timely letter again, page-3

yep, i want to hear some sales figures and see the share price at .05 where it should be right now and where they should be raising more cash. once again it looks like the feet are being dragged to ensure options holders are not in the money.

that said i like the tone of this letter. if they actually sell the story they should get the shareprice moving. no sign of that yet.

motherhood stuff at this stage.



?Wheeze Rate ? A New Paradigm in Asthma Management?
Shareholder Update
January 27th, 2011
Dear Shareholder,
As the world embraces the Year 2011 and things return to normal in Australia, there is good
reason to take comfort in that Team KarmelSonix has continued its commitment to building
long term shareholder value.
Since the AGM held on November 30, 2010, we have devoted our attention to executing the
Company?s Tripod of success principles and business plan (see my November Letter to
Shareholders). Our team has been focused totally on establishing quality manufacturing,
meaningful sales planning for CY 2011 and pushing ahead with the clinical work which is
concentrated on our Centers of Excellence initiative that expands our current seven clinical
sites to ten world renowned clinical sites.
I am pleased to report that we are making significant progress in each of these fronts. As a
direct result of the pioneering clinical work with our devices at leading medical institutions
such as the Royal Bromton Hospital (UK), Mass General (Boston), Oakland Children (CA), to
name a few, the broader medical community is increasingly able to use our devices with
specific clinical symptoms in patient populations who suffer from asthma and other lung
function limitations. This has resulted in more rapid acceptance of our acoustic respiratory
devices in medical practices in the US and Europe.
Additionally, there are early indications that our sales strategy is paying off in a number of
important regions. In Europe and the US in particular, we are seeing positive feedback from
the market for our devices and a growing advocacy for our WHolterTM service model. We are
also continuing with various discussions aimed at accelerating the rollout of our products in
key markets.
We have also continued our assessment and qualification of an appropriate strategic
manufacturing partner and I am pleased to advise that this work has almost been finalised
and we will shortly be in a position to announce this new partnership.
Last October, the professionals at Team KarmelSonix launched a new service designed to test
market the WHolterTM home sleep test device in Southern California. The WHolterTM is the
world?s first approved device to record and quantify the presence of nocturnal wheeze and
cough in patients at home. This revolutionary device provides a new means to diagnose and
quantify the presence of nocturnal wheeze which is one important cause of sleep apnea in a
significant percentage of patients undergoing sleep studies, and therefore represents a very
significant market.

About KarmelSonix : KarmelSonix Ltd focuses on supplying innovative non-invasive acoustic
tools for disease management of asthma and related pulmonary disorders. Asthma affects 6-
16% of the population in developed countries with a cost exceeding $US15 billion in the US
alone.
Acoustic Asthma Management is a breakthrough in monitoring of the asthmatic patient of all
ages, including the very young, very old and others who cannot perform currently available
tests. The technology that comes from extensive R&D and clinical validation in the US, Israel
and Australia, facilitate continuous monitoring of patients at home, in the ICU and even during
sleep. The company is now focussing its efforts on early commercialization of its products
particularly in the AsiaPac, European and North American markets.
Having launched this test, I can report that the interest in our WHolterTM Home Sleep test has
been strong and as of this writing, we have recently launched our 10th site in the US with
prospects for more in Q1, 2011. The rapid pace of adoption is indeed highly encouraging.
The footprint of our WHolterTM service now spans from California to the Midwest to the East
Coast of the United States and is currently being established in Australia.
In addition we are seeing an increasingly positive market response to our products in Europe.
A number of our European distributors are making new commitments to our products by
hiring dedicated clinical and sales specialists to handle our products. We are reciprocating
that commitment by providing training for the product specialists in the coming months.
Finally, we are working diligently with medical service providers and medical reimbursement
specialists to advance our reimbursement codes from CPT Category III to CPT Category I in
the US. By way of background, CPT code is an American Medical Association code system
assigned to medical devices, services and tests. A CPT code is a critical issue in generating
sales as it is required in order to initiate reimbursement of a new medical device.
KarmelSonix has a number of dedicated CPT codes for its products.
Further updates and announcements are expected to be released in the coming weeks.
Thank you for continued interest in and support for KarmelSonix.
Yours sincerely,
Ross Haghighat
Chairman and CEO