| Restatement | NOTE 2 — Business, Basis of Presentation and Significant Accounting Policies Americrew, Inc. (the “Company”, or “PhoneBrasil”) was organized in New Jersey as Donald Utz Engineering, Inc. in 1991. The Company later 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”). The Company subsequently became inactive and ceased operations. 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 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 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 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 Series A 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. 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. On September 13, 2021, the Company increased the authorized common stock to 1,650,000,000 shares. On November 16, 2021, the Company changed its name to Americrew, Inc. The Company filed a Second Certificate of Amendment to the Company’s Amended and Restated Certificate of Incorporation (the “Amendment”) with the New Jersey Secretary of State pursuant to the New Jersey Business Corporation Act (the “NJBCA”). The Amendment made the following changes: 1. Change the name of the Company to Americrew, Inc. 2. The total number of shares of stock of the Company was changed to 85,000,000 shares consisting of (i) 75,000,000 shares of common stock, par value $0.001, and (ii) 10,000,000 shares of preferred stock, par value $0.001. 3. The Company effected a reverse stock split wherein each 100 shares of common stock issued and outstanding or held by the Company in treasury stock immediately prior to the effective time were combined and converted into one share of common stock. Following the MIKAB acquisition, in 2021 the Company changed its domicile from New Jersey to Delaware. Under guidance of ASU 805-10-55-11 through 15 MIKAB has been identified as the acquirer for accounting purposes. Accordingly, the historical financial statements are those of MIKAB for all periods presented. AmeriCrew, Inc. (AmeriCrew” or the “Company”) and Mikab, Corporation (“Mikab”) are each service companies engaged in the business of building a national infrastructure involving the installation of rural wireless telecommunication cables, upgrading wireless communications towers and other above-ground infrastructure and going forward providing planning, installation, maintenance and upgrade services with respect to electronic vehicle (EV) charging stations. The Company provides specialty contracting services to market participants in the telecommunications and clean energy industries and infrastructure build throughout the United States. A proportion of the Company’s workforce is staffed through a unique in-house program through which the Company hires and trains military veterans to provide construction and maintenance services to customers. The Company’s operations (determined based on revenue) are predominantly focused on its telecommunications infrastructure services business, and in the geographic area of New Jersey and Indiana. The Company’s chief operating decision maker has been identified as the Chief Operating Officer, who reviews consolidated results when making decisions about allocating resources and assessing performance of the Company. Therefore, the Company operates in one segment with four business units: Wireless, Fiber Clean Energy and Workforce Development. 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. From an accounting perspective, the financial statements of the combined entity represent a continuation of the financial statements of the accounting acquirer/legal acquiree. As such, the historical cost bases of assets and liabilities of the acquiring entity (the accounting acquirer/legal acquiree) are maintained in the consolidated financial statements of the merged company and the assets and liabilities (if any) of the acquired entity (the legal acquirer) are accounted for under the acquisition method. Results of operations of the acquired entity (the legal acquirer) are included in the financial statements of the combined company only from the acquisition date. 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 had approximately $389,000 in cash on hand as of. January 16, 2023. The Company will need to raise additional capital to fund its operations for the next 12 months and to repay its short-term debt and the convertible promissory notes. A total of $2,485,000 of the senior secured promissory notes mature between October 4, 2023, and December 30, 2023. In addition, the Company owes $464,078 to the estate of a family member of its Chief Operating Officer which is due January 1, 2025. Our liquidity is primarily derived from financing transactions and revenue from our contracts with customers, although management anticipates a larger proportion of our capital resources to be derived from financing transactions in future periods, particularly as we seek growth capital to fund our acquisition efforts in the next 12 months. The Company is reliant upon completing one or more securities offerings in the future to continue its operations as planned and to meet its financial obligations. Because it was only able to raise $2,485,000 of the up to $15,000,000 sought in its recent private placement offerings which closed as of December 31, 2021, the Company launched a second offering of $7 million of convertible notes and warrants in August 2022, of which $838,000 was raised in 2022; this offering expires on March 31, 2023. We will therefore require additional capital in order to execute our business plan. We believe substantial doubt exists about the Company’s ability to continue as a going concern for twelve months from the date of issuance of our financial statements. The accompanying consolidated financial statements do not include any adjustments related to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might result from the outcome of this uncertainty. 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 valuation of warrants associated with debt financings, recoverability of net deferred tax assets and other 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. Impact of COVID-19 The effects of the COVID-19 pandemic continue to impact certain aspects and geographies of the global economy due to supply chain, production and other logistical disruptions. While we have continued to operate as a provider of essential services from the onset of the pandemic, during the course of the pandemic our operations and financial results have been adversely impacted by governmental responses to the COVID-19 pandemic, including shut-down orders and limitations on work site practices implemented by governments. The longer-term implications of the COVID-19 pandemic on our financial performance remain uncertain and variable in the current economic environment including rising interest and inflation rates. We continue to monitor governmental vaccination and testing standards, or requirements related to COVID-19, as well as certain standards and guidance for preventing the spread of COVID-19. While the impact of these standards has lessened in 2022, we continue to monitor changes in these standards that may impact our business. Principles of Consolidation The consolidated financial statements include the accounts of AmeriCrew, Mikab Corporation and AmeriCrew CE Services, LLC. These companies are the operating units of AmeriCrew and generate all of the revenues for AmeriCrew. AmeriCrew CE Services, LLC was formed on March 29, 2021, as a subsidiary of Mikab. All intercompany transactions are eliminated in consolidation. Significant Accounting Policies The following is a summary of significant accounting policies followed in the preparation of the accompanying consolidated financial statements. 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. The Company reviews all receivables periodically and all uncollectible amounts are written off against income. The Company expects to collect all the receivables shown on the balances sheet. From time to time, The Company uses its non-recourse factor arrangement to receive advances on approved invoices. September 30, 2022 December 31, 2021 Accounts Receivable – Total $ 1,880,003 $ 1,491,860 Less: Allowance for Doubtful Accounts $ (65,000 ) $ (39,300 ) Accounts Receivable – Net $ 1,815,003 $ 1,452,560 Revenue Recognition The Company 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 Company 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 Company 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 Company 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 Company determines are within the scope of ASC 606, the Company 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 Company 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. Trucks and Automobiles have an estimated useful life of 7-15 years, Equipment has an estimated useful life of 5-15 years and Improvements have an estimated useful life of 5-10 years. Fixed Assets September 30, 2022 December 31, 2021 Trucks and Automobiles $ 867,388 $ 785,331 Equipment 293,543 293,543 Improvements 381,300 381,300 Total Cost 1,542,231 1,460,174 Less: Accumulated Depreciation (1,382,143 ) (1,355,576 ) Fixed Assets –Net 160,088 104,598 Depreciation and amortization expense related to fixed assets amounted to approximately $27,000 and approximately $33,000 for the period ended September 30, 2022, and December 31.2021, respectively. (Loss) Earnings per share We compute basic earnings (loss) per common share by dividing net income (loss) available to common shareholders by the weighted-average number of shares of common stock outstanding during the period. We compute diluted earnings (loss) per common share by dividing net income (loss) available to common shareholders by the sum of (1) the weighted-average number of shares of common stock outstanding during the period, (2) the dilutive effect of the assumed exercise of warrants, and (3) the dilutive effect of other potentially dilutive securities. We exclude the potential dilutive effect of warrants and convertible instruments from the determination of diluted earnings (loss) per common share if the effect if including them would be antidilutive. Income Tax As a result of the stock transactions on August 12, 2021, The Company Subchapter S election has been terminated. As of that date forward the Company is be treated as a taxable C corporation. Separate short year tax returns for S and C Corporations were required to be filed for 2021. The Company is a C Corporation for federal income tax purposes. Income taxes include U.S. federal, state, and local taxes, and deferred taxes arising from temporary differences between income for financial reporting and income tax purposes. These differences are primarily related to the allowance for doubtful accounts, inventories, prepaid expenses, and various accruals. Deferred tax assets and liabilities are determined based on the difference between the consolidated financial statement balances and the tax bases of assets and liabilities using enacted tax rates in effect for the years in which the differences are expected to reverse. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the years that include the enactment date. Valuation allowances are established when necessary to reduce deferred tax assets to amounts expected to be realized. Deferred tax assets and liabilities are aggregated and shown as a net non-current amount on the accompanying consolidated balance sheet. An uncertain tax position in a tax return is recognized in the consolidated financial statements when it is more likely than not that the position would be sustained upon examination by taxing authorities. A recognized tax position is then measured at the largest amount of benefit that has greater than a 50% likelihood of being realized upon ultimate settlement. Accounting provisions also require that a change in judgment that results in subsequent recognition, derecognition, or change in a measurement of a tax position taken in a prior annual period (including any related interest and penalties) be recognized as a discrete item in the period in which the change occurs. The Company regularly evaluates the likelihood of recognizing the benefit from income tax positions taken in various federal and state filings by considering all relevant facts, circumstances, and information available. The Company evaluates all significant tax positions. As of September 30, 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 policy is to include interest and penalties, if any, within the provision for taxes in the consolidated statement of operations and comprehensive loss. To date, there have been no interest or penalties charged in relation to unrecognized tax benefits. The Company’s income tax returns are subject to examination by appropriate taxing authorities. As of September 30, 2022, the Company’s federal and state income tax returns generally open for 2021. Customer concentrations The Company has five major customers that accounted for 82% of its total sales for the year ended September 30, 2022. Four major customers accounted for 77% of the Company’s total sales for the year ended December 31, 2021. New Accounting Standards 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. This standard is effective for AmeriCrew in the annual reporting period beginning after Dec 15, 2021. The new standard requires a modified retrospective basis. ASU 2016-02, which the Company adopted during the first quarter of 2022, resulted in the recording of a right of use operating lease asset of $694,734, a right of use finance lease asset of $259,253, an operating lease liability of $700,584 and a finance lease liability of $253,401, on the Company’s consolidated financial statements. |
