SOURCE: Sleep Holdings, Inc.

March 09, 2007 14:30 ET

Allen and Company Increases Equity Stake in Sleep Holdings, Inc. With Additional Options to Purchase up to $102 Million More at Prices up to $35 per Share

Additional Capital to Ignite Company's Growth Strategy

DALLAS, TX -- (MARKET WIRE) -- March 9, 2007 -- SLEEP HOLDINGS, INC. (OTC: SLHJ) announces Dallas investor Gary Allen plans to increase his stake in the company. Allen and Company, Ltd. and Elan Equites Corp. of Europe have jointly agreed to purchase 2,000,000 million newly issued restricted Sleep Holdings common stock directly from the company. Additionally, Allen and Elan have acquired options to purchase an additional 6,800,000 shares at prices up to $35 per share. The total financial package would mean that if all the options are exercised by Allen and Elan, they will purchase an additional 8,800,000 shares at an average price per share of $11.60 per share, providing Sleep Holdings with $4.05 per share of cash to grow and expand its operations in the sleep diagnostic and sleep durable medical equipment industry. This is an equity financing arrangement and not debt.

Elan's London representative, Paul Simms, stated, "We are extremely excited about the opportunity to become a shareholder in Sleep Holdings, Inc. They have put together a superior management team to build their holdings in the sleep disorder and diagnostic industry."

"Sleep Holdings' newly committed capital will allow the company to execute its business plan at a much faster pace," said Jim Gaines, a member of the Sleep Holdings Board of Directors. "Mr. Allen is committed to the sleep industry and will provide invaluable input to Sleep Holdings' Governing Board and Senior Management as we continuously refine and expand our business."

Roy Mers, Sleep Holdings CEO, said, "We are elated that this financial package was finally approved. This will assist Sleep Holdings in further advancing our unique approach to open innovation."

Dr. Michael Breus, Sleep Holdings' Clinical Advisory Board Chairman, stated, "I am proud to be part of the winning business model for the sleep industry and excited that Sleep Holdings has allowed me to participate in and help direct their explosive growth and bright future."

SLEEP HOLDINGS intends to grow its revenues by (i) acquiring small independent sleep centers and corporate owned diagnostic centers, (ii) opening new freestanding sleep centers, (iii) opening new hospital-based sleep centers under our management in conjunction with hospital partners, (iv) provide management services and technical support for sleep disorder centers and (v) increase the Company's internal sales and rental volumes of sleep related medical equipment.

SLEEP HOLDINGS' mission is to provide innovative solutions to patients suffering from sleep disorders. We strive to provide the highest standard sleep studies, medical directorship, patient education, and therapeutic recommendations in order to assist patients with an overall improved quality of life.

This news release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities and Exchange Act of 1934, as amended, which are intended to be covered by safe harbors created hereby. Such forward-looking statements involve known and unknown risks and uncertainties.

Sleep Holdings, Inc. is a registered trademark. Other product or service names mentioned herein are the trademarks of their respective owners.

Contact Information

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    Sleep Holdings, Inc.
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