Graymark Raises $3 Million in Private Placement Transaction

OKLAHOMA CITY, May 3, 2011 /PRNewswire/ -- Graymark Healthcare, Inc. (NASDAQ: GRMH), the nation's second largest provider of diagnostic sleep services and an innovator in comprehensive care for obstructive sleep apnea (OSA), entered into subscription agreements with insiders and existing accredited investors to sell $3 million of newly issued shares of its common stock and warrants in a private placement.

Under the terms of the transaction, Graymark will sell 5,172,411 million shares for $0.58 per share, a 29% premium to Friday's consolidated closing bid price of $0.45 per share. The purchasers will also receive warrants to purchase up to an aggregate of approximately 5,172,411 million shares of common stock at an exercise price of $0.45 per share. The warrants may be exercised beginning 6 months after the closing date and will expire in 3 years. The closing of the transaction is expected to take place on or about May 6, 2011, subject to the satisfaction of customary closing conditions.

No investment banking or advisory fees were paid by the company.

The company intends to use the proceeds of this private placement to pay down its short-term debt obligations with Arvest Bank as well as for general corporate purposes.

This press release shall not constitute an offer to sell or the solicitation of an offer to buy any security. The securities issued in the private placement have not been registered under the Securities Act of 1933, as amended, or any state securities laws. Unless so registered, the common stock and warrants may not be offered or sold in the United States absent an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and any applicable state securities laws.

About Graymark Healthcare

Headquartered in Oklahoma City, Okla., Graymark Healthcare, Inc. (NASDAQ:GRMH) is the nation's second largest provider of sleep management solutions. In addition to diagnosing and treating over 80 sleep disorders, the company specializes in comprehensive care for Obstructive Sleep Apnea (OSA). Graymark offers its services through 98 sleep laboratories throughout the United States, including standalone or IDTF facilities, rural outreach sites and hospital or provider agreements. For more information, visit www.graymarkhealthcare.com.

Important Cautions Regarding Forward-Looking Statements

This press release may contain forward-looking statements that are based on the company's current expectations, forecasts and assumptions. Forward-looking statements involve risks and uncertainties that could cause actual outcomes and results to differ materially from the company's expectations, forecasts and assumptions. These risks and uncertainties include risks and uncertainties not in the control of the company, including, without limitation, the current economic climate and other risks and uncertainties, including those enumerated and described in the company's filings with the Securities and Exchange Commission, which filings are available on the SEC's website at www.sec.gov. Unless otherwise required by law, the company disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

SOURCE Graymark Healthcare, Inc.

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