January 19, 2023 -- InvestorsHub NewsWire -- In the very first month of 2023, UC Asset LP (OTCQB: UCASU) apprears very active, and have put forward a number of press releases it put forward. 

$1M Gross Profit

Based on these news release, UC Asset closed a deal, with which UC Asset made $550,000 gross profit out of a $1.9 million sale. It was a cash deal, and UC Asset claimed it had no debt financing on that deal. This means that UC Asset should have about $1.9 million cash at its hands upon closing the deal.

UC Asset sets a goal of $1 million gross profit for 2023.  Now it had gone more than halfway through to reach that goal in the very first month. According to its news release, $1 million gross profit will be about $0.20 per share. 

According to its SEC filings, UC Asset had been profitable in past years. It had distributed cash dividend twice. The last cash distribution of $0.10 per share was distributed in 2022.

$3M Cannabis Property Acquisition  

The company also announced that it entered into a MOU to acquire a 10,000 square foot cannabis cultivation property in the State of Oklahoma, through a non-cash acquisition deal. Upon closing of the acquisition, UCASU will invest $1 million to build extra 5,000 square feet of cannabis cultivation facility at the same site.

After acquisition, the current operator on the property, Fire Ranch Farm, will continue to rent the property from UC Asset. UC Asset expects to receive monthly rents representing a 14.4% cash on cash annual return. 

The non-cash acquisition will be closed through the issuance of 2.5 million preferred shares of UC Asset to the current property owner. Those preferred shares will have a fixed conversion rate of 1:1.  A fixed conversion rate means that those preferred shares are NOT toxic, in the sense that it won't flood the market with cheap shares. In fact, it appears that those share will have a fixed cost of $1.20 per share, which is 60% higher than the company's current PPS of $0.75.

More, holder of the preferred shares will receive no dividends from UC Asset, unless those preferred shares are converted into common shares. But if the holder converts the shares, UC Asset will start to charge more rent on the property. The company claims that this is a strong protection for exist shareholders, because the increase of rent may outweigh the additional dividend allocated to newly converted shares.

Cannabis Property Investment

Cannabis property investment was a hot topic last year, when shares of Innovative Property (NYSE: IIPR) and Power REIT(NYSE: PW) soared roof top high. It has had big adjustments since then. But overall, cannabis properties still yield much higher ROI than other properties.

UC Asset's claims that, since it announced its intention to invest in cannabis property in October 2021, their team have made hundreds of phone calls to potential sellers, screened tens of opportunities, and conducted research in 5 different states, including Colorado, California and New York. And finally they chose to acquire this property in Oklahoma.

UC Asset aims to become one of the leading cannabis property investor in the State of Oklahoma.

 

Links to these news releases by UCASU 

https://finance.yahoo.com/news/uc-asset-sold-farmland-550k-133300886.html

https://finance.yahoo.com/news/uc-asset-3m-cannabis-property-143400580.html 

 

 

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SOURCE: Money Chats Group

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