DALLAS, TX -- (MARKET WIRE) -- 10/04/06 -- SLEEP HOLDINGS, INC. (PINKSHEETS: SLHH) -- Newly appointed Chairman and CEO Roy Mers announced today that SLEEP HOLDINGS, INC. has entered into a definitive contract to acquire Sleep Technology Institute, LTD, located at 20403 University Blvd, Suite 300, Sugar Land, Texas.

SLEEP HOLDINGS, INC. will pay $335,000 cash and issue an $865,000 convertible note for a total purchase price of $1,200,000. One half of the principal amount of the note can be converted at $1.00 per share and the remaining half at $2.00 per share into restricted and unregistered common stock of the company. The transaction is expected to close by the end of calendar year 2006.

Sleep Technology Institute of Sugar Land is a state of the art sleep diagnostic center and sleep related medical equipment provider that is headed by Founder and President Kevin Asp, CRT, RPSGT.

The Sugar Land location hosts its proprietary IT infrastructure, enabling centralized scoring, billing, physician interpretations, and technical support for all its sleep centers nationally from Texas to Alaska.

Commenting on the acquisition, Company CEO Roy Mers said, "Sleep Diagnostic Management is one of the most promising growth areas in the medical services arena. By leveraging the professional relationships and resources of SLEEP HOLDINGS, we believe there is an exciting opportunity to promote rapid national expansion of Sleep Technology Inc.'s services."

Adding, "In fact, it is our belief that Sleep Technology Institute will prove to be a highly significant contributor to our Company's future growth."

Commenting on the transaction, Mr. Asp noted, "It was clear from the outset that we shared the same enthusiasm, expectations and vision for the future of sleep diagnostic centers."

"Given SLEEP HOLDINGS' expanding national presence, proven track record and people-oriented management style, I quickly recognized that SLEEP HOLDINGS was the right organization with the right resources capable of accelerating Sleep Technology Inc.'s exciting growth potential," he concluded.

Mr. Mers further stated that, "We are very excited SLEEP HOLDINGS intends to grow its revenues by acquiring existing sleep diagnostic centers, opening new free standing sleep diagnostic centers, operating sleep centers in conjunction with hospital partners, and expanding internal sales and rental volumes of medical equipment specific to the sleep industry."

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 press 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.

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