CONSOLIDATED BALANCE SHEETS
(Unaudited)
|
|
September 30,
|
|
|
December 31,
|
|
|
|
2015
|
|
|
2014
|
|
Assets
|
Current Assets
|
|
|
|
|
|
|
Cash
|
|
$
|
2,150
|
|
|
$
|
2,369
|
|
Prepayment for services - Related party
|
|
|
6,900
|
|
|
|
-
|
|
Total Current Assets
|
|
|
9,050
|
|
|
|
2,369
|
|
|
|
|
|
|
|
|
|
|
Property, plant and equipment, net of accumulated depreciation of $73,992 and $73,374
|
|
|
-
|
|
|
|
618
|
|
|
|
|
|
|
|
|
|
|
Total Assets
|
|
$
|
9,050
|
|
|
$
|
2,987
|
|
|
|
|
|
|
|
|
|
|
Liabilities and Stockholders’ Deficit
|
|
|
|
|
|
|
|
|
|
Current Liabilities
|
|
|
|
|
|
|
|
|
Accounts payable
|
|
$
|
43,759
|
|
|
$
|
56,622
|
|
Accounts payable to related party
|
|
|
5,026
|
|
|
|
5,026
|
|
Accrued expenses
|
|
|
181,603
|
|
|
|
155,886
|
|
Notes payable to related parties
|
|
|
34,156
|
|
|
|
155,885
|
|
Notes payable
|
|
|
24,500
|
|
|
|
47,950
|
|
Total Current Liabilities
|
|
|
289,044
|
|
|
|
421,369
|
|
|
|
|
|
|
|
|
|
|
Stockholders' Deficit
|
|
|
|
|
|
|
|
|
Preferred Stock, 10,000,000 shares authorized, 9,000,000 undesignated authorized at $.001 par value, none issued or outstanding
|
|
|
-
|
|
|
|
-
|
|
Series A Convertible Preferred Stock, $0.001 par value, 1,000,000 shares authorized, none issued or outstanding
|
|
|
-
|
|
|
|
-
|
|
Common Stock, 490,000,000 authorized at $0.001 par value; 10,837,142 and 10,566,969 shares issued and outstanding
|
|
|
10,822
|
|
|
|
10,567
|
|
Additional paid-in capital
|
|
|
10,227,530
|
|
|
|
9,760,054
|
|
Accumulated deficit
|
|
|
(10,508,346
|
)
|
|
|
(10,189,003
|
)
|
Total Stockholders’ Deficit
|
|
|
(279,994
|
)
|
|
|
(418,382
|
)
|
Total Liabilities and Stockholders’ Deficit
|
|
$
|
9,050
|
|
|
$
|
2,987
|
|
The accompanying notes are an integral part of these unaudited consolidated financial statements.
Crown Equity Holdings, Inc.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
|
|
Three Months Ended
|
|
|
Nine Months Ended
|
|
|
|
September 30,
|
|
|
September 30,
|
|
|
|
2015
|
|
|
2014
|
|
|
2015
|
|
|
2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
$
|
124
|
|
|
$
|
-
|
|
|
$
|
801
|
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses
|
|
|
12,369
|
|
|
|
61,525
|
|
|
|
287,498
|
|
|
|
475,310
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss from operations
|
|
|
(12,245
|
)
|
|
|
(61,525
|
)
|
|
|
(286,697
|
)
|
|
|
(475,310
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other (expense) income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense
|
|
|
(1,027
|
)
|
|
|
(16,937
|
)
|
|
|
(4,034
|
)
|
|
|
(32,021
|
)
|
Loss on debt conversion
|
|
|
(23,407
|
)
|
|
|
(370,806
|
)
|
|
|
(28,612
|
)
|
|
|
(370,806
|
)
|
Other (expense) income
|
|
|
-
|
|
|
|
230
|
|
|
|
-
|
|
|
|
(2,301
|
)
|
Settlement expense
|
|
|
-
|
|
|
|
-
|
|
|
|
(10,000
|
)
|
|
|
-
|
|
Loss on derivative
|
|
|
-
|
|
|
|
(36,696
|
)
|
|
|
-
|
|
|
|
(36,696
|
)
|
Unrealized (loss) gain on marketable securities
|
|
|
-
|
|
|
|
(6,500
|
)
|
|
|
-
|
|
|
|
(3,000
|
)
|
Total other expense
|
|
|
(24,434
|
)
|
|
|
(430,709
|
)
|
|
|
(42,646
|
)
|
|
|
(444,824
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
$
|
(36,679
|
)
|
|
$
|
(492,234
|
)
|
|
$
|
(329,343
|
)
|
|
$
|
(920,134
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss per share – basic and diluted
|
|
$
|
(0.00
|
)
|
|
$
|
(1.07
|
)
|
|
$
|
(0.03
|
)
|
|
$
|
(2.02
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of common shares
outstanding - basic and diluted
|
|
|
10,706,088
|
|
|
|
459,596
|
|
|
|
10,688,273
|
|
|
|
455,766
|
|
The accompanying notes are an integral part of these unaudited consolidated financial statements.
Crown Equity Holdings, Inc.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
|
|
Nine Months Ended
|
|
|
|
September 30,
|
|
|
|
2015
|
|
|
2014
|
|
Cash flows from operating activities
|
|
|
|
|
|
|
Net loss
|
|
$
|
(329,343
|
)
|
|
$
|
(920,134
|
)
|
Adjustments to reconcile net loss to net cash used in operating activities:
|
|
|
|
|
|
|
|
|
Depreciation
|
|
|
618
|
|
|
|
1,686
|
|
Common stock issued for services
|
|
|
194,700
|
|
|
|
266,500
|
|
Unrealized loss on marketable securities
|
|
|
-
|
|
|
|
3,000
|
|
Loss on derivative
|
|
|
-
|
|
|
|
36,696
|
|
Loss on conversion of related party debt
|
|
|
-
|
|
|
|
370,806
|
|
Amortization of debt discount
|
|
|
-
|
|
|
|
9,373
|
|
Loss on debt conversion
|
|
|
28,612
|
|
|
|
-
|
|
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
|
|
Prepayment for services - related party
|
|
|
(6,900
|
)
|
|
|
-
|
|
Accounts payable and accrued expenses
|
|
|
53,448
|
|
|
|
54,414
|
|
Net cash used in operating activities
|
|
|
(58,865
|
)
|
|
|
(177,659
|
)
|
|
|
|
|
|
|
|
|
|
Cash flows from investing activities
|
|
|
|
|
|
|
|
|
Advances to related parties
|
|
|
-
|
|
|
|
(16,140
|
)
|
Net cash used in investing activities
|
|
|
-
|
|
|
|
(16,140
|
)
|
|
|
|
|
|
|
|
|
|
Cash flows from financing activities
|
|
|
|
|
|
|
|
|
Proceeds from sale of common stock
|
|
|
22,081
|
|
|
|
-
|
|
Payments on related party notes payable
|
|
|
-
|
|
|
|
(3,500
|
)
|
Borrowings on notes payable
|
|
|
15,983
|
|
|
|
103,100
|
|
Borrowings on related party notes payable
|
|
|
20,582
|
|
|
|
100,350
|
|
Net cash provided by financing activities
|
|
|
58,646
|
|
|
|
199,950
|
|
|
|
|
|
|
|
|
|
|
Net increase (decrease) in cash
|
|
|
(219
|
)
|
|
|
6,151
|
|
Cash, beginning of period
|
|
|
2,369
|
|
|
|
1,088
|
|
Cash, end of period
|
|
$
|
2,150
|
|
|
$
|
7,239
|
|
|
|
|
|
|
|
|
|
|
Supplemental disclosure of cash flow information
|
|
|
|
|
|
|
|
|
Interest paid
|
|
$
|
-
|
|
|
$
|
22
|
|
Income taxes paid
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
Noncash investing and financing activities
|
|
|
|
|
|
|
|
|
Common stock issued for debt and interest
|
|
$
|
103,523
|
|
|
$
|
99,194
|
|
Common stock issued for settlement of accounts payable
|
|
|
19,495
|
|
|
|
-
|
|
Forgiveness of debt – related party
|
|
|
99,320
|
|
|
|
-
|
|
Debt discount due to derivative liability
|
|
|
-
|
|
|
|
40,000
|
|
The accompanying notes are an integral part of these unaudited consolidated financial statements.
Crown Equity Holdings, Inc.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 – BASIS OF PRESENTATION
The accompanying unaudited interim consolidated financial statements of Crown Equity Holdings Inc. (“Crown Equity”) have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules of the Securities and Exchange Commission, and should be read in conjunction with the audited consolidated financial statements and notes thereto contained in Crown Equity’s December 31, 2014 Annual Report filed with the SEC on Form 10-K. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations for the interim periods presented have been reflected herein. The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year. Notes to the financial statements which would substantially duplicate the disclosure contained in the audited financial statements for the most recent fiscal year end December 31, 2014 as reported on Form 10-K, have been omitted. Certain prior period amounts have been reclassified to conform to current period presentation.
NOTE 2 – GOING CONCERN
As shown in the accompanying financial statements, Crown Equity has an accumulated deficit of $10,518,346 and a working capital deficit of $279,994 as of September 30, 2015. Unless profitability and increase in shareholders’ equity continues, these conditions raise substantial doubt as to Crown Equity's ability to continue as a going concern. The financial statements do not include any adjustments that might be necessary if Crown Equity is unable to continue as a going concern.
Crown Equity continues to review its expense structure reviewing costs and their reduction to move towards profitability. The Company’s expenses are planned to decrease as a percent of revenue resulting in profitability and increased shareholders’ equity.
NOTE 3 – RELATED PARTY TRANSACTIONS
As of September 30, 2015 and 2014, the Company has prepayment of services to related parties of $6,900 and $0, respectively
The Company is provided office space by one of the officers and directors at no charge. The Company believes that this office space is sufficient for its needs for the foreseeable future.
As of September 30, 2015 and December 31, 2014, the Company had a payable of $5,026 to Montse Zaman, director. The payable is unsecured, bears no interest and due on demand.
As of December 31, 2014, the Company had outstanding notes payable to related parties of $155,885. During the nine months ended September 30, 2015, the Company borrowed an additional $20,582 under related party notes. A total of $98,550 or related party debt principal and $770 of related party accrued interest was forgiven by the note holders and accounted for as a capital transaction. $43,761 of the debt principal and $15,046 of accrued interest was settled by issuing common stock with fair value of $70,568 resulting in a loss of $11,761. As of September 30, 2015 the aggregate outstanding balance under these related party notes payable was $34,156. These notes payables are with various officers and directors of the Company and with entities controlled by officers or directors of the Company including Montse Zaman, Phoenix Consulting Services Inc. and Ken Bosket and etc.
NOTE 4 – NOTES PAYABLE
As of September 30, 2015, the aggregate unpaid principal balance under notes payable to non-related party was $24,500. During the nine months ended September 30, 2015, the Company borrowed an aggregate of $15,983 from non-related third parties. $39,433 of the debt principal and $5,283 of the accrued interest were settled by issuing common stock with fair value of $57,668 resulting in a loss of $12,952. The notes are unsecured, due on demand.
During the nine month ended September 30, 2015, the Company settled an accounts payable of $19,495 by issuing common stock with fair value of $23,394 resulting in a loss of $3,899.
NOTE 5 – EQUITY
During the nine months ended September 30, 2015, the Company issued:
22,081 common shares for cash at $1.00 per share for a total of $22,081 cash,
and 110,000 common shares for services valued at $194,700.
During the nine month ended September 30, 2015, the Company settled an accounts payable of $19,495 by issuing common stock with fair value of $23,394 resulting in a loss of $3,899.
NOTE 6 – SUBSEQUENT EVENTS
Total common shares issued for the period from October 1, 2015 through September 15, 2016 was 354,689 shares which are broken down as follows:
|
·
|
168,267 shares were issued for cash proceeds of $93,767,
|
|
|
|
|
·
|
42,496 shares were issued for services and
|
|
|
|
|
·
|
143,926 shares were issued for the settlement of promissory notes and interest of $79,707.
|
On June 1, 2016 the following executive changes occurred:
|
·
|
Appointed its CFO, Rudy Chacon to Vice President, its Chairman, Kenneth Bosket to Chief Financial Officer and appointed Mike Zaman as Chairman of the Board, who also remained as the corporation’s President/ CEO and Arnulfo Saucedo-Bardan as it Chief Operations Officer.
|
ITEM 2: MANAGEMENT’S DISCUSSION AND ANALYSIS
This report contains forward looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended. Crown Equity’s actual results could differ materially from those set forth on the forward looking statements as a result of the risks set forth in Crown Equity’s filings with the Securities and Exchange Commission, general economic conditions, and changes in the assumptions used in making such forward looking statements.
OVERVIEW
Crown Equity Holdings Inc. (”Crown Equity”) was incorporated in August 1995 in Nevada. The Company is offering its services to companies seeking to become public entities in the United States. It has launched a website, www.crownequityholdings.com, which offers its services in a wide range of fields. The Company provides various consulting services to companies and individuals dealing with corporate structure and operations globally. The Company also provides public relations and news dissemination for publicly and privately held companies.
In December, 2010, the Company formed two wholly owned subsidiaries Crown Tele Services, Inc. and Crown Direct, Inc. Crown Tele Services, Inc. was formed to provide voice over internet (“VoIP”) services to clients at a competitive price and Crown Direct, Inc. was formed to provide direct sales to customers. Both entities had minimum sales during the quarter.
In March, 2011, the Company formed a wholly owned subsidiary CRWE Real Estate, Inc. as a subsidiary to engage in potential real estate holdings. The entity had minimal activity during the quarter.
The Company has focused its primary vision to using its network of websites to provide advertising and marketing services, as a worldwide online media advertising publisher, dedicated to the distribution of quality branding information. The Company offers Internet media-driven advertising services, which cover and connect a wide range of marketing specialties, as well as search engine optimization for clients interested in online media awareness. As part of its operations, the Company has utilized the services of software and hardware technicians in developing its websites and adding additional websites. This allows the Company to disseminate news and press releases for its customers as well as general news and financial information on a much bigger scale than it did previously. The Company markets its services to companies seeking market awareness of them and the services or goods that they offer. The Company then publishes information concerning these companies on its many websites. The Company is paid in cash and/or stock of the customer companies. The Company has numerous consulting and service customers and is therefore not dependent on any particular customer for a majority of its revenue.
Crown Equity’s office is located at 11226 Pentland Down Street, Las Vegas, NV 89141.
As of September 30, 2015, Crown Equity had no employees and was utilizing the services of one independent contractor and consultant.
RESULTS OF OPERATIONS
Three Months Ended September 30, 2015 Compared to the Three Months Ended September 30, 2014
For the three month period ended September 30, 2015, revenues were $124 and $0 for the same period in 2014. Net loss was $36,679 for the three month period ended September 30, 2015. Operating expenses were $12,369 for the three months ended September 30, 2015 and $61,525 for the same period in 2014. Other income and expenses for the three month period ended September 30, 2015 were $24,434 and $430,709 for the same quarter in 2014.
The Company incurred unrealized losses on its marketable securities during the three months ended September 30, 2015 of $0 compared to unrealized gains of $6,500 for the same period ended September 30, 2014.
Interest for the three months ended September 30, 2015 and 2014 was $1,027 and $16,937, respectively.
Nine Months Ended September 30, 2015 Compared to the Nine Months Ended September 30, 2014
For the nine month period ended September 30, 2015, revenues were $801 and $0 for the same period in 2014. Net loss was $329,343 for the nine month period ended September 30, 2015 and net losses of $920,134 were recorded for the nine months ended September 30, 2014. Operating expenses were $287,498 for the nine months ended September 30, 2015 and $475,310 for the same period in 2014. Other income and expenses for the nine month period ended September 30, 2015 were other expenses of $42,646 and other expenses of $2,301 for the same nine months in 2014.
The Company incurred unrealized losses on its marketable securities during the nine months ended September 30, 2015 of $0 compared to unrealized gains of $3,000 for the same period ended September 30, 2014. The majority of our operating expenses in the nine months ended September 30, 2015 was $194,700 in stock issued for services. Interest expense incurred during the nine month period ended September 30, 2015 was $4,034 compared to $32,021 for the same period in 2014.
LIQUIDITY AND CAPITAL RESOURCES
During the nine months ended September 30, 2015, Company had cash provided by financing activities of $58,646 and $199,950 for the same period in 2014.
Cash flows used in investing activities for the year ended December 31, 2015 was $0. Cash flows used in investing activities for the year ended December 31, 2014 totaled $22,640.
At September 30, 2015, Crown Equity had current assets of $9,050 and current liabilities of $289,044. Stockholders' deficit as of September 30, 2015 was $279,994.
Net cash used in operating activities for the nine months ended September 30, 2015 was $58,865 compared to net cash used of $177,659 for the same period in 2014, a net change of $154,403.
Cash received from borrowings on notes payable and notes payable to related parties constituted all of the funds raised in both periods presented.
Our existing capital may not be sufficient to meet Crown Equity's cash needs, including the costs of compliance with the continuing reporting requirements of the Securities Exchange Act of 1934, as amended. This condition raises substantial doubt as to Crown Equity's ability to continue as a going concern. The financial statements do not include any adjustments that might be necessary if Crown Equity is unable to continue as a going concern.