Press Release



QSound Labs Shares Continue Nasdaq SmallCap Market Listing on Conditional Basis



Compliance with Continued Listing Requirements must be Achieved by July 9



CALGARY, CANADA - June 19, 2001 - QSound Labs, Inc. (NASDAQ: QSND), today announced that its common shares will continue to be listed on the Nasdaq SmallCap Market pending demonstration, on or prior to July 9, 2001, of the Company's compliance with Nasdaq's $1.00 minimum bid price requirement, and the ability to sustain compliance on a long-term basis.

In order to achieve compliance with the minimum bid price requirement, the Company has proposed a reverse stock split to its shareholders. The Company is seeking to obtain approval for this proposal at the Special and Annual Meeting of Shareholders scheduled to take place on June 28, 2001. In order to be approved, a two-thirds majority of shareholders who vote at the meeting, in person or by proxy, is required. Although the Company believes that the reverse stock split will result in the ability of the Company to meet Nasdaq's minimum bid price requirement, there can be no assurance that it will do so.

The continued listing of the Company's shares follows a hearing held before a Nasdaq panel on June 7, 2001 at which the Company addressed its non-compliance with Nasdaq's minimum bid price requirement for continued listing.

This release contains forward-looking statements within the meaning of the Private Securities Litigation Act of 1995 concerning, among other things, the liquidity and marketability of the Company's stock. Investors are cautioned that such forward-looking statements involve risk and uncertainties, which could cause actual results, performance or achievements of the Company, or industry results to differ materially from those reflected in the forward-looking statements. Such risks and uncertainties include, but are not limited to, risks associated with the Company's ability to effect a consolidation of its shares on or before July 9, 2001, to comply with Nasdaq's SmallCap Market minimum bid requirements, and to maintain its listing on the Nasdaq SmallCap Market and other risks detailed from time to time in the Company's periodic reports filed with the Securities and Exchange Commission. Forward-looking statements are based on the current expectations, projections and opinions of the Company's management, and the Company undertakes no obligation to publicly release the results of any revisions to such forward-looking statements which may be made, for example to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.





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