Spatializer stockholders and working capital for the
ongoing audio operations. Staff and operating cost reductions in each of the
company's facilities have been implemented to preserve the company's limited
cash resources.

Effective immediately, Steven D. Gershick has resigned as chief executive
officer of Spatializer and as president of MultiDisc Technologies, Inc. but will
continue to serve as chairman of the board of the company. Henry R. Mandell, who
joined the company in March, 1998 as senior vice president finance has been
designated as interim chief executive officer to oversee all of the corporate
activities with support from Kibel Green Issa. Michael Bolcerek has resigned as
president of Desper Products, Inc.



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Steven D. Gershick, Spatializer chairman stated, "In his short time with the
company, Henry Mandell has proven to be a highly qualified executive and the
board is pleased that he has agreed to assume these additional
responsibilities."

Henry R. Mandell, Spatializer's interim chief executive officer remarked, "This
week's decision by the U.S. Court of Appeals in our patent litigation with
QSound Labs, Inc. should eliminate the substantial negative market perceptions
faced by the company over the last four years. While the audio litigation was
pending, the company added the MultiDisc technology to diversify and balance its
licensing portfolio. We continue to believe that the MultiDisc Technology has
considerable prospects, however, we recognize that the capital investment
required to properly commercialize the technology is beyond our current
capacity. This repositioning strategy and the victory in the patent litigation
provides a new opportunity to further solidify our position as a leading
provider of virtual audio solutions."

Spatializer Audio Laboratories, Inc., is a leading developer, licensor, and
marketer of next-generation audio technologies for the consumer electronics,
computing and entertainment industries. The company's advanced audio technology
is incorporated into consumer electronics audio, video and DVD products from
global brand leaders including Toshiba, Panasonic, Hitachi, Sharp, Sanyo and
Proton and in PC multimedia systems and peripherals from Compaq, AST, Dell,
Gateway 2000, Fujitsu, Seido-Epson, NEC, Micron and Labtec.

Kibel Green Issa, Inc. is a nationally recognized, west coast-based firm
specializing in underperforming and financially troubled situations of middle
market companies. Clients cover a broad spectrum of industries including
manufacturing, distribution, service and technology.

Spatializer stock is traded on the NASDAQ SmallCap Market System under the
symbol SPAZ. The Company is headquartered in Woodland Hills, CA, and has
marketing engineering and R&D facilities in Mountain View, CA, Huntington Beach,
CA and Tokyo, Japan. Further information may be obtained from Securities and
Exchange Commission (SEC) filings, Web site, or be contacting the company
directly.


Safe Harbor Act Statement Under the Private Securities Litigation Reform Act of
1995: Certain of the comments by Mr. Gershick and Mr. Mandell, and certain other
information in this news release is forward looking and involves risk and
uncertainties that could significantly impact the results, including but not
limited to dependence on new technology and intellectual property, timely
completion of prototype products, the introduction of new competitive
technologies and other risks detailed from time to time in the Company's
periodic reports filed with the Securities and Exchange Commission.

Spatializer(R) is a registered trademark of Desper Products, Inc. All other
trademarks are the property of their respective owners.



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