BioCrossroads' Indiana Seed Fund Invests $250,000 in SonarMed, Inc.; Company Will Use Investment to Validate Market Opportunities and Move Product Closer Towards Patient Use.

INDIANAPOLIS -- Indiana's only targeted life sciences seed stage investment fund, the $6 million Indiana Seed Fund I, has announced today its first investment. Indiana-based SonarMed, Inc. will receive $250,000 in working capital to help the company continue to grow in Indiana.

SonarMed is developing a system called Smart Tubes(TM), a line of breathing tubes designed to increase cost effectiveness and improve the care of patients who cannot breathe on their own. The technology originated at Purdue University and the company was formed in early 2005 to develop the system and to accelerate the path to market. It will be headquartered in Indianapolis, Indiana.

This new system uses sonar technology to help determine tube position within the patient's airway and provides other vital information necessary for tube monitoring. Currently, there are no methods that can provide this information quickly, easily or cost-effectively.

"The SonarMed technology will improve the quality of patient care by providing an early warning to medical professionals that there is a problem with a patient's breathing tube that could prevent adequate oxygen delivery," said Greg Ayers, M.D., Ph.D., SonarMed Advisor. "We are also committed to continuing the development of this technology in Indiana because of the availability of resources, like the Indiana Seed Fund, that will help us on our path to improve healthcare for these patients that are in critical condition, needing mechanical help to breathe."

"This new technology will make giant strides in alleviating some of the most unpleasant complications of intubation," said Dr. August Watanabe, Chairman of the BioCrossroads Board. "With nearly 67 million breathing tubes sold each year worldwide, the market for this technology is extensive. Before the Indiana Seed Fund, this company would have had to look elsewhere for investment. Now, Indiana is in a position to keep these types of companies, which only adds fuel to our growing economy."

Seed funding supports start-up companies, usually in existence for less than 18 months, allowing them to pursue a unique concept or promising technology. Like "angel funding," seed funding usually provides capital after a company develops an idea or the basic technology, but before the company is ready for an institutional investment, such as venture capital.

The latest PricewaterhouseCoopers MoneyTree(TM) Survey shows that the percentage of later stage investments continues to rise as seed and early stage funding continues to drop. For Indiana, this trend makes organizations such as BioCrossroads critical in helping these companies to stay and grow in the state. The organization realized from its inception that a lack of capital was hindering Indiana's life sciences industry growth potential. Since 2003, BioCrossroads has raised and leveraged nearly $130 million for market-driven life sciences investments in Indiana.

SonarMed will use this investment to conduct additional market research, validate its product prototypes, preparation to navigate the regulatory process through the FDA, and hire a full-time CEO. In addition, BioCrossroads will provide additional support for SonarMed by serving on its Board of Directors.

"BioCrossroads understands that in order to have a truly return-driven entrepreneurial environment in Indiana, we need to stimulate seed stage investment," said Nora Doherty, BioCrossroads Chief Financial Officer and Indiana Seed Fund Director. "This investment by the Indiana Seed Fund marks a first, but major step in developing and sustaining these early-stage life sciences companies that are desperately needed in Indiana. It's a risky, long-term proposition, but BioCrossroads is confident that this investment in SonarMed is a sound decision."

Additional information on the Indiana Seed Fund can be found at www.biocrossroads.com/entrepreneur/isf.htm. Indiana life sciences entrepreneurs can also submit proposals for Indiana Seed Fund investment using this website. Proposals are being accepted through February 28, 2006. The Indiana Seed Fund anticipates making investments over approximately a two to three year time period, but the final investment period will depend on the quantity and quality of the submissions received.

About BioCrossroads:

BioCrossroads is Indiana's life science initiative, a public-private collaboration that supports the region's research and corporate strengths while encouraging new business development. With government, industry and academic resources aligned to accelerate business growth, the region is fertile ground for investors and entrepreneurs to build new ventures. Learn more at www.biocrossroads.com. To learn more about the Indiana Future Fund, visit www.indianafuturefund.com.

About SonarMed, Inc.

SonarMed is a development stage medical device company with its office located in Indiana. The company's core technology is the use of sonar to determine the location and function of endotracheal (breathing) tubes that are used to provide oxygen to patients who require mechanical assistance to breathe. The company will develop and market a line of "intelligent endotracheal tubes" which will provide clinically relevant information to critical care medical professionals that will aid them in treating patients in the intensive care unit, emergency room and eventually in the operating room. The system will provide early warning as to the specific tube location and possible malfunction of the tube. It will also allow for a reduction in routine clinical testing, such as chest x-rays and other tests, periodically performed to assess these tubes.

About the Indiana Seed Fund I

The $6 million, return-driven Indiana Seed Fund was launched in June 2005 and is managed by BioCrossroads with funding coming from BioCrossroads, the Indiana Finance Authority and the Indiana Health and Educational Facility Financing Authority. The Seed Fund provides working capital in the range of $50,000-$500,000 to promising Indiana life sciences companies at the preliminary stages of operation.