Health Reimbursement Act and Credit Cards Acceptance for Policy Payments Drive Growth
MIAMI, FL, Aug. 01, 2019 (GLOBE NEWSWIRE) -- via NEWMEDIAWIRE -- Novus Acquisition and Development, Corp. (OTC Markets: NDEV), through its wholly-owned subsidiary WCIG Insurance Services, Inc., is a diversified insurance entity in health, liability, annuity and accident, and, the nation’s first carrier/aggregator offering a cannabis health plan, today reported financial and operational results for its second quarter ended June 30, 2019.
Second Quarter 2019 Highlights:
- Revenue increased 24% to $53,689 for the three months ended June 30, 2019, as compared to the three months ended June 30, 2018
- Revenue increased 25% to $105,363 for the six months ended June 30, 2019, as compared to the six months ended June 30, 2018
- 12 consecutive quarters of revenue growth
- Demonstrated 39% profit margin pricing structure in its business model for the three months ended June 30, 2019
- Shareholder equity remained strong with an increase to $1,433,872 at June 30, 2019, from $1,395,552 at December 31, 2018
- Cash and Cash Equivalents increased to $135,306 at June 30, 2019, from $115,173 at December 31, 2018
Management Discussion and Analysis
Novus’ Chief Executive Officer, Frank Labrozzi, commented, “Our second quarter results reflect our continued success as a supplemental health plan in the medical cannabis industry. Utilizing internal capitalization and continued restraints on the ability to disseminate advertising, Novus Cannabis MedPlan platform generated record quarterly revenue with growth in all of our key performance indicators. This was contributed to recent industry shifts in regards to the Health Reimbursement Act and the ability for credit card processing for policy payments should provide wind at our back to continue our growth path.
Specifically, with Novus Cannabis MedPlan, we are continuously working closely with cannabis cultivators, manufacturers and dispensaries in educating them on our added value by driving customers to their storefronts with higher than average monthly med purchases and gratuitous local advertising efforts. As the legalized cannabis territories expand and the current legalized states add licenses, our Provider Network gains value to the cultivators, manufacturers and dispensaries which is our valued Provider Network.”
Two key issues that have turned positive for Novus in the second quarter were:
- Federal Government Appointing Health Reimbursement Act and;
- Credit Cards Acceptance for Policy Payments via the Safe Banking Act of 2019
Health Reimbursement Act
In June 2019 the White House newly adopted Health Reimbursement Act (HRA) giving the American worker a choice to select their own health plan and the opportunity to supplement cannabis to their health plans along with particular 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. The White House estimates that as many as 800,000 employers, mostly smaller businesses, will choose this option, expanding healthcare choices for 11 million workers. These changes give employees more control over their healthcare dollars of which they were denied a choice in the past.
The American consumer has seen from the larger health carriers’ deductibles and healthcare cost accelerating at three times inflation since 2008. So, the communication strategy will be an educational message offering reimbursement-based health benefits that is easy to understand. We will begin by a) doubling our 480 plus agent/affiliates nationwide, and, b) immediately begin our marketing initiatives via direct-to-consumer.
Credit Cards Acceptance for Policy Payments/ Safe Banking Act of 2019
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, a leading credit card processing platform. Novus’ workaround strategy was that we don’t touch or sell the plant, we provide insurance benefits to patient/members and this appears to be satisfactory.
We are witnessing relaxing banking policies thanks to the effort of The SAFE Banking Act of 2019 (The Act) introduced by U.S. Senator Bob Menendez, a senior member of the Senate Banking Committee. Notwithstanding the denial from the inflexible banking system due to the threat of being prosecuted under federal law, this has not stopped Novus’ progress in the booming cannabis industry, but it certainly helps by reducing as many regulatory impediments as possible.
Novus Cannabis MedPlan’s business model is clearly the most unique niche in the cannabis industry and is projected to continue to grow. We invite you to review the following:
- 2019 Q2 Filing: Click Here
- Executive Summary: Click Here
- Quote: Click Here
- Website: Click Here
- Investor's Page: Click Here
- How Insurance Companies are Evaluated: Click Here
- Media Coverage Click Here
Financial Results for the Three Months Ended June 30, 2019:
Revenue increased by 24% to $53,689 for the three months ended June 30, 2019, as compared to the three months ended June 30, 2018. The growth was primarily due to greater awareness and visibility of the Novus Cannabis MedPlan offering an increased number of strategic partners and dispensary providers. The Healthcare Reimbursement Act and the acceptance of credit cards for policy payments has increased consumer participation. The improvement in key performance indicators (KPI) in the Company’s in-house marketing efforts, resulting in a greater number of providers, patient members and lives covered.
Operating and Net income decreased by 18% but remained strong at $21,084 for the three months ended June 30, 2019; this is due to direct investment in the development and roll out of our Telemedicine platform. This represents a 39% operating profit margin for the three months ended June 30, 2019. The Company will increased its spending in telemedicine and in marketing geared toward the Healthcare Reimbursement Act and credit card processing.
The Company’s Balance Sheet remained strong with an increase in the cash balance to $135,306 and the Net Asset Value (NAV) of $1,433,872.
Financial Results for the Six Months Ended June 30, 2019:
Revenue increased by 25% to $105,363 for the six months ended June 30, 2019, as compared to the six months ended June 30, 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.
Capital Structure, Shares Outstanding and Trading as of June 30, 2019:
- No Convertible Notes
- 100,953,624 common shares issued and outstanding
- No sales of insider shares since the third quarter of 2015
We invite you to review the entire filing here: https://www.otcmarkets.com/stock/NDEV/filings
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.
Chairman and CEO