Phototron (OTCBB: PHOT) Signs Merger Agreement with SG Technologies

Orlando, FL 3/23/12 (StreetBeat) -- Phototron Holdings, Inc. (OTCBB: PHOT), the hydroponic growing systems company behind the “grow your own” revolution, today announced that in accordance with its previously announced letter of intent, Phototron has signed a definitive agreement and plan of merger (the “Merger Agreement”) to acquire SG Technologies Corp, a leading manufacturer of hi-powered light emitting diode (“LED”) products for indoor horticulture (the “Merger”).

“This merger with SG Technologies is a major milestone for Phototron,” said Craig Ellins, Phototron’s CEO. “We believe the merger will significantly expand our current product offering and provide additional financial strength as we look to integrate the Stealth Grow line, which is well respected in the industry.”

SG Technologies sells products under the highly recognized “Stealth Grow” brand. SG Technologies is comprised of a team of experienced horticulturists and engineers who have worked to bring LEDs to the forefront of indoor horticulture by creating a superior line of LED grow lights.

“We believe that combining our operations will create a win-win for both the long established Phototron and Stealth Grow brands,” said Sterling Scott, CEO of SG Technologies. “As I increase my role at Phototron post-merger, I look forward to implementing various strategic growth opportunities and sales initiatives that will benefit our loyal customers and enhance stockholder value.”

The closing of the Merger is subject to several conditions, including, without limitation, the approval of the Merger by the holders of a majority of SG Technologies’ outstanding shares of common stock and the absence of demands for or entitlement to dissenters’ rights with respect to the Merger. There can be no assurance that the conditions to the closing of the Merger will be satisfied, or that the Merger will be consummated. If all conditions to the closing of the Merger are satisfied, Phototron anticipates that the Merger will close within the second quarter of 2012.

Pursuant to the Merger Agreement, Sterling Scott will become Phototron’s Executive Chairman of the Board and CEO. Craig Ellins will become the Vice Chairman of the Board.

The Merger Agreement will be included as Exhibit 2.1 of the Current Report on Form 8-K which will be filed by Phototron later today (the “Form 8-K”) and the discussion of the Merger Agreement set forth herein is qualified in its entirety by reference to Exhibit 2.1 of the Form 8-K.

In addition, on March 16, 2012, Phototron entered into a Securities Purchase and Exchange Agreement (the “Purchase Agreement”), pursuant to which, among other things, Phototron may sell up to an aggregate of $2,000,000 in principal amount of 6% Senior Secured Convertible Notes in exchange for a cash purchase price and/or the cancellation and exchange of any promissory note issued by Phototron, or evidencing debt assumed by Phototron.

The Purchase Agreement will be included as Exhibit 10.1 of the Form 8-K and the discussion of the Purchase Agreement set forth herein is qualified in its entirety by reference to Exhibit 10.1 of the Form 8-K.

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