Novus Acquisition and Development Corp (NDEV)

[Murdoc]

From todays annual report >>

The biggest news lies in the executive summary pulled from today's annual report IMO

EXECUTIVE SUMMARY

Introduction

Novus Acquisition & Development Corp, a Nevada Corp, (symbol NDEV) along with its subsidiary, WCIG Insurance Service, LLC, (California Insurance Entity) specializes in the healthcare insurance sector of the medical marijuana field (“MMJ or Cannabis”).

During the fiscal year 2015, one of our objectives was to establish each state’s MMJ statutory protocols for MMJ healthcare insurance, and then integrate those protocols into our web portal http://www.getnovusnow.com. This portal design makes Novus the online one-stop insurance entity, giving consumers instant and easy access to a range of insurance solutions tailored specifically to their insurance profile.

To meet this consumer demand, Novus’ portal has established a footprint in the institutional insurance business where Novus has positioned itself to generate up to 40 insurance lines of business, plus automation of API gateways tied to 24 of the country’s most prominent insurance carriers, making Novus a multi-dimensional insurance company. In our strategic assessment in the MMJ market, we found that internationally there has been a significant increase in the amount of insurance contracts completed via the Internet. Seventy-Two percent of consumers use the internet as their primary source of insurance information and procurement. Novus’ assessment concluded that very few insurance companies use technology, which leads to lower satisfaction rates and customer retention. Novus’ portal will give consumers ease of benefits selection, premium payments, and binding of policies.

Value added, Wall Street and the insurance industry complement each other with the integration of insurers and investment banks, who are both constituents to leverage capital market positions with the nation’s largest insurance carriers, to take advantage of any revenue opportunity.

Expand to Multiple Lines of Business

With our efforts in the fourth quarter of 2015 Novus’ management has procured multiple lines of health care services for mid-market consumers and institutions that are not insured or under insured with just over 100 providers online covering over 10,000 zip codes nationwide, including within the MMJ sector. Our current benefit packages cover, in addition to medical cannabis, physician visits, dental, Lasik, hearing, diabetic supplies, lab services, and gain entry in the commercial liability market.

Novus’ portal was designed to attract, convert, optimize and retain customers, and deliver high consumer satisfaction with the right message to the right customer at the right time. According to Bain and Co., financial services and insurance research shows that each customer who is satisfied will bring 6.3 new customers per year on an average with a loyalty renewal rate of 97%.

Competitive Assessment

In the current environment major insurers won’t cover MMJ for at least the next 5 years, leaving Novus the market share of a national consumer base of close to 23 million patients. The reason health insurers won’t cover MMJ includes:

a) MMJ is not approved by the FDA, and that approval depends on clinical studies conducted within the US that measure efficacy, safety, effectiveness and side effects

b) major carriers don’t want to jeopardize their lucrative federal agreements with Medicare and Medicaid that can reach into the billions of dollars annually

MMJ Health Revenue

In this new industry it is difficult to determine which MMJ companies have the right business model, but one item we can address is that the industry is highly fragmented, therefore Novus can take advantage of these opportunities. Mainly in risk oversight, our revenue is realized on a Per Member Per Month “PMPM” basis, derived from an HMO term, which is based on the number of members being current on their premiums.

For MMJ (THC based products), we have approval to roll out our health insurance products and services in California (representing 50% of the MMJ market), Arizona, Colorado, Michigan, Hawaii, Alaska, Oregon, Vermont, with a filing currently in Nevada.

The Novus business model is based on health insurance in risk and non-risk areas. The program works as follows: “members”, “patients" or “lives” for the oversight management to mitigate risk, patients pay a fee of $19.95 per month. According California NORML, conservative estimates indicate there are now over 1,000,000 medical marijuana cardholders in California, or 2% of the population. Recent data stipulate an estimate of over 1,125,000 patients, or 3% of the population. Therefore, we can project 2% of the population in California alone are qualified for some type of MMJ treatment (psychoactive component), and in 5 years, as other states join in the movement, we project nationwide market shares of close to 8 million patients.

Ultimately, as new state and federal determinations are made in the MMJ industry, Novus intends to integrate this insurance infrastructure into its quality of care model providing added value to the entire sector as a unified national brand. With this infrastructure we are expanding into an HMO component, once federal statutes approve MMJ on a national level. Then, whatever direction the MMJ industry protocol goes Novus will be there with the most important part, integration of patients into their preference of treatment through our network.

The Insurance Model

One milestone Novus is proud of is a contractual agreement with the makers of Charlotte’s Web by the Stanley Brothers. This accomplishment was largely contributed in 2014 when parents lobbying for the use of cannabis-derived Cannabidiol (CBD), orally administered oil for treatment of seizures, gained a lot of traction in the United States. This windfall put us in a position to execute an agreement for CBD products with the Stanley Brothers (CW Botanicals and the nonprofit, Realm of Caring) where Novus has an exclusive 65% discount for our members for the Advance clinical formula, as well as a 30% discount of the consumer formula.

This has been a game changer for Novus since all states allow CBD concentrates, with the exception of Florida, providing a market potential of over 23 million in the areas of chronic pain, Alzheimer’s, glaucoma, multiple scleroses, traumatic brain injury, epilepsy, hypertension, Parkinson’s, PTSD, etc.

Determining the efficacy of CBD products can be difficult; the barrier of entry for many CBD products coming to market is on the contrary. Novus’ staff physician, Dr. Michelle Riello, produced an in-house assessment of patients using cannabis products (mainly CBD) via the measurement of nitric oxide in saliva. This lends an objective measure to the therapeutic benefit of CBD products, and demonstrates that many CBD products available are failing to achieve this objective. While Novus is not in the business of clinical studies, it is our duty to our members to determine if the products we offer in our benefit’s packages meet quality standards.

MMJ Property Casualty Revenue

Lloyds of London’s exit from MMJ Property and Casualty left only one underwriter in the market, Berkshire Hathaway Specialty Insurance, and after our talks with them, they concluded, that they are not willing to bring in any wholesalers and want to keep the market share to themselves. This leaves cultivators, manufactures, labs, distributors, dispensaries and delivery services paying substantially higher premiums on coverage plans, which are anticipated to continue rising in the coming months. It is Novus’ intention, starting in California, to underwrite coverage for P&C in the MMJ market with competitive pricing while competing with Berkshire.

Within this industry we will sell property insurance (insurance on revenue, cars and businesses) and casualty insurance (liability insurance). The revenue model is clear, give competitive pricing on premiums for the policies issued, and redistribute those premiums into the reinsurance or personal investment market.

Why Diversification

Novus acquired WCIG Insurance in late August of 2015 with the knowledge that the insurance industry plays a vital role in the economy of the United States. Even though MMJ is a budding industry, Novus is attracted to the insurance industry with over $1.4 trillion market share with a global reach.

U.S. based insurers are also significant participants in the global financial markets. As of year end 2014, the Life Health and Property and Casualty sectors reported $7.3 trillion in total assets, roughly half the size of total assets held by insured depository institutions.

Growth Opportunities in Emerging Markets

Also alluring are emerging markets in Asia and Latin America, which present growth opportunities for U.S. insurers. Between 2000 and 2007, three-fourths of global insurance premium growth was generated in North America and Western Europe. Since 2007, the majority of global premium growth has shifted to Asia and Latin America. Similarly, the MMJ market growth will be over 7% per annum, as motioned before, no longer being one dimensional.

Street Valuations Of Insurance Companies

Another frequently cited metric for publicly traded insurers (and other financial institutions) is price to book value, which compares the market value to the book value (i.e., on the balance sheet) of an institution.

Many off-shore investment firms are leaning towards insurance because the valuations consistently trade more than 15-20 times, making the global insurance market a rapid expansion, particularly in emerging markets within Asia and Latin America. By way of comparison, while total global premium volume grew by 90 percent from $2.4 trillion in 2001 to $4.6 trillion in 2011, U.S. premium volume only grew by 33 percent, from $904 billion to $1.2 trillion. Projections estimate by 2030 the U.S. market share will fall to seven percent globally, taking a distant third place behind India (twenty-three percent) and China (eighteen percent), and there embeds future investors.

Management

The Company has assembled an Executive management team comprised of individuals with strong analytical skills in the equity markets, marketable cap structuring, healthcare controlled risk technology, finance and management experience in market consolidation and roll ups.

Frank Labrozzi-CEO

Mr. Labrozzi is a Wall Street veteran for the past 24 years. A results-oriented analytical executive in mergers and acquisitions. Mr. Labrozzi has a diverse industry disciplines and has worked with over 100 small to mid cap companies and investment firms with specialty of focus on:

• Mergers and Acquisitions • Corporate Finance

• Turnaround/ Reorg • Public Offerings

• Corporate Start Ups • Strategic Planning

Mr. Labrozzi has consulted and negotiated contractual terms with many industry leaders with increased market capitalization, corporate cap structure and market assessment with over 100 private and public companies.



Andrea Lopez, Director

Ms. Lopez’s fifteen-year tenure of global operational experience has included many facets of compliance and roll out of the healthcare delivery processes. Specifically, creating and maintaining healthcare policies under the performance standards and scrutiny of Medicare, and Fortune 500 Companies. She is an active member of the Global Healthcare Anti-Fraud Network, the National Health Care Anti-Fraud Association, the European Healthcare Fraud & Corruption Network, and the Health Care Compliance Association.

As a member of the Board of Directors and President and CEO of Novus Medical Group, Inc. d/b/a Novus MedPlan, Ms. Lopez will develop medical plans putting Novus on the path of a Health Care Insurance program called the “MedPlan” program. The MedPlan program will seek to deliver a health insurance format to patients interested in using medical marijuana in the states where it is legal.



Funding Initiatives

Currently the company seeks to get an institutional LC, that will allow us to gain the market cap to underwrite policies, initially in California then generate reciprocity throughout the country gain dry powder and move on to national markets.



Cap Structure

Authorized 200 million

Insider Rest 44.5 million

Float 17.8 million

Total Issued 88.9 million

Contact

Frank Labrozzi, CEO

Novus Acquisition & Development Corp
13020 SW 92 Ave, Suite A310
Miami, FL 33176
Voice: 305-467-6699
Email: [e-mail]
Website: www.getnovusnow.com