|
Shareholder value is primarily derived by two factors including its net asset value per share and its trading multiple to net asset value. The Company's net asset value is determined by adding the portfolio company values plus its cash and cash equivalents minus its liabilities.(subtracting total Liabilities from total Assets) This formula equals Net Asset Value. The division of the Company's Net Asset Value by its number of outstanding shares equals its Net Asset Value per share.
While a trading multiple is effected by many conditions, similar companies over the last three years have shown an average multiple of 2.82 times Net asset Value per share. While this is an average, one must understand that prior performance is not necessarily indicative of future results.
Moreover, Universal Capital Management's policy of dividending shares of specific portfolio companies to its shareholders when appropriate, is an added incentive to potential investors. Its first dividend was of Theater Xtreme shares wherein its shareholders received approximately 5.5 shares of Theater Xtreme for every 100 shares of Universal Capital Management. At the time of distribution each share of Theater Xtreme was trading at $1.50 per share.
As a result of this policy, Universal Capital Management expects to remain at or exceed the industry's average trading multiple.
| 
