Press Release



QSound Labs and iLab America Form Strategic Partnership



QSound’s QSurround® 7.1 Technology To Be Incorporated Into iLAB’s Turn-Key Solution for Consumer Electronics OEMs



CALGARY, CANADA - November 26, 2002 - QSound Labs, Inc. (NASDAQ: QSND), a leading supplier of audio software solutions, and iLAB America, a leader in digital audio product designs, today announced that they have joined forces to offer QSound’s QSurround technology in a new “off-the-shelf” production board designed and developed by iLAB. This collaboration will be the first to offer QSound’s new QSurround 7.1 technology to Consumer Electronics OEMs and will be available in the 1st quarter of 2003.

“Offering a turn-key solution significantly reduces an OEMs time to market, helping them keep their competitive edge,” said Wayne Boyle, President and CEO, iLAB America. “Having previously worked with QSound, we are well aware of the quality of their audio technology and the considerable talents of their engineers. Moving forward to form a partnership and offering a product based on our board design and QSound’s superior audio technology was, in our view, the next logical step.”

At the heart of the QSurround 7.1 technology is QSound’s Multi-Speaker Surround Synthesis technology (QMSS), a stereo-to-surround synthesis algorithm that creates stunning surround effects with distinctly different outputs for 4, 5.1 6.1, or 7.1 full-range speakers, including a discrete subwoofer channel. QMSS has been featured in numerous consumer electronics products, including the critically acclaimed Acoustic Edge™ Sound card from Philips.

"QSound's continued relationship with iLABs will give OEMs unmatched technology that transforms ordinary stereo music, games and movies to true surround-sound mediums,” stated David Gallagher, President and CEO, QSound Labs. “We are anticipating many positive results from this partnership, and are looking forward to seeing the evolution and advances made in the surround-sound industry.”

About iLAB America
Founded in 1998, iLAB America, short for Integration Laboratories, develops state of the art Multiroom and Home Theater integration products for many of the A/V industry's most respected brands. ILAB America specializes in the design and development of Digital audio products such as Dolby Digital, DTS and virtual surround sound processors. With complete ISO 9002 certified production and test services, iLAB America greatly simplifies and speeds the process of reaching the market for OEM's by providing a complete design to production solution through a single source. With manufacturing based in China, iLAB America’s competitive pricing can offer significant marketing advantages while maintaining the ease of communicating directly with its US-based office. For more information, visit our website at

This release contains forward-looking statements within the meaning of the Private Securities Litigation Act of 1995 concerning, among other things, availability of production boards in the first quarter of 2003. 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 dependence upon iLabs' use of QSound technology, 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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