AIWA Selects QSound's QSurround Technology for New DVD Models.

CALGARY, Alberta--(BUSINESS WIRE)--June 22, 1999--

QSound Labs, Inc.(NASDAQ:QSND)

Over 65 QSound-enhanced models of Portable Audio,

Mini-Component, Multimedia Speaker, and DVD Systems Now Available

World-wide

QSound Labs, Inc. (NASDAQ: QSND), the leading supplier of analog and digital audio solutions, announced that AIWA Co. Ltd., one of the world's leading consumer elec-tronics manufacturers, has introduced its first DVD players featuring QSurround(TM). In North America, the models now available are, XD-DV300, XD-DW1 and XD-DP1. This brings the total number of AIWA's QSound-enhanced portable audio, multimedia speaker, mini-component, and DVD product models in the world-wide consumer marketplace to over 65.

Momentum in the DVD arena has been growing steadily with sales of DVD players in the U.S. increasing significantly during the first 5 months of 1999 to over 900,000 units as compared to 197,000 units during the same period in 1998. According to the Cahner's In-Stat Group, the market will heat up in the coming years rising to more than $ 1 billion in revenues and shipping more than 5 million units in 2002.

"The prolific use of QSound's technology by AIWA in new and existing product lines is very rewarding," stated David Gallagher, President and CEO of QSound Labs. "It confirms the strength of our alliance as well as AIWA's commitment to enlarge their already significant share of the home audio marketplace worldwide."

AIWA's worldwide presence in the home audio market is ever increasing, and for the 5th year in a row AIWA's sales rose to new highs in the United States. The addition of QSurround to AIWA's new DVD product line provides QSound with increased, comprehensive exposure to consumers worldwide.

QSound's relationship with AIWA began in 1997 when QSound's stereo expansion technology, QXpander(TM) was incorporated into AIWA's portable audio and multimedia speaker systems. Since that time, the technology has been enjoyed by over 6 million AIWA customers world-wide. As a direct result of the success of these products, early in 1999, Mini-Component systems with QSurround(TM), QSound's "virtual surround" technology, were added to AIWA's catalog of QSound products and in May, the first USB Speakers with QSound entered the marketplace.

About QSurround

QSurround is QSound's family of "virtual surround" technologies which includes, QSurround, QSound Multi-Speaker System (QMSS(TM)) and QSound Matrix Surround Decoder/Virtualizer (QMDV(TM)). QSurround is ideal for playback of Dolby(TM) Digital, Dolby Surround or MPEG information. Certified by Dolby Labs, QSurround meets the challenge of new multi-channel audio delivery formats. By creating "virtual speakers", QSurround reproduces the full surround sound effect of multi-channel audio with only two physical speakers, and also includes enhancements for every system configuration upa full "5.1-channel" set-up.

About AIWA Co. Ltd. And AIWA America, Inc.

AIWA Co., Ltd., based in Tokyo is a $ 3 billion manufacturer and marketer of consumer and professional audio and video, computer data storage, and communication products. Based in Mahwah, New Jersey AIWA America is a world leader in consumer electronics and computer products. The company has thrived by identifying and satisfying market needs. Its commitment explains AIWA's history of industry "firsts". The parent company, founded in 1951, introduced Japan's first cassette tape recorder, was the first to manufacture digital audio tape (AT) products, and was first to market a recording headphone stereo. AIWA offers a wide range of products in the U.S. for the consumer electronics, multimedia, computer storage and peripheral marketplace.

About QSound Labs, Inc.

Founded in 1988, Calgary-based QSound Labs, Inc. (NASDAQ: QSND), is a technology company specializing in software audio applications for the Internet, PC/multimedia, Consumer Electronics and Healthcare industries. Its patented technologies provide these industries with immersive, realistic sound environments that include positional audio, stereo enhancement and virtual surround sound solutions. For more information, visit our Web site at http://www.qsound.com.

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.