UC Asset Announces Plan of Secondary Public Offering via Reg A

Rhea-AI Summary

UC Asset LP (OTCQB: UCASU) has announced plans for a secondary public offering (SPO) through Reg A Tier II registration, aiming to raise up to $10 million by issuing preferred shares. The company intends to use the majority of funds to expand its cannabis property portfolio, where it currently holds $1.6 million in equity generating a 14.4% cash return.

The preferred shares will carry an 8% preferred dividend per annum, significantly higher than the average REIT dividend yield of 3.94%. While these preferred shares won't be publicly traded initially, they can be converted into common shares after a 6-month holding period. The company is in talks with leading Reg A platforms, likely to partner with one of the top 4 platforms by capital raised in 2024.

Positive

• Current cannabis property portfolio generates 14.4% cash return
• Proposed 8% preferred dividend rate exceeds average REIT yield of 3.94%
• Preferred shares convertible to common shares after 6 months
• Existing $1.6 million equity in cannabis property demonstrates track record

Negative

• Preferred shares will not be initially publicly traded
• No definitive agreements with Reg A platforms yet
• Potential shareholder dilution upon preferred share conversion

ATLANTA, Jan. 23, 2025 /PRNewswire/ -- UC Asset LP (OTCQB: UCASU) announces today that the company is seeking to launch a secondary public offering (SPO) through Reg A Tier II registration, with the intention of issuing preferred shares to raise up to $10 million.

Investing in Cannabis Property

The majority of the capital raised will be used to expand its portfolio of cannabis property. Currently, the company holds $1.6 million equity in cannabis property and is receiving a 14.4% cash return, in addition to potential upside from property appreciation.

Back in 2022, the company announced its intention to raise up to $10 million for cannabis property investment through an SPO. However, after months of research, the company postponed its SPO plan until now.

"We understand that, back then, we did not have a history of successfully managing a portfolio of cannabis property," elaborates Dr. Larry Wu, founder of UC Asset. "Now that we have a proven track record, and especially that we believe we have outperformed our peer asset managers on the public market, it is time to re-launch our SPO."

Dr. Wu also emphasizes that it is a better time to invest in cannabis properties than two years ago, as the price of cannabis properties has likely hit its historical low, and the whole cannabis industry is likely ready for another wave of fast growth.

Issuing Preferred Shares with 8% Preferred Dividend

If launched, Wu expects that the company will issue preferred shares which will carry a preferred dividend of 8% per annum. This, according to Wu, will be much higher than the average dividend yield of REITs.

"According to a recent survey from S&P Global Market Intelligence, as of December 11, 2024, publicly traded U.S. equity REITs posted a one-year average dividend yield of 3.94%," says Wu.

The disadvantage is that UC Asset's preferred shares will not be publicly traded. However, Wu asserts that preferred shares will be eligible to be converted into common shares after a holding period of 6 months. And UC Asset's common shares are currently traded on OTCQB.

Working with Leading Reg A Platform

Wu confirms that the company has reached out to several popular platforms, and will likely work with one of the Reg A platforms that ranked top 4, in terms of total capital raised in the year 2024.

Wu cautions that the company has not entered into definitive agreements with any of the top 4 Reg A platforms, and may end up using other approaches, such as working with a conventional investment bank.

About UC Asset LP

UC Asset LP is a limited partnership formed for the purpose of investing in real estate with innovative strategies.  For more information about UC Asset, please visit: www.ucasset.com

Disclaimer:

This News Release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements involve known and unknown risks, uncertainties and other important factors that could cause our actual results, performance or achievements, or industry results, to differ materially from any these statements. You are cautioned not to place undue reliance on any those forward-looking statements. Except as otherwise required by the federal securities laws, we undertake no obligation to publicly update or revise any forward-looking statements after the date of this news release. None of such forward-looking statements should be regarded as a representation by us or any other person that the objectives and plans set forth in this News Release will be achieved or be executed.

For More Information Contact: IR@UCasset.com, +1 470-475-1035

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SOURCE UC Asset LP

FAQ

What is the size of UC Asset's (UCASU) planned secondary public offering in 2025?

UC Asset plans to raise up to $10 million through a secondary public offering via Reg A Tier II registration.

What dividend rate will UCASU's new preferred shares offer?

The preferred shares will carry an 8% preferred dividend per annum.

How much is UC Asset's current cannabis property portfolio worth?

UC Asset currently holds $1.6 million in equity in cannabis property investments.

What is the conversion period for UCASU's new preferred shares to common shares?

The preferred shares can be converted into common shares after a 6-month holding period.

What return is UC Asset generating from its current cannabis property investments?

UC Asset is receiving a 14.4% cash return from its cannabis property investments, plus potential property appreciation.