10-Q 1 acru_10q.htm FORM 10-Q acru_10q.htm

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

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

 

For the quarterly period ended March 31, 2022

 

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

 

Americrew Inc.

(Exact name of registrant as specified in its charter)

 

Delaware

(State or other jurisdiction of incorporation)

 

86-2551989

(IRS Employer Identification No.)

 

3001 PGA Boulevard

Suite 305

Palm Beach Gardens, FL 33410 Tel: (609) 433-6711

(Address and telephone number of registrant’s executive office)

 

Securities registered pursuant to Section 12(b) of the Act: None.

 

Indicate by checkmark whether the issuer: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 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 (§232.405 of this chapter) 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 filed, an accelerated filer, a non-accelerated filer, or a smaller reporting company.

 

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 checkmark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes      No ☒

 

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of March 31, 2022:

 

Common Stock, $0.000001 15,764,424

 

 

 

 

AMERICREW INC.

 

TABLE OF CONTENTS

 

 

 

 

Page

 

PART I Financial information

 

 

 

 

 

 

 

 

Item 1

Financial statements (unaudited)

 

3

 

 

 

 

 

 

Item 2

Management’s discussion and analysis of financial condition and results of operations

 

13

 

 

 

 

 

 

Item 3

Quantitative and qualitative disclosures about market risk

 

15

 

 

 

 

 

 

Item 4

Controls and procedures

 

15

 

 

 

 

 

 

PART II Other Information

 

 

 

 

 

 

 

Item 1

Legal proceedings

 

16

 

 

 

 

 

 

Item 2

Unregistered sales of equity securities and use of proceeds

 

16

 

 

 

 

 

 

Item 3

Defaults upon senior securities

 

16

 

 

 

 

 

 

Item 4

Mine safety disclosures

 

16

 

 

 

 

 

 

Item 5

Other information

 

16

 

 

 

 

 

 

Item 6

Exhibits

 

17

 

 

 

 

 

 

Signatures

 

18

 

 

 
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AMERICREW INC.

 

CONSOLIDATED BALANCE SHEETS  

 

 

 

March 31,

 

 

December  31,

 

 

 

2022

 

 

2021

 

ASSETS

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$405,710

 

 

$721,452

 

Accounts receivable - net of allowance

 

 

1,208,189

 

 

 

1,452,560

 

Prepaid

 

 

132,754

 

 

 

241,865

 

Total current assets

 

$1,746,653

 

 

 

2,415,877

 

 

 

 

 

 

 

 

 

 

Fixed assets:

 

 

 

 

 

 

 

 

Fixed asset - cost

 

 

1,460,174

 

 

 

1,460,174

 

Less accumulated depreciation

 

 

(1,363,891)

 

 

(1,355,576

)

Fixed assets, net

 

 

96,283

 

 

 

104,598

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

-

 

 

 

 

 

 

 

 

 

 

Total assets

 

$1,842,936

 

 

$2,520,475

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ (DEFICIT) EQUITY

Current liabilities:

 

 

 

 

 

 

 

 

Accounts payab

 

$873,602

 

 

$1,089,070

 

Accrued expenses

 

 

0

 

 

 

138,051

 

Loan payable - related party

 

 

170,780

 

 

 

170,780

 

Total current liabilities

 

$1,044,382

 

 

 

1,397,901

 

 

 

 

 

 

 

 

 

 

Other liabilities:

 

 

 

 

 

 

 

 

Loan payable – stockholder

 

 

464,078

 

 

 

464,078

 

Loan payable - other (Note 10)

 

 

0

 

 

 

90,717

 

Notes payable, net (Note 10)

 

 

435,608

 

 

 

522,563

 

Convertible notes, net (Note _)

 

 

2,411,732

 

 

 

2,411,732

 

Convertible notse accrued interest

 

 

2,538

 

 

 

14,706

 

Total liabilities

 

$4,358,338

 

 

$4,763,647

 

Commitments and contingencies

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stockholders’ (deficit) equity (Note 2 and Note 13)

 

 

 

 

 

 

 

 

Preferred stock, $0.001 par value, 10,000,000 shares authorized, and 0  outstanding as of March 31, 2022 and December 31, 2021, respectively

 

 

0

 

 

 

0

 

Common stock, $0.001 par value, 75,000,000 shares authorized, 15,764,424 shares issued and outstanding as of March 31, 2022 and December 31, 2021

 

 

15,764

 

 

 

15,764

 

 

 

 

 

 

 

 

 

 

Additional paid in capital

 

 

(139,966)

 

 

(139,966

Accumulated (deficit) equity

 

 

(2,391,200)

 

 

(2,257,020

)

Total Stockholders’ (deficit) equity

 

$(2,515,402)

 

 

(2,381,222)

 

 

 

 

 

 

 

 

 

Total liabilities and stockholders’ (deficit) equity

 

$1,842,936

 

 

$2,520,475

 

 

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

 

 
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AMERICREW INC.

CONSOLIDATED STATEMENTS OF OPERATIONS  

 

 

 

Quarter Ended

 

 

Quarter Ended

 

 

 

March 31,

 

 

March 31,

 

 

 

2022

 

 

2021

 

Revenue

 

$1,943,778

 

 

$1,345,665

 

 

 

 

 

 

 

 

 

 

Cost of revenue

 

 

1,446,364

 

 

 

840,230

 

Gross Profit

 

$487,414

 

 

$505,435

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

General and administrative expenses

 

$613,278

 

 

$388,517

 

Depreciation

 

 

8,315

 

 

 

8,315

 

Total operating expenses

 

$621,593

 

 

$396,832

 

 

 

 

 

 

 

 

 

 

Operating (loss) income

 

$

 (134,180

 

 

108,603

 

(Loss) earnings per common share (Note 2):

 

 

 

 

 

 

 

 

Basic

 

$

 (0.01

 

$0.01

 

Diluted

 

$

 (0.01

 

$0.01

 

Weighted-average number of common shares outstanding

 

 

 

 

 

 

 

 

Basic

 

 

15,764,424

 

 

 

15,764,424

 

Diluted

 

 

15,764,424

 

 

 

15,764,424

 

 

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

 

 
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AMERICREW INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT)   

 

 

 

Common Stock

 

 

Preferred Stock

 

 

Additional Paid in

 

 

Retained

 

 

Total Equity

 

 

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Earnings

 

 

(Deficit)

 

1

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance as of 12/31/2021

 

 

15,764,424

 

 

$15,764

 

 

 

-

 

 

$-

 

 

$(139,966)

 

$(2,257,020)

 

$(2,381,222)

Net Income (loss)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$(134,180)

 

$(134,180)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance as of 3/31/2

 

 

15,764,424

 

 

$15,764

 

 

 

-

 

 

$-

 

 

$(139,966)

 

$(2,391,200)

 

$(2,515,402)

  

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

 

 
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AMERICREW INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS  

 

 

 

Quarter Ended

 

 

Quarter Ended

 

 

 

March 31,

 

 

March 31,

 

 

 

2022

 

 

2021

 

Cash flows from operating activities:

 

 

 

 

 

 

Net income (loss) from continuing operations

 

$(134,179)

 

$108,604

 

 

 

 

 

 

 

 

 

 

Adjustments to reconcile net operating income / (Loss) to net cash provided by / (used in) operating activities:

 

 

 

 

 

 

 

 

Depreciation

 

 

8,315

 

 

 

8,315

 

 

 

 

 

 

 

 

 

 

Interest Expense

 

 

0

 

 

 

6,578

 

 

 

 

 

 

 

 

 

 

(Increase) decrease in net accounts receivable

 

 

244,371

 

 

 

(431,803)

 

 

 

 

 

 

 

 

 

(Increase) in other assets

 

 

109,110

 

 

 

75,366

 

Increase in accrued expenses

 

 

 

 

 

 

 

 

Increase in accounts payable

 

 

(353,519)

 

 

455,793

 

Increase/(decrease) in related party - short term debt

 

 

0

 

 

 

0

 

Increase/(decrease) in other current liabilities

 

 

0

 

 

 

0

 

Net cash (used) provided by operating activities

 

 

(125,902)

 

$222,853

 

 

 

 

 

 

 

 

 

 

Cash flows from investing activities

 

 

 

 

 

 

 

 

Acquisition of fixed assets

 

 

0

 

 

 

0

 

Net cash (used) by investing activities

 

 

0

 

 

 

0

 

 

 

 

 

 

 

 

 

 

Cash Flows from financing activities

 

 

 

 

 

 

 

 

Proceeds from issuance of convertible notes

 

 

0

 

 

 

 

 

Payment of recapitalization costs

 

 

0

 

 

 

 

 

(Repayments) of loans

 

 

(189,840)

 

 

0

 

Premiums paid for stockholders’ life insurance

 

 

 

 

 

 

6,788

 

Distributions to stockholders

 

 

 

 

 

 

 

 

Net cash (used)/provided by financing activities

 

 

 

 

 

 

6,788

 

 

 

 

 

 

 

 

 

 

Net increase/(decrease) in cash and cash Equivalents

 

 

(315,742)

 

 

216,065

 

Cash and cash equivalents at beginning of period

 

 

721,452

 

 

 

781,497

 

Cash and cash equivalents at end of period

 

$405,710

 

 

 

997,562

 

 

 

 

 

 

 

 

 

 

Supplemental disclosure of cash flow information:

 

 

 

 

 

 

 

 

Income taxes paid

 

$1,875

 

 

$2,890

 

Interest paid

 

$13,046

 

 

$17,262

 

 

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

 

 
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Table of Contents

 

AmeriCrew INC. NOTES TO UNAUDUTED FINANCIAL STATEMENTS

 

NOTE 1 – ORGANIZATION AND DESCRIPTION OF BUSINESS

 

AmeriCrew Inc. f/k/a PhoneBrasil International, Inc. f/k/a Utz Technologies, Inc. (the “Company”, or “PhoneBrasil”) was organized in New Jersey as Donald Utz Engineering, Inc. in 1991. In April of 1991, the Company changed its name to Utz Engineering, Inc. In March 2002, the Company changed its name to Utz Technologies, Inc. The Company changed its name to PhoneBrasil International, Inc. and further filed a Registration of Alternate Name in the State of New Jersey for the use of the name PhoneBrasil International, Inc. (“we” or the “Company”). On November 16, 2021, the company changed its name to AmeriCrew, Inc. We were a development stage company engaged in the telecommunications industry.

 

On April 20, 2007, with a new management team in place, the Board of Directors, in furtherance of its plan designed to grow the Company substantially, and materially change the business direction of the Company, took the following action:

 

1. Elected to divest the Company of its then-current business activities by selling, in consideration of the assumption of all indebtedness and relief of obligations under executory contracts, all of its business assets;

 

2. Agreed to acquire all the capital shares of PhoneBrasil Telephonia Voipdigital, Inc., in exchange for 6,000,000 shares of the Company’s capital stock: and

 

3. Agreed, subject to Shareholder approval, to change the Company’s name to PhoneBrasil International Inc.

 

On February 14, 2020, the Superior Court of New Jersey Equity Division appointed Custodian Ventures, LLC as the custodian for PhoneBrasil International, Inc., f/k/a Utz Technologies, Inc., Civil Action No. C-2-20, finding that Custodian Ventures, LLC had exhausted all reasonable means of serving the Summons and Complaint in the action to the officers and directors of PhoneBrasil International, Inc., f/k/a Utz Technologies, Inc., and thereby deemed to have served the Summons and Complaint pursuant to Rule 4:4-4(b)(3) and the officers and directors failed to answer or respond in the time allotted by Rule 1:20-6.2. There was no opposition.

 

On September 30, 2020, the Company filed a Restated Certificate of Incorporation which increased the authorized shares to 300,000,000 shares of common stock and 10,000,000 shares of preferred stock each with a par value of $0.000001 per share. The preferred shares are convertible to common shares at a ratio of 30 to 1.

 

The increase in the shares the Company is authorized to issue was made because Management believed that it would better position the Company in its efforts to make acquisitions of viable business entities on a stock for stock basis. The Board of Directors further believed it would benefit the shareholders to have a substantial number of unreserved shares available for issuance so that adequate shares may be available for the possible business combination or acquisition.

 

On September 15, 2020, the Company issued 18,000,000 shares of $0.00001 par value common stock to Custodian Ventures, LLC in return for a reduction of $5,000 of the interest-free demand loans issued to the Company by Custodian Ventures, LLC.

 

On October 5, 2020, the Company issued 10,000,000 shares of Series A Preferred Stock to Custodian Ventures, LLC in return for a reduction of $10,000 of related party debt that had been extended to the Company.

 

Effective December 9, 2020, DR Shell LLC, a Delaware limited liability company (the “Buyer”) purchased from Custodian Ventures LLC, 18,000,000 shares of the common stock of the Company, representing approximately 62% of the outstanding Common Stock of the Company, and (ii) 10,000,000 shares of Convertible Preferred Stock of the Company, for a total purchase price of $245,000 in cash. The funds were provided by the Buyer’s members. The shares were acquired pursuant to a Stock Purchase Agreement, dated December 9, 2020 (the “SPA”), by and among the Seller, the Buyer, and David Lazar, then Chief Executive Officer of the Company and managing director of Custodian Ventures, LLC. Additionally, under the terms of the SPA, Mr. Lazar forgave $41,229 in related-party loans.

 

As a result of the transaction, Mr. Ross DiMaggio, the manager of the Buyer, acquired control of the Company.

 

 
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Under the terms of the SPA, effective December 9, 2020, Mr. Lazar resigned as the Chief Executive Officer, Treasurer, and Secretary of the Company, and Mr. DiMaggio was appointed as the sole director, Chief Executive Officer, Treasurer, and Secretary of the Company.

 

On August 12, 2021, The Company executed a Share Exchange Agreement with MIKAB Corporation (MIKAB).  The Company exchanged 94.2% of the outstanding PhoneBrasil Common Stock for the capital stock of MIKAB.

 

MIKAB provides specialty contracting services to market participants in the telecommunications and clean energy industries and infrastructure build throughout the United States. A proportion of our workforce is staffed through a unique in-house program through which we hire and train military veterans to provide construction and maintenance services to our customers. We also hire employees with skill and experience in our fields and use third party independent contractors for our operations.

 

On September 13, 2021, the Company increased the authorized common stock to 1,650,000,000.

 

The Company’s accounting year-end is December 31.

 

NOTE 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 condensed consolidated financial statements have been prepared by the Company without audit pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). The Company 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 condensed consolidated financial statements include all of 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 condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto on December 31, 2021, as presented in the Company’s Annual Report on Form 10-K filed on April 22, 2022 with the SEC.

 

Going Concern

 

The accompanying financial statements have been prepared assuming the Company 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.

 

Because the Company does not expect that existing operational cash flow will be sufficient to fund presently anticipated operations, this raises substantial doubt about the Company’s ability to continue as a going concern. Therefore, the Company will need to raise additional funds and is currently exploring alternative sources of financing. Historically, the Company 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 from related parties. The Company will be required to continue to so until its operations become profitable. Also, the Company has, in the past, paid for consulting services with its common stock to maximize working capital, and intends to continue this practice where feasible.

 

 
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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. The most significant estimates relate to income taxes and contingencies. The Company 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. On March 31, 2022, and December 31, 2021, the Company’s cash equivalents totaled $405,710 and $721,452, respectively. On May 17, 2022, the Company’s cash equivalents totaled $566,614

 

Accounts Receivable and Allowance for Uncollected Amounts

 

Accounts Receivable are stated at their full collectible value less an allowance for doubtful accounts for any receivables over six months old from the balance sheet date. The Company reviews all receivables prior to the year end and all uncollectible amounts are written off against income. The Company expects to collect all the receivables shown on the balances sheet.

 

 

 

March 31,

2022

 

 

December 31, 2021

 

Accounts Receivable – Total

 

$1,247,489

 

 

$1,491,860

 

Less: Allowance for Doubtful Accounts

 

$

(39,300

)

 

$

(39,300

Accounts Receivable – Net

 

$1,208,189

 

 

$

1,452,560

 

 

Revenue Recognition

 

The Corporation adopted Accounting Standards Codification ("ASC") 606 - Revenue from Contracts with Customers ("ASC 606") as of January 1, 2019 using the modified retrospective method. This method allows the Corporation to apply ASC 606 to new contracts entered into after January 1, 2019, and to its existing contracts for which revenue earned through December 31, 2018 has been recognized under the guidance in effect prior to the effective date of ASC 606. The revenue recognition processes the Corporation applied prior to the adoption of ASC 606 align with the recognition and measurement guidance of the new standard, therefore adoption of ASC 606 did not require a cumulative adjustment to opening equity in 2019.

 

Under ASC 606, a performance obligation is a promise within a contract to transfer a distinct good or service, or a series of distinct goods and services, to a customer. Revenue is recognized when performance obligations are satisfied, and the customer obtains control of promised goods or services. The amount of revenue recognized reflects the consideration to which the Corporation expects to be entitled to receive in exchange for goods or services.

 

Under the standard, a contract's transaction price is allocated to each distinct performance obligation. To determine revenue recognition for arrangements that the Corporation determines are within the scope of ASC 606, the Corporation performs the following five steps: (i) identifies the contracts with a customer; (ii) identifies the performance obligations within the contract; (iii) determines the transaction price; (iv) allocates the transaction price to the performance obligations in the contract; and (v) recognizes revenue when, or as, the Corporation satisfies each performance obligation.

 

Customers are billed as work is completed and accepted. Extended contracts are billed in segments as completed. The amount of unbilled work in process at the end of a period is immaterial to the financial statements taken as a whole. If a contract has been completed and accepted but not billed at the end of the year, the contract price is accrued as sales in the year completed.

 

Depreciation

 

Fixed assets are carried at cost. Depreciation of the fixed assets is calculated on the straight-line method over estimated useful lives of 5-15 years.

 

Fixed Assets

March 31,

2022

December 31, 2021

Trucks and Automobiles

$785,332$785,332

Equipment

293,542293,542

Improvements

381,300381,300

Total Cost

$1,460,174$1,460,174

Less: Accumulated Depreciation

$

(1,363,891

)

$

(1,355,576

)

Fixed Assets – Book Value

$96,283$104,598

 

 
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Income Tax Status

 

Effective January 1, 1981, the Company elected with the consent of its stockholders, to be taxed under the provisions of subchapter S of the Internal Revenue Code. Under these provisions, the Company does not pay Federal corporate income tax on its income. Instead, the stockholders are liable for individual Federal income tax on the Company’s taxable income. For tax purposes, income is reported using the income tax basis of accounting.

 

The same election was made for the State of New Jersey as of January 1, 1995. However, there are minimum taxes due to New Jersey based on the amount of the Company’s revenues. Any tax paid is reported as an expense under Other Operating Expenses.

 

As a result of the stock transactions on August 12, 2021, Mikab’s Subchapter S election has been terminated. As of that date forward the Company will be treated as a taxable C corporation. Separate short year tax returns for S and C Corporations will be required to be filed for 2021.

 

Major Customers

 

The Company had four major customers that accounted for approximately 80% of its total sales for the three months ended March 31, 2022. Three major customers accounted for approximately 80% of the company’s total sales for the year ended December 31, 2021.

 

Principles of Consolidation

 

The consolidated financial statements include two other related entities controlled by the Company, MIKAB Inc. and AmeriCrew CE, LLC. This company is the operating unit of the Company and generate all of the revenues for the Company. All intercompany transactions are eliminated in consolidation.

 

New Accounting Standards (Pending Adoption)

 

Leases (ASU 2016-02) In February 2016, the FASB issued new lease accounting guidance in ASU No. 2016-02, Leases-Topic 842, which has been codified in ASC 842, Leases. Under this new guidance, lessees will be required to recognize for all leases (with the exception of short-term leases): 1) a lease liability equal to the lessee's obligation to make lease payments arising from a lease, measured on a discounted basis and 2) a right-of-use asset which will represent the lessee's right to use, or control the use of, a specified asset for the lease term. As Mikab was a non-public entity, this standard is effective for the Company's annual reporting period beginning after Dec 15, 2021 enacted through ASU 2016-02. The new standard requires a modified retrospective basis. The adoption of ASC 842 will require the Company to recognize non-current assets and liabilities for right-of-use assets and operating lease liabilities on its consolidated balance sheet but is not expected to have a material effect on the Company's results of operations or cash flows. ASC 842 will also require additional footnote disclosures to the Company's consolidated financial statements.

 

NOTE 2 – Uninsured Cash Balances

 

The Company maintains demand deposit checking accounts and a money market account at Chase Commercial and TD Bank. At times during the year, the Company’s cash balance exceeded the FDIC and SPIC insured limits.

 

NOTE 3 – Non-Recurring Item

 

As a result of the Corona 19 Virus pandemic, Mikab was able to obtain Paycheck Protection Program loans described in the CARES Act in the amount of $351,370 for payroll and other expense reimbursement in 2021 and 2020. Both loans were completely forgiven in 2021.

 

 
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NOTE 4 – Related Party Transactions

 

Mikab and the Company have entered into a number of related party transactions. Some of the owners of the Company own stock in entities which sell goods and services and lease premises to the Company. These are done as arms-length transactions and are as follows for the three months March 2022 and year ended 2021:

 

Entity

 

Product

 

2022

 

 

2021

 

New Jersey Tower Service Inc

 

Services

 

$0

 

 

$33,767

 

Mikab Equipment Sales Inc

 

Equipment

 

$0

 

 

$23,836

 

29 Aladdin Avenue Realty LLC

 

Premises Lease

 

$9,300

 

 

$27,900

 

75 Second Street Realty LLC

 

Premises Lease

 

$3,600

 

 

$10,800

 

Mikab Realty LLC

 

Premises Lease

 

$3,600

 

 

$10,800

 

Mikab Properties LLC

 

Premises Lease

 

$26,993

 

 

$80,978

 

RR Power Leasing LLC

 

Equipment

 

$27,150

 

 

$0

 

Novation Enterprises Services & Workforce

 

Dev

 

$60,000

 

 

$0

 

 

NOTE 5 – Leasing Arrangements

 

The Company leases a commercial building under a twenty-year lease beginning October 1, 2009 and ending September 30, 2029, payable in monthly installments of $8,998 from Mikab Properties (a related party as described in Note 3). The Company is required to carry insurance and pay for all needed repairs, maintenance and real estate taxes. The rental amount has been reduced in the last three years to $96,000 in 2020 and $87,000 in 2019 by agreement between the parties. There were oral month-to-month agreements for the three other premises the Company leases prior to 2021. Beginning in 2021, these three premises are under five-year lease agreements payable in monthly installments of $3,100 to 29 Aladdin Avenue Realty LLC, $1,200 to 75 Second Street Realty LLC and $1,200 to Mikab Realty LLC. Each has a 3% annual increase for the term of the leases.

 

NOTE 6 – Employee Incentive Mortgages

 

Several key employees of Mikab were given mortgages in the amount of $75,000. These mortgages were being amortized over a nineteen-year period. In August 2021, Mikab forgave the loans.

 

NOTE 7 – Stockholders’ Life Insurance

 

The Company has purchased insurance on the lives of certain stockholders. The Company is both the owner and beneficiary of these policies. The purpose of these policies is to buy back the shares of the stockholder in the event of their death.

 

The Company also provides whole life insurance to several of the key employees who had been given incentive mortgages as described in Note 6.

 

NOTE 8 – Retirement Plans

 

The Company maintains a 401-K retirement plan and a discretionary profit-sharing plan for all qualified employees. There are no significant unfunded liabilities at the March 31, 2022 and December 31, 2021. The Company’s retirement plan contributions were approximately $3,000 for the three months ended March 31, 2022 and $8,876 for 2021.

 

NOTE 9 – Accounting for Uncertain Tax Positions

 

The Company evaluates all significant tax positions. As of March 31, 2022, the Company does not believe that it has any significant tax positions that would result in additional tax liability to the stockholders of the Company nor does it believe that there are any tax benefits that would increase or decrease within the next twelve months.

 

The Company’s income tax returns are subject to examination by appropriate taxing authorities. As of December 31, 2021, the Company’s federal and state income tax returns generally remain open for the last three years.

 

NOTE 10 – Fair Market Value (FMV)

 

The carrying amounts reflected in the balance sheet for cash and cash equivalents approximate their respective fair values due to the short maturities of those instruments.

 

These financial statements are required to disclose the methods used to determine the fair value of financial assets and liabilities based on a hierarchy of three levels of input.

 

Level 1 inputs are based on unadjusted market prices within active markets.

 

Level 2 inputs are based on quoted prices for similar assets and liabilities in active or inactive markets.

 

Level 3 inputs would be primarily valued using management assumptions about the assumptions market participants would utilize in pricing the asset or liability. The company has no financial assets or liabilities requiring fair valuation. The bridge loans carry warrants, however they are immaterial in terms of valuation.

 

 
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NOTE 11 - Net Income (Loss) per Share

 

Net Income (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 equivalents outstanding.

 

NOTE 12 – Notes and Loans Payable Related Party

 

As of March 31, 2022 and December 31, 2021 there were notes payable to a related party of $ 170,870. In addition, there was a note payable of $435,608 as of March 31, 2022 and $522,562 as of December 31, 2021.

 

NOTE 13 – Loan Payable Stockholder

 

As of March 31 2022 and December 31, 2021 the balances of loan payable stockholder were $464,078 and $ 464,078 respectively. The loan bears no interest until maturity January 1, 2025. Interest after maturity is 10% per annum until fully repaid.

 

NOTE 14 – GOODWILL and INTANGIBLE ASETS

 

GOODWILL

 

The Company entered into a Stock Purchase Agreement (the “SPA”) effective as of August 12, 2021 with MIKAB and its stockholders. On August 12, 2021, the Company completed the acquisition of all of the issued and outstanding stock of MIKAB and MIKAB became a wholly owned subsidiary of the Company. At the closing the Company delivered to the sellers a 94.6% of the Equity of The Company.

 

Under guidance of ASU 805-10-55-11 thru 15 MIKAB has been identified as the acquirer for accounting purposes. As a result of the foregoing the Company has not recorded goodwill. The Company intends to conduct a valuation study on the acquisition prior to yearend and will adjust its intangible assets pursuant to the final valuation report.

 

NOTE 15 – EQUITY

 

Common Stock

 

The Company has authorized 300,000,000 shares of $0.000001 par value, common stock. As of March 31, 2022, and December 31, 2021, there were 15,764,424 shares of Common Stock issued and outstanding, respectively.

 

Change of Control

 

Effective December 9, 2020, DR Shell LLC, a Delaware limited liability company purchased from Custodian Ventures LLC, 18,000,000 shares of the common stock of the Company, representing approximately 62% of the outstanding Common Stock of the Company, and (ii) 10,000,000 shares of Preferred Stock of the Company, for a total purchase price of $245,000 in cash. This transaction had no impact on the Company’s financial statements.

 

NOTE 16 – SUBSEQUENT EVENTS

 

None

 

 
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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION

 

Cautionary Note Regarding Forward Looking Statements

 

This report contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding management’s future plans for the Company, our liquidity and ability to raise capital, our business strategy and our future operations. All statements other than statements of historical facts contained in this report, including statements regarding our future financial position, liquidity, working capital sources, business strategy and plans and objectives of management for future operations, are forward-looking statements. The words “believe,” “may,” “estimate,” “continue,” “anticipate,” “intend,” “should,” “plan,” “could,” “target,” “potential,” “is likely,” “will,” “expect” and similar expressions, as they relate to us, are intended to identify forward-looking statements. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our financial condition, results of operations, business strategy and financial needs.

 

The results anticipated by any or all of these forward-looking statements might not occur. Important factors, uncertainties and risks that may cause actual results to differ materially from these forward-looking statements include the ability to close a reverse merger transaction, the possibility that we are unable to raise capital as and when needed, the ongoing impact of the coronavirus pandemic and its negative effect on the U.S. and global economies, and our lack of an operating history and revenue. Further information on the risk factors affecting our business is contained in “Risk Factors” of our annual report on Form 10-K for the fiscal year ended December 31, 2020. We undertake no obligation to publicly update or revise any forward-looking statements, whether as the result of new information, future events or otherwise.

 

Company Overview

 

AmeriCrew Inc. f/k/a PhoneBrasil International, Inc. (the “Company”, or “AmeriCrew”) is a Delaware Corporation that was organized in New Jersey in 1991. We were a development stage company engaged in the telecommunications industry and at some point we became a shell issuer as referred to on Rule 144(i) under the Securities Act of 1933.  Effective December 13, 2021, AmeriCrew merged in to it’s parent, a New Jersey Corporation, names PhoneBrasil International, Inc. which changed the Company domicile and name.

 

On December 9, 2020, DR Shell LLC, a Delaware limited liability company (“DR Shell”) purchased from Custodian Ventures LLC, a Wyoming limited liability company (“Custodian Ventures”), (i) 18,000,000 shares of the Company’s common stock, representing approximately 62% of the outstanding common stock of the Company, and (ii) 10,000,000 shares of Series A Convertible Preferred Stock of the Company, in exchange for $245,000 in cash. The shares were acquired pursuant to a Stock Purchase Agreement, dated December 9, 2020, by and among Custodian Ventures, DR Shell and David Lazar, then Chief Executive Officer of the Company. As a result, Mr. Ross DiMaggio, the manager of DR Shell, acquired control of the Company.

 

Following the acquisition of Mikab Corporation (“Mikab”) in a reverse merger which closed on August 12, 2021 pursuant to which we issued 94.2% of our outstanding common stock to the former Mikab stockholders in exchange for 100% of the capital stock of Mikab (the “Acquisition”), we now provide specialty contracting services to market participants in the telecommunications and clean energy industries and infrastructure build throughout the United States. A proportion of our workforce is staffed through a unique in-house program through which we hire and train military veterans to provide construction and maintenance services to our customers, and we also hire employees with skill and experience in our fields and use third party independent contractors for our operations.

 

Our business, which is conducted primarily through Mikab, consists of the following:

 

 

·

fiber construction and 5G wireless construction, which are collectively grouped into the broader category of telecommunications infrastructure and consist of construction and maintenance and related services with respect to fiber optic cables;

 

 

 

 

·

wireless cell towers and 5G small and macro cells;

 

 

 

 

·

site planning and installation and related services for clean energy systems, with an initial focus on electronic vehicle, or EV, charging stations; and

 

 

 

 

·

workforce development with respect to the unique in-house training program to support the services we provide which is currently being provided at the parent company level and is in the process of being transferred to a new subsidiary.

 

 
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Since the Acquisition, we have continued our telecommunications service business, commenced training of veterans, negotiated with third parties about EV opportunities, and commenced a small number of site planning projects in the EV space.

 

Mikab is a service company engaged in the business of building a national infrastructure involving the installation of rural wireless telecommunication cables, upgrading wireless communications towers and going forward providing services to EV charging stations.

 

Business opportunities that we believe are in the best interests of the Company and its shareholders may be scarce, or we may be unable to obtain the businesses we identify as viable for our objectives such as Mikab, including due to competitive forces in the marketplace beyond our control. There can be no assurance that we will be able to locate compatible business opportunities for the Company. See –“Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2021.

 

Plan of Operation

 

The company is focused on hiring and training Military Veterans, to install fiber, microwave equipment and electronic vehicle charging stations throughout the United States. Mikab, the predecessor company, has more than 50 years of experience in this industry and has a diverse client base including Fortune 500 companies that will be needing these types of services for many years to come. The current management team of the company includes four Executives that have more than 100 years of experience in this area.

 

The Company raised $2,485,000 of capital and is trying to raise additional capital to grow the business organically as well as through acquisitions. It should be noted that with the changes to SEC Rule 15c2-11 becoming effective in late September 2021, we currently trade on the OTC Pink Market for 12 months following the effective date of the new Rule. We expect that will create more competition for operating businesses and may make acquiring an operating business more difficult.

 

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.

 

Our prospects must be considered in light of 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.

 

Liquidity and Capital Resources

 

Cash Flows used by Operating Activities:

 

For the three months ended March 31, 2022, net cash flows used in operating activities was $ 134,179.

 

The Company has $566,614 cash on hand as of May 17, 2022.

 

 
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COVID-19 Update

 

To date, the COVID-19 pandemic has not had a material impact on the Company, particularly due to our current lack of operations. The pandemic may, however, have an impact on our ability to evaluate and acquire an operating entity through a reverse merger or otherwise, and/or on one or more of the businesses we may acquire. Many government restrictions have been relaxed and the economy has continued to open in more jurisdictions. However, the emergence of new and transmittable variants of COVID-19 appears to have led to a resurgence of the virus, particularly in populations with low vaccination rates and has resulted in new restrictions in certain geographies and among certain businesses. The long-term financial impact on us cannot be reasonably estimated at this time. As a result, the effects of COVID-19 may not be fully reflected in our financial results until future periods. See “Risk Factors” contained in our annual report on Form 10-K for the fiscal year ended December 31, 2021 for more information.

 

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

 

Not applicable.

 

ITEM 4. CONTROLS AND PROCEDURES

 

Evaluation of Disclosure Controls and Procedures.

 

We are required to maintain “disclosure controls and procedures” as such term is defined in Rule 13a-15(e) under the Securities Exchange Act of 1934. Based on his evaluation as of the end of the period covered by this Quarterly Report on Form 10-Q, Mr. Kelley Dunne, who is presently serving as our Chief Executive Officer has concluded that our disclosure controls and procedures were not effective to ensure that the information relating to our company, required to be disclosed in our SEC reports (i) is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms, and (ii) is accumulated and communicated to our management, including our Chief Executive Officer, to allow timely decisions regarding required disclosure as a result of material weaknesses in our internal control over financial reporting.

 

Changes in Internal Controls over Financial Reporting

 

There have been no changes in the Company’s internal control over financial reporting during the three-month period covered by this report that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

 

 
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PART II. OTHER INFORMATION

 

ITEM 1. LEGAL PROCEEDINGS

 

We are not currently involved in any legal proceedings and we are not aware of any pending or threatened legal actions against the Company.

 

ITEM 1A. RISK FACTORS

 

Refer to 10-K filed on April 22,2022

 

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.

 

 
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ITEM 6. EXHIBITS

 

The exhibits listed in the accompanying “Exhibit Index” are filed or incorporated by reference as part of this Form 10-Q.

 

 

 

 

 

Incorporated by

Reference

Filed or

Furnished

Herewith

Exhibit #

 

Exhibit Description

 

Form

 

Date

 

Number

 

 

2.1

 

Agreement and Plan of Merger of PhoneBrasil International Inc. with and into Americrew Inc.

 

DEF14C

 

10/14/21

 

Annex B

 

 

3.1

 

Certificate of Incorporation

 

DEF 14C

 

10/14/21

 

Annex C

 

 

3.2

 

Bylaws

 

DEF14C

 

10/14/21

 

Annex D

 

 

10.1

 

Form of Amended and Restated Consolidated Bridge Funding Promissory Note

 

8-K

 

1/18/22

 

10.1

 

 

10.2

 

Form of Note Modification Agreement

 

8-K

 

1/18/22

 

10.2

 

 

10.3

 

Form of Warrant

 

8-K

 

1/18/22

 

10.3

 

 

10.13

 

Promissory Note issued to the Estate of Wesley Weis

 

10-K

 

4/15/22

 

10.13

 

10.14

 

Factoring and Security Agreement dated January 28, 2022

 

10-K

 

4/15/22

 

10.14

 

10.15

 

Code of Ethics

 

10-K

 

4/15/22

 

10.15

 

31.1

 

Certification of Principal Executive Officer (302)

 

 

 

 

 

 

 

Filed

31.2

 

Certification of Principal Financial Officer (302)

 

 

 

 

 

 

 

Filed

32.1

 

Certification of Principal Executive and Principal Financial Officer (906)

 

 

 

 

 

 

 

Furnished*

101.INS

 

Inline XBRL Instance Document.

 

 

 

 

 

 

 

Filed

101.SCH

 

Inline XBRL Taxonomy Extension Schema Document.

 

 

 

 

 

 

 

Filed

101.CAL

 

Inline XBRL Taxonomy Extension Calculation Linkbase Document.

 

 

Filed

101.DEF

 

Inline XBRL Taxonomy Extension Definition Linkbase Document.

 

 

Filed

101.LAB

 

Inline XBRL Taxonomy Extension Label Linkbase Document..

 

 

 

 

 

 

 

Filed

101.PRE

 

Inline XBRL Taxonomy Extension Presentation Linkbase Document.

 

 

Filed

104

 

Cover Page Interactive Data File (Embedded as Inline XBRL document and contained in Exhibit 101).

 

*

This exhibit is being furnished rather than filed and shall not be deemed incorporated by reference into any filing, in accordance with Item 601 of Regulation S-K.

 

Copies of this report (including the financial statements) and any of the exhibits referred to above will be furnished at no cost to our stockholders who make a written request to our Corporate Secretary at Americrew Inc., 21 Omaha Street, Dumont, NJ 07628.

 

 
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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.

 

 

 

AMERICREW INC.

 

 

 

 

 

May 23, 2022

 

/s/ P. Kelley Dunne

 

 

 

P. Kelley Dunne

 

 

 

Chief Executive Officer

(Principal Executive Officer)

 

 

May 23, 2022

 

/s/ Ross DiMaggio

 

 

 

Ross DiMaggio

 

 

 

Chief Financial Officer

(Principal Financial Officer)

 

 

 
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