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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended September 30, 2022

 

Or

 

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the transition period from ______ to ______

 

Commission file number 333-173039

 

AMERIGUARD SECURITY SERVICES, INC.

(Exact name of registrant as specified in its charter)

 

HEALTH REVENUE ASSURANCE HOLDINGS, INC.

(Prior name)

 

Nevada   99-0363866

(State or other jurisdiction of
incorporation or organization)

  

(I.R.S. Employer

Identification No.)

 

5470 W. Spruce Avenue, Suite 102    
Fresno, CA   93722
(Address of principal executive offices)   (Zip Code)

 

Registrant’s telephone number, including area code (559) 271-5984

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class   Trading Symbol(s)   Name of exchange on which registered
N/A   N/A   N/A

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☐ Yes   ☒ No

 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☐ Yes   ☒ No

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer ☐ Accelerated filer ☐
Non-accelerated Filer ☒ Smaller reporting company ☒
    Emerging growth company ☐

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act.) ☒ Yes   ☐ No

 

The number of shares outstanding of the registrant’s common stock as of November 10, 2022 was 3,417,302 shares.

 

 

 

 

 

 

TABLE OF CONTENTS

 

    PAGE
Part I – FINANCIAL INFORMATION   1
       
Item 1. Financial Statements (Unaudited)   2
       
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations   10
       
Item 3. Quantitative and Qualitative Disclosures about Market Risk   11
       
Item 4. Controls and Procedures   11
       
Part II – OTHER INFORMATION   13
       
Item 1. Legal Proceedings   13
       
Item 1A. Risk Factors   13
       
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds   13
       
Item 3. Defaults Upon Senior Securities   13
       
Item 4. Mine Safety Disclosures   13
       
Item 5. Other Information   13
       
Item 6. Exhibits   13
       
SIGNATURES   14

 

i

 

 

PART I FINANCIAL INFORMATION

 

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

 

Information contained in this quarterly report on Form 10-Q contains “forward-looking statements.” These forward-looking statements are contained principally in the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and are generally identifiable by use of the words “may,” “will,” “should,” “expect,” “anticipate,” “estimate,” “believe,” “intend” or “project” or the negative of these words or other variations on these words or comparable terminology. The forward-looking statements herein represent our expectations, beliefs, plans, intentions or strategies concerning future events, including, but not limited to: our ability to consummate the Merger, as such term is defined below; the continued services of the Officer as such term is defined below; our future financial performance; the continuation of historical trends; the sufficiency of our resources in funding our operations; our intention to engage in mergers and acquisitions; and our liquidity and capital needs. Our forward-looking statements are based on assumptions that may be incorrect, and there can be no assurance that any projections or other expectations included in any forward-looking statements will come to pass. Moreover, our forward-looking statements are subject to various known and unknown risks, uncertainties and other factors that may cause our actual results, performance, or achievements to be materially different from future results, performance or achievements expressed or implied by any forward-looking statements. These risks, uncertainties and other factors include but are not limited to: the risks of limited management, labor, and financial resources; our ability to establish and maintain adequate internal controls; our ability to develop and maintain a market in our securities; and our ability obtain financing, if and when needed, on terms that are acceptable. Except as required by applicable laws, we undertake no obligation to update publicly any forward-looking statements for any reason, even if new information becomes available or other events occur in the future.

 

As used in this quarterly report on Form 10-Q, “we”, “our”, “us” and the “Company” refer to Ameriguard Security Services, Inc. a Nevada corporation unless the context requires otherwise.

 

1

 

 

Item 1. Financial Statements.

 

Index to Financial Statements

 

  Page
Financial Statements:    
     
Balance Sheets as of September 30, 2022 (Unaudited) and December 31, 2021   3
     
Statements of Operations for the three and nine months ended September 30, 2022 and 2021 (Unaudited)   4
     
Statement of Stockholders’ Deficit for the nine months ended September 30, 2022 (Unaudited) and Year ended December 31, 2021   5
     
Statements of Cash Flows for the nine months ended September 30, 2022 and 2021 (Unaudited)   6
     
Notes to Financial Statements (Unaudited)   7

 

2

 

 

AMERIGUARD SECURITY SERVICES, INC.
(formerly HEALTH REVENUE ASSURANCE HOLDINGS, INC.)
BALANCE SHEETS

 

           
   September 30,   December 31, 
   2022   2021 
   (Unaudited)     
ASSETS          
Current Assets          
Cash  $-   $- 
Total Current Assets   -    - 
           
TOTAL ASSETS  $-   $- 
           
LIABILITIES AND STOCKHOLDERS’ DEFICIT          
LIABILITIES          
Current Liabilities          
Due to related party  $49,120   $10,596 
Total Current Liabilities   49,120    10,596 
           
STOCKHOLDERS’ DEFICIT          
Series A-1 Preferred Stock, par value $0.001 25,000,000 shares authorized, 10,000,000 shares issued and outstanding at September 30, 2022 and December 31, 2021, respectively   10,000    10,000 
Common stock, par value $0.001, 500,000,000 shares authorized, 3,417,302 (post-split) and 68,346,042 (pre-split) shares issued and outstanding at September 30, 2022 and December 31, 2021, respectively   68,346    68,346 
Additional paid-in capital   9,976,045    9,976,045 
Accumulated deficit   (10,103,511)   (10,064,987)
Total Stockholders’ Deficit   (49,120)   (10,596)
           
TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT  $-   $- 

 

The accompanying unaudited notes are an integral part of these unaudited financial statements.

 

3

 

 

AMERIGUARD SECURITY SERVICES, INC.
(formerly HEALTH REVENUE ASSURANCE HOLDINGS, INC.)
STATEMENT OF OPERATIONS

(Unaudited)

 

                     
   For the
Three Months ended		   For the
Nine Months ended		 
   September 30,   September 30,   September 30,   September 30, 
   2022   2021   2022   2021 
Revenue  $-   $-   $-   $- 
Total Revenue   -    -    -    - 
                     
Expenses                    
General and administrative expenses   1,962    1,028    11,324    2,678 
Professional fees   5,500    8,319    27,200    14,698 
Total Operating Expenses   7,462    9,347    38,524    17,376 
                     
Net Income (Loss)  $(7,462)  $(9,347)  $(38,524)  $(17,376)
                     
Net Income (Loss)                    
Basic and diluted earnings per share  $(0.00)  $(0.00)  $(0.00)  $(0.00)
                     
Weighted average number of common shares outstanding - basic and diluted   3,417,302    68,346,042    3,417,302    68,346,042 

 

The accompanying unaudited notes are an integral part of these unaudited financial statements.

 

4

 

 

AMERIGUARD SECURITY SERVICES, INC.

(formerly HEALTH REVENUE ASSURANCE HOLDINGS, INC.)

STATEMENTS OF STOCKHOLDERS’ DEFICIT
(Unaudited)

 

For the Three and Nine Months ended September 30, 2022 and the Year ended December 31, 2021

 

 

                                    
   Series A-1           Additional       Total 
   Preferred Stock   Common Stock   Paid-In   Accumulated   Stockholders’ 
   Shares   Amount   Shares   Amount   Capital   Deficit   Deficit 
Balance at December 31, 2020   10,000,000    10,000    68,346,042    68,346    9,939,684    (10,043,670)   (25,640)
Net loss for the period ended March 31, 2021   -    -    -    -    -    (5,183)   (5,183)
Balance at March 31, 2021   10,000,000    10,000    68,346,042    68,346    9,939,684    (10,048,853)   (30,823)
Net loss for the period ended June 30, 2021   -    -    -    -    -    (2,847)   (2,847)
Balance at June 30, 2021   10,000,000    10,000    68,346,042    68,346    9,939,684    (10,051,700)   (33,670)
Forgivness of related party debt   -    -    -    -    36,361    -    36,361 
Net loss for the period ended September 30, 2021   -    -    -    -    -    (9,347)   (9,347)
Balance at September 30, 2021   10,000,000    10,000    68,346,042    68,346    36,361    (10,061,047)   (6,656)
Net loss for the period ended December 31, 2021   -    -    -    -    -    (3,940)   (3,940)
Balance at December 31, 2021   10,000,000    10,000    68,346,042    68,346    9,976,045    (10,064,987)   (10,596)
Reverse Split of Common Stock 1 for 20             3,417,302    68,346                
Net loss for the period ended March 31, 2022   -    -    -    -    -    (19,180)   (19,180)
Balance at March 31, 2022   10,000,000    10,000    3,417,302    68,346    9,976,045    (10,084,167)   (29,776)
Net loss for the period ended June 30, 2022        -          -     -     (11,882)   (11,882)
Balance at June 30, 2022   10,000,000    10,000    3,417,302    68,346    9,976,045    (10,096,049)   (41,658)
Net loss for the period ended September 30, 2022        -          -     -     (7,462)   (7,462)
Balance at September 30, 2022   10,000,000    10,000    3,417,302    68,346    9,976,045    (10,103,511)   (49,120)

 

The accompanying unaudited notes are an integral part of these unaudited financial statements.

 

5

 

 

AMERIGUARD SECURITY SERVICES, INC.
(formerly HEALTH REVENUE ASSURANCE HOLDINGS, INC.)
STATEMENT OF CASH FLOWS

(Unaudited)

 

           
   For the
Nine Months ended
September 30,		 
   2022   2021 
Cash Flow from Operating Activities          
Net Income (Loss)  $(7,462)  $(8,030)
Adjustments to reconcile net loss to net cash used in operating activities:          
Increase in accounts payable        822 
Net Cash Used in Operating Activities   (7,462)   (7,208)
           
Cash Flows from Financing Activities          
Due to related party   7,462    7,208 
Net Cash provided by financing activities   7,462    7,208 
           
Net increase (decrease) in cash   -    - 
Cash at beginning of period   -    - 
Cash at end of period  $-   $- 
           
Supplemental Disclosure of Interest and Income Taxes Paid:          
Interest paid during the period  $-   $- 
Income taxes paid during the period  $-   $- 

 

The accompanying unaudited notes are an integral part of these unaudited financial statements.

 

6

 

 

AMERIGUARD SECURITY SERVICES, INC.
(formerly HEALTH REVENUE ASSURANCE HOLDINGS, INC.)
NOTES TO FINANCIAL STATEMENTS

 

For the Nine Months ending September 30, 2022

(Unaudited)

 

1 – NATURE OF BUSINESS AND GOING CONCERN

 

Overview

 

Ameriguard Security Services, Inc., a Nevada company (“AGSS”) formerly Health Revenue Assurance Holdings, Inc). (“HRAA”) intended to become a provider of revenue cycle services to a broad range of healthcare providers.

 

On February 10, 2012, HRAA entered into an Agreement and Plan of Merger and Reorganization with Health Revenue Assurance Holdings, Inc. (formerly known as Anvex International, Inc., “HRAH”), a Nevada company, and its wholly-owned subsidiary Health Revenue Acquisition Corporation (“Acquisition Sub”), which was treated for accounting purposes as a reverse recapitalization with HRAA, considered the accounting acquirer.

 

The Company had been dormant since August 2014.

 

On July 14, 2020, as a result of a custodianship in Clark County, Nevada, Case Number: A816259, Custodian Ventures LLC (“Custodian”) was appointed Custodian of the Company.

 

On July 15, 2020 Custodian appointed David Lazar as the Company’s Chief Executive Officer, President, Secretary, Chief Financial Officer, Chief Executive Officer and Chairman of the Board of Directors.

 

On September 8, 2021, in a private stock purchase agreement, 10,000,000 shares of Series A-1 Preferred Stock, $0.001 par value per share (AGSS), were transferred from Custodian Ventures, LLC to Ameriguard Security Services, Inc. California corporation (“Ameriguard”). As a result, the Ameriguard became holder of approximately 91% of the voting rights of the issued and outstanding share capital of the Company on a fully-diluted basis and became the controlling shareholder. The consideration paid for the Shares was $450,000. In connection with the transaction, David Lazar has forgiven the Company from all debts owed to him and/or Custodian Ventures, LLC.

 

On September 8, 2021, the Company accepted the resignations from David Lazar as the Company’s Chief Executive Officer, Chief Financial Officer, Treasurer, Secretary and as a Member of the Board of Directors. Effective on the same date to fill the vacancies created by Mr. Lazar’s resignations, the Company appointed Lawrence Garcia as the Company’s President, CEO, CFO, Treasurer, Secretary, and Chairman of the Board of Directors. These resignations are in connection with the consummation of the private stock purchase agreement and was not the result of any disagreement with Company on any matter relating to Company’s operations, policies or practices.

 

On March 11, 2022, the Company, amended its articles of incorporation to change its name to Ameriguard Security Services, Inc. from Health Revenue Assurance Holdings, Inc. The name was deemed effective by FINRA on March 17, 2022.

 

Going Concern

 

The accompanying financial statements have been prepared assuming AGSS will continue as a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business for the twelve months following the date of these financial statements. As of September 30, 2022, AGSS had no cash and an accumulated deficit of $10,103,511.

 

Because AGSS does not expect that existing operational cash flow will be sufficient to fund presently anticipated operations, this raises substantial doubt about AGSS’s ability to continue as a going concern. Therefore, AGSS will need to raise additional funds and is currently exploring alternative sources of financing. Recently the Company is being funded by Ameriguard which has extended interest-free demand loans to AGSS. Historically, AGSS raised capital through private placements, to finance working capital needs and may attempt to raise capital through the sale of common stock or other securities and obtaining some short-term loans. The Company will be required to continue to so until its operations become profitable. Also, AGSS has, in the past, paid for consulting services with its common stock to maximize working capital, and intends to continue this practice where feasible.

 

7

 

 

2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

Basis of Presentation

 

The accompanying financial statements have been prepared in accordance with the Financial Accounting Standards Board (“FASB”) “FASB Accounting Standard Codification™” (the “Codification”) which is the source of authoritative accounting principles recognized by the FASB to be applied by nongovernmental entities in the preparation of financial statements in conformity with generally accepted accounting principles (“GAAP”) in the United States.

 

Management’s Representation of Interim Financial Statements

 

The accompanying unaudited financial statements have been prepared by AGSS without audit pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). AGSS uses the same accounting policies in preparing quarterly and annual financial statements. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) have been condensed or omitted as allowed by such rules and regulations, and management believes that the disclosures are adequate to make the information presented not misleading. These financial statements include all the adjustments, which in the opinion of management are necessary to a fair presentation of financial position and results of operations. All such adjustments are of a normal and recurring nature. Interim results are not necessarily indicative of results for a full year. These financial statements should be read in conjunction with the audited financial statements and notes thereto on December 31, 2021, as presented in the AGSS’s Annual Report on Form 10-K.

 

Use of Estimates

 

The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The most significant estimates relate to income taxes and contingencies. AGSS bases its estimates on historical experience, known or expected trends, and various other assumptions that are believed to be reasonable given the quality of information available as of the date of these financial statements. The results of these assumptions provide the basis for making estimates about the carrying amounts of assets and liabilities that are not readily apparent from other sources. Actual results could differ from these estimates.

 

Cash and cash equivalents

 

The Company considers all highly liquid temporary cash investments with an original maturity of three months or less to be cash equivalents. The Company had no cash on hand as of September 30, 2022, and December 31, 2021, respectively.

 

Income taxes

 

AGSS accounts for income taxes under FASB ASC 740, “Accounting for Income Taxes”. Under FASB ASC 740, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Under FASB ASC 740, the effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. FASB ASC 740-10-05, “Accounting for Uncertainty in Income Taxes” prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities.

 

The amount recognized is measured as the largest amount of benefit that is greater than 50 percent likely of being realized upon ultimate settlement. The Company assesses the validity of its conclusions regarding uncertain tax positions quarterly to determine if facts or circumstances have arisen that might cause it to change its judgment regarding the likelihood of a tax position’s sustainability under audit.

 

8

 

 

Net Loss per Share

 

Net loss per common share is computed by dividing net loss by the weighted average common shares outstanding during the period as defined by Financial Accounting Standards, ASC Topic 260, “Earnings per Share.” Basic earnings per common share (“EPS”) calculations are determined by dividing net income by the weighted average number of shares of common stock outstanding during the year. Diluted earnings per common share calculations are determined by dividing net income by the weighted average number of common shares and dilutive common share equivalents outstanding.

 

Recent Accounting Pronouncements

 

There are no recent accounting pronouncements that impact the Company’s operations.

 

3 – EQUITY

 

Common Stock

 

On March 11, 2022, AGSS amended its articles of incorporation to reverse split its Common Stock at a rate of one-for-20, which was declared effective by FINRA on March 17, 2022. The Common Stock was reverse split to post-split 3,417,302 shares from pre-split 68,346,042 common shares.

 

The Company has authorized 500,000,000 shares of $0.001 par value, Common Stock. As of September 30, 2022 and December 31, 2021, there were 3,417,302 (pre-split 68,346,042) and 68,346,042 (post-split 3,417,302) shares of Common Stock issued and outstanding, respectively.

 

Preferred Stock

 

On November 16, 2020, the Company designated, out of the Twenty-five Million (25,000,000) authorized shares of preferred stock, par value $0.001 per share, of Series A-1 Preferred Stock, consisting of Ten Million (10,000,000) shares, which are convertible to common stock at the conversion ratio of 72 shares of common stock for each share of preferred stock. These shares were awarded to Custodian Ventures, managed by former officer and director David Lazar, for services performed for the Company. These shares were valued at par value assuming all of the preferred shares were converted to common stock, or $720,000 which was recorded as stock-based compensation.

 

On September 8, 2021, in a private transaction Custodian Ventures LLC sold its Series A-1 Preferred Stock to Ameriguard Security Services, Inc., California corporation. The officer and control person of Ameriguard Security Services, Inc., California corporation is Lawrence Garcia, the Company’s President, CEO, CFO, Treasurer, Secretary, and Chairman of the Board of Directors.

 

As of September 30, 2022 and December 31, 2021, there were 10,000,000 shares of Series A-1 Preferred Stock issued and outstanding, respectively.

 

4 – DUE TO RELATED PARTY

 

As of September 8, 2021, the Company had a due to related party Custodian Ventures LLC, of which former officer and director David Lazar is a managing member, totaling $36,361. On September 8, 2021, the $36,361 was forgiven in full by Custodian Ventures LLC and the Company recorded the resulting gain as additional paid-in capital.

 

During the quarter ended September 30, 2022, Ameriguard paid expenses on behalf of AGSS totaling $11,882, As of September 30, 2022, AGSS had a balance due to related party totaling $41,659.

 

5 – COMMITMENTS AND CONTINGENCIES

 

AGSS did not have any contractual commitments as of September 30, 2022, and December 31, 2021, respectively.

 

6 – SUBSEQUENT EVENTS

 

In accordance with SFAS 165 (ASC 855-10) management has performed an evaluation of subsequent events through the date that the financial statements were available to be issued and has determined that it does not have any material subsequent events to disclose in these financial statements.

 

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

 

Organizational History of the Company and Overview

 

Plan of Operation

 

We are pursuing a business combination with Ameriguard. To date we have no signed definitive agreement, have not submitted the terms of the proposed transaction to appropriate regulatory agencies for approval and are determining the terms of any agreement. If a business combination is consummated with Ameriguard, AGSS will cease to be a shell company (as defined in Rule 12b-2 of the Exchange Act). We will be an operating company engaged in providing guard security services.

 

The Company has no operations from a continuing business other than the expenditures related to running the Company and has no revenue from continuing operations as of the date of this Report.

 

In addition to pursuing the business combination as in the plan of operation, management intends to explore and identify business opportunities within the U.S., including a potential acquisition of an operating entity through a reverse merger, asset purchase or similar transaction. Our ability to effectively identify, develop and implement a viable plan for our business may be hindered by risks and uncertainties which are beyond our control, including without limitation, the continued negative effects of the coronavirus pandemic on the U.S. and global economies. For more information see AGSS’s 2021 Form 10-K.

 

We do not currently engage in any business activities that provide revenue or cash flow. During the next 12-month period we anticipate incurring costs in connection with investigating, evaluating, and negotiating potential business combinations, filing SEC reports, and consummating an acquisition of an operating business.

 

Given our limited capital resources, we may consider a business combination with an entity which has recently commenced operations, is a developing company or is otherwise in need of additional funds for the development of new products or services or expansion into new markets, is an established business experiencing financial or operating difficulties and is in need of additional capital. Alternatively, a business combination may involve the acquisition of, or merger with, an entity which desires access to the U.S. capital markets.

 

Other than our pursuit of combination as in our plan of operation, as of the date of this Report, our management has not had any discussions with any representative of any other entity regarding a potential business combination. Any target business that is selected may be financially unstable or in the early stages of development. In such event, we expect to be subject to numerous risks inherent in the business and operations of a financially unstable or early-stage entity. In addition, we may consummate a business combination with an entity in an industry characterized by a high level of risk or in which our management has limited experience, and, although our management will endeavor to evaluate the risks inherent in a particular target business, there can be no assurance that we will properly ascertain or assess all significant risks.

 

Our management anticipates that we will likely only be able to effect one business combination due to our limited capital. This lack of diversification will likely pose a substantial risk in investing in the Company for the indefinite future because it will not permit us to offset potential losses from one venture or operating territory against gains from another. The risks we face will likely be heightened to the extent we acquire a business operating in a single industry or geographical region.

 

We anticipate that the selection of a business combination will be a complex and risk-prone process. Because of general economic conditions, including unfavorable conditions caused by the coronavirus pandemic, rapid technological advances being made in some industries and shortages of available capital, management believes that there are a number of firms seeking business opportunities at this time at discounted rates with which we will compete. We expect that any potentially available business combinations may appear in a variety of different industries or regions and at various stages of development, all of which will likely render the task of comparative investigation and analysis of such business opportunities extremely difficult and complicated. Once we have developed and begun to implement our business plan, management intends to fund our working capital requirements through a combination of our existing funds and future issuances of debt or equity securities. Our working capital requirements are expected to increase in line with the implementation of a business plan and commencement of operations.

 

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Based upon our current operations, we do not have sufficient working capital to fund our operations over the next 12 months. If we close a reverse merger, it is likely we will need capital as a condition of closing that acquisition. Because of the uncertainties, we cannot be certain as to how much capital we need to raise or the type of securities we will be required to issue. In connection with a reverse merger, we will be required to issue a controlling block of our securities to the target’s shareholders which will be very dilutive. 

 

Additional issuances of equity or convertible debt securities will result in dilution to our current shareholders. Further, such securities might have rights, preferences, or privileges senior to our Common Stock. Additional financing may not be available upon acceptable terms, or at all. If adequate funds are not available or are not available on acceptable terms, we may not be able to take advantage of prospective new business endeavors or opportunities, which could significantly and materially restrict our business operations.

 

We anticipate that we will incur operating losses in the next 12 months, principally costs related to our being obligated to file reports with the SEC. Our prospects must consider the risks, expenses and difficulties frequently encountered by companies in their early stage of development. Such risks for us include, but are not limited to, an evolving and unpredictable business model, recognition of revenue sources, and the management of growth. To address these risks, we must, among other things, develop, implement, and successfully execute our business and marketing strategy, respond to competitive developments, and attract, retain, and motivate qualified personnel. There can be no assurance that we will be successful in addressing such risks, and the failure to do so could have a material adverse effect on our business prospects, financial condition, and results of operations.

 

Critical Accounting Policies and Estimates

 

Our management’s discussion and analysis of our financial condition and results of operations is based on our financial statements, which have been prepared in accordance with U.S. generally accepted accounting principles, or “GAAP.” The preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the reported period. In accordance with GAAP, we base our estimates on historical experience and on various other assumptions that we believe are reasonable under the circumstances. Actual results may differ from these estimates under different assumptions or conditions.

 

Our significant accounting policies are fully described in Note 2 to our financial statements appearing elsewhere in this Quarterly Report, and we believe those accounting policies are critical to the process of making significant judgments and estimates in the preparation of our financial statements.

 

Off-Balance Sheet Arrangements

 

None.

 

Item 3. Quantitative And Qualitative Disclosures About Market Risk.

 

As a smaller reporting company, we are not required to provide the information called for by this Item.

 

Item 4. Controls and Procedures.

 

Evaluation of Disclosure Controls and Procedures.

 

Our management is responsible for establishing and maintaining a system of “disclosure controls and procedures” (as defined in Rule 13a-15(e) and 15d-15(e) under the Exchange Act) that is designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized, and reported, within the time periods specified in the Commission’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Exchange Act is accumulated and communicated to the issuer’s management, including its principal executive officer or officers and principal financial officer or officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

 

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Management’s Report on Internal Control over Financial Reporting.

 

Our management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. Our internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. Our internal control over financial reporting includes those policies and procedures that:

 

  ● pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets;
     
  ● provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors; and
     
  ● provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements.

 

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with policies or procedures may deteriorate.

 

Our management assessed the effectiveness of our internal control over financial reporting based on the parameters set forth above and has concluded that as of September 30, 2022, our internal control over financial reporting was not effective to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S. generally accepted accounting principles as a result of the following material weaknesses:

 

  ● The Company does not have sufficient segregation of duties within accounting functions due to only having one officer and limited resources.
     
  ● The Company does not have an independent board of directors or an audit committee.
     
  ● The Company does not have written documentation of our internal control policies and procedures.

 

We plan to rectify these weaknesses by implementing an independent board of directors, establishing written policies and procedures for our internal control of financial reporting, and hiring additional accounting personnel at such time as we complete a reverse merger or similar business acquisition.

 

Changes in Internal Control over Financial Reporting.

 

There were no changes in our internal control over financial reporting during the quarter ended September 30, 2022 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

 

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PART II OTHER INFORMATION

 

Item 1. Legal Proceedings.

 

The Company may be involved in certain legal proceedings that arise from time to time in the ordinary course of its business. Legal expenses associated with any contingency are expensed as incurred. The Company’s officers and directors are not aware of any threatened or pending litigation to which the Company is a party or which any of its property is the subject and which would have any material, adverse effect on the Company.

 

Item 1A. Risk Factors.

 

Reference is made to the risks and uncertainties disclosed in Item 1A (“Risk Factors”) of our Annual Report on Form 10-K for the period ended December 31, 2021, filed March 31,2022 which sections are incorporated by reference into this report, as the same may be updated from time to time. Prospective investors are encouraged to consider the risks described in AGSS’s 2021 Form 10-K, and our Management’s Discussion and Analysis of Financial Condition and Results of Operations contained in this Report and other information publicly disclosed or contained in documents we file with the Securities and Exchange Commission before purchasing our securities.

 

As a smaller reporting company, the Company is not required to disclose material changes to the Risk Factors that were contained in the 2021 Form 10-K.

 

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

 

None.

 

Item 3. Defaults Upon Senior Securities.

 

None.

 

Item 4. Mine Safety Disclosures.

 

Not applicable.

 

Item 5. Other Information.

 

None.

 

Item 6. Exhibits.

 

The exhibits listed on the Exhibit Index below are provided as part of this report.

 

31*   Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32**   Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

 

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SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

  AMERIGUARD SECURITY SERVICES, INC.
     
Dated: November 10, 2022 By: /s/ Lawrence Garcia
    Lawrence Garcia
   

Chief Executive Officer and
Chief Financial Officer

(Principal Executive Officer and Principal Financial Officer)

 

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

 

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