PEABODY, MA -- Jan 15, 2002 -- In a private offering completed today, SleepMed raised $2 million. The Company issued 5-year subordinated convertible debentures to a group of investors comprised of shareholders of SleepMed and a small group of private investors. The debentures bear annual interest of 11% and are convertible, at the option of holders, into SleepMed's $0.01 par value common stock at $1.50 per share.

"The capital provided by this financing positions SleepMed to continue its rapid growth," stated Jerry Myers, SleepMed's President and Chief Executive Officer. "SleepMed had revenue of $35 million last year and we expect revenue of $46 million in 2002," said Myers. "Last year was solidly profitable and net income in 2002 will increase significantly as we leverage investments in management and systems made during the past two years."

SleepMed is the nation's largest provider of diagnostic and treatment services for sleep disorders and epilepsy. The Company has a presence in 39 states with over 200 sleep laboratories, ambulatory testing centers and hospital installations of its proprietary DigiTrace monitoring systems. The Company expects to perform 37,000 sleep studies and 21,000 patient days of ambulatory EEG monitoring in 2002.