Novus Acquisition & Development Corp. (OTC Pink: NDEV) is engaged within the insurance services industry and offers solutions for health, liability, annuity, and accident. Shares of the insurance company dropped 14.29%, through early trading on Friday, August 18, 2017. Over the past month, Novus Acquisition & Development Corp. has seen average daily volume of 112,963 shares. However, volume of 59,594 shares or dollar volume of $21,453, has already exchanged hands on Friday.
Shares of Novus Acquisition & Development Corp. are under pressure today, after the company recently announced second quarter 2017 earnings results. During the second quarter, the company saw revenue growth of 121%, compared to a year ago. Furthermore, it was the fourth straight quarter of revenue growth. Here is the full press release detailing of the strong earnings results:
Novus Acquisition & Development Corp. Press Release:
MIAMI, FL / ACCESSWIRE / August 16, 2017 / Novus Acquisition and Development Corp. (OTC PINK: 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 the three month period ended June 30, 2017.
Second Quarter Highlights
Key Milestones Achieved in Q2 2017:
- Revenues increased 121%, from year ago period
- Revenue increased for 4th consecutive quarter
- Scalability through minimal fixed overhead expense
- 4th consecutive quarter of operating profitability
- Increased awareness through strategic direct marketing relationships
- Permitted to market its health benefits packages in Florida
- No insider sales since 3rd quarter of 2015
- Cash on hand has increased to $83,276 from $74,236 at the end of the first quarter
Novus continues to execute its plan as an early mover as an insurance entity in the legal medical cannabis industry with its unique business model and strategic partnerships with a focus on growing its number of covered lives. Utilizing a multi-prong direct marketing plan with strategic partners has been a key part of the focus to gain visibility and awareness and grow the business. This direct marketing approach with strategic partnership relationships targets three pools of people:
- a wide audience of cannabis interested people via digital marketing, social media, and influencers targets millions of people at likely minimal conversion rates
- a more specific audience seeking medical cannabis information via medical cannabis focused websites or apps targets hundreds of thousands of people at likely 10-15% conversion rates
- a very specific audience seeking medical cannabis product via dispensaries, doctors, and MMJ card holders targets tens of thousands of people at likely 20-50% conversion rates
Subsequent to the end of the quarter, on August 2, Novus partnered with PotBotics, a Silicon Valley data aggregation and technology provider to the medical cannabis market. The partnership will introduce Novus MedPlan to the thousands of visitors and users of PotBotics seeking information on different medical cannabis options.
Novus is in ongoing discussions with a wide variety of potential strategic partners to increase its visibility and awareness with the ultimate goal of increasing its lives covered and revenue. The continued discussions range from widely known nationwide cannabis brands to niche local state businesses.
In the second quarter, Novus successfully permitted to market its health benefits packages in the state of Florida. Novus has begun its entry into what is expected to be the second largest cannabis revenue generating state in the U.S. and become a major player in the cannabis sector that will rival the current markets of Colorado and California. Many analysts project that Florida’s cannabis market will grow to $1.6 billion by 2020 at a compound annual growth rate of 140%; making it at least half the size of California’s projected $2.6 billion and projecting Florida to be 7.5% of the total legal U.S. cannabis market by 2020.
Financial Results for the Three Months Ended June 30, 2017:
Revenue increased by 121% to $31,094 for the three months ended June 30, 2017, as compared to the three months ended June 30, 2016. 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.
4th Consecutive Quarter of Sequential Increase in Revenue:
Operating and Net income increased by almost 10-fold to $11,448 for the three months ended June 30, 2017, as compared to the three months ended June 30, 2016. This represents a 37% operating profit margin for the three months ended June 30, 2017.
The Company’s Balance Sheet remained strong with an increase in the cash balance to $83,276 and the Net Asset Value (NAV) of $1,390,108.
Financial Results for the Six Months Ended June 30, 2017:
Revenue increased by 76% to $58,318 for the six months ended June 30, 2017, as compared to the six months ended June 30, 2016. 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.
Operating and Net income increased by 287% to $21,282 for the six months ended June 30, 2017, as compared to the six months ended June 30, 2016. This represents a 36% operating profit margin for the six months ended June 30, 2017.
Conventional valuation analyses can demonstrate how investors might want to review how an insurance company is valued. By focusing on a company’s balance sheet “equity,” divided by the amount of “shares issued,” an approximate valuation can be determined at an approximate multiple of “20 times” for emerging growth companies.
The Company did not raise any capital in the three months ended June 30, 2017. All sorts of institutional convertible notes with variable toxic pricing structures approached the Company. Novus did not take and will not consider any such capital as to protect its shareholder equity. In the second quarter of 2017, Company insiders and affiliates have not liquidated any of its holdings nor have taken any cash salary compensation for the preservation of the shareholder value. Common Shares Issued and Outstanding, direct from Company filings at OTC Markets: https://www.otcmarkets.com/stock/NDEV/filings.
- As of June 30, 2017: 95,703,624 of common shares issued and outstanding.
- As of March 31, 2017: 92,453,624 of common shares issued and outstanding.
- The additional shares issued and outstanding are to management and advisors to the company in lieu of cash compensation under contracts.
- No sales of insider shares have been done since the third quarter of 2015.
Closing from the CEO
We are focused on the remainder of 2017 to execute on strategic acquisitions and strategic partnership agreements to help grow our business. Rapid growth for many insurance companies is through strategic acquisitions, and/or business combinations. Novus feels the advantages are adding value to the combined entity by increasing overall revenues. Expand distribution channels that you can leverage more effectively with our own products and services. Accessing a talent pool without the need to engage in an extensive search and hiring process.
Novus’s focus of expansion of acquisitions are but not limited to:
- Books of business to consolidation of synergistic health plans
- Improve operation efficiencies
- Re-org, of businesses with antiquated technologies
- Increase valuations models
- Boost net capital
- Acquire undervalued firms
- Further diversification
- Empowerment within market segments
Novus’s management team remains mindful of potential impacts from fluctuating economic conditions volatility in the U.S. equity markets, rising interest rates, and the direction of current politics that could impact the industry.
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.
- For more information, please visit: http://www.getnovusnow.com
- For NDEV Q2 2017 and 2016 Annual Financial Filings: https://www.otcmarkets.com/stock/NDEV/filings
- Learn How Insurance Companies Are Evaluated: http://bit.ly/2ddIYva
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 Medical Group disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.