UCASU may report more profits for both 2021 and 2020 upon changing accountingApr 4th, 2022 9:45 EST
Atlanta, April 04, 2022 (GLOBE NEWSWIRE) — UC Asset LP (OTCQX: UCASU) management announces that the company may report better profit results for both its fiscal years of 2021 and 2020, after the Company switched its accounting method from fair market value accounting to historical cost accounting.
Previously, the Company reported close to zero profit for fiscal year 2020, and it projected a $0.10 per share operating profit ($0.13 per share net equity gain including the gains from buybacks) for fiscal year 2021. However, last week the Company filed a Form 8-K, which announced the accounting method change, and declared that its previously financial reports, as well as projections, should no longer be relied upon.
The change of accounting method was a decision by the Company’s management, in light of SEC (Security and Exchange Commission) staff’s conclusion that the Company did not meet the criteria to apply investment company accounting, i.e., fair market value accounting. The Company had historically used investment company accounting based on its understanding of related rules, and had presented its argument for applying fair value accounting to the staff of SEC. But SEC objected the company’s argument.
“Fair value accounting and historical cost accounting are both GAPP accounting methods, and there is not necessarily any superiority of either one over the other. It’s just a matter of which method should be applied to us. We will respect the staff of SEC’s opinion on this matter, and we will switch to historical cost accounting for our upcoming financial reports,” says Larry Wu, founder of UC Asset.
“Different accounting methods would present a company’s financial situation from different perspectives,” elaborates Wu. “In case of our Company, fair value accounting would spread the investment gain/loss from a portfolio property over the whole period when we hold this property, while historical accounting will report all investment gain/loss at the moment when we sell the property. Most of our investments are profitable. Therefore, historical accounting will report less profit for any fiscal year when we sell less properties and will report more profit when we sell more properties, in comparison to fair value accounting.”
UC Asset did sell a large part of its portfolio properties in the year 2020 and 2021, as the Company started to exit most of its investments in residential properties, for the purpose to invest in income producing properties, such as cannabis properties and Airbnb properties. As a result, the Company will likely report higher profits for the year 2020 and 2021.
“It’s still too soon to tell how much more profits we may report for the year of 2020 and 2021,” cautions Greg Bankston, managing general partner of UC Asset. “We are working round the clock with our accountants and auditors to provide our investors with reliable financial statements as soon as possible.”
Bankston confirms that if the Company may report a net income higher than previously projected net equity gain of $0.10 per share ($0.13 per share after factoring in the shareholder equity gain from share buybacks), it will still distribute $0.10 per share dividend to all shareholders who held UCASU shares by the end of December 31, 2021.
Bankston also confirms that the company are still committed to seek an up-list to NYSE American or NASDAQ Small Cap, combined with a secondary public offering of approximately $10-30 million, and are engaging investment bankers for these business goals.
About UC Asset LP
UC Asset LP is a limited partnership formed for the purpose of investing in real estate with innovative strategies, concentrating in metropolitan areas of Atlanta, GA. For more information about UC Asset, please visit: www.ucasset.com
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:
Christal Jordan | Executive Director, UC Asset LP
[email protected] | 678-499-0297