Company: AGSS
Filing Date: 2025-05-12
Form Type: 10-K
Source: 0001829126-25-003553
Chunk: 11

Company: AMERIGUARD SECURITY SERVICES, INC.
Filing Date: 2025-05-12
Form: 10-K
Item: Item 1
Chunk 11
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 been very successful in the government
contracting market. Our new CFO has 22 years of experience in improving business performance as well as organizational growth across various
sectors. Our Senior Controller has over 38 years of business finance experience, the last 15 of which he has been focusing on organizational
development consulting across multiple industries, and an Operations team on the east coast managing IT and our federal contracts, and
we have engaged legal and SEC compliance professionals. We have a Board of Directors with Wall Street and government security experience
making us well positioned to aggressively grow the business.

8

Results of Operations for
the fiscal year ending December 31, 2024

Revenues and Cost of Services

For 2024 the Company experienced a 26% overall
increase in operational revenue, totaling approximately $5,465,000. The increase results from the inclusion of a full year of revenue
from TransportUS Inc. (TUS). The increase over revenue received in 2023 totaled approximately $8,100,000, and a decrease in total guard
services revenue from AmeriGuard Security Services Inc. (AGS) of approximately $2,700,000. The revenue decrease experienced by AGS was
mainly from the loss of the contract with the Environmental Protection Authority, EPA, that ended in May 2023. All other revenue
items had only minor changes with no significant impact on total revenue.

For the federal guard contracts, as the costs
of labor increases within the unionized contract so does the revenue. For Commercial operations there is a lag between cost increases
and service rate increases. It’s our practice to adjust service rates annually in the month of February. Although we did increase
our billing rates for new contracts during 2024, the existing companies will not see an additional rate increase until February 2025.
Although demand for services has continued to increase in 2024, the expectations of the cost of those services is out of line with the
market expectations. As AGS deals with the increased labor costs, the customers are experiencing similar cost pressures and are less
willing to pay for our traditional services. This conflict with AGS needing to raise services fees and customers needing to pay less
has created challenges in the market. As a result, AGS has needed to shift its approach to protecting business assets from the traditional
standing guard to technology and patrol services. AGS has established a 24-hour dispatch department to monitor camera systems and direct
patrolling officers to the problem