A Few Rules




Copyright © 1997
Russ Klein

Russ Reports -November 1999

I suggest that you do some DD before leaping into any of these.

FAVORITE SMALL CAPS FROM INVESTORS

This company almost went down the tubes due to one of their units which operated unprofitably, however, this unit was discontinued and the company seems to be on its way up. The message from the CEO tells the whole story but PLEASE do some research on your own.

SPATIALIZER AUDIO LABS(SPAZ.OB)OTCBB

Approx. Shs. Outstanding - 35,322,153
Approx. Shs. in Float - 24,900,000
52 Wk. Range - $0.89 - $0.0625 (5 year high $6.00)
Recent Price - $0.43

Spatializer Audio Laboratories, Inc. is a leading developer, licensor and marketer of next generation audio technologies for the consumer electronics, personal computing and entertainment industries. The Company develops and licenses advanced 3-D virtual and positioned audio signal processing technology, licensing to more than 80 OEM's and chip makers around the world.
Excerpts from a message by CEO Henry R. Mandell:
"Since late September, 1998, we have refocused our corporate efforts on our core audio business, Desper Products, Inc. While we face many challenges ahead in effecting our turnaround plan, including securing increased working capital to support the execution of our recovery plan, we have nevertheless successfully capitalized on many opportunities afforded to us over the past several months. In January 1999, we jointly announced the licensing of our suite of technoloies to Apple Computer, Inc., for inclusion in all hardware platforms in the second half of this year. This license agreement is a strong validation of our Company and its technology. On April 27, 1999, we announced the first quarterly profitability in our Company's history. In May 1999, we announced the launch of spatializer.com, a new business unit devoted entirely to adopting our core audio technologies for Internet applications and to capitalize on e-commerce opportunities. In June 1999, we announced several significant design wins for our virtual surround sound technology, N-2-2TM, which has been incorporated into DVD players from such global consumer electronics leaders as Toshiba, LG Electronics, Zenith, Emerson, Acer, and Hitachi."
This looks like a good spot to put a list of some of the Licensees of SPAZ products:
Toshiba, Apple, Samsung, Acer, XKing, Panasonic, C-Cube, Compaq, Sharp, ESS Technology, Hitachi, Motorola, JVC, Sanyo, Hewlett Packard, Digital, Epson, Zoran, Matsushita, and many more.
In order to understand what "Spatializer" is, we need to see a little history
Way back in 1982, Stephen W. Desper, the renowned Hollywood recording engineer, filed a US patent for a device he called the Spatializer. While working in the Studio with groups like the Beach Boys, Steve was also working hard at home to find new ways of improving the audio presentation. His goal was to make the sound that came out of the speakers the same as what he was hearing in the studio - to eliminate the spectral transmission losses inevitable in even the most sophisticated of recording environments. The Spatializer was just such a device - it created a rich immesive soundfield which seemed to envelop the listener, without introducing any spectral or tonal distortion. To make this long story short, Steve realized the potential of his invention and with the help of friends, he continued to research and improve the Spatializer and in 1986 formed a company called "Desper Products, Inc." A little further down the road, with the Spatializer now ready for the world to see, with a name change to Spatializer Audio Laboratories, Inc., the company had its IPO in 1992.
Today, Spatializer Audio is a very different company. In September 1998, new management were appointed and a new corporate strategy developed. All efforts were re-focussed on the development of Spatializer's audio subsidiary. While the company still retains the rights to over 50 patents on the MultiDisc technologies, Spatializer is now, once again an audio-only company dedicated to pushing the boundaries of the audio experience.
So, here we are: November 9, 1999 - Company Press Release
Spatializer Audio Laboratories, Inc. Reports Third Consecutive Quarter of Improved Profitability
Unit Sales of N-2-2 Enabled DVD Players by Third Party OEMs Increases by 50% Over Prior Quarter
The company reported net income for the quarter of $33,000, ($0.00) basic and diluted per share, compared with a net loss of ($1,124,000) ($0.05) basic per share a year ago. Revenues for the third quarter of fiscal 1999 were $324,000, compared to revenues of $390,000 a year ago, a decrease of 17%.
The continued turnaround in net income was driven by a significant reduction in operating expenses to $239,000 in the quarter ended Sept. 30,'99, from $1,480,000 a year ago, a decrease of 84%. This reduction reflects the continuing favorable impact of the restructuring initiatives implemented in the fourth quarter of fiscal 1998 and the discontinued operation of MultiDisc Technologies, Inc.
The decrease in third quarter revenue results primarily from a flat fee royalty buy-out arrangement of Desper Products audio division in the comparable quarter last year, for which there were no comparable revenues in the current period, partially offset by increased running royalties from technology licensed for the DVD market.
Henry R. Mandell, Interim CEO, stated, "I am gratified to report yet another consecutive quarter of improved profitability. With three consecutive quarters of improved profitability under our belt, the results of our restructuring initiative implemented late last year are clearly evident."
O.K. there you have some basic information on SPAZ. Now do some of your own research before taking any position or making any decision on SPAZ.
Editor has not been compensated by SPAZ of anyone else for the inclusion of this company in this web site. The Editor does not have a position in SPAZ.
None of the companies reviewed on this web site are recommended for addition to anyone's portfolio. That decision must be made by each individual after doing his/her own research and after obtaining investment from a licensed Broker or one of those "financial advisors". This Editor is not a registered investment advisor, a broker, an account exec. with any broker. Just an ordinary citizen now who offers suggestions from time to time.
See full Disclaimer and Disclosure on another page.

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rklein@bellsouth.net
Russ Reports Nov. '99