Lighting Science Group Corporation (LSG) announced today that through one of its wholly-owned subsidiaries it has acquired all of the assets of Lamina Lighting, Inc. Year-to-date revenues for the first six months of 2008 for Lamina were approximately $2.1 million.

LSG paid Lamina $4.5 million in cash. LSG may also make “earn-out” payments to Lamina of up to $10.5 million in the second quarter of 2010. The amount of any future earn-out payments will be determined based on 85 percent of the 2009 sales of Lamina products and certain components developed by Lamina, subject to certain adjustments. Under the purchase agreement, LSG acquired all inventories, accounts receivable, property, equipment, and intellectual property of Lamina, and assumed all accounts payable and certain other accrued liabilities.

Related to the closing of the acquisition of the assets of Lamina, LSG also announced today that it has entered into an agreement with Bank of Montreal (BMO) to obtain a $20 million demand line of credit. Additionally, LSG entered into a guarantee agreement with Pegasus IV, L.P., an investment fund managed by Pegasus Capital Advisors, whereby Pegasus will provide a guarantee to BMO for amounts outstanding under the demand line of credit. In exchange for providing the guarantee, LSG will issue a warrant to Pegasus for the purchase of 942,857 shares of common stock. The warrant will have an exercise price of $7.00 per share, a term of five years and will entitle the holder to anti-dilution protection for, among other things, sales of common stock below $7.00 per share. LSG and Pegasus have also entered into an agreement whereby Pegasus has committed to provide a bridge loan of up to $20 million to LSG in the event that the payment is demanded under the BMO demand line of credit. Upon closing and funding of the bridge loan, if any, LSG would pay additional fees and issue an additional warrant for the purchase of common stock to Pegasus.

LSG anticipates that it will use $4.5 million of the BMO demand line of credit to fund the acquisition price of the Lamina assets. The balance of the BMO demand line of credit, along with current assets will remain available for financing of working capital and other corporate purposes as determined by the Company.

“Today’s acquisition further strengthens our product portfolio and gives us access to an integrated platform of products with an established global supply chain,” says Govi Rao, chairman and chief executive officer of Lighting Science Group. “The combination of LSG and Lamina provides significant opportunities to leverage complementary product platforms and market segments, and offers international cross-selling opportunities. The acquisition of Lamina strengthens our current OEM relationships, and enables us to broaden our range of light engines and module offerings with fully-integrated solutions coupled with extensive technical knowledge. We are also pleased that in today’s challenging credit market that we were able to partner with Pegasus and the Bank of Montreal to create the structure that will provide LSG with significant capital to expand our business globally and continue to develop innovative products.”

“Our integration with LSG gives Lamina immediate access to a global distribution network,” adds Frank Shinneman, president and CEO Lamina. “With the combined and expanded portfolio, the company will be well positioned to provide total lighting solutions for strategic customers across the globe. We are excited about the synergies enabled by this acquisition especially the opportunities this provides to our OEM partnerships.”

Pegasus Capital Advisors were the financial advisors to LSG during this transaction and Haynes and Boone, LLP acted as LSG’s outside legal counsel.