SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

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

For the ~~six~~nine month period ended ~~June~~ September 30, 2018

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

For the transition period from __ to ___

Commission File No. 000-55391

POWERCOMM HOLDINGS INC.
(Exact name of registrant as specified in its charter)

Delaware		47-3152668
(State or other jurisdiction of		(I.R.S. Employer
incorporation or organization)		Identification No.)

3429 Ramsgate Terrace

Alexandria, VA 22309

(Address of principal executive offices) (zip code)

571-259-8773
(Registrant’s telephone number, including area code)

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

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☐ No ☐

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

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☐ (Do not check if a smaller reporting company)	Smaller Reporting Company	☒
Emerging growth company	☒

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

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(1) of the Exchange Act. ☐

As of ~~August~~December 313, 2018, the Company had 24,330,000 shares of its common stock, par value $.0001 per share, issued and outstanding.

POWERCOMM HOLDINGS INC.
TABLE OF CONTENTS

		Page
PART I. FINANCIAL INFORMATION
Item 1.	Consolidated Financial Statements
	Condensed Consolidated Balance Sheets, June 30, 2018 (unaudited) and December 31, 2017	3
	Condensed Consolidated Balance Sheets, September 30, 2018 (unaudited) and December 31, 2017	3
	Condensed Statement of Operations, Three and Six Months Ended June 30, 2018 and 2017 (unaudited)	4
	Condensed Statement of Operations, Three and Nine months ended September 30, 2018 and 2017 (unaudited)	4
	Condensed Consolidated Statements of Cash Flows, Six Months Ended June 30, 2018 and 2017 (unaudited)	5
	Condensed Consolidated Statements of Cash Flows, Nine months ended September 30, 2018 and 2017 (unaudited)	5
	Notes to Condensed Financial Statements (unaudited)	6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	1013
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	1317
Item 4.	Controls and Procedures	1317
PART II. OTHER INFORMATION
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	1418
Item 5.	Other Information	1418
Item 6.	Exhibits	1418

POWERCOMM HOLDINGS INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

	June 30, 2018			December 31, 2017
	September 30, 2018			December 31, 2017
	~~(Unaudited)~~	(Unaudited)		*	*
Assets
Current Assets
Cash and cash equivalents	$	~~974~~628,~~774~~730		$	715,499
Accounts Receivable, net		~~796~~1,~~658~~553,498			401,919
Prepaid expenses		~~265~~207,~~297~~584			126,162
Other current assets		~~316~~148,~~000~~249			—
Total Current Assets		2,~~352~~538,~~729~~061			1,243,580
Furniture, fixture, and equipment, net		13,~~214~~394,~~805~~598			1,114,425
TOTAL ASSETS	$	3,567,534		$	2,358,005
Deferred line of credit costs		11,457			—
TOTAL ASSETS	$	5,944,116		$	2,358,005
Liabilities and Stockholder’s Equity
Current Liabilities
Accounts payable	$	~~180~~313,~~212~~157		$	132,367
Accrued expenses		~~266~~273,~~389~~839			270,199
Income taxes payable		~~259~~69,~~700~~300			240,700
Line of credit		5850,~~565~~000			176,865
Short-term loans		~~116~~72,~~520~~878			38,145
Long-term debt, current portion		~~226~~329,~~407~~514			219,932
Due to related party		4045,644			43,288
Total current Liabilities		1,~~148~~154,~~437~~332			1,121,496
Long-term debt, net		~~522~~2,~~871~~226,635			641,692
Deferred income taxes		~~397~~882,~~500~~400			400,500
Total Liabilities		24,~~068~~263,~~808~~367			2,163,688
Commitments and contingencies
Stockholder’s Equity
Preferred Stock, $0.0001 par value, 20,000,000 shares authorized; 1,000 shares outstanding as of June 30, 2018 and December 31, 2017, respectively		—			—
Preferred Stock, $0.0001 par value, 20,000,000 shares authorized; 1,000 shares outstanding as of September 30, 2018 and December 31, 2017, respectively		—			—
Common Stock, $0.0001 par value, 100,000,000 shares authorized; 24,330,000 shares issued, issuable and outstanding as of June 30, 2018 and December 31, 2017, respectively		2,433			2,433
Common Stock, $0.0001 par value, 100,000,000 shares authorized; 24,330,000 shares issued, issuable and outstanding as of September 30, 2018 and December 31, 2017, respectively		2,433			2,433
Discount on common stock		(50	)		(50	)
Additional paid-in capital		460,655			460,655
Retained Earnings (Accumulated deficit)		1,~~035~~217,~~688~~711			(268,721	)
Total Stockholders’ Equity		1,~~498~~680,~~726~~749			194,317
Total Liabilities and Stockholder’s Equity	$	35,~~567~~944,~~534~~116		$	2,358,005

*	Derived from audited information

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

POWERCOMM HOLDINGS INC.

CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

(Unaudited)

	For the Three Months Ended						For the ~~Six~~Nine ~~Months~~months ~~Ended~~ended
	June 30						June 30
	September 30						September 30
	2018			2017			2018			2017
Net Revenue	$	3,971,166		$	1,624,630		$	6,892,441		$	2,632,978
				As Amended						As Amended
Cost of Revenue		2,835,255			900,357			4,659,772			1,783,387
Net Revenue	$	3,819,180		$	2,211,576		$	10,711,621		$	4,844,554
Gross Profit		1,135,911			724,273			2,232,669			849,591
Cost of Revenue		2,970,703			1,486,305			7,630,475			3,412,269
Gross Profit		848,477			725,271			3,081,146			1,432,285
Operating expenses
General and administrative		~~262~~304,~~860~~270			~~279~~185,~~612~~080			~~493~~797,~~657~~927			~~518~~560,~~284~~787
Depreciation expense		7184,~~732~~537			5563,~~155~~499			~~138~~222,~~204~~741			~~105~~169,~~936~~435
Share based compensation		—			~~131,560~~—			—			131,560
Total Operating Expense		~~334~~388,~~592~~807			~~466~~248,~~327~~579			~~631~~1,~~861~~020,668			~~755~~861,~~780~~782
Operating Income		~~801~~459,~~319~~670			~~257~~476,~~946~~692			12,~~600~~060,~~808~~478			93570,~~811~~503
Other Income (Expense)
Interest Expense		(2619,~~476~~596	)		(2813,~~161~~909	)		(4565,~~820~~416	)		(4458,~~159~~068	)
Other Income (Expense), net		—36,449			—			138,~~809~~258			—
Total Other Income (Expense)		~~(26~~16,~~476~~853	)		(2813,~~161~~909	)		(4427,~~011~~158	)		(4458,~~159~~068	)
Income from operations before income tax		~~774~~476,~~843~~523			~~229~~462,~~785~~783			12,~~556~~033,~~797~~320			49512,~~652~~435
Income tax expense		~~194~~294,~~988~~500			—361,400			~~252~~546,~~388~~888			—361,400
Net Income	$	~~579~~182,~~855~~023		$	~~229~~101,~~785~~383		$	1,~~304~~486,~~409~~432		$	49151,~~652~~035
Income per share - basic and diluted	$	0.0201		$	0.0100		$	0.0506		$	0.0001
Weighted average common shares outstanding - basic and diluted		24,330,000			2223,~~983~~300,~~187~~000			24,330,000			2122,~~847~~347,~~901~~363

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

POWERCOMM HOLDINGS INC.

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

(Unaudited)

	For the Six Months ended June 30,
	For the Nine months ended September 30,
	2018			2017
				As Amended
Operating Activities
Net Income	$	1,~~304~~486,~~409~~432		$	49151,~~652~~035
Adjustments to reconcile net income to net cash provided (used) in operating activities:
Depreciation and amortization		~~138~~222,~~204~~741			~~105~~169,~~936~~435
Gain on disposal of assets		(36,460	)		—
Stock based compensation		—			131,560
Changes in Operating Assets and Liabilities
(Increase) decrease in Accounts receivable		(~~394~~1,~~739~~151,579	)		(~~287~~239,~~361~~580	)
(Increase) decrease in Prepaid expenses and Other current assets		~~(194~~109,~~102~~288	)		2225,~~284~~659
Increase (decrease) in Accounts payable		47180,~~846~~792			—
Increase (decrease) in Accrued expenses		(3,~~810~~640	)		575,~~603~~874
Increase (decrease) in Other current liabilities		—			5220,~~736~~711
Increase (decrease) in Current income taxes payable		19(171,~~000~~400	)		—42,900
Increase (decrease) in Deferred income taxes payable		(3481,~~000~~900	)		—318,500
Net cash provided by operating activities		~~913~~1,~~808~~125,354			~~132~~626,~~410~~094
Investing Activities
Capital expenditures		(93488,~~092~~184	)		(729,~~689~~969	)
Proceeds from disposal of capital assets		15,547			—
BioFuel investment		—			(1,750	)
Net cash used in investing activities		(93472,~~092~~637	)		(931,~~439~~719	)
Financing Activities
Repayment of related party advances		(2,644	)		—
Note payable principal payments		(~~440~~594,~~497~~363	)		(64382,~~621~~905	)
Line of credit repayments, net		(~~118~~126,~~300~~865	)		—
Proceed from long term debt, net		—			17,490
Proceeds from long term debt, net		—			40,590
Proceeds from advances – related party		—			86,871
Loan fees paid		(20,614	)		—
Net cash (used in) provided by financing activities		(561,441	)		39,740
Proceeds from advances – related party		5,000			86,871
Net increase in cash		259,275			162,711
Net cash (used in) provided by financing activities		(739,486	)		(255,444	)
Net increase (decrease) in cash		(86,769	)		338,931
Cash, beginning of period		715,499			49,744
Cash, end of period	$	~~974~~628,~~774~~730		$	~~212~~388,~~455~~675
Supplemental Disclosures:
Cash paid during period for:
Interest	$	4565,~~820~~416		$	4458,~~160~~068
Taxes	$	236,388		$	—
Non-cash investing and financing activities:
Equipment purchases financed	$	~~145~~704,~~492~~867		$	~~111~~382,~~791~~383
Financed insurance premiums	$	261,032		$	—
Insurance proceeds receivable	$	49,801			—
Real estate purchase financed	$	1,338,750		$	—
Financed insurance premiums	$	289,157		$	—

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

POWERCOMM HOLDINGS INC.

Notes to Unaudited Financial Statements

~~June~~ September 30, 2018

NOTE 1 – ORGANIZATION AND NATURE OF OPERATIONS

ORGANIZATION

The Company was incorporated in the State of Delaware on January 12, 2015, and was formerly known as White Grotto Acquisition Corporation (“White Grotto” or “White Grotto Acquisition”). On September 14, 2015, the Company implemented a change of control by issuing shares to new shareholders, redeeming shares of existing shareholders, electing new officers and directors and accepting the resignations of its then existing officers and directors. In connection with the change of control, the shareholders of the Company and its board of directors unanimously approved the change of the Company’s name from White Grotto Acquisition Corporation to PowerComm Holdings, Inc.

On November 15, 2016, the Company entered into a merger agreement (the “Acquisition”) with PowerComm Construction, Inc., a Virginia corporation (“PCC”). The current business of PCC is in electric utility, fiber optic, and telecommunications construction and maintenance services. PCC installs, connects and services the energy and communications sectors. Pursuant to the Acquisition, the Company has acquired the business plan, operations and contracts of its now wholly-owned subsidiary, PowerComm Construction, Inc. (“PCC” or “PowerComm Construction”).

PRINCIPALS OF CONSOLIDATION

The accompanying consolidated financial statements include the accounts of ~~PowerComm~~the ~~Holdings,~~Company ~~Inc.~~ and its wholly -owned ~~subsidiary, PowerComm~~or ~~Construction,~~controlled ~~Inc~~subsidiaries. All material intercompany accounts, transactions and profits have been eliminated in consolidation.

BASIS OF PRESENTATION UNAUDITED INTERIM FINANCIAL STATEMENTS

The condensed consolidated balance sheet as of ~~June~~September 30, 2018 and the condensed consolidated statements of operations and cash flows for the ~~six~~nine-month periods ended September ~~June~~ 30, 2018 and 2017 have been prepared by the Company without audit. The condensed consolidated balance sheet as of December 31, 2017 has been derived from the audited financial statements as of that date, but does not include all required year-end disclosures. In the opinion of management, such statements include all adjustments considered necessary to present fairly the Company’s financial position as of ~~June~~September 30, 2018 and December 31, 2017, and its results of operations and cash flows for all periods presented. These condensed consolidated financial statements should be read in conjunction with the audited financial statements and the notes thereto for the years ended December 31, 2017 and 2016, included in the Form 10-K filed by the Company on June 6, 2018.

The accompanying unaudited condensed consolidated financial statements are prepared in accordance with U.S. generally accepted accounting principles (U.S. GAAP) for interim financial information and with the instructions to Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all information and footnotes required by U.S. GAAP for complete financial statements. The Company believes that the disclosures are adequate to make the interim information presented not misleading. Operating results for the ~~six~~ nine months ended ~~June~~September 30, 2018 are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2018.

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

USE OF ESTIMATES

The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. Significant estimates include, but are not limited to, assumptions used in our impairment testing of long-lived assets.

CASH AND CASH EQUIVALENTS

The Company considers all cash on hand and in banks, certificates of deposit and other highly-liquid investments with original maturities of three months or less, when purchased, to be cash and cash equivalents. As of ~~June~~September 30, 2018, and December 31, 2017, the Company has unsecured deposits of $~~517~~345,~~150~~068 and $480,360, respectively.

REVENUE RECOGNITION

The Company performs underground and overhead utility services primarily in the eastern and southeastern regions of the United States for utility companies. The Company’s work is performed under cost-plus-fee contracts. The length of the Company’s contracts vary, but are typically two to three years in length. While the contracts that the Company enters into are multi-year in nature, the services performed under those contracts generally occurs under discrete projects that are individually billed and that range from a couple of weeks to as short as a few days in length. In most instances, the Company bills its customer on a near daily basis. Prior to adoption of ASC 606, the Company’s policy was that revenue became fixed and determinable upon signoff of the work performed by the customer. Upon signoff, the customer accepted the work performed and therefore no warranty or defect allowances were able to be presented by the customer. Upon adoption of ASC 606, revenue becomes recognizable by the Company when control of the goods and services performed are transferred to the customer. The Company’s policy is that transfer of control occurs when the customer signs off on the work performed. The result of the adoption of ASC 606, therefore, did not constitute a material change in how the Company recognizes revenue.

COST OF REVENUE

Costs of revenue include all direct materials, labor costs, equipment and those indirect costs, including depreciation of machinery and equipment, trucks and vehicles, and indirect labor, supplies, tools, repairs and miscellaneous job costs. Changes in job performance, job conditions and estimated profitability, may result in revisions to costs and income and are recognized in the period in which the revisions are determined.

DEBT ISSUANCE COSTS

Certain fees and costs incurred to obtain long-term financing are capitalized and included as Intangible Assets in the condensed consolidated balance sheet, net of accumulated amortization. These costs are amortized to interest expense over the term of the related debt. When debt is extinguished prior to its maturity date, the amortization of the remaining unamortized debt issuance costs, or pro-rata portion thereof, is charged to loss on extinguishment of debt. Unamortized debt issuance costs were $20,614 and $0 as of September 30, 2018 and 2017, respectively.

RECLASSIFICATIONS

Certain amounts in the prior period financial statements have been reclassified to conform to the current period presentation. These reclassifications had no effect on reported consolidated net loss.

NOTE 3 – REVENUE

The Company adopted the provisions of the guidance in the new revenue standard under ASC 606 effective January 1, 2018 applying the modified retrospective method to all contracts. Results for reporting periods beginning after January 1, 2018 are presented under the new revenue recognition guidance, while prior period amounts are not adjusted and continue to be reported in accordance with the historic accounting under previous revenue recognition guidance. The adoption of this guidance did not have any material impact on the Company’s consolidated condensed financial statements. As was discussed in Note 2, there was no material impact to net revenue for the ~~six~~nine months ended September ~~June~~ 30, 2018 as a result of applying the new revenue recognition guidance.

NOTE 4 - PROPERTY AND EQUIPMENT

Property and equipment consist of the following:

	June 30, 2018			December 31, 2017
Vehicles & trucks	$	2,387,663		$	2,241,584
Land	$	442,400		$	—
Machinery & equipment		653,227			560,723
Building and improvements		1,162,668			—
Office furniture & fixtures		103,686			103,686
Vehicles & trucks		2,956,293			2,241,584
Machinery & equipment		704,286			560,723
Office furniture & fixtures		140,397			103,686
Computer & software		25,647			25,647
		3,170,223			2,931,640
		5,431,691			2,931,640
Less: Accumulated depreciation		(12,~~955~~037,~~418~~093	)		(1,817,215	)
Net property and equipment	$	13,~~214~~394,~~805~~598		$	1,114,425

Depreciation expense was $~~138~~222,~~204~~741 and $~~105~~169,~~936~~435 for the ~~six~~ nine months ended ~~June~~September 30, 2018 and 2017, respectively.

During the quarter ended September 30, 2018, two capital items were wrecked, or otherwise damaged beyond repair. Claims were filed with the Company’s insurance carrier and settlements totaling $65,348 have been received. Gains on disposal totaling $36,460 were recorded in the third quarter and included in ‘Other income and expense’.

REAL ESTATE ACQUISTION

On July 12, 2018, the Company, jointly with a related entity, closed on the purchase of an industrial property in Upper Marlboro, Prince George’s County, Maryland. The Company paid $1.575 million plus closing costs. The industrial property is approximately 1.77 acres, fenced and paved, which will provide for the ability of the Company to significantly increase its truck fleet and has an office building and drive up warehouse of approximately 12,000 square feet. The facility will house all of the Company’s operations and will function as corporate headquarters. The Company financed 85% of the purchase price, or approximately $1.339 million. The purchase loan bears interest at a rate of 5.24% per annum, payable over 10 years at $8,076 monthly with a payment due on the 120^th month estimated at approximately $1,008,000, and is secured with a first mortgage on the real estate and the personal guarantee of David Kwasnik, the Chief Executive Officer and majority shareholder of the Company. The purchase loan was made to the Company and to Kwasnik Properties, LLC (the “LLC”) on a joint and several basis. The two members of the LLC are David and Laura Kwasnik, both officers and majority shareholders of the Company. After miscellaneous improvements the Company has begun moving all operating assets and personnel to the new facilities.

The Company has included the financial statements of the LLC in these consolidated financial statements and will continue to do so in future filings in accordance with the “Variable Interest Entity” rules.

NOTE 5 - DEBT

Lines of Credit

Lines of credit consist of the following:

	June 30, 2018		December, 31, 2017
	September 30, 2018		December, 31, 2017
$200,000 Line of Credit with SunTrust Bank, variable interest rate equal to the Prime Rate as published in the Wall Street Journal plus 6%, at 11.00% per annum as of June 30, 2018, renewed annually, due on demand, secured by all assets of the Company.	$	58,565	$	176,865
$500,000 Line of Credit with Branch Banking and Trust Company (“BB&T”), variable interest rate equal to BB&T’s Prime Rate, at 5.25% per annum as of September 30, 2018, due on July 12, 2020, interest due monthly, secured by all assets of the Company. The Company incurred $11,457 of costs associated with this line of credit and will amortize these costs ratably over the life of the line of credit.	$	50,000	$	—
Total Lines of Credit	$	58,565	$	176,865
$200,000 Line of Credit with SunTrust Bank, variable interest rate equal to the Prime Rate as published in the Wall Street Journal plus 6%, secured by all assets of the Company. Retired as of September 30, 2018.		—		176,865
Total Lines of Credit	$	50,000	$	176,865

On July 12, 2018, the Company’s subsidiary, PowerComm Construction, Inc., entered into a $500,000 line of credit with a lending institution. The line of credit, in the form of a promissory note (the “Note”), matures on July 12, 2020, when all unpaid principal and interest become due and payable. The interest rate on the Note is variable and is based on the Lender’s Prime Rate, currently at 5.25%, and is due monthly. A component of the acquisition of the new line of credit was paying off and closing the existing $200,000 line of credit with Sun Trust Bank.

Short Term Debt

Short term debt consists of the following:

	June 30, 2018		December 31, 2017
	September 30, 2018		December 31, 2017
Notes payable to an insurance premium finance company, terms ranging from six to nine months, bearing interest at rates ranging from 7.2% to 8.6%, per annum, monthly payments totaling $42,162, secured by various insurance policies and all rights thereto.	$	116,520	$	38,145
Notes payable to an insurance premium finance company, terms ranging from six to nine months, bearing interest at rates ranging from 7.2% to 9.3%, per annum, monthly payments totaling $32,055, secured by various insurance policies and all rights thereto.	$	72,878	$	38,145
Total Short Term Debt	$	~~116~~72,~~520~~878	$	38,145

Long-term debt

Long-term debt consists of the following:

	June 30, 2018			December 31, 2017
	September 30, 2018			December 31, 2017
Multiple notes payable, to various banks and finance organizations, maturing at various dates from February 2019 through March 2023, bearing interest rates ranging from 0% to 7.9%, per annum, monthly payments totaling $26,691, secured by vehicles and equipment	$	749,278		$	861,624
Multiple notes payable, to various banks and finance organizations, maturing at various dates from February 2019 through August 2024, bearing interest rates ranging from 0% to 8.0%, per annum, monthly payments totaling $39,790, secured by vehicles and equipment	$	1,237,645		$	861,624
Less: Current Portion		(226,407	)		(219,932	)
Note payable to a bank, maturing in July 2028, bearing interest at a rate of 5.24% per annum, monthly payment of $8,075, secured by real estate. The Company paid loan costs in the amount of $9,157		1,327,655			—
Total Long Term Debt	$	522,871		$	641,692
		2,565,300			861,624
Less: Current Portion		(329,508	)		(219,932	)
Less: Discount		(9,157	)		—
Total Long Term Debt	$	2,226,635		$	641,692

NOTE 6 - DUE TO RELATED PARTY

As of ~~June~~September 30, 2018 and December 31, 2017, the balances due to a related party amounted to $4045,644 and $43,288, respectively, and are unsecured. There is no written agreement and the funds are due on demand with no maturity date, and bearing no interest.

NOTE 7 – CUSTOMER CONCENTRATIONS

For the six months ended June 30, 2018 and 2017, respectively, service revenue from Potomac Electric Power Co (“PEPCO”), which is now a wholly owned subsidiary of Exelon Corp, accounted for 97% and 79% of the Company’s net revenue, respectively. Accounts receivable due from PEPCO accounted for 100% of the Company accounts receivable balances as of June 30, 2018. For the year ended December 31, 2017, three customers accounted for 100% of the Company’s revenues and two customers accounted for 100% of its accounts receivable balance.

NOTE 8 – SUBSEQUENT EVENTS

On July 12, 2018, the Company, jointly with a related entity, closed on the purchase of an industrial property in Upper Marlboro, Prince George’s County, Maryland. The Company paid $1.575 million plus closing costs. The industrial property is approximately 1.77 acres, fenced and paved, which will provide for the ability of the Company to significantly increase its truck fleet and has an office building and drive up warehouse of approximately 12,000 square feet. The facility will house all of the Company’s operations and will function as corporate headquarters. The Company financed 85% of the purchase price, or approximately $1.339 million. The purchase loan bears interest at a rate of 5.24% per annum, payable over 10 years at $8,076 monthly with a payment due on the 120th month estimated at approximately $1,008,000, and is secured with a first mortgage on the real estate and the personal guarantee of David Kwasnik, the Chief Executive Officer and majority shareholder of the Company. The purchase loan was made to the Company and to Kwasnik Properties, LLC (the “LLC”) on a joint and several basis. The two members of the LLC are David and Laura Kwasnik, both officers and majority shareholders of the Company. After miscellaneous improvements the Company will begin moving all operating assets and personnel to the new facilities.

The Company expects to include the financial statements of the LLC in its consolidated financial statements in future filings in accordance with the “Variable Interest Entity” rules.

On July 12, 2018, the Company’s subsidiary, PowerComm Construction, Inc., entered into a $500,000 line of credit with a lending institution. The line of credit, in the form of a promissory note (the “Note”), matures on July 12, 2020, when all unpaid principal and interest become due and payable. The interest rate on the Note is variable and is based on the Lender’s Prime Rate, currently at 4.75%, and is due monthly. A component of the acquisition of the new line of credit was paying off and closing the existing $200,000 line of credit with Sun Trust Bank.

~~ITEM 2.~~NOTE ~~MANAGEMENT’S~~7 ~~DISCUSSION~~- ~~AND~~INCOME ~~ANALYSIS~~TAXES ~~OF FINANCIAL CONDITION~~ AND ~~RESULTS~~CORRECTION OF ~~OPERATIONS~~AN ERROR

The following ~~discussion~~table ~~should~~shows bea ~~read in conjunction with our audited financial statements and notes to our financial statements~~reconciliation ~~included~~of ~~elsewhere~~income intax ~~this~~expense ~~report.~~between ~~This~~the ~~discussion~~amount ~~contains~~reported ~~forward-looking statements that involve risks~~ and ~~uncertainties.~~the ~~Actual results~~amount ~~could~~under ~~differ~~the ~~materially~~statutory ~~from~~tax ~~those~~rates ~~anticipated~~ in ~~these~~effect ~~forward-looking~~for ~~statements~~the asnine amonths ~~result~~ended September of30, ~~various~~2018 ~~factors~~and ~~discussed elsewhere~~2017, ~~in this report.~~respectively:

Certain information included herein contains statements that may be considered forward-looking statements, such as statements relating to our anticipated revenues, gross margin and operating results, future performance and operations, plans for future expansion, capital spending, sources of liquidity, and financing sources. This forward-looking information involves important risks and uncertainties that could significantly affect anticipated results in the future, and accordingly, such results may differ from those expressed in any forward-looking statements made herein. These risks and uncertainties include those relating to our liquidity requirements, the continued growth of the software industry, the success of our product development, marketing and sales activities, vigorous competition in the construction industry, dependence on existing management, leverage and debt service (including sensitivity to fluctuations in interest rates), domestic or global economic conditions, the inherent uncertainty and costs of prolonged arbitration or litigation, and changes in federal or state tax laws or the administration of such laws.

	September 30, 2018			September 30, 2017 (as amended)
Income tax expense from statutory rate	$	549,000		$	205,000
Effect of change in tax status		—			107,100
Other items		(6,112	)		(8,300	)
Effect of permanent timing differences		4,000			57,600

Income tax expense, as reported	$	546,888		$	361,400

~~Overview~~The current income tax provision represents the estimated amount of income taxes paid or payable for the year, as well as changes in estimates from prior years. The deferred income tax provision represents the change in deferred tax liabilities and assets. The following table presents the significant components of the provision for income taxes:

PowerComm Holdings, Inc., through its wholly owned subsidiary PowerComm Construction, Inc., installs, connects and services the energy and communications sectors. Experienced PCC teams also build and maintain America’s infrastructure from fiber-optic lines to high voltage lines to cellular communication towers. The current business of PCC is in electric utility, fiber optic, and telecommunications construction and maintenance services. PCC has provided for almost 20 years a diverse range of power services, telecommunications and fiber optic services and cellular services. PCC is a longstanding service provider that works on complex projects for industry leaders. PCC service crews perform electrical power line work on overhead and underground power distribution infrastructures as well as on transmission and sub-transmission lines.

	September 30, 2018		September 30, 2017 (as amended)
Current
Federal	$	51,400	$	35,400
State		17,900		7,500
Total current provision	$	69,300	$	42,900

Deferred
Federal	$	352,388	$	236,000
State		125,200		82,500
Total deferred provision	$	477,588	$	318,500

Income tax expense	$	546,888	$	361,400

~~The Company~~On ~~has expertise in a variety of electric utility~~December 22, ~~fiber optic~~2017, ~~and~~the ~~telecommunications~~Tax ~~construction and maintenance services~~Act ~~and~~was issigned ~~qualified~~into ~~also~~law toand dosignificantly ~~business~~reformed inthe ~~all~~Internal 50Revenue ~~states,~~Code ~~the District~~ of ~~Columbia~~1986, ~~and~~as ~~Puerto~~amended. ~~Rico~~ The ~~current~~Tax ~~business~~Act ofwill significantly impact the Company is inby ~~electric~~reducing ~~utility,~~the ~~fiber~~federal ~~optic,~~corporate ~~and~~tax ~~telecommunications~~rate ~~construction~~from ~~and~~35% ~~maintenance~~to ~~services.~~21%, ~~The~~effective ~~Company~~January 1, ~~installs~~2018, ~~connects~~ and ~~services~~by ~~the~~allowing ~~energy~~expensing of ~~and~~certain ~~communications~~capital ~~sectors~~expenditures. ~~Experienced~~However, ~~teams~~the ~~also~~Tax ~~build~~Act ~~and~~limits ~~maintain~~the ~~America’s~~deductibility ~~infrastructure~~of ~~from fiber-optic~~meals, ~~lines~~entertainment toexpenses ~~high~~and ~~voltage~~certain ~~lines~~executive compensation, toimposes ~~cellular~~limitations ~~communication~~on ~~towers.~~the ~~The~~deductibility ~~Company~~of ~~has~~interest ~~its~~expense ~~headquarters~~and ineliminates ~~Northern~~the ~~Virginia, with~~domestic ~~offices~~production inactivities ~~Southern Maryland, Nashville, Tennessee, and Washington, D~~deduction.C.

~~The~~Shortly after the Tax Act was enacted, ~~Company~~the ~~has~~Securities ~~filed~~and aExchange ~~registration~~Commission ~~statement~~issued onguidance ~~Form~~under ~~S-1~~Staff Accounting Bulletin No. 118, Income Tax Accounting Implications of the Tax Cuts and Jobs Act (“SAB 118”) to ~~register~~address the ~~resales~~application of ~~common~~GAAP ~~stock~~and ~~shares~~direct ~~held~~taxpayers byto ~~certain~~consider ~~existing~~the ~~shareholders~~impact of the ~~Company~~Act as “provisional” when a registrant does not have the necessary information available, prepared or analyzed (including computations) in reasonable detail to complete the accounting for the change in tax law. AsIn accordance with SAB 118, the Company has recognized the provisional tax impacts, outlined above, related to the re-measurement of its net deferred tax liability. The ultimate impact may differ from the ~~date~~provisional amounts, possibly materially, due to, among other things, the significant complexity of ~~this~~the ~~Report~~Tax Act, anticipated additional regulatory guidance or related interpretations that may be issued by the ~~registration~~Internal ~~statement~~Revenue ~~was~~Service ~~under~~(the ~~review~~“IRS”), changes in accounting standards, legislative actions, future actions by states within the U.S. ~~Securities~~ and ~~Exchange~~changes ~~Commission~~in estimate, analysis, interpretations and assumptions the Company has made.

For the six months ended June 30, 2018, the Company generated $6,892,441 in net revenues and had net income of $1,304,409. As of June 30, 2018, the Company had retained earnings of $1,035,688.

Revenues and Losses

During the three months ended June 30, 2018, the Company posted net revenues of $3,971,166, total operating expenses of $334,592, consisting of salary and wage expenses of $126,129, depreciation of $71,732 and other general and administrative expenses of $136,731, and net income of $579,855. In comparison, during the three months ended June 30, 2017, the Company posted net revenues of $1,624,630, total operating expenses of $466,327, consisting of salary and wage expenses of $92,301, share based compensation of $131,560, depreciation of $55,155 and other general and administrative expenses of $187,311, and net income of $229,785.

~~During the~~Deferred ~~three~~income ~~months~~taxes ~~ended~~are ~~June~~recorded ~~30,~~based upon ~~2018,~~temporary differences between the ~~Company~~financial ~~incurred~~statement ~~cost~~and oftax ~~revenue~~bases of ~~$2,835,255,~~assets ~~compared~~and toliabilities ~~cost~~and ofavailable ~~revenue~~net ~~of $900,357~~operating ~~for~~loss ~~the~~and ~~three~~tax ~~months~~credit ~~ended June 30, 2017~~carryforwards. ~~The~~Temporary ~~increase~~differences inand ~~cost~~carryforwards ofthat ~~revenue~~comprised ~~was~~deferred aincome ~~result~~tax ofassets ~~increased~~and ~~costs relative to the increase~~liabilities inwere ~~revenue~~as ~~from customer contracts.~~follows:

Based on past performance, the Company is dependent on revenues generated from Potomac Electric Power Co. and RCN Telecom Services, LLC. For the six months ended June 30, 2018 and June 30, 2017, service revenue from Potomac Electric Power Co. accounted for 97% and 79% of the Company’s net revenue, respectively.

	September 30, 2018			September 30, 2017 (as amended)
Deferred income tax assets
Investments	$	(51,900	)	$	(51,900	)

Deferred income tax liabilities
Depreciation		286,600			287,200
Cash basis timing adjustment		647,700			83,200
		934,400			370,400

Net deferred income tax liability	$	882,400		$	318,500

~~Liquidity~~The Company’s deferred income tax assets and ~~Capital~~liabilities ~~Resources~~are subject to adjustment in future periods based on the Company’s ongoing evaluations of such deferred assets and liabilities and new information available to the Company.

~~As of~~Valuation ~~June~~allowances ~~30,~~are ~~2018,~~recognized ~~the Company had improved its working capital position from $0.122 million as of December 31, 2017 to $1.204~~on ~~million~~deferred ~~and~~tax ~~had~~assets aif ~~cash position of approximately $975,000 compared to approximately $715,000 as of December 31, 2017. In addition, for~~ the ~~six months ended June 30, 2018, the~~ Company’s ~~cash~~believes ~~flows~~it ~~from~~is ~~operating~~more ~~activities~~likely ~~increased~~than tonot ~~approximately~~that ~~$914,000 from~~some ~~cash~~or ~~flows~~all ~~provided by operations~~ of ~~approximately $132,000 for~~ the ~~six~~deferred ~~months~~tax ~~ended~~assets ~~June~~will ~~30,~~not ~~2017~~be realized. The Company ~~has~~believes ~~been notified~~the ~~that~~majority ~~it is now a preferred vendor for all~~ of ~~Exelon~~the ~~Corp.~~deferred ~~and~~tax ~~has~~assets ~~begun~~will ~~receiving~~be ~~new~~realized ~~contracts~~due ~~and has begun bidding on additional contracts. In 2017, and~~ to ~~date in 2018,~~ the ~~Company~~reversal ~~has~~of ~~significantly~~certain ~~increased~~significant temporary ~~its~~differences ~~revenue run rate~~ and ~~expects the~~anticipated ~~increases~~future totaxable ~~continue~~income ~~through~~from ~~the~~operations ~~remainder of 2018~~ and, ~~into~~accordingly, ~~2019. The increased revenue~~ has ~~allowed the Company to begin operating profitably and the Company expects that those conditions will~~ not ~~only~~recorded ~~continue~~an ~~but increase in the coming quarters as new contracts are received and executed upon~~allowance.

~~Results~~ Correction of ~~Operations~~an Error

~~Discussion of~~In the ~~three~~period ~~months~~ ended ~~June~~September 30, ~~2018~~2017, asthe ~~compared~~Company todid ~~the~~not properly ~~three~~record ~~months~~its ~~ended~~expected ~~June~~current ~~30,~~and ~~2017~~deferred income tax liabilities for its expected income tax expense. The table below shows the correction of this error:

Our total revenue was $3,971,166 compared to $1,624,630 for the three month periods ended June 30, 2018 and 2017, respectively, representing an increase of $2,346,536, or approximately 144%, in 2018. The increase in our revenue in the second quarter of 2018, as compared to the same period in 2017, can largely be attributed to many positive events, including being named a Contractor of Choice for PEPCO / Exelon, which led to the Company being awarded contracts from PEPCO including one for $56 million and two others for $5 million and $4 million, respectively. Additionally, going forward in 2018, the Company has recently obtained contracts with companies such as Southern Company, Georgia Power, Gulf Power, Entergy and its affiliates, and Google, among others. In June 2016, PCC received minority-owned certification status from the Capital Region of the National Minority Supplier Development Council (“NMSDC”). NMSDC is one of the country’s leading corporate membership organizations committed to helping supplier diversity by matching certified minority-owned businesses to its vast network corporate members who wish to purchase their products, services and solutions. Its corporate membership includes many of the largest public and privately-owned companies, as well healthcare companies, colleges and universities. NMSDC maintains rigorous certification standards and PCC anticipates that such certification will provide a large base for growth and potential new projects.

	As originally Presented			Correction			As Amended

Current income taxes payable	$	0		$	42,900		$	42,900
Total current liabilities	$	1,097,475		$	42,900		$	1,140,375

Deferred income taxes payable	$	0		$	318,500		$	318,500
Total liabilities	$	1,619,129		$	318,500		$	1,937,629

Retained earnings (Accumulated Deficit)	$	(71,209	)	$	(361,400	)	$	(432,609	)
Total liabilities and stockholders’ equity	$	1,683,038		$	—		$	1,683,038

~~Our cost~~In ~~of revenue was $2,835,255 compared to $900,357 for~~ the ~~three~~period ~~month periods~~ ended ~~June~~September 30, ~~2018 and~~ 2017, ~~respectively, representing an increase of $1,934,898, or approximately 215%, in 2018 comparing that in 2017. The increase is~~ the ~~result~~Company ofdid ~~the 144% growth~~not inproperly ~~revenues.~~record ~~The~~its ~~gross~~expected ~~margin~~current on revenue dropped from 45% in 2017 to 29% in 2018. Our margin difference between the respective quarterly periods can, in part, be attributed to several factors. One was the impact of the transition due to a change we implemented in 2017 to reduce reliance on outside contract work. In 2017, we increased our use of agreements with local International Brotherhood of Electrical Workers Unions (“IBEW” locals) in which we contract with the local to provide skilled professionals to assist us with our contract jobs and wedeferred ~~agree~~income totax ~~compensate~~liabilities ~~the IBEW local~~ for ~~each~~its ~~professional~~expected ~~for~~income ~~the~~tax ~~time at their standard contract rates plus a fixed rate to cover their vacation, health and sick pay and other benefits of the given IBEW local~~expense. WeThe ~~do not~~table ~~enter~~below ~~into and are not part of any collective bargaining agreement when we contract for~~ shows the ~~use~~correction of ~~their~~this ~~local employees.~~error:

	As originally Presented		Correction			As Amended

Income tax expense	$	0	$	361,400		$	361,400
Net Income	$	512,435	$	(361,400	)	$	151,035

Earnings per share	$	0.02	$	(0.01	)	$	0.01

~~Although the~~NOTE ~~net~~9 ~~changes~~– ~~and~~CUSTOMER ~~percent changes for our revenues and our cost of revenue for the three month periods ended June 30, 2018 and~~CONCENTRATIONS ~~2017 are summarized above, these trends should not necessarily be viewed as a definitive indication of our future results.~~

~~Gross profit~~For ~~was $1,135,911 compared to $724,273 for~~ the ~~three~~nine months ~~ending~~ended ~~June~~September 30, 2018 and 2017, respectively, service anrevenue ~~increase~~from Potomac Electric Power Co (“PEPCO”), which is now a wholly owned subsidiary of ~~$411~~Exelon Corp,~~638,~~ accounted orfor 5798%, ~~from~~and ~~2018~~78% toof ~~2017.~~the ~~The~~Company’s ~~increase~~net ~~was~~revenue, ~~mainly~~respectively. Accounts receivable due tofrom PEPCO accounted for 100% and 63% of the ~~significant~~Company ~~growth~~accounts inreceivable ~~revenue,~~balances as ~~noted~~of ~~above~~September 30, 2018 and 2017, respectively. For the ~~change~~year ~~described~~ended December 31, 2017, ~~above~~three oncustomers ~~our~~accounted ~~reduction~~for in100% ~~outside~~of ~~contracted~~the ~~labor~~Company’s revenues and two customers accounted for 100% of its accounts receivable balance.

The operating expenses for the Company were $334,592 compared to $466,327 for the three months ended June 30, 2018 and 2017, respectively, representing a decrease of $131,735, or 28%, in the three months ended June 30, 2018 compared to the same period in 2017. The decrease is due, primarily, to one time charge in 2017 for share based compensation of $131,560 and to an increase in depreciation expense and other normal business operation costs that accompanied our growth in revenue as described above.

Interest expense was $26,474 compared to $28,161 in the three month periods ended June 30, 2018 and 2017, respectively, a decrease of approximately 6%. The change in interest expense for the quarter-end periods was due primarily to the fact that, although the Company continues to acquire machinery and equipment, primarily vehicles, and has financed the majority of those acquisitions through various banks and finance companies, the rates on these financing transactions are relatively low, the Company has also significantly reduced the balance in its line of credit, which bears interest at a much higher rate. The net effect of these two circumstances is that interest expense has remained relatively stable, on a comparative basis.

Discussion of the six months ended June 30, 2018 as compared to the six months ended June 30, 2017

Our total revenue was $6,892,441 compared to $2,632,978 for the six month periods ended June 30, 2018 and 2017, respectively, representing an increase of $4,259,463, or approximately 162%, in 2018. The increase in our revenue in the first six months of 2018, as compared to the same period in 2017, can largely be attributed to many positive events, including being named a Contractor of Choice for PEPCO / Exelon, which led to the Company being awarded contracts from PEPCO including one for $56 million and two others for $5 million and $4 million, respectively. Additionally, going forward in 2018, the Company has recently obtained contracts with companies such as Southern Company, Georgia Power, Gulf Power, Entergy and its affiliates, and Google, among others. In June 2016, PCC received minority-owned certification status from the Capital Region of the National Minority Supplier Development Council (“NMSDC”). NMSDC is one of the country’s leading corporate membership organizations committed to helping supplier diversity by matching certified minority-owned businesses to its vast network corporate members who wish to purchase their products, services and solutions. Its corporate membership includes many of the largest public and privately-owned companies, as well healthcare companies, colleges and universities. NMSDC maintains rigorous certification standards and PCC anticipates that such certification will provide a large base for growth and potential new projects.

Our cost of revenue was $4,659,772 compared to $1,783,387 for the six month periods ended June 30, 2018 and 2017, respectively, representing an increase of $2,876,385, or approximately 161%, in 2018 comparing that in 2017. The increase is the result of the 162% growth in revenues. Even though cost of revenues grew by 161%, the gross margin on revenue remained stable at 32% in both 2017 and 2018. We expect our margin to grow slightly in 2018 due to the result of a change we implemented in 2017 to reduce reliance on outside contract work. In 2017, we increased our use of agreements with local International Brotherhood of Electrical Workers Unions (“IBEW” locals) in which we contract with the local to provide skilled professionals to assist us with our contract jobs and we agree to compensate the IBEW local for each professional for the time at their standard contract rates plus a fixed rate to cover their vacation, health and sick pay and other benefits of the given IBEW local. We do not enter into and are not part of any collective bargaining agreement when we contract for the use of their local employees.

Although the net changes and percent changes for our revenues and our cost of revenue for the six month periods ended June 30, 2018 and 2017 are summarized above, these trends should not necessarily be viewed as a definitive indication of our future results.

Gross profit was $2,232,669 compared to $849,591 for the six months ending June 30, 2018 and 2017, respectively, an increase of $1,383,078, or 163%, from 2018 to 2017. The increase was mainly due to the significant growth in revenue, as noted above, and the change described above on our reduction in outside contracted labor.

The operating expenses for the Company were $631,861 compared to $755,780 for the six months ended June 30, 2018 and 2017, respectively, representing a decrease of $123,919, or 16%, in the six months ended June 30, 2018 compared to the same period in 2017. The decrease is due, primarily, to one time charge in 2017 for share based compensation of $131,560 and to an increase in depreciation expense and other normal business operation costs that accompanied our growth in revenue as described above.

Interest expense was $45,820 compared to $44,159 in the six month periods ended June 30, 2018 and 2017, respectively, an increase of approximately 4%. The change in interest expense for the respective six-month periods was due primarily to the fact that, although the Company continues to acquire machinery and equipment, primarily vehicles, and has financed the majority of those acquisitions through various banks and finance companies, the rates on these financing transactions are relatively low, the Company has also significantly reduced the balance in its line of credit, which bears interest at a much higher rate. The net effect of these two circumstances is that interest expense has remained relatively stable, on a comparative basis.

Changes in Cash Flow

Operating Activities

The Company had net cash provided by operating activities for the six months ended June 30, 2018 of $913,808 compared to net cash provided by operating activities for the six months ended June 30, 2017 of $132,410, an improvement to cash of approximately $781,398. Cash provided by operating activities is driven by our net income and adjusted by non-cash items as well as changes in operating assets and liabilities. Non-cash adjustments include depreciation and share based compensation. Non-cash adjustment for depreciation totaled $138,204 and $105,936 for the six months ended June 30, 2018 and 2017, respectively. For the six months ended June 30, 2018, the net negative change in operating assets and liabilities was $528,805 compared to the six months ended June 30, 2017 where the net negative change in operating assets and liabilities was $154,738. The negative change in operating assets and liabilities had a much greater impact on net cash provided by operating activities for the six months ended June 30, 2018 compared to the six months ended June 30, 2017.

Investing activities

Capital expenditures, primarily the purchase of vehicles and equipment, was $93,092 for the six months ended June 30, 2018 compared to $7,689 in the comparable period in 2017. Additionally, there was a miscellaneous $1,750 use of cash for investing activities for the six months ended June 30, 2017. There was no comparable use of cash in the same period in 2018.

Financing Activities

Net cash used by financing activities was $561,441 for the six months ended June 30, 2018 compared to net cash provided by financing activities of $39,740 for the six months ended June 30, 2017. The primary difference is that in the six months ended June 30, 2018, we used cash to reduce our debt by $561,441, including payments of $2,644 to reduce a payable to a related party. This is compared to payments to reduce debt of $64,621, net of proceeds from a payable to a related party of $86,871 and net of approximately $17,500 in loan proceeds in the six months ended June 30, 2017.

Off-Balance Sheet Arrangements

The Company has no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on its financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.

~~Sources of~~ITEM ~~Revenue~~2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion ~~Company~~should ~~earns~~be ~~revenue~~read ~~from~~in ~~executing~~conjunction ~~its~~with ~~business~~our ~~plan~~audited financial statements and ~~continuing~~notes to ~~provide~~our ~~electric~~financial ~~utility,~~statements ~~fiber~~included ~~optic,~~elsewhere in this report. This discussion contains forward-looking statements that involve risks and ~~telecommunications~~uncertainties. Actual results could differ ~~construction~~materially ~~and~~from ~~maintenance~~those ~~services~~anticipated ~~through~~in ~~its~~these ~~wholly~~forward-looking ~~owned~~statements ~~subsidiary,~~as ~~PowerComm~~a ~~Construction,~~result ~~Inc~~of various factors discussed elsewhere in this report.

~~Critical~~Certain information ~~Accounting~~included ~~Policies~~herein contains statements that may be considered forward-looking statements, such as statements relating to our anticipated revenues, gross margin and operating results, future performance and operations, plans for future expansion, capital spending, sources of liquidity, and financing sources. This forward-looking information involves important risks and uncertainties that could significantly affect anticipated results in the future, and accordingly, such results may differ from those expressed in any forward-looking statements made herein. These risks and uncertainties include those relating to our liquidity requirements, the continued growth of the software industry, the success of our product development, marketing and sales activities, vigorous competition in the construction industry, dependence on existing management, leverage and debt service (including sensitivity to fluctuations in interest rates), domestic or global economic conditions, the inherent uncertainty and costs of prolonged arbitration or litigation, and changes in federal or state tax laws or the administration of such laws.

The financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires making estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. The estimates are based on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis of making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.Overview

~~ITEM~~PowerComm Holdings, 3Inc., ~~Quantitative~~through its wholly owned subsidiary PowerComm Construction, Inc., installs, connects and ~~Qualitative~~services ~~Disclosures~~the ~~About~~energy ~~Market~~and ~~Risk~~communications sectors. Experienced PCC teams also build and maintain America’s infrastructure from fiber-optic lines to high voltage lines to cellular communication towers. The current business of PCC is in electric utility, fiber optic, and telecommunications construction and maintenance services. PCC has provided for almost 20 years a diverse range of power services, telecommunications and fiber optic services and cellular services. PCC is a longstanding service provider that works on complex projects for industry leaders. PCC service crews perform electrical power line work on overhead and underground power distribution infrastructures as well as on transmission and sub-transmission lines.

~~Information~~The Company has expertise ~~not~~in ~~required~~a variety of electric utility, fiber optic, and telecommunications construction and maintenance services and is qualified also to bedo ~~filed~~business byin aall ~~smaller~~50 ~~reporting~~states, ~~company~~the District of Columbia and Puerto Rico The current business of the Company is in electric utility, fiber optic, and telecommunications construction and maintenance services. The Company installs, connects and services the energy and communications sectors. Experienced teams also build and maintain America’s infrastructure from fiber-optic lines to high voltage lines to cellular communication towers. The Company has its headquarters in Northern Virginia, with offices in Southern Maryland, Nashville, Tennessee, and Washington, D.C.

~~ITEM~~The Company has filed 4a registration statement on Form S-1 to register the resales of common stock shares held by certain existing shareholders of the Company. ~~Controls~~As of the date of this Report, the registration statement was under review by the U.S. Securities and ~~Procedures~~Exchange Commission.

~~Disclosure~~For the nine months ~~Controls~~ended September 30, 2018, the Company generated $10,711,621 in net revenues and ~~Procedures~~had net income of $1,486,432. As of September 30, 2018, the Company had retained earnings of $1,217,711.

~~Pursuant to~~Revenues ~~Rules adopted by the Securities~~ and Exchange Commission, the Company carried out an evaluation of the effectiveness of the design and operation of its disclosure controls and procedures pursuant to Exchange Act Rules. This evaluation was done as of the end of the period covered by this report by the Company’s principal executive officer (who is also the principal financial officer) in consultation with an outside accounting advisor.Income

~~Based upon~~During ~~that evaluation,~~ the ~~Company’s~~three ~~principal~~months ended ~~executive~~September ~~officer~~30, ~~has~~2018, ~~concluded that~~ the Company’s ~~disclosure~~posted ~~controls and~~net ~~procedures~~revenues ~~are~~of ~~not effective in gathering~~$3,819,180, ~~analyzing~~total ~~and~~operating ~~disclosing~~expenses ~~information~~of ~~needed~~$388,807, toconsisting ~~ensure~~of ~~that the information required~~salary toand bewage ~~disclosed~~expenses byof ~~the Company in its periodic reports is recorded~~$161,640 ~~processed,~~depreciation ~~summarized~~of ~~and reported~~$84,537 ~~within the time periods specified in the Commission’s rules~~ and ~~forms.~~other ~~Disclosure~~general ~~controls~~ and ~~procedures~~administrative ~~include,~~expenses ~~without~~of ~~limitation~~$142,630 ~~controls~~ and ~~procedures~~net ~~designed~~income of to$182,023. ~~ensure~~In ~~that~~comparison, ~~information~~during ~~required~~the tothree bemonths ~~disclosed~~ended bySeptember an30, ~~issuer~~2017, in the ~~reports~~Company ~~that~~posted itnet ~~files~~revenues orof ~~submits~~$2,211,576, ~~under~~total ~~the~~operating ~~Act~~expenses isof ~~accumulated~~$248,579, ~~and~~consisting ~~communicated~~of tosalary ~~the~~and ~~issuer’s~~wage ~~management,~~expenses ~~including~~of ~~its~~$84,819, ~~principal~~depreciation ~~executive~~of $63,499 and ~~principal~~other general ~~financial~~and ~~officers,~~administrative orexpenses ~~persons~~of ~~performing similar functions~~$100,261 asand ~~appropriate~~net toincome ~~allow~~of ~~timely decisions regarding required disclosure~~$101,383.

~~The Company intends to engage outside accounting advisors to assist the Company in implementing effective disclosure controls and procedures.~~13

~~Changes~~During the three months ended September 30, 2018, the Company incurred cost of revenue of $2,970,703, compared to cost of revenue of $1,486,305 for the three months ended June 30, 2017. The increase in ~~Internal~~cost ~~Controls~~of ~~over~~revenue ~~Financial~~was ~~Reporting~~a result of increased costs relative to the increase in revenue from customer contracts.

~~There was~~Based noon ~~change~~past in performance, the Company’s ~~internal~~is ~~control~~dependent ~~over~~on ~~financial~~revenues ~~reporting~~generated ~~that~~from ~~was~~Potomac ~~identified~~Electric inPower ~~connection~~Co. ~~with~~and ~~such~~RCN ~~evaluation that~~Telecom ~~occurred~~Services, ~~during~~LLC. For the ~~period~~nine ~~covered~~months ended bySeptember ~~this~~30, ~~report~~2018 ~~that~~and ~~has~~2017, ~~materially~~service ~~affected,~~revenue orfrom isPotomac ~~reasonably~~Electric ~~likely~~Power toCo. ~~materially~~accounted ~~affect,~~ for 98% and 78% of the Company’s net ~~internal~~revenue, ~~control over financial reporting~~respectively.

~~PART II~~Liquidity --and ~~OTHER~~Capital ~~INFORMATION~~Resources

~~ITEM~~As of September 30, 2018, the Company had improved its working capital position from $0.122 million as of December 31, 2017 to $1.384 ~~LEGAL~~million ~~PROCEEDINGS~~and had a cash position of approximately $629,000 compared to approximately $715,000 as of December 31, 2017. In addition, for the nine months ended September 30, 2018, the Company’s cash flows from operating activities increased to approximately $1,125,000 from cash flows provided by operations of approximately $626,000 for the nine months ended June 30, 2017. The Company has been notified that it is now a preferred vendor for all of Exelon Corp. and has begun receiving new contracts and has begun bidding on additional contracts. In 2017, and to date in 2018, the Company has significantly increased its revenue run rate and expects the increases to continue through the remainder of 2018 and into 2019. The increased revenue has allowed the Company to begin operating profitably and the Company expects that those conditions will not only continue but increase in the coming quarters as new contracts are received and executed upon.

~~From time~~Results ~~to time, the Company may become a party to legal actions or proceedings in the ordinary course~~ of its business. As of June 30, 2018, there were no other such actions or proceedings, either individually or in the aggregate, that, if decided adversely to the Company’s interests, the Company believes would be material to its business.Operations

13Discussion of the three months ended September 30, 2018 as compared to the three months ended June 30, 2017

~~ITEM~~Our total revenue was $3,819,180 compared to $2,211,576 for the three month periods ended September 30, 2018 and 2017, respectively, representing an increase of $1,607,604, or approximately 73%, in 2018. ~~UNREGISTERED~~The ~~SALES~~increase OFin ~~EQUITY~~our ~~SECURITIES~~revenue ~~AND~~in ~~USE~~the OFthird ~~PROCEEDS~~quarter of 2018, as compared to the same period in 2017, can largely be attributed to many positive events, including being named a Contractor of Choice for PEPCO / Exelon, which led to the Company being awarded contracts from PEPCO including one for $56 million and two others for $5 million and $4 million, respectively. Additionally, going forward in 2018, the Company has recently obtained contracts with companies such as Southern Company, Georgia Power, Gulf Power, Entergy and its affiliates, and Google, among others. In June 2016, PCC received minority-owned certification status from the Capital Region of the National Minority Supplier Development Council (“NMSDC”). NMSDC is one of the country’s leading corporate membership organizations committed to helping supplier diversity by matching certified minority-owned businesses to its vast network corporate members who wish to purchase their products, services and solutions. Its corporate membership includes many of the largest public and privately-owned companies, as well healthcare companies, colleges and universities. NMSDC maintains rigorous certification standards and PCC anticipates that such certification will provide a large base for growth and potential new projects.

~~None~~Our cost of revenue was $2,970,703 compared to $1,486,305 for the ~~six~~three ~~months~~month periods ended ~~June~~September 30, 2018 and 2017, respectively, representing an increase of $1,484,398 or approximately 100%, in 2018 comparing that in 2017. The increase is the result of the 73% growth in revenues. The gross margin on revenue dropped from 33% in 2017 to 22% in 2018. Our margin difference between the respective quarterly periods can, in part, be attributed to several factors. Due to our rapid increase in revenues the Company has to anticipate the staffing and infrastructure necessary to accommodate that growth. Accordingly, we hire staff and acquire the equipment and tools ahead of the work start dates. This growth, and related costs, are due in great part to a ramp up in work for low/high voltage conduit line work that we expect to see increased billings starting in the 4th quarter, but more materially so in the first quarter of 2019.

~~ITEM 5. OTHER INFORMATION~~14

NoAlthough the net changes ~~Changes~~and inpercent ~~Nomination~~changes ~~Procedures~~for our revenues and our cost of revenue for the three month periods ended September 30, 2018 and 2017 are summarized above, these trends should not necessarily be viewed as a definitive indication of our future results.

~~During~~Gross profit was $848,477 compared to $725,271 for the ~~quarter~~three ~~covered~~months byending ~~this~~September ~~Report~~30, ~~there~~2018 ~~were~~and ~~not~~2017, ~~any~~respectively, ~~material~~a ~~changes~~decrease of $123,206, or 17%, from 2018 to ~~the~~2017. ~~procedures~~The bydecrease ~~which~~in ~~security~~gross ~~holders~~profit ~~may~~as ~~recommend~~a percentage of revenue was mainly due to a substantial growth in payroll and other ~~nominees~~costs of sales that was necessary to accommodate the ~~Board~~increased ofwork ~~Directors~~under new contracts that we expect to bill in the 4th quarter.

~~ITEM~~The operating expenses 6for the Company were $388,807 compared to $248,579 for the three months ended September 30, 2018 and 2017, respectively, representing an increase of $140,228, or 56%, in the three months ended September 30, 2018 compared to the same period in 2017. ~~EXHIBITS~~The increase is due, primarily, to and to an increase in depreciation expense and payroll. We expect payroll will continue to grow as the Company continues to grow.

Exhibit No.		Description
2.1		Agreement and Plan of Reorganization between PowerComm Holdings, Inc. and PowerComm Construction, Inc. (filed as exhibit to the Form 8-K filed November 23, 2016)
3.1		Certificate of Incorporation (filed as exhibit to the Form 10-12G filed March 3, 2015)
3.2		By-laws (filed as exhibit to the Form 10-12G filed March 3, 2015)
3.3		Sample stock certificate (filed as exhibit to the Form 10-12G filed March 3, 2015)
10.1		Master Agreement for Services between Southern Company Services, Inc. and PowerComm Construction Inc. (filed as an exhibit to the Form 8-K/A filed October 5, 2017)
10.2		Master Services Agreement between RCN Telecom Services LLC and PowerComm Construction Inc. (filed as an exhibit to the Form 8-K/A filed October 5, 2017)

Interest expense was $19,596 compared to $13,909 in the three month periods ended September 30, 2018 and 2017, respectively, an increase of approximately 41%. The change in interest expense for the quarter-end periods was due primarily to the fact that the Company acquired the real estate that is now the location of its new headquarters and financed approximately $1.4 million of the purchase. Additionally, the Company continues to acquire machinery and equipment, primarily vehicles, and has financed the majority of those acquisitions through various banks and finance companies.

14Discussion of the nine months ended September 30, 2018 as compared to the nine months ended June 30, 2017

10.3		Construction Contract between PHI Service Company and PowerComm Construction Inc. (filed as an exhibit to the Form 8-K/A filed October 5, 2017)
31*		Certification of the Chief Executive Officer and Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32*		Certification of the Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS*		XBRL Instance Document
101.SCH*		XBRL Taxonomy Extension Schema Document
101.CAL*		XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF*		XBRL Taxonomy Extension Definition Linkbase Document
101.LAB*		XBRL Taxonomy Extension Label Linkbase Document
101.PRE*		XBRL Taxonomy Extension Presentation Linkbase Document

Our total revenue was $10,711,621 compared to $4,844,554 for the nine month periods ended September 30, 2018 and 2017, respectively, representing an increase of $5,867,067, or approximately 121%, in 2018. The increase in our revenue in the first nine months of 2018, as compared to the same period in 2017, can largely be attributed to many positive events, including being named a Contractor of Choice for PEPCO / Exelon, which led to the Company being awarded contracts from PEPCO including one for $56 million and two others for $5 million and $4 million, respectively. Additionally, going forward in 2018, the Company has recently obtained contracts with companies such as Southern Company, Georgia Power, Gulf Power, Entergy and its affiliates, and Google, among others. In June 2016, PCC received minority-owned certification status from the Capital Region of the National Minority Supplier Development Council (“NMSDC”). NMSDC is one of the country’s leading corporate membership organizations committed to helping supplier diversity by matching certified minority-owned businesses to its vast network corporate members who wish to purchase their products, services and solutions. Its corporate membership includes many of the largest public and privately-owned companies, as well healthcare companies, colleges and universities. NMSDC maintains rigorous certification standards and PCC anticipates that such certification will provide a large base for growth and potential new projects.

*Our cost of revenue ~~Filed~~was ~~herewith~~ $7,630,475 compared to $3,412,269 for the nine month periods ended September 30, 2018 and 2017, respectively, representing an increase of $4,218,206, or approximately 124%, in 2018 comparing that in 2017. The increase is the result of the 121% growth in revenues. Even with this growth in cost of revenues of 124%, the gross margin on revenue remained stable at 30% in 2017 compared to 29% in 2018. We expect our margin to remain in this range through the last quarter of 2018 and into 2019 as the Company continues to grow rapidly and hires employees and incurs costs necessary to manage that growth. More specifically, this growth, and related costs, are due in great part to a ramp up in work for low/high voltage conduit line work that we expect to see increased billings from starting in the 4th quarter, but more materially so in the first quarter of 2019.

15Although the net changes and percent changes for our revenues and our cost of revenue for the nine month periods ended September 30, 2018 and 2017 are summarized above, these trends should not necessarily be viewed as a definitive indication of our future results.

~~SIGNATURES~~Gross profit was $3,081,146 compared to $1,432,285 for the nine months ending September 30, 2018 and 2017, respectively, an increase of $1,648,861, or 115%, from 2017 to 2018. The increase was mainly due to the significant growth of 121% in revenue, as noted above, and to a ramp up in work for low/high voltage conduit line work that we expect to see increased billings from starting in the 4th quarter, but more materially so in the first quarter of 2019.

~~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.~~15

~~Dated:~~The operating expenses for the Company were $1,020,668 compared to $861,782 for the nine months ended September 430, 2018 and 2017, respectively, representing an increase of $158,886, or 18%, in the nine months ended September 30, 2018 compared to the same period in 2017. The increase is due to increases in wages and normal business operation costs that accompanied our growth in revenue, as described above, including an increase in depreciation expense and is net of a one-time charge in 2017 for share based compensation of $131,560.

~~POWERCOMM~~Interest ~~HOLDINGS~~expense was $65,416 ~~INC~~compared to $58,068 in the nine month periods ended September 30, 2018 and 2017, respectively, an increase of approximately 13%. ~~By:~~The ~~/s/~~change ~~David~~in ~~Kwasnik~~interest ~~Name:~~expense ~~David~~for ~~Kwasnik~~the ~~Title:~~respective ~~Chief~~nine-month ~~Executive~~periods ~~Officer~~was due primarily to the fact that the Company acquired the real estate that is now the location of its new headquarters and financed approximately $1.4 million of the purchase. Additionally, the ~~Chief~~Company ~~Financial~~continues ~~Officer~~to acquire machinery and equipment, primarily vehicles, and has financed the majority of those acquisitions through various banks and finance companies.

16Changes in Cash Flow

Operating Activities

The Company had net cash provided by operating activities for the nine months ended September 30, 2018 of $1,125,354 compared to net cash provided by operating activities for the nine months ended June 30, 2017 of $626,094, an improvement to cash of approximately $499,260. Cash provided by operating activities is driven by our net income and adjusted by non-cash items as well as changes in operating assets and liabilities. Non-cash adjustments include depreciation and gain on disposal of assets, as well as stock based compensation. The non-cash adjustment for depreciation totaled $222,741 and $169,435 for the nine months ended September 30, 2018 and 2017, respectively. For the nine months ended September 30, 2018, the net negative change in operating assets and liabilities was $547,359 compared to the nine months ended June 30, 2017 where the net negative change in operating assets and liabilities was $187,336. The negative change in operating assets and liabilities had a much greater impact on net cash provided by operating activities for the nine months ended September 30, 2018 compared to the nine months ended June 30, 2017.

Investing activities

Capital expenditures, primarily the purchase of vehicles and equipment, was $221,866 for the nine months ended September 30, 2018 compared to $29,969 in the comparable period in 2017. A capital expenditure was made for the acquisition of the new company headquarters totaling $266,318 in the quarter ended September 30, 2018. Additionally, there was a miscellaneous $1,750 use of cash for investing activities for the nine months ended June 30, 2017. There was no comparable use of cash in the same period in 2018.

Financing Activities

Net cash used by financing activities was $739,486 for the nine months ended September 30, 2018 compared to net cash used by financing activities of $255,444 for the nine months ended June 30, 2017. The primary difference is that in the nine months ended September 30, 2018, we used cash to reduce our debt by $723,872, including payments of $2,644 to reduce a payable to a related party. This is compared to payments to reduce debt of $382,905, net of proceeds from a payable to a related party of $86,871 and net of approximately $40,590 in loan proceeds in the nine months ended June 30, 2017.

Expected 4^th quarter changes in liquidity

The Company’s main operating subsidiaries are cash basis taxpayers. The most effective way to manage our current income tax liability is through expending cash in the 4^th quarter to pay for normal recurring expenses in an accelerated manner in order to reduce our US Federal and multi state tax liabilities. We expect to deploy most of our current cash availability plus also use our availability under our line of credit in order to accelerate payments to our vendors in order to reduce our tax liability. This will have a significant impact on our short term liquidity. However, because we are only accelerating our payments to vendors, we expect that this will reverse itself in the 1^st quarter of 2019 as our payments to vendors will be significantly reduced due to the accelerated payments in the 4^th quarter of 2018.

Off-Balance Sheet Arrangements

Sources of Revenue

The Company earns revenue from executing its business plan and continuing to provide electric utility, fiber optic, and telecommunications construction and maintenance services through its wholly owned subsidiary, PowerComm Construction, Inc.

Critical Accounting Policies

ITEM 3. Quantitative and Qualitative Disclosures About Market Risk.

Information not required to be filed by a smaller reporting company.

ITEM 4. Controls and Procedures.

Disclosure Controls and Procedures

Pursuant to Rules adopted by the Securities and Exchange Commission, the Company carried out an evaluation of the effectiveness of the design and operation of its disclosure controls and procedures pursuant to Exchange Act Rules. This evaluation was done as of the end of the period covered by this report by the Company’s principal executive officer (who is also the principal financial officer) in consultation with an outside accounting advisor.

Based upon that evaluation, the Company’s principal executive officer has concluded that the Company’s disclosure controls and procedures are not effective in gathering, analyzing and disclosing information needed to ensure that the information required to be disclosed by the Company in its periodic reports is recorded, processed, summarized and reported, within the time periods specified in the Commission’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Act is accumulated and communicated to the issuer’s management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

The Company intends to engage outside accounting advisors to assist the Company in implementing effective disclosure controls and procedures.

Changes in Internal Controls over Financial Reporting

There was no change in the Company’s internal control over financial reporting that was identified in connection with such evaluation that occurred during the period covered by this report that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

PART II -- OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

From time to time, the Company may become a party to legal actions or proceedings in the ordinary course of its business. As of September 30, 2018, there were no other such actions or proceedings, either individually or in the aggregate, that, if decided adversely to the Company’s interests, the Company believes would be material to its business.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

None for the nine months ended September 30, 2018.

ITEM 5. OTHER INFORMATION

No Changes in Nomination Procedures

During the quarter covered by this Report, there were not any material changes to the procedures by which security holders may recommend nominees to the Board of Directors.

ITEM 6. EXHIBITS

Exhibit No.		Description

2.1		Agreement and Plan of Reorganization between PowerComm Holdings, Inc. and PowerComm Construction, Inc. (filed as exhibit to the Form 8-K filed November 23, 2016)
3.1		Certificate of Incorporation (filed as exhibit to the Form 10-12G filed March 3, 2015)
3.2		By-laws (filed as exhibit to the Form 10-12G filed March 3, 2015)
3.3		Sample stock certificate (filed as exhibit to the Form 10-12G filed March 3, 2015)
10.1		Master Agreement for Services between Southern Company Services, Inc. and PowerComm Construction Inc. (filed as an exhibit to the Form 8-K/A filed October 5, 2017)
10.2		Master Services Agreement between RCN Telecom Services LLC and PowerComm Construction Inc. (filed as an exhibit to the Form 8-K/A filed October 5, 2017)

10.3		Construction Contract between PHI Service Company and PowerComm Construction Inc. (filed as an exhibit to the Form 8-K/A filed October 5, 2017)
31*		Certification of the Chief Executive Officer and Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32*		Certification of the Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS*		XBRL Instance Document
101.SCH*		XBRL Taxonomy Extension Schema Document
101.CAL*		XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF*		XBRL Taxonomy Extension Definition Linkbase Document
101.LAB*		XBRL Taxonomy Extension Label Linkbase Document
101.PRE*		XBRL Taxonomy Extension Presentation Linkbase Document

* Filed herewith

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.

Dated: December 3, 2018

	POWERCOMM HOLDINGS, INC.

	By:	/s/ David Kwasnik
	Name:	David Kwasnik
	Title:	Chief Executive Officer, Chief Financial Officer

Filing Compare · PowerComm Holdings Inc.