Business Model Designed to Withstand Economic Downturns
MIAMI, FL / ACCESSWIRE / May 28, 2020 / 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 the three months ended March 31, 2020.
"The year 2020 shows continual increases in the number of lives covered that continues to drive our revenue growth," stated, Frank Labrozzi, CEO of Novus. "Our Cannabis MedPlan and its business model is designed to weather economic adversity, even during this global COVID-19 pandemic."
First Quarter 2020 Financial Highlights:
Revenue increased $7,403 or 14% to $59,077 for the three months ended March 31, 2020, as compared to the three months ended March 31, 2019
Demonstrated a 34% profit margin pricing structure in its business model for the three months ended March 31, 2020
Net income increased $2,828 or 16% to $20,308 for the three months ended March 31, 2020, as compared to the three months ended March 31, 2019
No dilution to the total shares outstanding this reporting period, with no insider sales
Shareholder equity remained strong with an increase to $1,445,891 at March 31, 2020, from $1,426,431 at December 31, 2019
Cash and Cash Equivalents increased to $152,968 at March 31, 2020, from $149,822 at December 31, 2019
Increased Zip Code Availability In Our Network Provider Coverage Area
Executed Contract With Mark Kuban To Head Broker Relations
Continued to Ramp with Managing General Agency (MGA) with Healthfield Solutions, LLC
Increased Agent/Affiliate Base:
Our Agent/Affiliate base grew 10% with 840 active reps. Our growth potential is tied to these participants book of business throughout the year as opposed to the two months during Open Enrollment.
Increased 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 22,000 zip codes. CBD providers offer nationwide delivery for CBD with participating top brands. We invite you to review our latest coverage of providers.
Click on the Map to View Provider Network
Executed Contract With Mark Kuban To Head Broker Relations
Mark Kuban is a 30-year powerhouse veteran with Colonial Life & Accident, Sun Life, and National InsureTech platforms for the communication of benefits. One of the country's leading producer, resulting in the largest first-year increase in production by field sales in National & Regional Association/Group through a national broker distribution network.
He is experienced in implementing techniques in marketing, training producers in cross selling that has successfully expanded into 27 states. He provides a supporting role to agent/affiliates with InsureTech enrollment technologies, carrier selection, and revenue increase by building participation within their current book of business.
Continues to Ramp Up With Managing General Agency (MGA), 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.
Continues to Ramp Up With Ease.com, 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.
Financial Results for the Three Months Ended March 31, 2020
Revenue increased by $7,403 or 14.3% to $59,077 for the three months ended March 31, 2020, as compared $51,674 for the three months ended March 31, 2019. 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 increased by $2,828 or 16.2% to $20,308 for the three months ended March 31, 2020, as compared $17,480 for the three months ended March 31, 2019. The increase in income from operations was primarily due to an increase in revenue and a decrease in professional fees.
The Company's Balance Sheet remained strong with an increase in the cash balance to $152,968 and Shareholder Equity to $1,4445,891.
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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.
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SOURCE: Novus Acquisition and Development, Corp.
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