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[url="http://www.insonus.com/preleases.htm"]http://www.insonus.com/preleases.htm[/url]

INSONUS MEDICAL COMPLETES $7 MILLION ROUND OF FINANCING, 
FUNDED BY ESSEX WOODLANDS HEALTH AND PIPER JAFFRAY VENTURES

MAY 31, 2001 - Newark, CA -- InSonus Medical, Inc. has completed a $7 million round of private financing to complete the development of world’s smallest and most inconspicuous hearing devices for the hearing impaired. The round was led by Essex Woodlands Health Ventures, which also participated in the previous round. "We are pleased with our initial investment in InSonus with progress made exceeding our expectations," stated Jim Currie, Managing Partner of Essex Woodlands Health Ventures, an investment firm focusing exclusively on the health care industry. "We expect InSonus to play a significant role in the hearing aid market."

The financing was joined by US Bancorp/Piper Jaffray Ventures, also a major health care investment firm. "We are very excited to join InSonus in their quest to revolutionize the hearing aid business. We believe that their talented team is on the cusp of introducing revolutionary products that will ultimately solve many of the consumer dissatisfaction issues that have plagued this industry," stated Ned Scheetz, Managing Director with Piper Jaffray Ventures. "We think InSonus has the best shot of growing market penetration well beyond today's 20% level. We have great confidence that the InSonus team will continue to exceed their milestones as they move forward with their ambitious goals."

"We are very pleased to have Essex Woodlands and Piper Jaffray participate in this round, particularly when considering their depth of knowledge and experience in the health care business," stated Adnan Shennib, President and Chief Executive Officer of InSonus Medical.

InSonus Medical, Inc. is a start-up company developing innovative hearing devices by combining electronic implant technologies with high fidelity audio to produce the world's smallest hearing devices that operate continuously for up to six months inside the ear canal. The company’s advanced hearing devices will be fitted by Ear, Nose, and Throat (ENT) doctors, in collaboration with affiliated Audiologists. The company's proprietary products and distribution channels are designed to provide alternatives for the growing hearing-impaired population, estimated at 28 million in the U.S., the vast majority of whom are generally dissatisfied with or unable to utilize conventional hearing aid products, according to industry reports.