USA Digital, Inc. Receives Confirmation From Lucent Technologies, Inc. That it has 'Discontinued the PathStar Product Line.'

Apr 03, 2001, 01:00 ET from USA Digital, Inc.

    ORLANDO, Fla., April 3 /PRNewswire/ --
 USA Digital, Inc. (OTC Bulletin Board:   UDIG) announced today that the company
 has received confirmation from Lucent Technologies, Inc. (NYSE:   LU), that it
 has discontinued the PathStar(TM) product line, and that Lucent has requested
 the return of the equipment that had already been delivered.
     USA Digital had previously entered into an agreement with Lucent for the
 purchase of $25 million of the PathStar(TM) product set and associated network
 equipment over a three-year period (the "Agreement").  Lucent introduced
 Gallant Capital and Finance, LLC ("Gallant Capital") to USA Digital for the
 purpose of financing this equipment.  Financing was to be provided by Gallant
 Capital, pursuant to an agreement, which provides up to $30 million in
 financing.
     In addition, Lucent has informed the Company that it will no longer honor
 the Company's financing agreement with Gallant Capital.  Although Lucent has
 offered the Company an alternate solution to the canceled PathStar(TM) product
 line, it has conditioned the alternate solution on the Company obtaining
 additional financing acceptable to Lucent.  Lucent has taken this position
 despite the fact that Gallant Capital has informed USA Digital that its
 financing for the Lucent equipment remains in place.  Under the circumstances,
 USA Digital believes it is in its best interest to see what is available from
 the other major vendors, and with interest rates down, to look for other
 funding sources for whatever solution it decides to deploy.
     USA Digital President Mark D. Cobb stated, "We are extremely disappointed
 with Lucent's decision to cancel the PathStar product line without providing
 us with advanced notice, and its unwillingness to honor our financing
 arrangement.  As a result, we have commenced looking at product lines and
 financing arrangements with other entities so that we may carry out our
 business plan.  If no agreement with Lucent can be reached, we intend to
 pursue all legal remedies available to us."
     Mr. Cobb also stated, "USA Digital continues to execute our Roll-
 Up/Acquisition strategy while positioning the Company to take advantage of the
 market."
     USA Digital, Inc. (www.usa-digital.com) is a rapidly growing, highly
 integrated communications provider utilizing a roll-up/acquisition strategy
 that will address the rapidly expanding communication demands of small to
 medium-sized businesses.
 
     Certain information and statements included in this release constitute
 "forward-looking statements" within the meaning of the Federal Private
 Securities Litigation Reform Act of 1995. Such forward-looking statements
 involve known and unknown risks, uncertainties, and other factors which may
 cause the results, performance or achievements of the Company to be materially
 different from any future results, performance, or achievements expressed or
 implied in such forward-looking statements.
 
 

SOURCE USA Digital, Inc.
    ORLANDO, Fla., April 3 /PRNewswire/ --
 USA Digital, Inc. (OTC Bulletin Board:   UDIG) announced today that the company
 has received confirmation from Lucent Technologies, Inc. (NYSE:   LU), that it
 has discontinued the PathStar(TM) product line, and that Lucent has requested
 the return of the equipment that had already been delivered.
     USA Digital had previously entered into an agreement with Lucent for the
 purchase of $25 million of the PathStar(TM) product set and associated network
 equipment over a three-year period (the "Agreement").  Lucent introduced
 Gallant Capital and Finance, LLC ("Gallant Capital") to USA Digital for the
 purpose of financing this equipment.  Financing was to be provided by Gallant
 Capital, pursuant to an agreement, which provides up to $30 million in
 financing.
     In addition, Lucent has informed the Company that it will no longer honor
 the Company's financing agreement with Gallant Capital.  Although Lucent has
 offered the Company an alternate solution to the canceled PathStar(TM) product
 line, it has conditioned the alternate solution on the Company obtaining
 additional financing acceptable to Lucent.  Lucent has taken this position
 despite the fact that Gallant Capital has informed USA Digital that its
 financing for the Lucent equipment remains in place.  Under the circumstances,
 USA Digital believes it is in its best interest to see what is available from
 the other major vendors, and with interest rates down, to look for other
 funding sources for whatever solution it decides to deploy.
     USA Digital President Mark D. Cobb stated, "We are extremely disappointed
 with Lucent's decision to cancel the PathStar product line without providing
 us with advanced notice, and its unwillingness to honor our financing
 arrangement.  As a result, we have commenced looking at product lines and
 financing arrangements with other entities so that we may carry out our
 business plan.  If no agreement with Lucent can be reached, we intend to
 pursue all legal remedies available to us."
     Mr. Cobb also stated, "USA Digital continues to execute our Roll-
 Up/Acquisition strategy while positioning the Company to take advantage of the
 market."
     USA Digital, Inc. (www.usa-digital.com) is a rapidly growing, highly
 integrated communications provider utilizing a roll-up/acquisition strategy
 that will address the rapidly expanding communication demands of small to
 medium-sized businesses.
 
     Certain information and statements included in this release constitute
 "forward-looking statements" within the meaning of the Federal Private
 Securities Litigation Reform Act of 1995. Such forward-looking statements
 involve known and unknown risks, uncertainties, and other factors which may
 cause the results, performance or achievements of the Company to be materially
 different from any future results, performance, or achievements expressed or
 implied in such forward-looking statements.
 
 SOURCE  USA Digital, Inc.