OTC:AGSS
AMERIGUARD SECURITY SERVICES, INC.
A struggling OTC security services firm facing severe cash burn despite modest top-line growth in its patrol and monitoring divisions.
Key Metrics
Investment Thesis
Bull Case
Aggressive debt restructuring or a successful acquisition could turn around this distressed asset given its recurring revenue model and established client base. The company maintains operational continuity with positive gross profit margins of roughly 11%, suggesting underlying service demand remains intact despite current accounting losses.
Bear Case
The stock is extremely risky as total liabilities exceed assets by nearly $3M, leaving shareholders with negative equity of -$3.1M and minimal cash buffer. Continued cash burn at a rate of over $2M annually without significant financing or revenue acceleration makes bankruptcy highly probable in the near term.
About AMERIGUARD SECURITY SERVICES, INC.
Ameriguard Security Services (AGSS) provides comprehensive security solutions including patrol services, video surveillance monitoring, and alarm response primarily serving the North American markets. The company leverages a large fleet of vehicles and trained personnel to deliver real-time protection for residential, commercial, and industrial clients. Financial data indicates significant operating leverage challenges with revenue growth outpacing profitability in recent periods.
Analysis
Management Discussion
While revenue increased to $26.4M in 2024 from $24.9M in 2022, the company's financial health deteriorated sharply with operating profit turning to a loss of $3.4M and cash flow from operations hitting -$2.6M. The substantial increase in accounts payable by $1.2M suggests the firm is struggling to meet its obligations, while the retention of only $424k in cash against $7.6M in current liabilities creates an immediate solvency threat.
Industry Overview
The security services industry is recovering from pandemic-era demand spikes but faces margin compression from rising labor costs and inflationary pressures on fuel and insurance. Companies with diversified service portfolios and strong balance sheets are outperforming peers, while thin-margin operators like this firm face existential threats from interest rate hikes and credit tightening.
Financial Statements
Income Statement
Balance Sheet
Cash Flow
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Revenue | $24.9M | $24.4M | $26.4M |
| Cost of Revenue | $21.9M | $22.3M | $23.4M |
| Gross Profit | $3.0M | $2.0M | $3.0M |
| Operating Expenses | $3.1M | $4.5M | $6.4M |
| Operating Income | $-74.0K | $-2.4M | $-3.4M |
| G&A | $645.3K | $646.5K | $763.4K |
| D&A | — | $110.6K | $238.1K |
| Depreciation | $42.9K | $110.6K | $238.1K |
| Other OpEx | $2.4M | $3.8M | $5.6M |
| Non-Operating Income | $0 | $0 | $0 |
| Pre-Tax Income | $-74.0K | $-2.4M | $-3.4M |
| Income Tax | $10.3K | $22.8K | $3.6K |
| Continuing Ops | $-84.4K | $-2.5M | $-3.4M |
| Discontinued Ops | $0 | $0 | $0 |
| Net Income | $-428.5K | $122.6K | $-2.3M |
| Minority Interest | $0 | $0 | $0 |
| Net to Common | $-428.5K | $122.6K | $-2.3M |
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Current Assets | $3.2M | $4.1M | $3.3M |
| Cash & Equivalents | $1.2M | $2.2M | $424.6K |
| Accounts Receivable | $1.9M | $1.6M | $2.3M |
| Other Current Assets | $110.8K | $398.0K | $534.1K |
| Long-Term Assets | $601.5K | $1.9M | $6.5M |
| PP&E (Net) | $298.8K | $574.1K | $1.2M |
| Goodwill | — | — | $1.8M |
| Operating Leases | $302.7K | $1.0M | $3.3M |
| Other LT Assets | $0 | $340.7K | $288.5K |
| Total Assets | $3.8M | $6.1M | $9.8M |
| Current Liabilities | $2.7M | $4.5M | $7.6M |
| Accounts Payable | $761.5K | $449.9K | $1.6M |
| Current Leases | — | — | $924.8K |
| Other Current Liab | $1.9M | $4.0M | $5.1M |
| Long-Term Liabilities | $3.1M | $3.1M | $5.3M |
| LT Operating Leases | $294.4K | $1.1M | $2.3M |
| Other LT Liab | $2.8M | $2.0M | $3.0M |
| Total Liabilities | $5.8M | $7.6M | $12.9M |
| Shareholders' Equity | $-2.0M | $-1.5M | $-3.1M |
| Retained Earnings | $-2.1M | $-1.7M | $-3.3M |
| Total L&E | $3.8M | $6.1M | $9.8M |
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Net Income (CFO) | $-428.5K | $122.6K | $-2.3M |
| Non-Cash Adjustments | $664.4K | $1.4M | $-66.9K |
| Working Capital Changes | $30.6K | $-1.6M | $-208.4K |
| Cash from Operations | $266.4K | $-79.2K | $-2.6M |
| Cash from Investing | $-1.2M | $-193.0K | $-839.5K |
| Cash from Financing | $71.0K | $686.8K | $1.7M |
| FX Effect | $-1 | $0 | $0 |
| Net Change in Cash | $-902.1K | $414.6K | $-1.7M |
| Beginning Cash | $2.1M | $1.8M | $2.2M |
| Ending Cash | $1.2M | $2.2M | $424.6K |
Frequently Asked Questions
How does AMERIGUARD SECURITY SERVICES, INC. make money?
Core patrol security services utilizing a vehicle fleet for on-site presence, remote video surveillance monitoring centers providing 24/7 watch capabilities, alarm response teams dispatched to verified incidents, and specialized risk management consulting for high-value assets.
What are the main risks for AGSS?
Severe liquidity crisis indicated by negative net income of $2.3M and depleted cash reserves of only $424k against $12.9M in total liabilities, significant working capital deficit of $4.3M limiting operational flexibility, reliance on volatile commodity prices for fuel affecting patrol costs, and potential covenant breaches or credit rating downgrades due to insolvency metrics.
What is AGSS's competitive advantage?
Established relationships with long-term municipal and corporate clients ensuring recurring revenue streams, a proprietary dispatch network enabling rapid response times across key metropolitan areas, and a diversified service mix reducing dependency on any single contract type.
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Not financial advice. All content is for informational purposes only. Data may contain errors. Consult a qualified financial advisor before making investment decisions.