InnerScope Hearing Technologies
Inc.
Opens New
Corporate Owned Audiological
Clinic & Announces
its Audiological Clinic Expansion Plan &
Business Update
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, CA
-- November
14,
2018 -- InvestorsHub
NewsWire -- 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 HCP's 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
first
yearitsin
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
re-coop the $75,000
opening
investment within 6 months from
the "Grand Opening" date.
The
Rollout
Plan's 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 Walmart.com, and
other
potential vendor agreements with major
big box retailers and major pharmacies chains, InnerScope's
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 Walmart.com
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 Walmart.com
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: www.innd.com
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.
Contact
InnerScope Hearing
Technologies,
Inc.
Investor
Relations
Info@innd.com
916-218-4100
www.innd.com
Value Audiology & Hearing
Aid Center
TriWest
Healthcare Alliance
Zounds Hearing Inc.
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