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Novus Acquires Insurance Entity to Diversify Business Model

ID: 1380795
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(businesspress24) - MIAMI, FL -- (Marketwired) -- 08/24/15 -- Novus Acquisition & Development Corp. (OTC PINK: NDEV), through its subsidiary Novus Medical Group, Inc. (Novus), is pleased to announce today that it has acquired WCIG Insurance Services, Inc. (WCIG), a California insurance brokerage, license number 0K41569.

Novus will now be able to collaborate with other insurance carriers and reinsurers to expand into other insurance products, opening new sales channels, diversify its business model, and complement its health insurance strategy.

"What this means is that Novus is now a regulated insurance entity; shareholders, consumers and vendors can feel confident that Novus has accountability in the MMJ sector and other industries," says Novus Chairman Frank Labrozzi. "As an independent entity, we are able to make decisions, set the style of our policies and expand with ongoing flexibility in our business model."

Through this acquisition, Novus is now officially recognized by the state of California as a licensed health insurance provider in the largest MMJ market in the country. California represents 25% of the MMJ market (approximately 1.2 million registered patients) and with this California presence Novus will be able to exercise reciprocity into other states nationwide.

Additionally, Novus is now able to:

Continue offering discounts on THC-based MMJ and Integrative healthcare services

Offer high-CBD and low-THC products nationwide with the Charlotte''s Web contract

Accelerate the supplemental insurance business model

Compete in the property/casualty and errors and omissions sector for MMJ industry where rates have increased significantly, and;

Buy existing books of business that complement Novus earnings and net asset value

In reaching the conclusion of our due diligence in acquiring WCIG, we factored in three areas that will positively impact Novus.

The assessment was on the affect of expenditures on commission, advertising and administrative costs against our pricing structure, and Novus will be able to achieve a 57% EBITDA per patient. As the nation''s first MMJ insurance company, many of our shareholders call us a pioneer in this sector. However, we stay true to established business practices in the insurance realm.

Our analysis revealed that health insurance brokers/agents in the United States are faced with decreasing group and individual policy sales and need new approaches to sustain and grow their books of business. The average insurance sales rep earns $48,210 on the low end and $117,830 on the high end, for a national average of $107,125. By participating in the Novus MedPlan these agents can increase their income/revenue by 30% if they bring in as little as 500 patients, and 56% if they bring in 1,000 patients. The result is that independent agents/brokers will want to participate in the Novus MedPlan since the aforementioned numbers show that the revenue recognition is very attainable.

The terms of the agreement were under Section 1031 of the United States Internal Revenue Code (26 U.S.C. § 1031), as an exchange of stock that defers the recognition of capital gains. In this case a stock swap of 8,100,000 common shares of NDEV, i.e. 10% of the company, were issued for 100% of the WCIG.

This transaction is not a major dilution of the common stock; as of recent 6,900,000 common shares where returned to treasury and the reissuance of 8,100,000 common shares for this acquisition is a total dilution factor of 1.5%. In the WCIG acquisition document liquidation terms are stringent lock-up leak-out provisions, which go above and beyond the rules set by federal regulatory authorities.

Novus Acquisition & Development Corp. (NDEV), through its subsidiary Novus Medical Group, provides health insurance and related insurance solutions within the wellness and medical marijuana industries in states where legal programs exist. Novus Medical Group also plans to offer physicians'' education programs, pharmaceutical R&D, compliance, and business development services within the industry.

Novus Medical Group 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 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.

Novus Acquisition & Development Corp

Gary F. Labrozzi

Novus Medical Group, Inc.
Andrea Lopez
CEO & President

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published by: Marketwired
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Date: 08/24/2015 - 12:00
Language: English
News-ID 1380795
Character count: 0
Firma: Novus Acquisition & Development Corp
Ansprechpartner: Feedback to about Pressrelease-id:
Stadt: MIAMI, FL


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