InnerScope’s “Grand Opening” of its Roseville, California audiological hearing aid retail clinic is the first of 22 new audiological hearing aid retail clinics planned within Northern California in the next 6 to 12 months as part of InnerScope’s aggressive new retail location expansion plan.

InnerScope’s “Grand Opening” of its Roseville, California audiological hearing aid retail clinic is the first of 22 new audiological hearing aid retail clinics planned within Northern California in the next 6 to 12 months as part of InnerScope’s aggressive new retail location expansion plan.

ROSEVILLE, Calif., Nov. 14, 2018 — InnerScope Hearing Technologies Inc. (OTCQB:INND) announced the successful “Grand Opening” of its new audiological hearing aid retail clinic (“Retail Clinic”) located in Roseville, California. The opening of the brand-new retail clinic is part of InnerScope’s overall aggressive expansion rollout plan of opening 22 new retail clinics within Northern California over the next 6 to 12 months (“Rollout Plan”). The Rollout Plan consists of finding the right location and staffing with experienced and licensed Hearing Healthcare Professionals (“HCPs”) to operate each of the 22 retail clinic locations. InnerScope’s Rollout Plan takes advantage of its founders’ extensive thirty plus years of in-depth knowledge and experience in the Northern California hearing aid market. The founders of InnerScope generated over $16 million in annual hearing aid sales from the 20 retail clinics they opened and sold in 2016. Additionally, InnerScope has plans to quickly staff retail clinics by tapping into the pool of experienced HCPs looking for a reputable hearing aid company with vast industry experience.

Based on the founders’ previous owned retail clinics in the Northern California market, each new retail clinic is expected to generate an average of $500,000 to $1 million in its first year annual hearing aid sales revenue in with a growth factor of at least 5% every year after. However, some retail clinics are expected to generate $1.5 to $2 million in annual hearing aid sales revenue in its first year based on its location, senior demographics and the reported number of hearing aid sales currently generated from the competition in the market area.

InnerScope’s cost for opening a single retail clinic is a total of $75,000 all in, including all hard and soft costs. InnerScope believes it can cash flow each location within six weeks and they can recoup the $75,000 opening investment within 6 months from the “Grand Opening” date. The Rollout Plan is based on opening two or more new Retail Clinics every month starting in November 2018. The Roseville, California location was the first new retail clinic opened under the Rollout Plan which took 19 days from signing the lease for the location until its “Grand Opening”. So far, approximately $70,000 in gross revenue has been generated from only 5 days of Grand Openings from InnerScope’s Roseville and Walnut Creek Retail Clinics. Plans for four more “Grand Openings” of new locations are expected by year end of 2018. Two new locations openings will be in the Sacramento Area and two new locations will be in East San Francisco Bay Area (“East Bay”) for a total of eight retail clinic locations (including acquisitions) by end of 2018.

Considering the Founders’ in-depth knowledge and past experiences in successfully opening new retail clinics and the ability to cash flow each retail clinic within six weeks, InnerScope expects to have a total of 25 retail clinics including its Rollout Plan and retail clinic acquisitions by the end of 2019. These 25 retail clinics are expected to generate more than $12.5 million (based on $500,000 per location) in annualized gross revenue by year end of 2019 with a 20% to 30% EBITA.

Business Update

“InnerScope, and its team of very skilled professionals, are extremely proud of what’s been accomplished to date and look to continue to deliver on its mission, whereby increasing shareholder value for the more than 1400 shareholders and stakeholders,” stated Matthew Moore, CEO InnerScope Hearing Technologies.

InnerScope’s Retail Clinic Acquisitions

InnerScope announced earlier an LOI to acquire 100% of Value Hearing LLC and its two Northern California hearing aid retail locations. To complete this acquisition, Value Hearing LLC is in the process of a required audit of its financial records before InnerScope can complete the acquisition. InnerScope believes the acquisition should be completed in December 2018.

InnerScope previously announced in September 2018 that it has successfully acquired Kathy L. Amos audiology practice in Walnut Creek, California and has changed its dba to Value Audiology & Hearing Aid Center (“VAHAC”). This acquisition, with the Rollout Plan, gives InnerScope not only the ability to create a market presence in the East San Francisco Bay Area, but also gives InnerScope the ability to increase its market share within the East Bay by opening more retail clinics. In addition, Dr. Kathy L. Amos, Doctor of Audiology and InnerScope’s Director of Audiology, has been certified by and partnered with TriWest Healthcare Alliance as a provider to treat and proudly care for Veterans at VAHAC under the Department of Veterans Affairs (“VA”) the Patient-Centered Community Care (“PC3”) and Veterans Choice Programs (“VCP”). The PC3 and VCP allow Veterans to receive high quality care, closer to home or on a more timely basis from local private sector doctors. Dr. Amos as a PC3 and VCP provider will be able to process VA billing claims for treating and fitting Veterans with hearing aids.

InnerScope and Zounds Hearing Inc. Agreement

As previously announced on October 3, 2018, InnerScope entered into a Manufacturing Design and Marketing Agreement (the “Agreement”) with Zounds Hearing Inc. (“Zounds”) whereby Zounds was to provide design and technology services to InnerScope to enable the manufacture of hearing aids sold under the InnerScope’s brand names, the terms of which was also previously disclosed. Effective as of November 2, 2018, the InnerScope and Zounds entered into a First Amendment to the Zounds Agreement calling for a payment of $1,000,000 to Zounds for the Technology Access Fee, which fee is to be paid in eight (8) installments of $75,000 each, in four-week intervals until $600,000 is paid, and $400,000 to be paid as Product Surcharges based on $200 per unit manufactured for up to the first 2,000 units. Once $400,000 of Product Surcharges are paid, said per unit surcharge will be discontinued.

The Agreement also gives InnerScope the ability to market and sell the complete Zounds branded hearing aid product portfolio. This will allow InnerScope to immediately leverage Zounds current hearing aid inventory for InnerScope’s immediate inventory stock and ramp-up needs to facilitate the current orders and the Rollout Plan of retail clinics and other distribution channels.

“InnerScope has worked diligently to secure contracts and build a solid scalable business model and infrastructure,” said Matthew Moore, CEO of InnerScope Hearing Technologies. “InnerScope has grown and accomplished so much in just a very short time. We have hired key personnel to fill vital roles within the Company to ensure efficient execution of all contracts and agreements. InnerScope has grown to become much more than just a marketer and distributor of hearing aids. With the Zounds Hearing Inc. manufacturing agreement, InnerScope is able to manufacture its own high-quality hearing aids. As a manufacturer, it can directly compete with all of the six major global hearing aid manufactures (the “Big Six”) in this $4 to $5 billion U.S. hearing aid market. InnerScope, as a manufacturer, also plans to distribute hearing aids to the B2B audiological practices as well as become an industry consolidator by vertically integrating with its corporate owned hearing aid retail stores. Combined with the InnerScope’s vendor agreement with, and other potential vendor agreements with major big box retailers and major pharmacies chains, InnerScope is positioned to dominate the entire Direct-to-Consumer (“DTC”) hearing aid market space,” Mr. Moore continued.

“Currently, approximately 95% of all hearing aids bought each year (approximately 2 million people) are sold and fit by HCPs at retail clinics. We believe the 48 million people in the U.S. that has reported to have hearing loss and may benefit using hearing aids, but choose not to buy because of high cost and inconvenience of going to a retail clinic, will now start buy hearing aids online as a less expensive option. InnerScope is changing the way hearing aids are bought, sold and dispensed beginning with its agreement with and plans to work with other major online retailers. InnerScope anticipates that online hearing aid revenue in the next five years will exceed the $4 to $5 billion revenue currently generated by the retail clinics. We also believe that once people start realizing they have the option to save money by having easy and convenient access to purchasing aids online without sacrificing any of their hearing quality experience and/or hearing services needed, the online hearing aids sales will continue to grow year after year. We expect as the total hearing aid market increases so will the number of HCPs and the number of retail clinics in the U.S. InnerScope, with its Rollout Plan, is primed to capture both online and the retail clinic distribution channels as the hearing aid market continues to grow,” Mr. Moore concluded.

About InnerScope Hearing Technologies (“INND”)

InnerScope Hearing Technologies (INND) is a rapidly expanding consolidator of the hearing aid industry. Management is applying decades of profitable industry experience and technology to an antiquated and disjointed industry, unlocking scale and efficiency, which will serve all of InnerScope’s stakeholders. Its direct-to-consumer model is revolutionizing the industry with its relationship representing a paramount shift in the consumption of hearing aids by the hearing impaired.

In addition, InnerScope plans to continue to open, acquire, and operate a physical chain of audiological and retail hearing device clinics. InnerScope’s mission is to serve approximately 1.2 billion people around the globe that are suffering with 25 db or greater hearing loss across the entire hearing impaired vertical from R&D and manufacturing through direct consumer sales and services. For more information, please visit:

Safe Harbor

This presentation contains forward-looking statements, which relate to future events or InnerScope Hearing Technologies future performance or financial condition. Any statements that are not statements of historical fact (including statements containing the words “believes,” “should,” “plans,” “anticipates,” “expects,” “estimates” and similar expressions) should also be considered to be forward-looking statements. These forward-looking statements are not guarantees of future performance, condition or results and involve a number of risks and uncertainties. Actual results may differ materially from those in the forward-looking statements as result of a number of factors, including those described from time to time in InnerScope Hearing Technologies filings with the Securities and Exchange Commission. InnerScope Hearing Technologies undertakes no duty to update any forward-looking statements made herein.

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