Share prices for Universal Guardian Holdings Inc. (OTCBB: UGHO) plummeted like a stone this morning, dropping 60 percent after the company released its 8-K form, surprising investors and employees alike with the information inside.
The drop stems from the announcement that Universal Holdings has decided to close its U.S.-based operations “in order to focus on growth and profitability within the Services Group.”
Please share your thoughts: MN1 Message Board“The Services Group has been and continues to be the principal source of the company’s revenues,” the form read. “The suspension of operations eliminates significant overhead costs, thereby allowing the company to use existing resources for the Services Group. As part of this decision, Universal Holdings will lay-off or otherwise eliminate both operational and administrative staff for all U.S.-based operations.”
The form went on to say that the staffing reduction would happen “immediately,” and that the company was “unable at this time to make a good faith estimate of the costs associated with the suspension of operations, including contract termination and employee benefits.”
However, the news wasn’t entirely negative. The form went on to discuss how the company intends to reactivate its U.S.-based operations, and how it’s working to acquire the capital necessary to settle its debts, loans, and other problems.
“We may also seek to satisfy indebtedness without any cash outlay through the private issuance of debt or equity securities,” the statement finished. “Universal Holdings currently does not have any binding commitments for, or readily available sources of, additional financing. The company cannot give … any assurance that it will be able to secure the additional cash or working capital we may require to continue operations.”