Item 2.05 Costs Associated with Exit or Disposal Activities

On November 6, 2008, HearUSA, Inc. (the "Company") determined to implement an expense reduction plan and on November 10, 2008, announced that it was implementing the plan intended to save approximately $5 million in annual expenses. This plan was initiated to increase profitability and to respond to the current economic downturn. The expense reduction plan includes a restructuring of center operations, a reduction in the number of marketing programs and other cost control measures. The Company expects to eliminate approximately 65 positions, all previously held by active employees. The Company expects to complete its restructuring by the end of 2008.

The Company expects to incur severance charges of approximately $350,000 in the fourth quarter of 2008 as a result of implementing the plan. Other costs associated with the plan, if any, are not expected to be material.

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