Group completes $7.5 Million Financing with Laurus Funds
AUSTIN, TEXAS – December 2, 2004 – Digital Lifestyles
Group, Inc. (OTCBB: DLFG), the maker of hip-e™ and Northgate® products,
announced today that on November 30, 2004, it completed the funding
of a new three-year, $7.5 million credit facility with Laurus Master
Fund, Ltd., a New York-based institutional fund that specializes in
direct investments in small cap companies, pursuant to an agreement
executed on the same date.
The facility consists of a $4.75 million convertible revolving note
and a $2.75 million convertible term note. The outstanding balance
of the revolving note and the principal balance of the term note will
be convertible into shares of the company’s common stock, subject
to certain limitations set forth in the agreement based upon the stock’s
trading volume and Laurus’ ownership position. The fixed
conversion price of the notes is $0.39 per share, which is a premium
over the average closing price of the company’s common stock
over the ten trading days preceding the execution of the agreement. The
agreement and notes contain provisions that allow for the company’s
early repayment of the facility.
According to Ted Muftic, Chief Financial Officer of Digital Lifestyles
Group, “We are pleased to enter into this relationship with Laurus
Funds. The completion of this funding, following our recently
completed equity offering, will provide us with enhanced financial
flexibility to increase our working capital and fund the next growth
phase of our hip-e line of products and services.”
In connection with the facility, the company also issued to Laurus
warrants to purchase up to 3,846,154 shares of the company’s
common stock at $0.44 per share.
Neither the issuance of the notes and the warrants nor the issuance
of the shares of common stock issuable upon conversion of the notes
and exercise of the warrants will be or have been registered under
the Securities Act of 1933, as amended, and such securities may not
be offered or sold in the United States absent registration or an applicable
exemption from the registration requirements of the Securities Act. The
company has agreed to file a registration statement with the Securities
and Exchange Commission registering the resale of the shares of its
common stock issuable to Laurus upon conversion of the term note and
exercise of the warrants.
About Digital Lifestyles Group, Inc.
Digital Lifestyles Group, Inc. designs, manufactures
and markets digital lifestyle products, including software, personal
computers, accessories and entertainment and communication solutions.
The Company's products include hip-e, the first digital lifestyle platform
for teens, and the Northgate line of desktop and notebook computers
for consumer, business and education customers. The Company sells its
products through its online stores (www.hip-e.com, www.northgate.com),
direct sales force, third-party resellers and retail stores. More information
about Digital Lifestyles Group is available at www.dig-life.com.
This announcement contains forward-looking statements
within the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as
amended. These forward-looking statements are subject to significant
risks and uncertainties. Although the Company believes that the expectations
reflected in its forward-looking statements are reasonable, the Company
can give no assurance that such expectations or any of the forward-looking
statements will prove to be correct, and future results may differ
materially from those discussed in this press release. Important information
regarding the factors that may affect the Company's future performance
is included in its public reports that it files with the Securities
and Exchange Commission. The Company disclaims any intention or obligation
to revise any forward-looking statements, whether as a result of new
information, future event, change in expectations, conditions or circumstances,
or otherwise. Readers are cautioned not to place undue reliance on
these forward-looking statements, which speak only as of the date hereof.
The inclusion of any statement in this release does not constitute
an admission by the Company or any other person that the events or
circumstances described in such statement are material.