Press Release



QSound Labs to Showcase New 3D Audio Technology
In Intel Booth at CES



QSound’s New QImmersion Technology Takes Full Advantage of the Intel Pentium 4 Processor



CALGARY, CANADA - January 7, 2002 - QSound Labs, Inc. (NASDAQ: QSND), a prominent supplier of audio software solutions, today announced that it will be performing technology demonstrations of its patented 3D audio algorithms in the Intel (NASDAQ: INTC) booth (#331) at the 2002 International Consumer Electronics Show (CES), January 8-11 in Las Vegas.

One important new technology QSound will be demonstrating at CES is QImmersion, the audio experience for PC gamers. By combining localized 3D effects heard through headphones with an enhanced sound field through regular stereo speakers, QImmersion presents a layered audio effect that puts the player into the heart of the action. Other technologies being demonstrated include QSound’s patented audio enhancements for multi-speaker synthesis (QMSS™) and virtual 5.1 surround (QSurround®). These technologies have been optimized to take advantage of the Intel Pentium 4 processor’s advanced capabilities.

“The capabilities of the Pentium 4 processor have opened the door for software providers to create new PC experiences for the consumer,” said David Gallagher, president, CEO, QSound Labs. “Our goal is to provide computer audio solutions that are optimized for this high-performance processor.”

“QSound’s involvement in the Intel® Early Access Program for the Intel Pentium 4 Processor enabled it to make advancements in digital audio that use the features of the Pentium 4 in fun and creative ways, and we are happy to host its audio demonstrations at CES,” said Melissa Laird, director of Intel’s developer services and support.

* Intel and Pentium are trademarks or registered trademarks of Intel Corporation or its subsidiaries in the United States and other countries.

This release contains forward-looking statements within the meaning of the Private Securities Litigation Act of 1995 concerning, among other things, introduction of new products. 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 consumer acceptance of the Company’s products, the Company’s ability to carry out its business strategy and marketing plans, including availability of sufficient resources for the Company to do so timely and cost effectively, dependence on intellectual property, rapid technological change and competition, 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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