EXECUTIVE SUMMARY

The contents contained herein are for discussion purposes only, it intended for invited viewers only.
It is not to be construed as an offering or sell securities.

 Introduction

Novus Acquisition & Development Corp, a Nevada Corp, (symbol NDEV or Novus) along with its subsidiary, WCIG Insurance Service, LLC, (California Insurance Entity) is the nation’s first healthcare insurance plan in the medical marijuana field (“MMJ or Cannabis”), and property and casualty sector. Our objective is to expand from a wholesaler to a carrier of our won policies in a diverse surplus business lines outside the MMJ space.

Novus’ goal is file with all 50 states and become an underwriter under auspices of our own insurance policies, by the attaining the necessary net asset value to write such policies that is compliant for State Department of Insurance through out the country.

NDEV can attain this by taking advantage of our recent entry into Lloyds of London as a United States broker and up lift our status as a direct Lloyds Broker and place business directly with any Lloyd's managing agent subject to terms of our business agreement.

This is the predominant route to place business into the market in the United States; Novus is now approved to write annuities, giving us the ability to secure 100% of our own corporate annuities that will give NDEV the leverage to raise the necessary funds to qualify to enhance our balance sheet to move risk to other reinsurance carriers in their respective business sectors.

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 insurance agencies the ability to sell direct to consumers and give 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 it has positioned itself to generate up to 40 insurance lines of business, plus automation of API gateways tied to 24 of the world’s most prominent insurance/reinsurance carriers.

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 up-to-date 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 institutional investment firms 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 healthcare 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. 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%.

MMJ 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.  Insurance is the staple of NDEV’s business model, 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 of reciprocity 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 $24.95 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 extrapolate that 2% of the population in California alone are qualified for some type of MMJ treatment (psychoactive component), and within 5 years, other states will join in the movement.

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 non psychoactive), 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 their nonprofit, Realm of Caring) where Novus has an exclusive 65% discount for our patient/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 of the U.S. populous 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.

This is the basis of our assessment

Phytocannabinoids and Nitric Oxide in Human Physiology: Considerations for Immunological Application Michele Reillo, PhD, 2015 where we have filed a Process Patent.

The production of nitric oxide is essential for immunological function in the human body. In response to ingestion of certain foods, such as blueberries and dark green vegetables, the human body produces nitric oxide to fortify the immune system.

Phytocannabinoids, such as Cannabidiol, increase nitric oxide levels in humans (Reillo, 2015). Because the endocannabinoid system is vital in immunological function, the demonstration of increased nitric oxide after ingestion or inhalation of phytocannabinoids holds significance in the modulation of the endocannabinoid system response to pathogens, including viruses, retroviruses, bacteria, and spirochettes.

In 1993, Dr. Reillo demonstrated the antiretroviral effects of hyperbaric oxygen therapy and HIV, directly associated with the nitric oxide effects associated with hyperbaric oxygen therapy. Because Cannabidiol has been found to illicit a positive nitric oxide effect in humans, and in view of the epidemic of flaviviruses worldwide, including Dengue and Zika, which are also negatively affected by nitric oxide, the author and colleagues are in process of conducting in vitro and in vivo research pertaining to phytocannabinoids and the immunological response.

MMJ Property Casualty Revenue

Lloyds of London’s exit from MMJ Property and Casualty left only a couple of underwriters in the marketplace. 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 with the other carriers within the marketplace. Thus gaining a business relationship that transcend into procuring more of a patient base from dispensaries.

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 institutional investment market.

With our recent approval in property and casualty and annuity lines in California P&C gives NDEV the right to sell our own secured annuities. Then file with Department of Insurance (DOI) in every state in the country as an insurer.

NDEV’s corporate annuity program will be a variable annuity where institutional investors will put funds into Novus, have the principal protected by purchasing zero coupon bonds 5-7 year then NDEV can offer to the financial institutions the following:

a) Straight 6-7% interest per year, with a 18% profit sharing or;

b) The financial institution has the option to convert to common stock or warrant at a pre-negotiated value.

That way we can use the allocated funds for our underwriting efforts in our specific insurance lines of business.


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 Insurance 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 higher than 15-20 times multiple, 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 institutional 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 Letter of Credit, 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 international marketplace.

 

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: Frank@ndev.biz

Website: www.getnovusnow.com

 

Safe Harbor Statement

This submittal 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. The Company disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. It also brings to the attention of the reader that Novus or its subsidiaries will not be handling, sell or broker the sales of, receive funds from any marijuana or any illegal substances that the Federal government has not approved. Novus will as regulatory issues arise, modify its business model.

 

 

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