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 COVID-19, supply chain shortages, inflation and the Federal Reserve's interest rate increases in response, 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, 2021. 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 its parent, a New Jersey Corporation, named PhoneBrasil International, Inc. which changed the Company domicile and name.

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.






         16

  Table of Contents

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.

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.

While our business is profitable, we lack the capital to support further growth and need to raise capital to grow our business. See the Risk Factor in Part 2, Item 1A of this Report.





Results of Operations

Results of Operations for the Three and Six Months ended June 30, 2022 and 2021, Respectively





Revenue

For the three months ended June 30, 2022 and 2021, the Company's revenue was $4,678,413 and $1,229,733, respectively. The increase in revenue between periods was primarily attributable to commencement of work under a new contract beginning in the first quarter of 2022 and an increase in work orders from major customers.

For the six months ended June 30, 2022 and 2021, the Company's Revenue was $6,622,191 and $2,823,727, respectively. The increase in revenue between these periods was primarily attributable to the same reasons referenced above for the corresponding three month periods.

Cost of Revenue, Exclusive of Depreciation

For the three months ended June 30, 2022 and 2021, the Company's cost of revenue was $3,012,570 and $836,928, respectively. The Cost of Revenue as a percentage of sales increased due to the commencement of work under a new contract beginning in the first quarter 2022

For the six months ended June 30, 2022 and 2021, the Company's cost of revenue was $4,458,934 and $1,872,617, respectively.





Operating Expenses

For the three months ended June 30, 2022 and 2021, the Company had operating expenses of $1,036,653 and $274,710, respectively. The increase in operating expenses between periods was primarily attributable to increased labor, equipment and other expenditures in our efforts to meet the increased demand for our services in the recent period relative to the prior period.

For the six months ended June 30, 2022 and 2021, the Company had operating expenses of $1,658,247 and $876,875, respectively. The increase in operating expenses between periods was primarily attributable to the same reasons referenced above for the corresponding three month period.





Operating Income

For the three months ended June 30, 2022 and 2021, the Company had operating income of $629,190 and $118,095, respectively. The increase was primarily due to the increase in revenue, partially offset by an increase in operating expenses and cost of revenue year-over-year.

For the six months ended June 30, 2022 and 2021, operating income was $505,010 and $74,235, respectively, with the increase attributable to the same reason referenced above for the corresponding three-month periods.





Net Income

For the three months ended June 30, 2022 and 2021, the Company had net income of $490,494 and $118,095, respectively The -increase in the three months ended June 30, 2022 as compared to the three months ended June 30, 2021, was primarily attributable to the increased revenue in the 2022 period coupled with a lower increase in expenditures in the same period.

For the six months ended June 30, 2022 and 2021, the Company had net income of $356,314 and $423,188, respectively The decrease in the six months ended June 30, 2022 as compared to the six months ended June 30, 2021 was primarily attributable to normal business operations.

Understanding our Operating Results

Revenue from our customers is obtained from purchase orders submitted from time to time. Accordingly, the Company's ability to predict orders in future periods or trends affecting orders in future periods is limited. The Company's ability to predict revenue has become further limited by potential disruption to its supply chains or changes in customer ordering patterns due to uncontrollable events such as the COVID-19 pandemic and geopolitical turmoil. The Company's ability to recognize revenue in the future for its backlog of customer orders will depend on the Company's ability to acquire, assemble and deliver products and services to the customers and fulfill its other contractual obligations in a timely manner. In recent periods we have faced challenges in meeting customer demand due to limitations in our operational and capital resources, as more particularly described under "Item 1A - Risk Factors." Additionally, significant uncertainty exists surrounding our future revenue prospects given our dependence on a limited number of customers for the vast majority of our revenue.






         17

  Table of Contents

Liquidity and Capital Resources

Cash Flows used by Operating Activities:

For the six months ended June 30, 2022, net cash used by operating activities was $1,707,973, compared to net cash provided by operating activities of $619,555 for the six months ended June 30, 2021. The increase in the 2022 period as compared to the 2021 period was primarily attributable to an increase in net accounts receivable and an increase in other assets, offset by an increase in other current liabilities and accounts payable.

Cash Flows from Financing Activities:

For the six months ended June 30, 2022, the net cash provided by financing activities was $1,179,906 consisting of proceeds from the factoring of accounts receivable, net of repayments of loans and notes payable, and for the six months ended June 30, 2021, net cash provided by financing activities was $283,306 consisting primarily of proceeds from loans and notes payable.

Cash Flows from Investing Activities

We had no cash flows used in or provided by investing activities in the six months ended June 30, 2022 and 2021, respectively.

For the six months ended June 30, 2022, net income was $ 356,314. The Company has $511,857 cash on hand as of August 12, 2022. We do not have sufficient working capital conduct our operations for the 12 months following the filing of this Report. As a result, we are seeking to raise up to $7 million from the sale of convertible notes and warrants. See Note 2 to the Condensed Consolidated Financial Statements. We cannot assure you we will raise all of this sum or any amount.

The Company does not expect that existing operational cash flow will be sufficient to fund presently anticipated operations. The Company does not have sufficient working capital to meet its cash needs for the next 12 months. Accordingly, the Company will need to raise additional funds of at least $5 million to support its ongoing operations. As previously disclosed, we are engaged in a private offering of secured convertible notes and warrants which is being conducted on a best-efforts basis. As of November 3, 2022, we have raised $245,000 in the offering, and the offering remains ongoing as of the date of this report.

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 short-term loans from related parties.

Overall, there is no guarantee that cash flow from our existing or future operations and any external capital that we may be able to raise will be sufficient to meet our working capital needs.

© Edgar Online, source Glimpses