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|   |   |                                                                                         |
|--------|--------|----------------------------------------------------------------------------------------------|
| þ |   | Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |

|   |   |                                                                                          |
|--------|--------|-----------------------------------------------------------------------------------------------|
| o      |   | Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |

| SPATIALIZER AUDIO LABORATORIES, INC.                   |
|--------------------------------------------------------|
| (Exact name of Registrant as specified in its charter) |

| Delaware                                                       |   | 95-4484725                        |
|----------------------------------------------------------------|--------|-----------------------------------|
| (State or other jurisdiction of incorporation or organization) |   | (IRS Employer Identification No.) |

| Large accelerated filer | o      | Accelerated filer | o      | Non-accelerated filer                         | o      | Smaller reporting company | þ |
|-------------------------|--------|-------------------|--------|-----------------------------------------------|--------|---------------------------|--------|
|                    |   |              |   | (Do not check if a smaller reporting company) |   |                      |   |

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|                                |                                                                                            |   | Page   |   |
|-------------------------------------|-------------------------------------------------------------------------------------------------|--------|--------|--------|
| PART I. FINANCIAL INFORMATION  |                                                                                            |   |   |   |
| Item 1.                        | FINANCIAL STATEMENTS                                                                            |   |   | 3      |   |
| Item 2.                        | MANAGEMENT’S DISCUSSION & ANALYSIS OF FINANCIAL CONDITION & RESULTS OF OPERATIONS |   |   | 11     |   |
| Item 3.                        | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK                                      |   |   | 14     |   |
| Item 4.                        | CONTROLS AND PROCEDURES                                                                         |   |   | 14     |   |
|                                |                                                                                            |   |   |   |   |
| PART II.OTHER INFORMATION      |                                                                                            |   |   |   |
| Item 1.                        | LEGAL PROCEEDINGS                                                                               |   |   | 15     |   |
| Item 1A.                       | RISK FACTORS                                                                                    |   |   | 15     |   |
| Item 2.                        | UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS                                     |   |   | 15     |   |
| Item 3.                        | DEFAULTS UPON SENIOR SECURITIES                                                                 |   |   | 15     |   |
| Item 4.                        | SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS                                             |   |   | 16     |   |
| Item 5.                        | OTHER INFORMATION                                                                               |   |   | 16     |   |
| Item 6.                        | EXHIBITS                                                                                        |   |   | 16     |   |
|                                | SIGNATURES                                                                                      |   |   | 17     |   |
| EXHIBIT 31.1                        |                                                                                            |   |   |   |
| EXHIBIT 31.2                        |                                                                                            |   |   |   |
| EXHIBIT 32.1                        |                                                                                            |   |   |   |
| EXHIBIT 32.1                        |                                                                                            |   |   |   |

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|                                                                                                                                            |   | June 30,    |          | December 31, |
|-------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------|---------------|--------------|
|                                                                                                                                            |   | 2010        |          | 2009         |
|                                                                                                                                            |   | (unaudited) |          |         |   |   |
| ASSETS                                                                                                                                          |   |        |          |         |   |   |   |   |
|                                                                                                                                            |   |        |          |         |   |   |   |   |
| Current Assets:                                                                                                                                 |   |        |          |         |   |   |   |   |
| Cash and Cash Equivalents                                                                                                                       |   | $           | 3,061         |         |   | $ | 1,792 |   |
|                                                                                                                                            |   |        |          |         |   |   |   |   |
| Prepaid Expenses and Deposits                                                                                                                   |   |        | 0             |         |   |   | 0 |   |
| Total Current Assets                                                                                                                            |   |        | 3,061         |         |   |   | 1,792 |   |
|                                                                                                                                            |   |        |          |         |   |   |   |   |
| Total Assets                                                                                                                                    |   | $           | 3,061         |         |   | $ | 1,792 |   |
|                                                                                                                                            |   |        |          |         |   |   |   |   |
| LIABILITIES AND SHAREHOLDERS’ EQUITY                                                                                                      |   |        |          |         |   |   |   |   |
|                                                                                                                                            |   |        |          |         |   |   |   |   |
| Current Liabilities:                                                                                                                            |   |        |          |         |   |   |   |   |
|                                                                                                                                            |   |        |          |         |   |   |   |   |
| Accounts Payable                                                                                                                                |   |        | 951           |         |   |   | 11,867 |   |
|                                                                                                                                            |   |        |          |         |   |   |   |   |
| Loans from Officers                                                                                                                             |   |        | 32,500        |         |   |   | 0 |   |
|                                                                                                                                            |   |        |          |         |   |   |   |   |
| Total Current Liabilities                                                                                                                       |   |        | 33,451        |         |   |   | 11,867 |   |
|                                                                                                                                            |   |        |          |         |   |   |   |   |
| Commitments and Contingencies                                                                                                                   |   |        |          |         |   |   |   |   |
|                                                                                                                                            |   |        |          |         |   |   |   |   |
| Shareholders’ Equity:                                                                                                                     |   |        |          |         |   |   |   |   |
| Common shares, $.01 par value, 300,000,000 shares authorized, 6,500,000 and 6,500,000 shares issued and outstanding  in 2009 and 2008 |   |        | 65,000        |         |   |   | 65,000 |   |
| Additional Paid-In Capital                                                                                                                      |   |        | 47,219,856    |         |   |   | 47,219,856 |   |
| Accumulated Deficit                                                                                                                             |   |        | (47,315,246   | )            |   |   | (47,294,931 | ) |
| Total Shareholders’ Equity                                                                                                                |   |        |  (30,390 | )            |   |   | (10,075 | ) |
|                                                                                                                                            |   | $           | 3,061         |         |   | $ | 1,792 |   |

----

|                                              |   | For the Three Month Period Ended |      |
|---------------------------------------------------|--------|----------------------------------|-----------|
|                                              |   | June 30,2010                |      |   | June 30,2009 |   |
| Revenues :                                        |   |                             |      |   |   |   |   |   |
| rrrRoyalty Revenues                               |   | $                                | 0         |   |   | $ | 0 |   |
| C Cost of Revenues                                |   |                             | 0         |   |   |   | 0 |   |
| G Gross Profit                                    |   |                             | 0         |   |   |   | 0 |   |
| O Operating Expenses :                            |   |                             |      |   |   |   |   |   |
| G General and Administrative                      |   |                             | 4,477     |   |   |   | 13,601 |   |
| R Research and Development                        |   |                             | 0         |   |   |   | 0 |   |
| Sales and Marketing                               |   |                             | 0         |   |   |   | 0 |   |
|                                              |   |                             | 4,477     |   |   |   | 13,601 |   |
| O Operating Income (Loss)                         |   |                             | (4,477    | ) |   |   | (13,601 | )  |
| In Interest and Other Income                      |   |                             | 0         |   |   |   | 0 |   |
| In Interest and Other Expense                     |   |                             | 0         |   |   |   | 0 |   |
|                                              |   |                             | 0         |   |   |   | 0 |   |
| In Income (Loss) Before Income Taxes              |   |                             | (4,477    | ) |   |   | (13,601 | ) |
| In Income Taxes                                   |   |                             | 0         |   |   |   | 28 |   |
|                                              |   |                             |      |   |   |   |
| N  Net Income (Loss)                    |   | $                                | (4,477    | ) |   | $ | (13,629 | )  |
| B  Basic and Diluted Earnings Per Share |   | $                                | (0.00     | ) |   | $ | (0.00 | )  |
| W Weighted Average Shares Outstanding             |   |                             | 6,500,000 |   |   |   | 6,500,000 |   |
|                                              |   |                             |      |   |   |   |   |   |

----

|                                              |   | For the Six Month Period Ended |      |
|---------------------------------------------------|--------|--------------------------------|-----------|
|                                              |   | June 30,2010              |      |   | June 30,2009 |   |
| Revenues :                                        |   |                           |      |   |   |   |   |   |
| rrrRoyalty Revenues                               |   | $                              | 0         |   |   | $ | 0 |   |
| C Cost of Revenues                                |   |                           | 0         |   |   |   | 0 |   |
| G Gross Profit                                    |   |                           | 0         |   |   |   | 0 |   |
| O Operating Expenses :                            |   |                           |      |   |   |   |   |   |
| G General and Administrative                      |   |                           | 18,865    |   |   |   | 30,292 |   |
| R Research and Development                        |   |                           | 0         |   |   |   | 0 |   |
| Sales and Marketing                               |   |                           | 0         |   |   |   | 0 |   |
|                                              |   |                           | 18,865    |   |   |   | 30,292 |   |
| O Operating Income (Loss)                         |   |                           | (18,865   | ) |   |   | (30,292 | )  |
| In Interest and Other Income                      |   |                           | 0         |   |   |   | 0 |   |
| In Interest and Other Expense                     |   |                           | 0         |   |   |   | 0 |   |
|                                              |   |                           | 0         |   |   |   | 0 |   |
| In Income (Loss) Before Income Taxes              |   |                           | (18,865   | ) |   |   | (30,292 | ) |
| In Income Taxes                                   |   |                           | 1,450     |   |   |   | 5,053 |   |
|                                              |   |                           |      |   |   |   |
| N  Net Income (Loss)                    |   | $                              | (20,315   | ) |   | $ | (35,345 | )  |
| B  Basic and Diluted Earnings Per Share |   | $                              | (0.00     | ) |   | $ | (0.00 | )  |
| W Weighted Average Shares Outstanding             |   |                           | 6,500,000 |   |   |   | 6,500,000 |   |

----

|                                                                             |   | Six Months Ended |
|----------------------------------------------------------------------------------|--------|------------------|
|                                                                             |   | June 30,         |
|                                                                             |   | 2010             |   | 2009 |
| Cash Flows from Operating Activities:                                            |   |             |   |   |   |   |   |   |
| Net Loss                                                                         |   | $                | (20,315 | ) |   | $ | (35,345 | )  |
| Adjustments to reconcile net loss to net cash used in operating activities: |   |             |   |   |   |   |   |   |
|                                                                             |   |             |   |   |   |   |   |   |
| Net Change in Assets and Liabilities:                                            |   |             |   |   |   |   |   |   |
|                                                                             |   |             |   |   |   |   |   |   |
| Prepaid Expenses and Deposits                                                    |   |             | - |   |   |   | 1,974 |   |
| Accounts Payable                                                                 |   |             | (10,916 | ) |   |   | (5,062 | )  |
| Accrued Wages and Benefits                                                       |   |             |   |   |   |   |   |   |
| Loans from Officers                                                              |   |             |     32,500 |   |   |   | - |   |
|                                                                             |   |             |   |   |   |   |   |   |
| Accrued Expenses                                                                 |   |             | - |   |   |   | (15,000 | )  |
|                                                                             |   |             |   |   |   |   |   |   |
| Net Cash Used In Operating Activities                                            |   |             | 1,269 |   |   |   | (53,433 | ) |
|                                                                             |   |             |   |   |   |   |   |   |
| Increase (Decrease) in Cash and Cash Equivalents                                 |   |             | 1,269 |   |   |   | (53,433 | ) |
|                                                                             |   |             |   |   |   |   |   |   |
| Cash and Cash Equivalents, Beginning of Period                                   |   |             | 1,792 |   |   |   | 66,833 |   |
| Cash and Cash Equivalents, End of Period                                         |   | $                | 3,061 |   |   | $ | 13,400 |   |
| Supplemental Disclosure of Cash Flow Information:                                |   |             |   |   |   |   |   |   |
| Cash paid during the period for:                                                 |   |             |   |   |   |   |   |   |
| Interest                                                                         |   | $                | 0 |   |   | $ | 0 |   |
| Income Taxes                                                                     |   |             | 1,450 |   |   |   | 5,025 |   |

----

| (1) |   | Ability to Continue as a Going Concern, Sale of All or Substantially All of the Assets of Spatializer Audio Laboratories, Inc. |
|-----|--------|--------------------------------------------------------------------------------------------------------------------------------|

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|                                          |   |        |    |   | Weighted Average |   |
|-----------------------------------------------|--------|-------------|---------|--------|------------------|--------|
|                                          |   | Exercisable |    |   | Number           |   |   | Exercise Price |   |
| 2007                                          |   |        |    |   |             |   |   |   |   |
| Options outstanding at December 31, 2007 |   |        | 115,000 |   |             |   | 115,000 |   |   | $ | .80 |   |
|                                          |   |        |    |   |             |   |   |   |   |   |   |   |
| 2008                                          |   |        |    |   |             |   |   |   |   |   |   |   |
| Options granted                               |   |        | 0       |   |             |   | 0 |   |   | $ | -- |   |
| Options exercised                             |   |        | 0       |   |             |   | 0 |   |   | $ | -- |   |
| Options forfeited/expired                     |   |        | (55,000 | )      |             |   | (55,000 | ) |   | $ | .60 |   |
| Options outstanding at December 31, 2008 |   |        | 60,000  |   |             |   | 60,000 |   |   | $ | .98 |   |
|                                          |   |        |    |   |             |   |   |   |   |   |   |   |
| 2009                                          |   |        |    |   |             |   |   |   |   |   |   |   |
| Options granted                               |   |        | 0       |   |             |   | 0 |   |   | $ | -- |   |
| Options exercised                             |   |        | 0       |   |             |   | 0 |   |   | $ | -- |   |
| Options forfeited/expired                     |   |        | (10,000 | )      |             |   | (10,000 | ) |   | $ | .60 |   |
| Options outstanding at December 31, 2009 |   |        | 50,000  |   |             |   | 50,000 |   |   | $ | 1.00 |   |
|                                          |   |        |    |   |             |   |   |   |   |   |   |   |
| 2010                                          |   |        |    |   |             |   |   |   |   |   |   |   |
| Options granted                               |   |        | 0       |   |             |   | 0 |   |   | $ | -- |   |
| Options exercised                             |   |        | 0       |   |             |   | 0 |   |   | $ | -- |   |
| Options forfeited/expired                     |   |        | 0       |   |             |   | 0 |   |   | $ | -- |   |
| Options outstanding at June 30, 2010          |   |        | 50,000  |   |             |   | 50,000 |   |   | $ | 1.00 |   |
|                                          |   |        |    |   |             |   |   |   |   |   |   |   |

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| ·   | To provide a narrative explanation of a company’s financial statements “in plain English” that enables the average investor to see the company through the eyes of management. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | To enhance the overall financial disclosure and provide the context within which financial information should be analyzed; and |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------|

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| ·   | To provide information about the quality of, and potential variability of, a company’s earnings and cash flow, so that investors can ascertain the likelihood and relationship of past performance being indicative of future performance. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | An understanding of our operating environment and its risks (see below and Item 1A of Part II of this Form 10-Q) |
|--------------------|----------------------------------------------------------------------------------------------------------------------------|

| ·   | An outline of critical accounting policies |
|--------------------|--------------------------------------------|

| ·   | A review of our corporate governance structure |
|--------------------|------------------------------------------------|

| ·   | A review of the key components of the financial statements and our cash position and capital resources |
|--------------------|--------------------------------------------------------------------------------------------------------|

| ·   | A review of the important trends in the financial statements and our cash flow |
|--------------------|--------------------------------------------------------------------------------|

| ·   | Disclosure on our internal controls and procedures |
|--------------------|----------------------------------------------------|

| ·   | The market for our stock may not remain liquid and the stock price may be subject to volatility |
|--------------------|-------------------------------------------------------------------------------------------------|

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| ITEM 6.  EXHIBITS: |
|------------------------------|

|   |         |
|--------|--------------|
| 31.1   |    | Certification Pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934, as Amended |
|   |         |   |
| 31.2   |    | Certification Pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934, as Amended |
|   |         |   |
| 32.1   |    | Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |

| 32.2 |    | Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
|------|--------------|-------------------------------------------------------------------------------------------------------------------------|

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|   | SPATIALIZER AUDIO LABORATORIES, INC. (Registrant) |                                                                                          |
|--------|---------------------------------------------------|-----------------------------------------------------------------------------------------------|
|   |                                              |                                                                                          |   |
|   | By:                                               | /s/ Jay Gottlieb                                                                         |   |
|   |                                              | Name: Jay Gottlieb                                                                            |   |
|   |                                              | Title: Chairman of the Board, President, Secretary, Treasurer and Principal Executive Officer |   |
|   |                                              |                                                                                          |   |
|   |                                              | /s/ GREGGORY SCHNEIDER                                                                        |   |
|   |                                              | Name: Greggory Schneider                                                                      |   |
|   |                                              | Title: Director, Chief Financial and Principal Financial Officer                              |   |

----