Mr Osvaldo Iadarola reports

Audiotech Healthcare has entered into an e-commerce development and marketing agreement with PowerNet Communications Inc., a prominent e-commerce and Internet marketing firm based in Kamloops, B.C. Concurrent with the signing of this agreement, Audiotech has formed a new operating division which will focus exclusively on the development of profitable business-to-business (B2B) and business-to-consumer (B2C) Internet ventures catering specifically to the hearing care market.

In conjunction with PowerNet, Audiotech recently completed the development of HearingCenterOnline.com, the hearing care industry's most comprehensive on-line information resource. The initiative to create this valuable industry resource was driven by the need to provide a venue to bring hearing care professionals, manufacturers, educators and hearing care patients together in one place to share their experiences and knowledge. In addition to enhancing Audiotech's overall corporate image and attracting patients to its clinic, HearingCenterOnline.com will serve as an important tool to attract qualified hearing care professionals to join the company's clinic network. For educators and the hearing impaired, the site offers a wealth of valuable information and resources, including articles on hearing loss, loss prevention, new treatments and emerging technologies. In January, 2000, Audiotech commenced a comprehensive on-line and off-line marketing program to drive traffic to HearingCentreOnline.com. The results of the company's initial marketing program have exceeded its original expectations.

With the company's marketing program still only in its infancy (just three months), it has already surpassed the traffic received by the average Internet Web site over the course of an entire year. "As traffic to our site continues to increase, we will also be able to offer advertisers a demographically-targeted audience, thereby creating significant new advertising revenue opportunities for Audiotech," said Osvaldo Iadarola, president of Audiotech.

In addition to detailing plans to expand the marketing of HearingCenterOnline.com, the agreement with PowerNet Communications provides for the development of the next phase of Audiotech's Internet strategy. This phase involves a new Web site, HearingDepot.com, which will cater to both the B2B and B2C markets within the hearing care industry. In essence, the primary goal of HearingDepot.com is to convert the considerable traffic generated by HearingCenterOnline.com and other partnered Web sites into meaningful new revenue streams for Audiotech. Management recently concluded preliminary negotiations and received expressions of interest from several major hearing care product manufacturers, based upon the mutual expectation that HearingDept.com will become the pre-eminent on-line supplier of their respective product lines. In addition to providing a venue for the direct secure sale of assistive products to hearing impaired consumers, the site will ultimately serve as an efficient on-line supply system for Audiotech's clinic network and small independent clinics seeking increased efficiencies and economies of scale.

According to industry manufacturers, the annual market for hearing care products in North America (not counting hearing aids) tapped $200-million in 1999. This figure includes state, provincial and federal support programs, but does not include non-subsidized consumer purchases. Therefore, the actual market is considerably larger. As the baby boomer generation enters the age group most commonly associated with hearing impairment over the next decade, the size of this market is expected to grow dramatically. To the company's knowledge, there are currently no significant competitors offering similar services via the Internet. As a result, Audiotech has the opportunity, through early entry and penetration of the market, to capture a leading position within this growing market. It should be noted that the proposed structure of the distribution partnerships with leading manufacturers will enable Audiotech to pursue this segment of its business with limited additional overhead and administrative requirements.

It is anticipated that HearingDepot.com will be launched before September, 2000.

"HearingDepot.com is a natural extension to our existing business model. It allows us to capitalize upon our extensive relationships with hearing care product manufacturers, practitioners and of course, our patients," said Osvaldo Iadarola.