Americrew (ACRU) Risk Analysis

Our common stock is a "penny stock" if it does not qualify for one of the exemptions from the definition of "penny stock" under Section 3a51-1 of the Securities Exchange Act of 1934 (the "Exchange Act"). Our common stock may be a "penny stock" if it meets one or more of the following conditions: (i) it trades at a price less than $5 per share; (ii) it is not traded on a "recognized" national securities exchange which excludes the Pink Market or the OTCQB and OTCQX; or (iii) is issued by a company that has been in business less than three years with net tangible assets less than $5 million. The principal result or effect of being designated a "penny stock" is that securities broker-dealers participating in sales of our common stock will be subject to the "penny stock" rules of the SEC. For example, SEC Rule 15g-2 requires broker-dealers dealing in penny stocks to provide potential investors with a document disclosing the risks of penny stocks and to obtain a manually signed and dated written receipt of the document at least two business days before effecting any transaction in a penny stock for the investor's account. Moreover, Rule 15g-9 requires broker-dealers in penny stocks to approve the account of any investor for transactions in such stocks before selling any penny stock to that investor. This procedure requires the broker-dealer to: (i) obtain from the investor information concerning his or her financial situation, investment experience and investment objectives; (ii) reasonably determine, based on that information, that transactions in penny stocks are suitable for the investor and that the investor has sufficient knowledge and experience as to be reasonably capable of evaluating the risks of penny stock transactions; (iii) provide the investor with a written statement setting forth the basis on which the broker-dealer made the determination in (ii) above; and (iv) receive a signed and dated copy of such statement from the investor, confirming that it accurately reflects the investor's financial situation, investment experience and investment objectives. Compliance with these requirements may make it more difficult and time consuming for holders of our common stock to resell their shares to third parties or to otherwise dispose of them in the market or otherwise.

Our Certificate of Incorporation authorizes the issuance of up to 10,000,000 shares of "blank check" preferred stock, with $0.001 par value per share, with such designation rights and preferences as may be determined from time-to-time by the Company's Board of Directors (the "Board"). Subject to the terms of our outstanding securities, our Board is empowered, without stockholder approval, to issue shares of preferred stock with dividend, liquidation, conversion, voting or other rights which could adversely affect the voting power or other rights of the holders of our common stock. In the event of such issuances, the preferred stock could be used, under certain circumstances, as a method of discouraging, delaying or preventing a change in control of our Company.

Our principal stockholders beneficially own approximately 77% of our outstanding common stock. If such stockholders act together, they may have the ability to have a substantial influence on matters submitted to our stockholders for approval, including the election and removal of directors and the approval of any merger, consolidation or sale of all or substantially all of our assets. As a result, our other stockholders may have little or no influence over matters submitted for stockholder approval. In addition, the ownership of such stockholders could preclude any unsolicited acquisition of us, and consequently, adversely affect the price of our common stock. These stockholders may make decisions that are adverse to your interests.

From time-to-time, certain of our stockholders may be eligible to sell all or some of their common stock by means of ordinary brokerage transactions in the open market pursuant to Rule 144 promulgated under the Securities Act of 1933 (the "Securities Act"), subject to certain limitations. Generally, pursuant to Rule 144, non-affiliate stockholders may sell freely after six months subject only to the current public information requirement, although because we are a former shell, we must be current in filing our Quarterly and Annual Reports. Affiliates may sell after six months subject to the Rule 144 volume, manner of sale (for equity securities), and current public information and notice requirements as well as the current reporting requirement. Because the Company was a shell company until the Acquisition, Rule 144 has two modifications to the above provisions. Until August 12, 2022, any purchasers of the Company's securities cannot rely on Rule 144 for resale of such securities. Secondly, after that date, Rule 144 will only be available if the Company has filed all required Form 10-Qs and 10-Ks. Future sales of substantial amounts of our common stock in the public market, or the anticipation of these sales, could materially and adversely affect market prices prevailing from time-to-time, and could impair our ability to raise capital through sales of equity or equity-related securities. In addition, the market price of our common stock could decline as a result of sales of a large number of shares of our common stock in the market or the perception that these sales may occur.

Section 11 of our Certificate of Incorporation provides that unless the Company consents in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware (or, if such court does not have subject matter jurisdiction thereof, the U.S. District Court of Delaware) will, to the fullest extent permitted by law, be the sole and exclusive forum for: (i) any derivative action or proceeding brought on behalf of the Company (except to the extent that the Exchange Act provides otherwise), (ii) any action asserting a claim of breach of a fiduciary duty owed by any director or officer (or affiliate of any of the foregoing) of the Company to the Company or the Company's stockholders, (iii) any action asserting a claim arising pursuant to any provision of the Delaware General Corporation Law, the Company's Certificate of Incorporation or Bylaws, or (iv) any other action asserting a claim arising under, in connection with, and governed by the internal affairs doctrine. Section 11 of our Certificate of Incorporation further provides that unless the Company consents in writing to the selection of an alternative forum, the federal district courts of the United States of America located in Delaware will be the exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act or the Exchange Act and any person or entity purchasing or otherwise acquiring or holding any interest in shares of capital stock of the Company will be deemed to have notice of and consented to these provisions. We believe these provisions may benefit us by providing increased consistency in the application of Delaware law and federal securities laws by chancellors and judges, as applicable, particularly experienced in resolving corporate disputes, efficient administration of cases on a more expedited schedule relative to other forums and protection against the burdens of multi-forum litigation. If a court were to find the choice of forum provision that is contained in our Certificate of Incorporation to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in other jurisdictions, which could materially adversely affect our business, results of operations, and financial condition. For example, Section 22 of the Securities Act provides that state and federal courts have concurrent jurisdiction over claims to enforce any duty or liability created by the Securities Act or the rules and regulations promulgated thereunder. Accordingly, there is uncertainty as to whether a court would enforce such a forum selection provision as written in connection with claims arising under the Securities Act. To date, the Delaware Supreme Court has upheld the exclusive jurisdiction provisions in certificates of incorporation for claims under the Securities Act, and the U.S. Court of Appeals for the Seventh Circuit recently held that a forum selection clause was unenforceable as to a derivative claim that was brought under the Exchange Act. Further, to date no court has ruled on the exclusive venue provision for claims under the Securities Act. Accordingly, if a stockholder files a Securities Act claim or an Exchange Act claim in a federal court and we seek to rely upon the Delaware venues, we may not be successful. Because the choice of forum provisions in our Certificate of Incorporation may have the effect of severing certain causes of action between federal and state courts, stockholders seeking to assert claims against us or any of our current or former directors, officers, other employees, agents, or stockholders, may be discouraged from bringing such claims due to a possibility of increased litigation expenses arising from litigating multiple related claims in two separate courts. Additionally, a stockholder could face uncertainty as to which jurisdiction and venue a case will ultimately be heard in, particularly given that variations in facts, circumstances and the particular provisions at issue often alter the legal analysis and judicial interpretation, which may delay, prevent or impose additional obstacles on the stockholder in such litigation. The choice of forum provisions may therefore limit a stockholder's ability to bring a claim in a judicial forum that it finds favorable for, or otherwise present obstacles and challenges in connection with, disputes with us or any of our current or former director, officer, other employee, agent, or stockholder. Investors cannot waive compliance with the federal securities laws and the rules and regulations thereunder.

The Sarbanes-Oxley Act of 2002 requires, among other things, that we maintain effective disclosure controls and internal control over financial reporting. Our disclosure controls and procedures and internal controls have not been effective. Our management has no public company management experience, which may delay us in meeting our obligations under the Sarbanes-Oxley Act. In order to develop and improve the effectiveness of our disclosure controls and procedures and internal control over financial reporting, we anticipate that we will expend, significant resources, including accounting-related costs and significant management oversight. Any controls and procedures that we develop may become inadequate because of changes in conditions in our business, and once established, additional weaknesses in our disclosure controls and internal control over financial reporting may be discovered in the future. Any failure to develop or maintain effective controls or any difficulties encountered in their implementation or improvement could harm our operating results or cause us to fail to meet our reporting obligations and may result in a restatement of our financial statements for prior periods. As a public company, we are required to provide management reports on the effectiveness of our internal control over financial reporting in our periodic reports. However, our independent registered public accounting firm is not required to formally attest to the effectiveness of our internal control over financial reporting. If we fail to develop and maintain an effective system of disclosure controls and internal control over financial reporting, our ability to produce timely and accurate financial statements or comply with applicable regulations could be impaired, which could result in loss of investor confidence and could have an adverse effect on our stock price.

We have never paid cash dividends on our common stock and do not anticipate doing so in the foreseeable future. Further, the Notes prohibit us from paying cash dividends or distributions on any of our equity securities while the Notes remain outstanding. The payment of dividends on our common stock will depend on earnings, financial condition and other business and economic factors affecting us at such time as our board of directors may consider relevant. If we do not pay dividends, our common stock may be less valuable because a return on your investment will only occur if our stock price appreciates.

While Mikab had operations prior to the Acquisition, we have a limited operating history as a combined company following the August 2021 Acquisition from which to evaluate our prospects. Most importantly, our two most senior executive officers come from Mikab and Novation, so our operations going forward are subject to ordinary integration risks where two companies and two cultures are combined. Further, while Mikab and Novation have operated in the telecommunications sector prior to the Acquisition, neither company has operated in the clean energy space, making our expectations and projections with respect to that business segment particularly speculative. We may not accurately forecast customer behavior and recognize or respond to emerging trends, changing preferences or competitive factors facing us, and, therefore, we may fail to make accurate financial forecasts. Our current and future expense levels are based largely on our budget plans and estimates of future revenue. Additionally, our current revenue projections are based largely on customer and partner relationships and contracts that are still the subject of negotiation and in some cases are pending government funding and bidding processes, the results of which remain uncertain. Similarly, if we are able to raise sufficient capital in the future, we may use a portion of the proceeds to acquire other operating businesses in our segments or related segments to facilitate strategic growth and build our market presence and revenue potential. If we do acquire one or more businesses in the future, we may be unable to adjust our spending in a timely manner to compensate for any unexpected revenue shortfall, which could then force us to curtail or cease our business operations or plan of operations or acquisitions. Our prospects must be considered in light of the uncertainties, risks, expenses, and difficulties frequently encountered by companies in their early stages of operations and growth process. Due to these contingencies, we may be unable to achieve or maintain profitability in some or all of our business segments in a timely manner or at all, in which case you could lose all or some of your investment.

As of April 6, 2022, we have a total of approximately $5 million in backlog. Our backlog consists of the estimated amount of revenue we expect to realize from future work on uncompleted contracts, including new contracts under which work has not begun, as well as revenue from change orders and renewal options and our proportionate share of estimated revenue from proportionately consolidated non-controlled contractual joint ventures. A significant portion of our current 12-month backlog is attributable to master service agreements and other service agreements, which generally do not require our customers to purchase a minimum amount of services and are cancellable on short or no advance notice. The balance of our backlog is our estimate of work to be completed under contracts for specific projects. Backlog amounts are determined based on estimates that incorporate historical trends, anticipated seasonal impacts, experience from similar projects and estimates of customer demand based on communications with our customers. These estimates may prove inaccurate, which could cause estimated revenue to be realized in periods later than originally expected, or not at all. Additionally, our ability to estimate backlogs and revenue realization may become more difficult as we grow our operations and acquire businesses. We have experienced and may experience postponements, cancellations and reductions in expected future work due to changes in our customers' spending plans, market volatility, project delays and/or other factors. There can be no assurance as to our customers' requirements or that actual results will be consistent with the estimates included in our forecasts. As a result, our backlog as of any particular date is an uncertain indicator of future revenue and earnings. In addition, contracts included in our backlog may not be profitable. If our backlog fails to materialize, our results of operations, cash flows and liquidity would be materially and adversely affected.

We expect to record a significant amount of goodwill on our consolidated balance sheet in connection with future acquisitions. Under the Generally Accepted Accounting Principles in the U.S., goodwill must be evaluated for impairment at least annually or more frequently if events indicate it is warranted. If the carrying value of a reporting unit exceeds its current fair value, the goodwill is considered impaired. Events and conditions that could result in impairment in the value of our goodwill include, but are not limited to, significant negative industry or economic trends, competition and adverse changes in the regulatory environment, significant decline in the Company's stock price for a sustained period of time, limited funding, as well as or other factors leading to reduction in expected long-term revenues or profitability. We may in the future be required to record impairment charges with respect to goodwill related to acquisitions. If we record impairment charges related to our goodwill, our operating results would likely be materially and adversely affected.

In late 2021 we recently closed two private placement offerings of Notes and Warrants (the "2021 Notes and Warrants") which resulted in $2,485,000 in gross proceeds, well below the $15 million we sought to raise in those transactions. These proceeds were insufficient to pay our outstanding indebtedness as and when it comes due, meet our operational commitments, or fully implement our business plan. Although we entered into a Factoring and Security Agreement under which the purchaser agreed to purchase selected Mikab accounts receivable (subject to purchaser's discretion, a required reserve and payment of certain fees) and under which the purchaser's rights are secured by Mikab's assets, we plan to launch a new private placement and seek to raise up to $7 million on similar terms through the issuance of Notes and Warrants (the "2022 Notes and Warrants") in order to pay our liabilities and/or finance our operations. We obtained the consent of more than 51% of the holders of the 2021 Notes and Warrants to issue additional indebtedness, although there is a risk minority investors may challenge this action taken without their consent. Further, our outstanding securities contain provisions, such as those summarized in the following paragraph, which could limit our ability to raise capital in the future. See "Liquidity and Capital Resources" and "Item 13 - Certain Relationships and Related Transactions, and Director Independence" for more information on our outstanding securities. Because of the recent convertible debt financing as well as prior bridge loans, we have a total of $3,856,727 in outstanding indebtedness, which consists of (i) $256,000 owed to DR Shell LLC, the Company's former principal stockholder (the "Former Principal Stockholder"), which was a party to the Share Exchange Agreement wherein the Company agreed to pay the Former Principal Stockholder $300,000 upon the earlier of closing of financings of at least $7,000,000 or December 31, 2021, of which $44,000 has been paid as of the date of this Report and the remainder is past due, (ii) $464,078 payable by the Company to the Estate of Wesley Weis, a family member of our Chief Operating Officer, from loans made by Mr. Weis to Mikab, which amount accrues interest at the rate of 10% per annum and is payable January 1, 2025, (iii) $651,649 payable to certain investors including insiders from the bridge loans which mature in 2022 (including $351,649 due on July 31, 2022), and (iv) $2,485,000 from the Notes which mature in late 2023. Further, the Notes are secured by the Company's assets and guaranteed by the Company and its subsidiaries. Therefore, the occurrence of an event of default under these Notes, which would accelerate our payment obligations thereunder, could cause us to lose some or all of our assets and suspend or cease the related operations to the extent we are unable to repay the indebtedness or cure the event of default within the cure periods prescribed, if any. Events of default under the Notes include, among other things, (i) any default in the payment of amounts owing to the holder on the Notes; (ii) a material breach or the failure observe or perform any covenant or agreement under any of the transaction documents related to the Note transaction or any other material agreement, lease, document or instrument to which the Company or its subsidiaries is obligated; (iii) the Company or its subsidiaries experiences a material adverse effect as defined in the transaction documents; (iv) the Company issuing variable rate securities; and (v) the Registration Statement containing this Report failing to become effective by the 90th day following its initial filing date or by May 13th. Further, these Notes prohibit us from incurring further indebtedness, subjecting our assets to liens or encumbrances, or engaging in transactions with our affiliates, subject to limited exceptions. These restrictive covenants may have the effect of limiting or preventing our ability to raise the capital needed to repay the Notes, bridge loans or other outstanding indebtedness or fund our operations. Additionally, if we are unable to timely repay the bridge loans, which come due earlier than the Notes, this would trigger an event of default under the Notes which could result in a negative cascade effect that would materially harm our ability to continue our operations absent additional capital or obtaining a waiver or extension from the noteholders, which may require additional consideration, further diminishing our financial position. If we are unable to raise sufficient additional capital to pay these obligations as and when they come due, our business and your investment in us could be materially harmed.

Given our need for additional capital, we will need to raise additional capital in the future, the terms and availability of which will depend on market conditions, strategic considerations and operational requirements. Our planned private placement of Notes and Warrant on identical terms to our prior offering will create additional dilutions. To the extent that even more additional capital is raised through the issuance of shares or other securities convertible into, or exercisable for, shares of common stock, our stockholders will be diluted. Future issuances of our common stock or other equity securities, or the perception that such sales may occur, could adversely affect the prevailing market price of our common stock and impair our ability to raise capital through future offerings of equity or equity-linked securities. For example, we are required to register the shares of common stock issuable upon conversion and exercise of the 2021 Notes and Warrants. Once the Registration Statement we filed is effective, it will permit the resale of these shares at any time following the effective date of such Registration Statement as long as it remains effective. The resale of a substantial number of shares of our common stock in the public market could adversely affect the market price for our common stock and make it more difficult for investors to sell shares of our common stock at times and prices that they feel are appropriate. Furthermore, we expect that, because there will be a large number of shares registered pursuant to the Registration Statement, selling stockholders will continue to offer shares covered by such Registration Statement for a significant period of time, the precise duration of which cannot be predicted. Accordingly, the adverse market and price pressures resulting from an offering pursuant to this or subsequent registration statements may continue for an extended period of time and continued negative pressure on the market price of our common stock could have a material adverse effect on our ability to raise additional equity capital. To the extent that we raise funds and issue the 2022 Notes and Warrants, the dilution will increase.

We require additional capital to achieve our operational and acquisition goals during the next 12 months and for general corporate purposes. In late 2021 we raised just $2,485,000 of the $15 million we sought to raise by the end of 2021 through the sale of 2021 Notes and Warrants. Our planned offering of 2022 Notes and Warrants will occur in the near future. No assurances can be given that we will be successful in raising substantial capital as intended or at all. The terms of any financing may adversely affect the holdings or the rights of the Company's stockholders. The issuance of additional shares by us, or the possibility of such issuance, may cause the market price of our common stock to decline. In addition, any debt financing secured by us in the future (beyond the 2022 Notes) could involve restrictive covenants relating to our capital-raising activities and other financial and operational matters, which may make it more difficult for us to obtain additional capital and to pursue business opportunities. If we are unable to raise additional capital sufficient to meet our current growth goals, we may have to abandon our plans in certain regions or with respect to certain target companies, partnerships or contracts. There can be no assurance that such funding will be available to the Company in the amount required at any time or, if available, that it can be obtained on terms satisfactory to the Company.

We may be exposed to liabilities that are unique to the services we provide, including due to hazards and risks described elsewhere in these Risk Factors. While we intend to maintain insurance for certain risks, the amount of our insurance coverage may not be adequate to cover all claims or liabilities, and we may be forced to bear substantial costs resulting from risks and uncertainties of our business. It is also not possible to obtain insurance to protect against all operational risks and liabilities. Moreover, due to interpretations of our insurance policies, we may be forced to sue an insurance carrier, and the results may result in a material uninsured loss. The failure to obtain or maintain adequate insurance coverage on terms favorable to us, or at all, could have a material adverse effect on our business, financial condition, results of operations and prospects.

Prospective investors should be aware that if we are not successful in our business, their entire investment in the Company could become worthless. Even if the Company is successful, we can provide no assurances that investors will derive a profit from their investment. We need additional capital to meet our obligations and achieve our business objectives, and we cannot guarantee we will be successful in locating additional required capital as and when needed or that any such amounts will be sufficient for us to establish material revenue growth. If we are not successful, you may lose your entire investment.

The federal securities laws require us to comply with SEC reporting requirements relating to our business and securities. Complying with these reporting and other regulatory obligations is time-consuming and will result in increased costs to us which could have a negative effect on our financial condition or business. These increased costs are not reflected in the audited financial statements contained in this because during the periods covered Mikab was a private company not subject to SEC reporting obligations. Because the Acquisition was a reverse merger, we are required to include its financial statements for the two years ended prior to the date of the Acquisition. As a public company, we are subject to the reporting requirements of the Exchange Act and the requirements of the Sarbanes-Oxley Act. These requirements may place a strain on our systems and resources. We are required to file annual, quarterly and current reports with the SEC disclosing certain aspects and developments of our business and financial condition. The Sarbanes-Oxley Act requires that we maintain effective disclosure controls and procedures and internal controls over financial reporting. To maintain and improve the effectiveness of our disclosure controls and procedures, we will need to commit significant resources, hire additional executive officers and personnel and provide for additional management oversight. We intend to implement additional procedures and processes for the purpose of addressing the standards and requirements applicable to SEC reporting companies. Sustaining our growth will also require us to commit additional managerial, operational and financial resources to identifying competent professionals to join our Company and to maintain appropriate operational and financial systems to adequately support our intended expansion. These activities may divert management's attention from other business concerns, which could have a material adverse effect on our results of operations, financial condition or business.

Our business strategy contemplates expanding our presence in the industries we serve, including through strategic acquisitions of companies that complement or enhance our business. We will be highly reliant on funds received from recent financings as well as future securities offerings to achieve these acquisitions and resultant growth in our business, although we may use our common stock or preferred stock in connection with any acquisitions. Our recent private placements in 2021 did not result in sufficient capital to achieve these goals, so we need to raise additional capital in the future to be able to achieve our growth objectives. Even if we raise sufficient capital to be positioned to make acquisitions, we may be unable to find suitable acquisition candidates or to complete acquisitions on favorable terms, if at all. The number of acquisition targets that meet our criteria may be limited. We may also face competition for acquisition opportunities, and other potential acquirers may offer more favorable terms or have greater financial resources available for potential acquisitions. Further, amendments to SEC Rule 15c2-11 became effective on September 28, 2021. OTC Markets has passed a rule that permits shell companies to trade for only 18 months; as a result, we believe this will increase competition for target businesses, may make it harder to complete acquisitions and may increase the costs. This competition may further limit our acquisition opportunities or raise the prices of acquisitions and make them less accretive, or possibly not accretive, to us. Failure to consummate future acquisitions could negatively affect our growth strategies. The success of our acquisition strategy also depends on our ability to successfully integrate the operations of the acquired businesses with our existing operations and realize the anticipated benefits from the acquired businesses, such as the expansion of our existing operations, elimination of redundant costs and capitalizing on cross-marketing opportunities. Our ability to integrate and realize benefits can be negatively impacted by, among other things: - failure of an acquired business to achieve the results we expect;- diversion of management's attention from operational and other matters or other potential disruptions to existing business;- difficulties incorporating the operations and personnel, or inability to retain key personnel, of an acquired business;- additional financial reporting and accounting challenges associated with an acquired business;- unanticipated events or liabilities associated with the operations of an acquired business;- loss of business due to customer overlap or other factors;- risks and liabilities arising from the prior operations of an acquired business, such as performance, operational, safety, workforce or other compliance or tax issues, some of which we may not have discovered or accurately estimated during our due diligence and may not be covered by indemnification obligations or available insurance; and - any difficulty or failure to obtain the requisite capital on terms acceptable to us or at all as needed to fund acquisitions; There can be no assurance that we will be able to complete any acquisitions or, if we do, successfully complete the integration process for target companies without substantial costs, delays, disruptions or other operational or financial problems. We may not have access in the future to sufficient capital on favorable terms or at all. We require additional capital in order to pursue acquisitions, fund capital expenditures, and to meet our working capital needs, or to respond to changing business conditions. In addition, if we seek to incur indebtedness in the future, we may be required to agree to covenants that limit our operational and financial flexibility. Moreover, we cannot incur indebtedness to support our working capital unless we repay $2,485,000 of Notes. Further, we cannot prepay the Notes until December 31, 2022. If we pursue future debt or equity financings, we cannot be certain that such funding will be available on terms acceptable to us, or at all. Our inability to access additional capital could adversely affect our liquidity and may limit our growth and ability to execute our business strategy. Failure to successfully locate or acquire suitable businesses or integrate acquired businesses could adversely impact our business and prospects, and your investment in us could be harmed.

The growth of our business through acquisitions may expose us to risks, including the failure to identify significant issues and risks of an acquired business. A failure to identify or appropriately quantify a liability in our due diligence process could result in the assumption of unanticipated liabilities arising from the prior operations of an acquired business, some of which may not be adequately reserved and may not be covered by indemnification obligations. Since we anticipate that acquisition targets may be small privately-held companies that lack sophisticated records and financial statements, we may incur added risks. The assumption of unknown liabilities due to a failure of our due diligence could adversely affect our results of operations and financial position.