Disrupting the telehealth scene, InnerScope Hearing Technologies, Inc. (OTC: INND) offers a range of products, services, and programs for those suffering from hearing impairment and/or hearing-related issues. With the OTC Hearing Aid Law finally enacted, INND stock presents an investment opportunity for investors bullish on the industry’s potential at a relatively cheap PPS. With this in mind, INND has the potential to become a leader in this niche thanks to its deals with major retailers to offer its products through their channels. Meanwhile, INND is working to complete its audit to become SEC reporting and promised updates this month. As the company appears to be well-positioned for substantial growth in the coming years, INND stock could be one to hold onto for the long term.
INND Stock News
As is, INND is poised to take advantage of the Over-the-Counter Hearing Aid Act which is expected to become law in late 2021. This law will allow hearing aids to be sold in retail stores without requiring medical evaluation from a professional. Considering that the telehealth market is expected to reach $70.19 billion by 2026 and that INND has already begun preparing its “point-of-sale free self-check hearing screening kiosks”, the company appears to have a clear early mover advantage.
Through its multiple wholesale and retail partners as well as its online store, INND is “shifting hearing care out of the Clinics to online, in-store, and/or directly into peoples’ homes”. After securing a Co-op Marketing Partnership with Walmart back in 2018, INND has since capitalized on the franchise’s more than 5,000 stores and clubs nationwide. Interestingly, INND has also started offering subscription plans at affordable price points which will naturally draw in recurring customers and sales.
With plans to uplist to the OTCQB, INND is making notable efforts to improve its brand recognition and expand its operations. Announcing a comprehensive, six month hearing loss awareness campaign throughout lower Manhattan, INND has partnered with New to The Street TV to create 660 commercials and 156 digital billboards for the campaign. The company’s CEO, Matthew Moore, said it will “educate the public on the problem, and give direction on solutions for hearing impairments”. Similarly, INND has partnered with FSAstore.com, HSAstore.com, and WellDeservedHealth.com to market their products to consumers with pre-tax health spending accounts.
*Updated May 23rd, 2022
While the initiative for OTC hearing devices was begun under the Trump administration with the FDA Reauthorization Act of 2017, it was given a second boost by President Biden’s Executive Order in 2021. Until now, the FDA has not followed through on its commitment to create the rules for OTC hearing devices however, the FDA did issue a landmark proposal to improve access to hearing aids by establishing the OTC category.
Clearly, there is still more to be done before FDA-approved over-the-counter hearing aids can be freely accessed by Americans. However, INND stock has made headway by offering hearing devices as a direct-to-consumer option in the meantime.
iHear
In preparation for the expected FDA guidelines, INND acquired iHear Medical Inc which pioneered online direct-to-consumer hearing solutions This brought the only FDA-Cleared home hearing screener under INND’s umbrella and advanced FDA-Registered hearing aids and the TReO™ Personal Sound Amplification Product. As part of the acquisition, INND gained iHear’s customer base and established retail and contracted distribution channels.
The Acquisition also expanded InnerScope’s customer base and provided access to iHEAR’s established retail and contracted distribution channels. Recently, INND launched a new website for iHEAR offering the brand’s direct-to-consumer hearing products. Through this site, INND markets the same technology as hearing aids sold in clinics by professionals for a significantly lower price with the benefit of delivering the products directly to customers’ homes.
INND released this website update to offer a number of new features. The most significant feature is its new free online hearing screening service which provides users with a hearing wellness screening test using INND’s AI technology for pattern recognition and classification of hearing ability.
Hearing Assist
Following this, INND also acquired the direct-to-consumer hearing aid leader – Hearing Assist. Walmart’s largest hearing aid supplier, Hearing Assist has realized top-line revenues of more than $72 million since 2018 through the offering of its products in 757 Walmart stores across five states. Through its sales at these locations as well as online, the company has had more than 500 thousand sales.
In exchange, INND agreed to pay the equivalent of $10 million in restricted shares split into two different payments. In this way, the first $5 million shares are at a fixed price of $.0089 per share and the other $5 million in shares are valued at $.17 per share. In total, this valued the market cap of INND at more than $1 billion – a very bullish sign for the company.
To protect shareholder value, the company instituted a 24 month leak out agreement which dictates that these shareholders can convert and sell no more than 25% of their shares every 6 months. Similar to its acquisition of iHear, INND’s acquisition of Hearing Assist brings more assets to the company and attracts a wider audience to the brand.
Commenting on the transaction, the founder of Hearing Assist II LLC shared that, “The HearingAssist team is very excited about this opportunity to join forces with InnerScope to become the number one global leader in the direct-to-consumer hearing aid market”. He went on to say that, “Combining the talents and experience of HearingAssist, with our deep marketing and distribution experience and InnerScope, with its decades of proven track record of retail hearing aid sales and hearing aid R&D manufacturing, will create a powerful disruptive company in the global hearing device market.”
Seeking to improve upon HearingAssist’s existing image, INND launched a new website for the sale of Hearing Assist’s products. The website’s new design will help INND manage content, launch marketing campaigns, and add new features. One important new feature is its internal customer call center which is integrated with the website to aid the company in its growth plans.
Considering the nature of its business and its audience, it makes sense for INND to introduce a call center for users to contact INND’s hearing products specialists and receive free consultations with INND’s licensed hearing professionals. This personalized approach is just one part of INND’s overall mission to target a larger share of the direct-to-consumer hearing device market. As a result of these acquisitions, INND stock price could witness major growth as more assets and operations are integrated with the company.
Given INND’s current strategy of innovation and acquisition its no surprise to hear the company’s CEO – Matthew Moore – saying that after securing partnerships with semiconductor developers, manufacturing solutions, and multiple major retail and pharmacy chains, he believes that “we are building a hearing aid company that can go head-to-head against the “Big Five” global hearing aid manufacturers to be the disruptor leader in the emerging multibillion-dollar direct-to-consumer hearing aid market.”
Atlazo
In line with this mission, INND has partnered with Atlazo to develop next-generation hearing aids and products, utilizing Atlazo’s patented AI hardware to create features like voice commands, continuous health monitoring, and seamless connectivity with other smart devices. As is, this will reduce cost and time-to-market for manufacturers of wearable devices. The collaboration itself is protected by over 12 issued and pending patents.
Hearing Screening Kiosks
While INND has made progress on all these fronts, it has not neglected an important part of the challenges of DTC hearing products – hearing tests themselves. For this, INND has partnered with Hartig Drug Company to offer free hearing screenings using INND’s automated self-check hearing screening kiosk. In addition, Hartig plans to launch INND’s direct-to-consumer products both online and in-store in the near future which will help supplement the hearing tests.
The company’s hearing kiosks are also being implemented in the pharmacy section of K-VA-T Food Stores, Inc. Food City Pharmacy and the neighborhood grocery and pharmacy chain – Giant Eagle, Inc. In this way, INND is expanding its reach to make hearing testing affordable and accessible for the 48 million Americans suffering from hearing loss.
INND already has a strong relationship with the retail giant Walmart thanks to its acquisition of Hearing Assist. As a result, it received purchase orders from Walmart totaling over $277,000 for an in-store display to be located in 757 Walmart stores. Looking beyond the US, INND has also entered the Canadian market through Walmart’s Canada’s flagship online store.
In light of this expansion across numerous avenues, INND is positioning itself to be a major name in direct-to-consumer hearing solutions before capitalizing on the passage of the Over-the-Counter Hearing Aid Act. While the FDA has not published its new regulations yet, it is expected that sales could begin by the end of 2022 once these regulations are finalized. Given that INND’s products are sold through several large retailers like Walmart, Amazon, and Best Buy, INND stock could see significant growth as the public becomes more accustomed to direct-to-consumer and over-the-counter hearing aids.
If it is able to sell FDA-approved hearing solutions after the act’s passage, then INND stock price could be comparable to competitors like Eargo Inc. (NASDAQ: EAR). Recently EAR stock has taken a significant tumble following investigations by the DOJ regarding insurance reimbursement claims submitted to various federal employee health plans under the Federal Employee Health Benefits program. While the company admitted no fault in the final civil settlement agreement, it will be forced to pay approximately $34.4 million to the government to resolve allegations that it submitted or caused the submission of claims for payment to the FEHB program using unsupported hearing loss-related diagnosis codes. As a result, EAR stock has tumbled from its IPO price of around $40 to $1.17 due to the allegedly false and misleading representations it made regarding the available insurance coverage for its products.
With this competitor falling substantially, the INND stock forecast appears to be brighter.
*Updated June 13th, 2022
Purchase Order
In late May, INND stock saw a resurgence after the company announced a $1.5 million purchase order from Walmart for HearingAssist’s products and related supplies. This order covers four new HearingAssist models, branded ear care, and related cleaning accessories to showcase in 299 Walmart Vision Centers. Following this, INND received a second purchase order from Walmart worth $9.4 million. Now in the final phases of production, INND expects these products to be deployed across 1499 Walmart Vision Centers by late June or July.
Given the scale of these deals, INND is well-positioned to bolster its revenues this year. It is also a sign that Walmart sees increasing demand for INND’s products in the future as inflation and a possible recession drive more consumers to look for cost-effective hearing solutions. This is a very promising sign for the company as its various products could see rising demand and recognition thanks to their placement in Walmart locations across the US.
*Updated August 8th, 2022
RBC Convention
INND was recently presented by Cardinal Health in the RBC convention as the only Direct-to-Consumer hearing health company. During this convention, INND and iHear had their kiosks showcased where 115 Cardinal Health members checked their hearing. Considering these kiosks’ success in screening hearing loss, 147 members representing several pharmacy locations across the nation signed up for instant kiosk and product deployment in their locations. In light of this, INND is setting itself up for major financial growth once the OTC Hearing Aid Act is finalized.
FDA Meeting
With the OTC Hearing Aid Act expected to be enacted soon, INND alongside its subsidiaries HearingAssist and iHear requested a meeting with the FDA regarding the law’s regulations. Given that the FDA held meetings with other hearing aid companies like Eargo, INND is aiming to utilize its experience in these products to provide its input into the upcoming law. As investors are anticipating more updates regarding this potential meeting, INND stock could be one to watch this month.
OTC Hearing Aid Law
On that note, investors are anticipating an official announcement from the FDA regarding the law in the near future since a final rule was made that is consistent with change. Based on this, INND stock could be a smart investment at its current PPS as it could soar to new highs upon announcing the law. With this in mind, INND is set to benefit significantly from this law since it already offers its products through major retailers like BestBuy, Walmart, and RiteAid. In light of this, INND could become a leader in the hearing aid market since the company’s marketing efforts are more advanced than its competitors.
Funding
Looking to ramp up production in anticipation of the OTC Hearing Aid Act being announced, INND’s subsidiary HearingAssist entered into a receivable factoring agreement with Star Funding Inc. According to this agreement, HearingAssist will receive $2.7 million in funding over a period of 2 years where Star Funding will provide these funds on a transactional basis with no ceiling limit to the amount of funding. This funding is believed to be crucial for the company as the demand for its hearing aids and other hearing-related products is expected to surge once the OTC Hearing Aid Act is announced by the FDA. Considering the company’s efforts to set itself up for success when the law is enacted, INND stock has the potential to be an extremely profitable long-term hold.
Financials
In the meantime, INND is currently in the process of auditing its financials and filing its Form S-1 to become SEC reporting this summer – which would allow the company to uplist to the OTCQB. As for its Q2 financials, INND is preparing its financials to share them by August 15. Considering the company’s recent purchase order from Walmart, INND could show significant financial growth in Q2 and the coming quarters.
*Updated August 19th, 2022
FDA Final Rule
After six years of anticipation, the FDA finally released the final rule for the OTC Hearing Aid Law. This allows hearing aids for mild to moderate hearing loss to be sold in retail stores, pharmacies, and online channels without a medical exam. By October 16, the OTC Hearing Aid Law will be enacted after the final rule gets published in the Federal Register. Based on this, INND intends to register its hearing aid products as well as the products of iHear and HearingAssist to be in compliance with the FDA’s final rule. In this way, INND will be able to offer its products at its retailers’ stores and their websites. Considering that INND has deals with BestBuy, CVS, Walmart, and RiteAid, the company could be well-positioned to become a leader in this emerging market.
Share Cancellation
With the company looking to add value to its shareholders after the FDA’s final rule, INND shared plans for a significant share cancellation in the coming 20 days. In addition, INND is working to reduce or eliminate its convertible notes to reach the “next level”. These plans are leading investors to speculate INND stock could be NASDAQ bound as the company has major growth potential in light of the OTC Hearing Aid Law. As investors are anticipating more updates regarding the share cancellation, INND stock has the potential to further run on more news.
*Updated September 30th, 2022
Hearing Screening Kiosks Deployment
With the company preparing for the OTC Hearing Aid Law to become effective on October 17, INND intends to deploy 70 new hearing screening kiosks to keep up with the expected high demand for affordable hearing aid products. Out of those kiosks, INND is currently deploying 30 kiosks in a national pharmacy chain which could significantly increase the company’s brand awareness. While INND is yet to share additional information regarding the pharmacy chain, investors are anticipating updates that the company plans to share upon the kiosks’ launch. In light of this, holding INND stock could be a profitable decision for many investors.
Eliminating Toxic Debt
In addition to securing deals in anticipation of the OTC Hearing Aid Law becoming effective, INND has been working on adding value to its shareholders as it eliminated all of its toxic debt. To facilitate this, INND eliminated $3.4 million in debt and settled a default note of 255 million shares. At the same time, INND successfully canceled 216 million shares from a toxic lender – making the company free from toxic lenders. By eliminating its toxic debt, INND is could reduce the potential of dilution in the future which has led the company to review an AS reduction. In this way, INND stock could become more attractive for institutional investors looking to invest in this growing industry. Based on this, INND stock forecast appears to be brighter than ever.
Audited Financials
Meanwhile, INND has completed the audit of its 2019 and 2020 annual financials, and both were successfully filed with the SEC. Currently, INND plans to complete its 2021 audited financials as well as YTD 2022 statements to become a fully SEC reporting company. In this way, INND could pursue its long-term goal of listing on the NASDAQ. In light of these plans, INND stock could be a bargain at its current PPS given the company’s long-term potential.
*Updated January 30th, 2023
New Line Launch
With the OTC Hearing Aid Law now enacted, INND is capitalizing on this market opportunity as its iHear brand launched a new line of affordable OTC rechargeable hearing aids. This new line includes app-controlled models with full wireless audio streaming of music and hands-free phone calling. By launching this new line, INND appears to be in a prime position to secure a significant market share in the emerging OTC hearing aids market – especially with the company’s well-established distribution network of retailers and pharmacy chains.
Expanding Distribution Network
On that note, INND has been expanding its distribution network as its HearingAssist brand launched a complete line of OTC rechargeable hearing aids and their related supplies on RiteAid’s website. At the same time, HearingAssist launched its products on CVS.com and in 8 selected CVS pharmacy locations in Massachusetts and Rhode Island. In that way, INND is able to further penetrate the OTC hearing aids market considering RiteAid’s and CVS’ status as the largest pharmacy chains in the US. With this in mind, INND believes HearingAssist now has more distribution channels with retail locations than other OTC hearing aid competitors. In light of this, INND stock could be poised to appreciate greatly in the long term as the company grows its sales.
As for its iHear brand, the subsidiary recently launched 4 models of its OTC hearing aids on CVS.com. With both of the company’s brands available on CVS, INND is in a great position to bolster its brand recognition and market penetration in the US. Based on this, the company could be set for major financial growth – making INND stock an attractive long-term hold for many investors.
Nuheara Partnership
Given the company’s focus on securing a significant market share in the US, INND signed an MOU to partner with Nuheara Limited (ASX: NUH). Through this partnership, INND will receive licensing rights and support for its patents and Nuheara’s OTC self-fitting hearing aid technology which is expected to be integrated into INND’s hearing aids. In addition, INND will be the exclusive 3rd party retail chain distributor for Nuheara’s products – including its OTC self-fitting HP hearing PRO hearing aid. On that note, INND will be able to market and sell HP-branded OTC self-fitting hearing aids by Nuheara in the US through its sales channels. In that way, INND would be able to significantly boost its revenues while Nuheara would be able to expand its presence in the US market. In light of this, INND stock could be a bargain at its current PPS for long-term investors.
SEC Reporting
Meanwhile, INND remains working on becoming fully SEC reporting to facilitate a NASDAQ uplisting. While the company promised to finalize its audit by the end of 2022, the company is yet to complete this key process. However, more news could be announced soon since the company shared that it had significant breakthroughs and promised to share new developments this month. As a result, INND stock could be one to watch closely this week as it could soar on positive news.
Capital Raise
Looking to raise funds to facilitate additional growth initiatives, INND filed for a Reg A offering of 1 billion shares. Through this offering, INND could raise funds efficiently without issuing toxic debt instruments. With the company constantly working to further grow its business, INND stock is shaping to be one of the best long-term holds in the OTC.
INND Stock Financials
Q1 Financials
In terms of its financials, INND has shown considerable growth in Q1 mainly due to its acquisitions in 2021. With this in mind, INND increased its assets from $4 million in the same year-ago period to $21.8 million. This increase is largely the result of $17.2 million in intangible assets from the company’s IP and patents.
Despite this, INND reported $23.3 million in liabilities compared to $10.1 million in Q1 2021. Moreover, INND realized $404.6 thousand in revenues but has $1.1 million in total operating costs. As a result, INND reported a total net loss of $2.9 million – a substantial increase from $184 thousand in Q1 2021. While the company is not generating enough revenue to offset the costs of its operations, with time and passage of the OTC act INND could strengthen its financial position.
On that note, INND has restructured its convertible debt through an agreement with GS Capital. In this way, INND was able to reduce its convertible debt by $1.1 million. Now that the company has eliminated half of its convertible debt, INND intends to work towards eliminating the remainder of its convertible debt. This is an important move for the company considering its substantial share issuances since 2020 which have led to a steady increase in its outstanding shares from 3.6 billion shares in 2020 to 7.1 billion in 2022.
The company has also retained a PCAOB auditor to review its 2019, 2020, and Q1-Q3 2021 financial statements. After the audit is complete, INND intends to file a Form-10 or S-1 to become an SEC Fully Reporting company.
Q2 Financials
According to its Q2 report, INND is continuing substantial growth which is a bullish sign for the company after the FDA’s final rule regarding the OTC Hearing Aid Law. As of June 30, INND has $23.8 million in assets and $20.5 million in liabilities. As the company was able to increase its assets and reduce its liabilities QOQ, INND appears to be well-positioned for future financial growth.
In terms of revenues, INND reported record revenues of $6.9 million and reported a gross profit of $3.7 million. At the same time, INND reduced its operating costs slightly QOQ from $1.1 million to $1 million – leading to a net profit of $3.8 million. With this in mind, INND appears to be on track to deliver record revenues in Q3 as the company filled and delivered purchase orders worth more than $4 million which will be a part of Q3’s revenues. Given that the company is constantly receiving new purchase orders from retailers, INND could deliver on its expectations to report record revenues for the remainder of 2022 and beyond.
Q3 Financials
Looking into INND’s Q3 report, the company has $25.6 million in assets – including $1.7 million in cash. Meanwhile, the company has $18.3 million in liabilities – with $8.6 million in current liabilities. As for revenues, INND reported $6.5 million in Q3 and generated a gross profit of $3.4 million. INND also incurred $2.7 million in operating costs – leading the company to report a net income of $3.6 million. With the company reporting consecutive profitable quarters, INND stock could be well-positioned for further growth as it continues growing its business.
Media Sentiment
@hrdrock2 is watching for developments regarding the Medicare Hearing Aid Coverage Act which would expand Medicare to cover hearing aids.
Technical Analysis
INND stock price is currently at $.006 – testing a major resistance – and shows other resistances near .0069, .0082, and .01. Meanwhile, the stock has supports near .0047 and .0037. With INND trading at a major dip, the current PPS could be an intriguing entry for long-term investors. In the short term, investors are watching for news regarding INND’s audit which the company promised to share this month. Given that finalizing the audit would bring the company closer to achieving its target of NASDAQ uplisting, INND stock could soar once the audit is complete. Since this update could be imminent, INND could be poised to rebound soon. However, bullish investors could wait for a successful break through the resistance before adding shares to confirm the trend.
Although accumulation has been trending downwards over the past 2 months, it is currently witnessing a slight uptick which could signal a rebound in the near term. Meanwhile, the MACD is bearish, but a crossover appears to be approaching. The RSI climbed from 34 to 46 which leaves enough room for the stock to run if it picks momentum. In light of these indicators, INND appears to be poised to run this week – especially with an announcement regarding the audit right around the corner. INND has an OS of 8.5 billion and a float of 7 billion.
INND Stock Forecast
With the OTC Hearing Aid Law finally enacted, INND is in a prime position to emerge as an industry leader thanks to its deals with major retailers and pharmacy chains like Walmart, Best Buy, and CVS. In addition to these relationships, INND’s recent partnership with Nuheara has the potential to set the company up for major long-term growth. Given that INND has the licensing rights to Nuheara’s products in the US and is able to integrate Nuheara’s technology with its hearing aids, INND could continue reporting profits in the foreseeable future. Considering the growth potential of the OTC hearing aid market, the company’s products and partnerships could make INND stock a profitable investment over the long term.
Meanwhile, many investors are anticipating updates from the company regarding its ongoing audit which the company promised to announce this month. Since the audit is critical for the company’s efforts to uplist to the NASDAQ, INND stock could be poised to soar once the audit is complete. In light of this, INND stock could be one to buy this week in anticipation of the updates.
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