Digital Lifestyles to pay half of outstanding debt in cash, half in stock

By Sheri Kasprzak

New York, Dec. 14 - Digital Lifestyles Group Inc. said it has entered into an agreement with Laurus Master Fund Ltd. to repay $1.9 million of its outstanding debt.

Digital agreed to make interest-only payments until February 2006 when it effects its merger with Proton Digital Corp.

After the merger is completed, Digital will pay half of the outstanding principal - or $950,000 - in cash and will pay the remainder in stock at a price per share equal to the 30-day trading average before the effective date of the merger.

Corbin & Co. LLP was retained as an independent auditor to help Digital Lifestyles make the necessary filings with the Securities and Exchange Commission.

"We are satisfied to have reached what we believe is a beneficial repayment plan for all parties involved," said Andy Teng, the company's chief executive officer, in a statement.

Based in Walnut, Calif., Digital Lifestyles develops consumer electronics.

On Wednesday, the company's stock gained 6 cents to close at $0.50.

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