SpatiaLight Announces 2nd Quarter 2007 Results

Share Name	Share Symbol	Market	Type
Spatialight (MM)	NASDAQ:HDTV	NASDAQ	Common Stock

Spatialight (NASDAQ:HDTV)
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NOVATO, Calif., Aug. 9 /PRNewswire-FirstCall/ -- SpatiaLight, Inc. (OTC:HDTV) (BULLETIN BOARD: HDTV) , a leading developer and manufacturer of ultra high-resolution Liquid Crystal on Silicon (LCoS) microdisplays, today announced financial results for the period ended June 30, 2007. Net loss was $6.4 million and $12.3 million, or $0.11 per share and $0.24 per share, respectively for the second quarter and six months ended June 30, 2007 versus $5.3 million and $10.9 million or $0.13 per share and $0.28 per share, respectively for the same periods in 2006. Much of this loss was non-cash due to the impact of stock based financing and associated expenses. The cash usage for operating activities and investing activities was $4.2 million and $7.7 million for the six months ending June 30, 2007 and June 30, 2006 respectively. This 45% reduction in monthly expenditures for the comparable six month periods was due to reductions in product related expenditures and staffing at our manufacturing facility thereby improving our gross margin situation, as well as reductions in spending at the home office. Net loss for the quarter includes selling, general and administrative expenses of $1.6 million and $2.9 million, respectively for the second quarter and six months ended June 30, 2007, compared to $2.9 million and $5.5 million, respectively for the same periods in 2006, reflecting significant reduction in spending rates and in stock based compensation. SG&A expenses includes administrative costs associated with both our US and Korean facilities. The cost reductions include reductions in staffing as well as reduced legal, accounting, consulting and other general and administrative expenses. Research and development expenses were $405,000 and $699,000, respectively, for the three and six months ended June 30, 2007 versus $411,000 and $653,000, respectively, for the same periods in 2006. The slight decrease in the three months is due primarily to timing differences while the overall increase for the six month period is a result of increased spending related to our agreements with Deocom, Foreal and the Joint Development Agreement with SI Infocomm and SCRAM Technologies. During the second quarter of 2007, the Company continued to make progress toward its goals of developing new products for sale that will address market segments other than microdisplay based rear projection TV. While some companies enjoy success in this segment, the decreasing prices and increasing availability of larger screen sizes of flat panel TV's, particularly LCD-based TV's, continue to provide pressure on the segment. We believe there are opportunities for LCoS products employing solid state (laser or LED) light illumination sources. We expect that the next prototypes of an LED-based LCoS light engine from Foreal Spectrum will provide performance levels that will be very competitive for rear projection TV or monitor market applications. We have completed the development of the single panel version of our 1920x1080 panel and are near completion of our drive electronics and firmware design to drive these imagers in a color field sequential mode with a flicker free image suitable for head mounted display (HMD) applications. We affirm our expectation that our agreement with Deocom will result in production shipments later in the second half of this year, as they continue to make progress with their own product development for HMD's using our imagers, as well as in their own customer sales and marketing efforts. We believe that the high resolution of LCoS, coupled with reasonable size displays are a very good fit for the HMD market. We are continuing to explore opportunities in this segment. Another potentially large, although admittedly very cost sensitive, segment is that of micro-projectors or nano-projectors for use with mobile electronics. We have completed the design of a 0.33" diagonal SVGA imager and are proceeding with its development. SCRAM Technologies demonstrated a nano-projector concept prototype in June 2007 using SpatiaLight imagers to provide the display. The Company continues to fund its operational needs through the Equity Credit Agreement with a group of three financiers. In order to provide sufficient authorized capital for funding as well as to satisfy contractual obligations, the shareholders authorized the board of directors to declare a reverse split and increase in the number of post-reverse shares we are authorized to issue. An amendment effecting a 50:1 reverse split and authorizing the issuance of up to 15 million post split shares has been filed with the Secretary of State of New York and we expect our shares to begin trading on a post-reverse basis on August 24, 2007. 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/. 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 include the availability of sufficient funding for the company to continue as a going concern, the acceptance of LCoS technology in projection markets and by manufacturers of projection equipment, and a favorable outcome of certain investigations and potential enforcement actions by the U.S. Securities and Exchange Commission. Additional risk factors are outlined in the Company's filings with the e U.S. Securities and Exchange Commission, including its most recent reports on Form 10-Q and 10-K. DATASOURCE: SpatiaLight, Inc. CONTACT: Jeanette Long of SpatiaLight, Inc., +1-415-883-1693 Web site: http://www.spatialight.com/

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