SpatiaLight Enters Into Exclusive LCoS Supply Agreement With DeoCom Co., Ltd for High Definition Near-to-Eye 'Glasses'

NOVATO, Calif., Jan. 23  /PRNewswire-FirstCall/ -- SpatiaLight, Inc. (NASDAQ:HDTV), a leading developer and manufacturer of ultra high-resolution Liquid Crystal on Silicon (LCoS) microdisplays, announced today that it has entered into a Memorandum of Understanding with Korean based DeoCom Co., Ltd. to be the exclusive supplier of high-resolution imagers including all imagers with resolutions at or above 800 x 600, or 480,000 pixels on the display. Initial shipments of LCoS imagers will commence this March.

DeoCom, founded in Korea in 2000, is a developer and manufacturer of innovative near-to-eye (NTE) display products and is focused on selling near-to-eye high resolution display products into the consumer and professional markets.  DeoCom introduced its first model of head mounted NTE displays in Korea in July of 2001, and continues to be a leader in the industry.  DeoCom has commercialized products for the consumer, professional and military marketplaces including its 2005 introduction of the Miraglos line of NTE "glasses."  The NTE market is large and varied with product segments including: private viewing of television and DVDs, video gaming, mobile computing, virtual reality, 3-D simulation, medical imaging and treatment, industrial research & development, and numerous military applications.

Under the agreement, SpatiaLight will be the exclusive supplier for three years to DeoCom for all imagers with resolutions at or above 800 x 600 pixels. SpatiaLight will begin to deliver increasingly larger volumes of its T-3S (the single imager version of the T-3), 1920 x 1080p LCoS imagers to DeoCom beginning in March of 2007.  DeoCom has committed to purchase monthly volumes of imagers and associated driver chip sets in March with volumes of 1,000 units and increasing steadily through August of 2007, and beyond.  DeoCom will enjoy "most favored nation" pricing for meeting or exceeding minimum volume thresholds.  While each company will be responsible for their respective engineering and sample costs, SpatiaLight and DeoCom will engage in a 50/50 profit sharing arrangement for all gross profits above total manufacturing cost for the new products.

SpatiaLight and DeoCom will work together in developing both single panel binocular and dual panel stereoscopic models of 1920 x 1080p near-to-eye "glasses" for the consumer and professional marketplaces.  Importantly, SpatiaLight and DeoCom will act to form a world-wide NTE consortium to promote the DeoCom/SpatiaLight module as a standardized subassembly solution for original equipment manufacturers. The companies will work cooperatively to develop and promote the market for a variety of high definition and high-resolution display products in North America, Asia Pacific and other mutually agreed upon regions for a defined period of time.

Mike Jin, SpatiaLight's Chief Technology Officer commented, "We are excited to be working with DeoCom as they have an in-depth knowledge of the NTE application area and its market opportunity, as well as innovative enabling technologies and product development experience.  DeoCom's expertise will help us bring affordable high-definition consumer and professional solutions to market. Our LCoS panel technology is particularly well-suited for high-quality, high-definition portable applications. Due to its low-frequency hybrid digital/analog foundation, the products will be sufficiently low in power consumption to enable portable battery-based operation with full-HD resolution and offer the best video experience that we are aware of at a consumer price point."

David Hakala, SpatiaLight Chairman and Chief Executive Officer added "This NTE agreement is an entry into a new product category for SpatiaLight, and indicates the flexibility of SpatiaLight's proprietary backplane design and cell fabrication technology in addressing the needs of new market segments."

About SpatiaLight

SpatiaLight, Inc., founded in 1989, manufactures high-resolution LCoS imagers for use in high-definition display applications such as rear projection televisions, monitors, front projection systems, near-to-eye applications, micro-projectors and other display applications.  The company's primary manufacturing facility is located in South Korea.  SpatiaLight is committed to developing microdisplay technologies that will be the standard for the next generation of high definition televisions and to providing OEMs with the most cost effective, high-resolution microdisplays in the industry.

For more information about SpatiaLight, please visit the Company's website at: http://www.spatialight.com/ .

About DeoCom

DeoCom, founded in Korea in 2000, is a developer and manufacturer of innovative near-to-eye (NTE) display products.  The Company is focused on designing and selling near-to-eye high resolution display products into the consumer, professional and military markets.  DeoCom introduced its first model of head mounted NTE displays in Korea in July of 2001, and continues to be a leader in the industry.

For more information about DeoCom, please visit the Company's website at: http://www.deocom.com/ .

Safe Harbor Statement

This news release includes forward-looking statements that reflect SpatiaLight's current expectations about its future results, performance, prospects and opportunities.  SpatiaLight has tried to identify these forward- looking statements by using words and phrases such as "may," "will," "expects," "anticipates," "believes," "intends," "estimates," "plan," "should," "typical," "preliminary," "we are confident" or similar expressions. These forward-looking statements are based on information currently available to SpatiaLight and are subject to a number of risks, uncertainties and other factors that could cause SpatiaLight's actual results, performance, prospects or opportunities in the remainder of 2007 and beyond to differ materially from those expressed in, or implied by, these forward-looking statements.  These risks and uncertainties are outlined in the Company's filings with the U.S. Securities and Exchange Commission, including its most recent reports on Form 10-Q and 10-K. 

DATASOURCE: SpatiaLight, Inc.



CONTACT:  SpatiaLight, Inc., [phone]



Web site:  http://www.spatialight.com/

Web site:  http://www.deocom.com/

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