Product To Be World's First Consumer Personal 3D Display With Full HD Resolution NOVATO, Calif., Oct. 29 /PRNewswire-FirstCall/ -- SpatiaLight, Inc. (OTC:SPLT) (BULLETIN BOARD: SPLT) , a leading developer and manufacturer of ultra high-resolution Liquid Crystal on Silicon (LCoS) microdisplays, announced today that it has signed an agreement with Daeyang E&C of Korea (KOSDAQ: 033030) for the joint development and distribution of a 1920x1080 Full HD Head Mounted Display (HMD), also referred to as a Face Mounted Display (FMD), targeted at high end 3D video, gaming and personal viewing applications. The product is believed to be the world's first personal 3D display intended for the consumer market with Full HD resolution and virtual 74-inch screen size at a 2 meter viewing distance. The product is expected to be launched and demonstrated in the first quarter of 2008, and is expected to be available for worldwide sale starting in May 2008. Two key trends in the consumer electronics industry are the increasing availability of high definition content both in the gaming and video market segments, as well as an increasing amount of 3D content. Full HD 1920 x1080 resolution is provided by most new game consoles and by high end PC graphics cards. The game console market alone currently has a $37 billion market size and continues with significant growth. In addition, Full HD 1920 x1080 video is provided by both new high definition DVD formats, Blu-ray(TM) and HD-DVD(TM). Above and beyond the increasing amount of high definition content is significant growth in the availability of 3D media, both in the form of games and movies. This co-developed HMD product is targeting gamers on a worldwide basis such as players using personal game consoles such as Sony's PS3, Microsoft's X-BOX, as well as PC based gaming systems. It also targets personal video viewing for both High Definition or 3D viewing, and the product is designed to be compatible with all of these systems. "We have completed our assessment of the best opportunities for generating revenue in the short term, and have concluded that the HMD market is the segment where we should focus our efforts. We still believe that there are many applications for our high resolution LCoS technology in areas such as nano-projectors and similar projection based products, but feel that our resources need to be directed at HMD for the best opportunity for a short term return." said Dr. David Hakala, SpatiaLight's Chairman and Chief Executive Officer. He continued, "We have chosen to attack this market by supplying a Full HD LCoS imager capable of being operated in a single panel mode with image resolution and quality available at highly competitive pricing allowing us to enable exciting HMD applications. With the advent of more high resolution content as well as 3D content being delivered by both DVD based (Blu-Ray(TM) or HD-DVD(TM)) and gaming platforms (console and PC based) we intend to offer an HMD product, working in cooperation with Daeyang, to address the high resolution and 3D demands in the high performance consumer marketplace. We will discuss more specifics as milestone targets are met." Dr. Mike Jin, SpatiaLight's Chief Technology Officer added "Starting with our proven, established high quality 1920x1080p T3 imager, we have made the necessary modifications to our LC cell structure and fabrication as well to our drive circuitry and firmware to allow our product to make stunning, single panel Full HD images for HMD applications. Joining our Full HD LCoS product and system expertise with Daeyang's HMD experience should provide consumers with an exciting visual experience." Young Hyun Yim, the CEO of Daeyang E&C, commented, "With the availability of SpatiaLight's Full HD 1920x1080 single panel LCoS imager technology, we are now able to manufacture the world's first next-generation personal display product with full HD resolution and virtual 74-inch screen size. This release of this product in the first half of next year will revitalize the FMD market, which DaeYang E&C expects to contribute significantly in increasing the company's revenue. We look forward to the success of this joint effort with SpatiaLight." About SpatiaLight SpatiaLight, Inc. (OTCBB: SPLT), 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 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 Daeyang E&C Daeyang E&C (KOSDAQ listed company 033030), is a company well known for its HMD/FMD products and "MC Square" product. Daeyang E&C, Inc. previously showed its i-Visor branded HMD products at the New York PC Expo in 1999, 2000 CEBIT Expo in Hanover, Germany, and COMDEX Fall 2000, and gained a high level of attention from the industry. In 2001, Daeyang E&C released world's first 3D HMD. Since then, Daeyang E&C continuously improved its technology development of HMD and maintained its status as worldwide leader of HMD. 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., +1-415-883-1693 Web site: http://www.spatialight.com/

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