Novus Acquisition and Development, Corp. (OTC PINK:NDEV), through its wholly-owned subsidiary WCIG Insurance Services, Inc., is an insurance entity in health and, the nation’s first carrier offering cannabis health plans to recreation and medicinal users, today reported, its financial and operational results for its Earnings Report, December 31, 2019.
“Year End 2019 results demonstrate continual sales growth, as we experience momentum in 2020”, said Frank Labrozzi, CEO of Novus. “The commercialization of our Cannabis Health Plan is ever increasing, and new records will be set as we become the catalyst to exclusively corral rec and med users towards top cannabis brands.”
Fourth Quarter 2019 and Year End 2019 Financial Highlights are:
- Revenue increased 17.2% to $57,862 for the three months ended December 31, 2019, as compared to the three months ended December 31, 2018
- Revenue increased 22% to $219,240 for the twelve months ended December 31, 2019, as compared to the twelve months ended December 31, 2018
- 14 consecutive quarters of revenue growth
- Maintained an average of 31.7% EBITDA in its business model throughout the year of 2019
- No dilution to the total shares outstanding this reporting period, with no insider sales
- Shareholder equity remained strong with an increase to $1,426,431 at December 31, 2019, from $1,395,552 at December 31, 2018
- Cash and Cash Equivalents increased to $145,553 at December 31, 2019, from $115,173 at December 31, 2018
- Increased In-network Providers in nine states where THC is legal
- Earnings per share remained the same in Year End 2019, from Year End 2018 at $0.0140
- Participating brokers/agents/affiliates increased 16% from Year End 2018
- InvestorPlace Magazine Named Novus “30 Marijuana Stock to As the Future Turns Green”
Other Financial Highlights for Q4 2019:
- Revenues increase on average of 4.17% Quarter over Quarter in 2019
- Cash balance increased in Year End 2019 23.2% as compared to Year End 2018
- Total assets increased in Year End 2019 to 10.6% as compared to Year End 2018
- Total shareholder equity Year End increased 2.2% as compared to Year End 2018
Increased Broker/Agents Base:
Our broker agent base is well accepted by our niche product line and that they can increase their book of business steadily all year as opposed to the two months during Open Enrollment
A contributing factor to our growth and our appeal is the amount of uninsured of non-elderly Americans, this segment totals close to 30 million and projected clime by the end of 2020. This demographic goes without insurance for an entire calendar year and accustomed to paying for more than one-third of their care out-of-pocket (1). Key states that Novus has a presence, where the uninsured rates are 10% or more are, California, Arizona, Nevada, Colorado, and Illinois, siting from consumers that the fundamental reason is the cost health insurance is too high.
Increasing Network Provider Coverage Area
Expansion in our network of THC providers servicing our patient/members in areas that offer delivery options citywide and statewide covering over 20,000 zip code. CBD providers offer nationwide delivery for CBD with participating top brands. We invite you to review our latest coverage of providers.
Executed a Managing General Agency (MGA) with Healthfield Solutions, LLC
Novus executed an MGA Agreement with insurance entity Healthfield Solutions, LLC, to market the Novus Cannabis MedPlan. Healthfield Solutions will educate its arsenal of 1,600 agents, that will sell and bundle Novus Cannabis MedPlan with their own dental, life, and supplemental health plans and sell it to their client base of over 250,000.
Integrated with a Second FinTech Insurance Platform
Ease.com is a benefits administration and HR FinTech platform for businesses with 2-250 employees, accessed by 1,200 insurance brokers. Ease.com digitally mapped Novus’ benefit plans for easy quotation submissions that is accessed by 60,000 consumer visitors per month.
Additionally, employees who are enrolled by their employer can view via a dashboard a side-by-side plan comparisons with coverage details and the cost per-pay-period giving the employees the opportunity discuss benefit options with their dependents. Then confidentially modify important benefit details like plan summaries and policy variances to determine eligibility at their discretion.
Health Reimbursement Act
June 2019, the White House adopted Health Reimbursement Arrangement (HRA) that gives the American worker a choice to add cannabis to their health plans along with certain privacies from employers. An HRA is an employer-financed health plan used to reimburse employees tax-free for out-of-pocket medical expenses and individual health insurance premiums.
How this works is the employer furnishes a defined contribution on behalf of the employee, and the employee can choose the type of insurance coverage and apply unused funds to be rolled over from year to year. For example, an employer could fund an HRA for each worker and their family, which they could then use to shop for a plan that best suits their needs. These changes give employees more control over their healthcare dollars of which they were denied a choice in the past.
Over the past 10 years, the American consumer has witnessed healthcare costs and deductibles accelerating at three times inflation since 2008. So, our communication strategy will be an educational message offering reimbursement-based health benefits that is easy to understand. We have begun by a) increasing our agent/affiliates nationwide with an agreement that was singed with Healthfield Solutions, and, b) branding initiatives via direct-to-consumer marketing has been initiated.
Credit Cards for Policy Payments
For years management has been searching for a processor to provide transactional ACH/credit cards as opposed to collecting checks through the mail. After being shut down by banks and/or merchant providers in the past Novus has finally established a relationship with Authorize.net, a leading credit card processing platform. The workaround strategy that was proposed in September 2019 is till operational with no interruption. This has transcended into our depository relationship, where we are witnessing relaxing banking policies thanks to the effort of The SAFE Banking Act of 2019
Financial Results for the Three Months Ended December 31, 2019:
Revenue increased by $8,507 or 17.2% to $57,862 for the three months ended December 31, 2019, as compared $49,355 for the three months ended December 31, 2018. The growth was primarily due to expansion into new territories, market awareness / visibility of the Novus Cannabis MedPlan offering and an increased number of strategic partners, dispensary providers and lives covered. The Healthcare Reimbursement Act and the acceptance of credit cards for policy payments has increased usage.
Income from operations decreased by $3,433 or 18% to $15,334 for the three months ended December 31, 2019, as compared $18,794 for the three months ended December 31, 2018. The decrease in income from operations was primarily due to an increase in operating expenses including marketing and awareness expenses to increase users and providers and an increase in support expenses for the expanding revenue.
The Company’s Balance Sheet remained strong with an increase in the cash balance to $145,553 and Shareholder Equity to $1,426,431.
Financial Results for the Twelve Months Ended December 31, 2019:
Revenue increased by $39,069 or 22% to $219,240 for the twelve months ended December 31, 2019, as compared to $180,171 for the twelve months ended December 31, 2018. This increase was primarily due to increased awareness and visibility of the Novus MedPlan offering and the improvement in key performance indicators (KPI) in the Company’s in-house marketing efforts, which resulted in a great number of lives covered.
- 2019 Q4 Filing: Click Here
- Quote: Click Here
- Website: Click Here
- Investor’s Page: Click Here
- How Insurance Companies are Valued: Click Here
- Media Coverage: Click Here
- Source: “Total expenditures in millions by source of payment and insurance coverage, United States, 2017,” Center for Financing, Access and Cost Trends, Agency for Healthcare Research and Quality, Medical Expenditure Panel Survey, 2017, https://meps.ahrq.gov/mepstrends/hc_use/.
Novus Acquisition & Development Corp. (NDEV), through its subsidiary WCIG Insurance, provides health insurance and related insurance solutions within the wellness and medical marijuana industries in states where legal programs exist. Novus has developed its infrastructure within many lines of the insurance business such as health, property & casualty, life, accident, and fixed annuities.
Novus’ medical cannabis benefits package will work as outside developers and will not cultivate, handle, transport grow, extract, dispense, put up for sale, put on the market, vend, deliver, supply, circulate, or trade cannabis or any substances that violate the United States law or the Controlled Substances Act, nor does it intend to do so in the future and will continue to follow state and federal laws. The statements made about specific products have not been evaluated by the United States Food and Drug Administration (FDA) and are not intended to diagnose, treat, cure or prevent disease. All information provided on these press releases or any information contained on or in any product label or packaging is for informational purposes only and is not intended as a substitute for advice from your physician or other health care professional. Once a push notification is competed the transaction is solely between the state-licensed dispensary and the registered patient.
The state laws are in conflict with the federal Controlled Substances Act. The current administration has effectively stated that it is not an efficient use of resources to direct federal law enforcement agencies to prosecute those lawfully abiding by state-designated laws, allowing the use and distribution of medical marijuana. However, there is no guarantee that the current administration, nor any future administration, will not change this policy and decide to enforce the federal laws strongly. Any such change in the federal government’s enforcement of current federal laws could cause significant financial changes to Novus Medical Group. While we do not intend to harvest, distribute or sell cannabis or cannabis related products, we may be harmed by a change in enforcement by federal or state governments.
This release includes forward-looking statements, which are based on certain assumptions and reflects management’s current expectations. These forward-looking statements are subject to a number of risks and uncertainties that could cause actual results or events to differ materially from current expectations. Some of these factors include: general global economic conditions; general industry and market conditions and growth rates; uncertainty as to whether our strategies and business plans will yield the expected benefits; increasing competition; availability and cost of capital; the ability to identify and develop and achieve commercial success; the level of expenditures necessary to maintain and improve the quality of services; changes in the economy; changes in laws and regulations, includes codes and standards, intellectual property rights, and tax matters; or other matters not anticipated; our ability to secure and maintain strategic relationships and distribution agreements. Novus disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
Investor Contact Information
SOURCE: Novus Acquisition and Development Corporation