QSound Labs Launches 3D Audio Software for Microsoft Windows Media Player

Business Wire, August 17, 1999

CALGARY, Alberta--(BUSINESS WIRE)--Aug. 17, 1999--

Revolutionary iQms(TM) Now Available

To Millions of Windows(R) Media Users

QSound Labs, Inc. (NASDAQ: QSND), a leading supplier of digital and analog audio solutions, announced today that it has released iQms the first 3D audio enhancement software to support Microsoft's Windows Media Player.

This coincides with the release of Microsoft's Windows Media Technologies 4.0, which is setting a new standard for audio quality on the Web.

iQms is a compact software application that automatically synthesizes a remarkable 3D stereo image from mono audio and was specifically designed to maximize the audio performance of Windows Media Player. Also, by performing 3D enhancements in real-time, iQms stretches regular stereo audio images far beyond the speakers' normal range. When added to Media Player, iQms brings a bigger, bolder sound environment to your desktop, using your existing sound equipment. The product will be available from QSound's Website at http://www.qsound.com/iqms for the special launch price of $11.95 (regular $24.95).

"Working together with Microsoft to design and develop a product that brings QSound's unique 3D audio enhancement to Microsoft's Windows Technologies 4.0 has been very exciting," said David Gallagher, President and Chief Executive Officer of QSound Labs. "Microsoft users can now download the iQms technology and experience the most vibrant audio available over the Internet today."

"This relationship will also provide QSound technology with high visibility over the most widely-used software platform in the world, effectively positioning the Company as the undisputed leader in 3D Internet audio," concluded Mr. Gallagher.

Microsoft's Windows Media Technologies 4.0 is setting a new standard for audio quality on the Web. It provides users of Windows Media Player with CD quality at half the size of other audio formats and has the support of major record labels and artists. The addition of iQms's unique 3D audio capabilities to the Windows Media Player provides even greater audio enhancement capabilities for the user.

To date, 40 million users have downloaded Media Player and more than 1 copy is downloaded every second. With Windows Media Player shipping as part of every copy of Windows 98 Second Edition and as a feature of the upcoming Windows 2000 Professional that number is expected to grow substantially providing QSound's iQms with a very large potential user base.

"With the increased demand for high-quality audio and video, companies now more than ever have the need to differentiate themselves in the marketplace and expand their reach," said Will Poole, general manager, Marketing and Business Development, Streaming Media Division, Microsoft Corp. "We're excited to be working with QSound Labs to make this a reality through the superior audio quality of Windows Media Technologies 4.0."

About QSound Labs, Inc.

Since its inception in 1988, QSound Labs, Inc. has evolved into one of the world's leading audio technology companies, specializing in 3D sound placement and audio image enhancement. The Company has developed proprietary, patent-protected audio solutions that include virtual surround sound, positional audio and stereo enhancement for the consumer electronics, multimedia PC, Internet and healthcare markets. The Company's cutting-edge audio technologies create 3D audio environments, allowing consumers to enjoy stereo surround sound from just two speakers.

QSound Labs, Inc., also provides a full suite of E-commerce solutions for today's Internet user. Its leading E-commerce solutions enabler allows companies to refine new and existing business solutions for the Internet. For more information, visit our Web site at http://www.qsound.com.

All product and brand names are trademarks and/or registered trademarks of their respective owners. Additional news releases may be obtained via the Internet at www.qsound.com/press0.htm or by calling the company directly at 403-291-2492.

This release contains forward-looking statements within the meaning of the Private Securities Litigation Act of 1995 concerning, among other things, the anticipated introduction of new products and projected shipment dates of products and future financial results. 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 commercialization of the Company's technologies, dependence on the performance of third parties who have licensed the Company's technologies, dependence on intellectual property, uncertainties relating to product development and commercial introduction, rapid technological change and competition, manufacturing uncertainties 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.