Crown Equity Holdings, Inc. - Annual Report: 2009 (Form 10-K)
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
10-K
(Mark
One)
x ANNUAL
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE
ACT OF 1934
For the
fiscal year ended December 31, 2009
¨
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES
EXCHANGE
ACT OF 1934
For the
transition period from ___________ to ___________.
Commission
File Number: 000-29935
CROWN
EQUITY HOLDINGS INC.
(Exact
name of registrant as specified in its charter)
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Nevada
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33-0677140
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State or other jurisdiction of
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(IRS Employer
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incorporation or organization
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Identification Number)
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5440 West Sahara, Suite 205,
Las Vegas, NV 89146
(Address
of principal executive offices)(Zip Code)
Registrant's
telephone number, including area code: (702)
448-1543
Securities
registered pursuant to Section 12(b) of the Act: None.
Name of
each exchange on which registered: None.
Securities
registered pursuant to Section 12(g) of the Act: Common Stock
Indicate
by check mark if the registrant is a well-seasoned issuer, as defined in Rule
405 of the Securities Act
¨
Yes x
No
Indicate
by check mark if the registrant is not required to file reports pursuant to
Section 13 or Section 15d of the Act
¨
Yes x
No
Indicate
by check mark whether the registrant (1) has filed all reports required to be
filed by Section 13 or 15(d) of the Exchange Act during the preceding 12 months
(or such shorter period of that the registrant was required to file such
reports), and (2) has been subject to such filing requirements for the past 90
days. Yes x
No ¨
Indicate
by checkmark 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 (§232.405 of this
chapter) during the previous 12 months (or for such shorter period that the
registrant was required to submit and post such files.) Yes x
No ¨
Indicate
by checkmark if disclosure of delinquent filers to Item 405 of Regulation S-K
(§229.405) is not contained herein and will not be contained, to the best of the
registrant’s knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K. ¨
Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer or a smaller reporting
company. See the definitions of "large accelerated filer,"
"accelerated filer," and "smaller reporting company" in Rule 12b-2 of the
Exchange Act.
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Large accelerated filer ¨
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Accelerated filer ¨
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Non-accelerated filer ¨ (Do not check if smaller reporting company
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Smaller reporting company x
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Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Act.) ¨
Yes x
No
The
number of shares outstanding of the Company’s $.001 Par Value Common Stock as of
March 8, 2010 was 72,880,632. The aggregate number of shares of the voting stock
held by non-affiliates on March 10, 2010 was 26,023,220. The market value of
these shares, computed by reference to the market closing price on March 8, 2010
was $1,573,932. For the purposes of the foregoing calculation only, all
directors and executive officers of the registrant have been deemed
affiliates.
DOCUMENTS
INCORPORATED BY REFERENCE: None.
ITEM 1.
BUSINESS
A)
General
Crown
Equity Holdings Inc. formerly known as Micro Bio-Medical Waste Systems, Inc.
(the “Company”) was incorporated on August 31, 1995 as “Visioneering
Corporation” under the laws of the State of Nevada, to engage in any lawful
corporate undertaking, including, but not limited to, selected mergers and
acquisitions. None of the proposed business activities for which the Company’s
name was changed produced any revenues or created any appreciable business
activities for the Company.
In 2007,
the Company, through a wholly-owned subsidiary, Crown Trading Systems, Inc.
(“CTS”), a Nevada corporation, began to develop, sell and produce computer
systems which are capable of running multiple monitors from one computer. CTS is
able to run 16 monitors off one CPU. In late 2007, CTS began to attend trade
shows and starting selling these systems. In 2009, Crown Trading Systems was
dissolved as a corporation and its business was absorbed into the
Company. The Company still uses the trade name "Crown Trading
Systems." CTS has entered into reseller and distribution agreements
with over 30 wholesale and retail computer components to sell their products on
CTS’s website, www.crowntradingsystems.com.
The
Company is offering its services to domestic and global 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.
In 2009,
the Company re-focused its primary vision to using its network of Websites in
providing 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 covers and connects a range of marketing specialties, as well as search
engine optimization for clients interested in online media
awareness
The
Company’s office is located at 5440 West Sahara, Suite 205, Las Vegas NV
89146.
As of
December 31, 2009, the Company had no employees but was utilizing the services
of independent contractors and consultants.
Item 2.
Properties.
The
Company has sub-leased office space from an affiliate of the Company at a cost
of $2,400 per month for a period of twelve months, expiring in December,
2010. The Company believes that this office space is sufficient for
its needs for the period of the lease.
Item 3
Legal Proceedings.
The
Company has pending litigation in Arizona small claims court - Strojnik v. Crown
Equity Holdings, Inc. and Crown Partners, Inc which was filed September 25,
2008. The Company has assessed the outcome of a loss as remote and
furthermore the maximum liability in small claims court is
$2,500. The Company has not accrued any amounts related to this
contingency nor has there been any activity related to this
matter.
Item 4.
Submission of Matters to a Vote of Security Holders
In
August, 2009, the Board of Directors proposed to decrease the Company's
authorized capital as well as authorizing a class of preferred stock and making
certain other changes to the Company's articles of incorporation. At
a meeting held on October 15, 2009, the Company’s majority shareholder approved
an amendment to the Company’s Articles of Incorporation decreasing the number of
authorized shares of common stock from 5,000,000,000 from 490,000,000 and
approving the creation of a class of preferred stock, consisting of 10,000,000
shares, par value $.001, The Amended and Restated Articles of
Incorporation also included the following changes to the original Articles of
Incorporation and the many amendments filed thereto through the
years:
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o
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added
provisions governing the Board of
Directors;
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o
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added
a provision limiting the liability of
directors;
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o
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permitting
the votes of interested directors to be counted in certain
transactions;
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o
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added
a provision for the indemnification of officers and directors;
and
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o
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added
a provision permitting the Board of Directors to approve future stock
splits without a vote of the stockholders without affecting the authorized
capital stock.
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Item 5.
Market for Registrant’s Common Equity and Related Shareholder
Matters.
The
Company’s common stock is currently traded on the OTC Electronic Bulletin Board
in the United States, having the trading symbol “CRWE” and CUSIP #22834M107. The
Company’s stock is traded on the OTC Electronic Bulletin Board. As of December
31, 2009, the Company had 72,880,632 shares of its common stock issued and
outstanding, of which 26,023,220 were held by non-affiliates.
The
following table reflects the high and low quarterly bid prices for the fiscal
year ended December 31, 2009.
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Period
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High Bid
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Low Bid
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||||||
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1
st
Qtr 2009
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.11 | .02 | ||||||
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2
nd
Qtr 2009
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.075 | .02 | ||||||
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3
rd
Qtr 2009
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.11 | .03 | ||||||
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4
th
Qtr 2009
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.19 | .04 | ||||||
The
Internet provided the above information to the Company. These quotations may
reflect inter-dealer prices without retail mark-up/mark-down/commission and may
not reflect actual transactions.
As of
December 31, 2009, the Company estimates there are 42 “holders of record” of its
common stock and estimates that there are approximately 150 beneficial
shareholders of its common stock. The Company has authorized 490,000,000 shares
of common stock, par value $.001 and 10,000,000 shares of preferred stock, par
value $.001, none of which are issued and outstanding.
Item 6.
Selected Financial Data
Not
applicable.
Item 7.
Management’s Discussion and Analysis or Plan of Operation.
FORWARD-LOOKING STATEMENTS
MAY NOT PROVE ACCURATE
When used
in this Form 10-K, the words “anticipated”, “estimate”, “expect”, and similar
expressions are intended to identify forward-looking statements. Such statements
are subject to certain risks, uncertainties and assumptions including the
possibility that the Company will fail to generate projected revenues. Should
one or more of these risks or uncertainties materialize, or should underlying
assumptions prove incorrect, actual results may vary materially from those
anticipated, estimated or projected.
OVERVIEW
The
following discussion of the financial condition, changes in financial condition
and results of operations of the Company for the fiscal years ended December 31,
2009 and 2008 should be read in conjunction with the financial statements of the
Company and related notes included therein.
The
Company was incorporated on August 31, 1995 as Visioneering Corporation. On
January 12, 1996, the Company amended its Articles of Incorporation to change
its name to Asiamerica Energy Corporation, to Care Financial Corporation in
April 29, 1996 and to Trump Oil Corporation on May 15, 1997. In 1999, the
Company acquired 20/20 Web Design, Inc., a Colorado corporation wholly owned by
Crown Partners, Inc. As part of that transaction, the Company issued 8,620,000
shares of its common stock to Crown Partners with the result that Crown Partners
owned 80% of the issued and outstanding shares of the Company. The Company also
approved a ten-for-one reverse stock split as part of that
transaction. In August, 2009, Crown Partners transferred its shares
of the Company to Crown Marketing Corporation ("Crown Marketing") in exchange
for marketing and public relation services to be provided by Crown
Marketing.
Since the
agreements described above, the Company has financed its activities through the
distribution of equity capital, including private placements of its common stock
resulting in the Company raising capital of $853,494 from 1995 to the present.
The Company used the proceeds from these offerings to fund its proposed
operations, to pay salaries, to pay general and administrative expenses and any
necessary expenses.
The
Company entered into an agreement to acquire Sanitec™ Services of Hawaii, Inc.
("SSH") from its majority shareholder, Crown Partners, in November, 2003. The
Company was unable to secure the funding necessary to complete this transaction
and SSH ceased operations in May, 2005. The Company paid a non-refundable
deposit to Crown Partners of $45,520, of which $20,000 was advanced to SSH and
Crown allowed the Company to retain the remaining $25,520 to pay the Company's
obligations. The Company issued shares of its common stock in restricted form to
Crown in December 2007, which cancelled this debt.
The
Company will attempt to carry out its business plan as discussed below. The
Company cannot predict to what extent its lack of liquidity and capital
resources will hinder its business plan prior to the consummation of a business
combination.
LIQUIDITY AND CAPITAL
RESOURCES
Since
inception, the Company most significant change in liquidity or capital resources
or stockholders’ equity has been receipts of proceeds from offerings of its
capital stock. The Company’s balance sheet as of December 31, 2009 reflects
expanded assets and reduced liabilities from the previous year due to a
significant increase in revenue over any previous years. The increase in revenue
has had a positive impact on the Company’s liquidity however it may not reflect
the ability of the Company to fund itself without outside sources in the future.
Further, there exist no agreements or understandings with regard to loan
agreements by or with the Officers, Directors, principals, affiliates or
shareholders of the Company.
At
December 31, 2009, the Company had working capital of $164,392 which
consisted of current assets of approximately $257,714 and current liabilities of
$93,322. The current liabilities of the Company at December 31, 2009 are
composed primarily deferred revenue of $62,000, income tax accrual of $16,990
and accounts payable and accrued expenses of $14,332.
Cash flow
provided by operating activities during the year ending December 31, 2009 was
$243,123 compared to a negative amount of $127,394 for the same period in 2008.
This represents a positive change of $361,817. The primary factor to the
positive change include a net profit of $93,927 for the year ending December 31,
2009 compared to a net loss of $316,131 during the same period in
2008.
Cash flow
provided by financing was $3,591 for the period ending December 31, 2009
compared to $ 81,340 for the same period in 2008. The reduced level in 2009 was
due to the reduction of advances and notes payable by related parties made
compared to previous years offset by the sale of common stock totaling $25,000
in 2009.
The
Company will attempt to carry out its plan of business as discussed above. The
Company cannot predict to what extent its lack of liquidity and capital
resources will hinder its business plan. The Company will need additional
capital to fund that proposed operation.
NEED FOR
ADDITIONAL FINANCING
The
Company’s existing capital may not be sufficient to meet the Company’s cash
needs, including the costs of compliance with the continuing reporting
requirements of the Securities Exchange Act of 1934, as amended.
No
commitments to provide additional funds have been made by management or other
stockholders. Accordingly, there can be no assurance that any funds will be
available to the Company to allow it to cover its expenses.
The
Company might seek to compensate providers of services by issuances of stock in
lieu of cash.
The
Company is active in its business and since inception has experienced
significant change in liquidity or capital resources or stockholders’ equity
through increased sales and business activity. The Company’s balance sheet as of
December 31, 2009 reflects assets of $480,207 and liabilities of
$189,253. There exist no agreements or understandings with regard to
loan agreements by or with the Officers, Directors, principals, affiliates or
shareholders of the Company.
RESULTS
OF OPERATIONS
During
the period from August 31, 1995 (inception) through December 31, 2008, the
Company engaged in limited operations and attempted to commence operations in a
number of different fields, none of which was ultimately successful or resulted
in any appreciable revenues for the Company. For the year ended December 31,
2009, the Company had revenues of $659,907 compared to $23,190 revenues for the
year ended December 31, 2008. For the year ended December 31, 2009, the Company
had operating expenses of $594,023 and net income of 93,927. For the year ended
December 31, 2008, the Company had operating expenses of $313,204 resulting in a
net loss of $316,131. The difference in expenses between the two periods
resulted from the Company's increased expenses in operations during 2009. The
net income per share was $0.00 for year ended December 31, 2009 and net loss per
share of $0.00, for the year ended December 31, 2008.
As of
December 31, 2009, the Company had assets of $480,207 and liabilities of
$180,531. Shareholders’ Equity as of December 31, 2009 was $299,676
compared to shareholders’ deficit of $242,665 at December 31, 2008. Liabilities
decreased in 2009 through the reduction of debt due related parties and
decreased accounts payable. In addition short term debt of $97,209
was converted to long term debt maturing November 19, 2012.
Item 8.
Financial Statements.
Financial
statements are audited and included herein beginning on Exhibit 1, page 1 and
are incorporated herein by this reference.
Item 9.
Changes in and Disagreements with Accountants on Accounting and Financial
Disclosure.
There
were no disagreements with accountants on accounting and financial disclosure
during the relevant period.
Item 9a. Controls &
Procedures
Evaluation of Disclosure
Controls and Procedures
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 Securities Exchange Act of 1934, as
amended (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. It should be noted that the design of any system of
controls is based in part upon certain assumptions about the likelihood of
future events, and there can be no assurance that any design will succeed in
achieving its stated goals under all potential future conditions, regardless of
how remote. As of the end of the period covered by this Annual Report, we
carried out an evaluation, under the supervision and with the participation of
our Chief Executive Officer and our Chief Financial Officer, of the
effectiveness of the design and operation of our disclosure controls and
procedures. Based on this evaluation, our CEO and CFO has concluded that
the Company’s disclosure controls and procedures are not effective because of
the identification of a material weakness in our internal control over financial
reporting which is identified below, which we view as an integral part of our
disclosure controls and procedures.
Changes in Internal Controls
over Financial Reporting
We have
not yet made any changes in our internal controls over financial reporting that
occurred during the period covered by this report on Form 10-K that has
materially affected, or is reasonably likely to materially affect, our
internal control over financial reporting.
Management’s Annual Report
on Internal Control Over Financial Reporting
Our
management is responsible for establishing and maintaining adequate internal
control over financial reporting, as such term is defined in
Rules 13a-15(f) and 15d-15(f) of the Exchange Act. Our internal control
system was designed to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of financial statements for external
purposes, in accordance with generally accepted accounting principles. Because
of inherent limitations, a system of internal control over financial reporting
may not prevent or detect misstatements. Also, projections of any evaluation of
effectiveness to future periods are subject to the risk that controls may become
inadequate due to change in conditions, or that the degree of compliance with
the policies or procedures may deteriorate.
Our
management conducted an evaluation of the effectiveness of our internal control
over financial reporting using the criteria set forth by the Committee of
Sponsoring Organizations of the Treadway Commission (COSO) in Internal
Control—Integrated Framework. Based on its evaluation, our management concluded
that there is a material weakness in our internal control over financial
reporting. A material weakness is a deficiency, or a combination of control
deficiencies, in internal control over financial reporting such that there is a
reasonable possibility that a material misstatement of the Company’s annual or
interim financial statements will not be prevented or detected on a timely
basis.
The
material weakness relates to the lack of segregation of duties in financial
reporting, as our financial reporting and all accounting functions are performed
by an external consultant with no oversight by a professional with accounting
expertise. Our President does not possess accounting expertise and our
company does not have an audit committee. This weakness is due to the
company’s lack of working capital to hire additional staff. To remedy this
material weakness, we intend to engage another accountant to assist with
financial reporting as soon as our finances will allow.
This
annual report does not include an attestation report of the Company’s registered
public accounting firm regarding internal control over financial
reporting. Management’s report was not subject to the attestation by the
Company’s registered public accounting firm pursuant to temporary rules of the
SEC that permit the Company to provide only management’s report in this annual
report.
The
Company’s management carried out an assessment of the effectiveness of the
Company’s internal control over financial reporting as of December 31, 2009. The
Company’s management based its evaluation on criteria set forth in the framework
in Internal Control—Integrated Framework issued by the Committee of Sponsoring
Organizations of theTreadway Commission. Based on that assessment, management
has concluded that the Company’s internal control over financial reporting was
not effective as of December 31, 2009
Item 9B
Other Information
None.
Part
III
Item 10.
Directors, Executive Officers, Promoters and Control Persons; Compliance
with Section 16(a) of the Exchange Act.
Identification
of Directors and Executive Officers of the Company
The
following table sets forth the names and ages of all directors and executive
officers of the Company and all persons nominated or chosen to become a
director, indicating all positions and offices with the Company held by each
such person and the period during which they have served as a
director:
The
principal executive officers and directors of the Company are as
follows:
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Name
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Age
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Positions Held and Tenure
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Arnulfo
Saucedo-Bardan
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38
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Chairman
, Director since February, 2008
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Steven
Onoue
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51
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Director
since July, 2002
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Kenneth
Bosket
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63
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CEO,
Director since June 2008
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Montse
Zaman
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35
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Secretary,
Treasurer, Director since February, 2008
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Lowell
Holden
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67
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CFO,
Director since January 2010
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The
Directors named above will serve until the next annual meeting of the Company’s
stockholders. Thereafter, Directors will be elected for one-year terms at the
annual stockholders’ meeting. Officers will hold their positions at the pleasure
of the Board of Directors, absent any employment agreement, of which none
currently exist or is contemplated. There is no arrangement or understanding
between the Directors and Officers of the Company and any other person pursuant
to which any Director or Officer was or is to be selected as a Director or
Officer of the Company.
There is
no family relationship between or among any Officer and Director except that
Arnulfo Saucedo-Bardan and Montse Zaman are brother and sister.
The
Directors and Officers of the Company will devote their time to the Company’s
affairs on an “as needed” basis. As a result, the actual amount of time which
each will devote to the Company’s affairs is unknown and is likely to vary
substantially from month to month.
The
Company has no audit or compensation committee.
Business
Experience. The following is a brief account of the business experience during
at the least the last five years of the directors and executive officers,
indicating their principal occupations and employment during that period, and
the names and principal businesses of the organizations in which such
occupations and employment were carried out.
KENNETH
BOSKET. Kenneth Bosket is a director of the Company. Mr. Bosket has
been CEO of the Company since June, 2008. Mr. Bosket retired in 2004 after 30
years with Sprint (Telecommunication Division). Mr. Bosket is co-founder of
JaHMa, a music company in Las Vegas, Nevada and a former Board Member and
President of Bridge Counseling Associates, a mental health and substance abuse
service company. His experience includes implementing appropriate procedures for
positioning his organization's goals with successful teaming relationships,
marketing and over 30 years of extensive customer service, as well as managing
various departments, and being a western division facilitator working directly
for a President of Sprint. Mr. Bosket has received numerous awards, such as the
Pinnacle Award for his exceptional service with his former employer combined
with his community service involvements. Mr. Bosket earned a Masters of Business
Administration from the University of Phoenix and a Bachelor's of Business
Administration from National University.
STEVEN
ONOUE. Mr. Onoue is a director of the Company. From 2000 until
August, 2009, Mr. Onoue was an officer and director of Crown Partners, Inc., the
former majority shareholder of the Company. As part of his duties
with Crown Partners, Mr. Onoue was formerly as vice president and manager of
Sanitec™ Services of Hawaii, Inc., a wholly-owned subsidiary of Crown Partners,
Inc. engaged in medical waste treatment and disposal, from 2000 until May,
2005. Prior to that, Mr. Onoue was the president of Cathay Atlantic
Trading Company in Honolulu, Hawaii which traded in hard commodities and acted
as consultant to many construction and renovation projects. Mr. Onoue acts as a
community liaison and legislative analyst to Rep. Suzuki of the State of Hawaii.
Mr. Onoue has been registered securities professional as well as a being
involved in real estate in Hawaii for more than 15 years.
ARNULFO
SAUCEDO-BARDAN. Mr. Saucedo-Bardan is a businessman and developer and has been
self-employed for more than five years. Mr. Saucedo-Bardan is the brother of
Montse Zaman. ”
MONTSE
ZAMAN. Montse Zaman is the secretary and treasurer for the Company.
She worked for Zaman & Company, a private business consulting firm, as an
administrative assistant from 2003 until the end of 2008. She has an extensive
background in journalism and has a degree in Communications from Instituto
Superior De Ciencia Y Technologia A.C. in Mexico.
LOWELL
HOLDEN. Lowell Holden is CFO and Chief Accounting Officer of the
Company as well as a director. Since 1983, Mr. Holden has owned and
operating his own consulting firm, LS Enterprises, Inc., which provides business
consulting, accounting and other services to businesses. Mr. Holden
has a broad range of business experience including managing, securing financing,
structuring of transactions, and is experienced and knowledgeable in managing
relationships with customers, financing institutions and stockholders. Mr.
Holden also has a background in assisting companies in fulfilling their
financial auditing and SEC reporting requirements. Mr. Lowell Holden has a
Bachelor's of Science degree from Iowa State University.
CONFLICTS OF
INTEREST
The
Officers and Directors of the Company will devote only a small portion of their
time to the affairs of the Company, estimated to be no more than approximately
15 hours per month. There will be occasions when the time requirements of the
Company’s business conflict with the demands of their other business and
investment activities. Such conflicts may require that the Company attempt to
employ additional personnel. There is no assurance that the services of such
persons will be available or that they can be obtained upon terms favorable to
the Company.
There is
no procedure in place which would allow the Officers and Directors to resolve
potential conflicts in an arms-length fashion. Accordingly, they will be
required to use their discretion to resolve them in a manner which they consider
appropriate.
The
Company’s Officers and Directors may actively negotiate or otherwise consent to
the purchase of a portion of their common stock as a condition to, or in
connection with, a proposed merger or acquisition transaction. It is anticipated
that a substantial premium over the initial cost of such shares may be paid by
the purchaser in conjunction with any sale of shares by the Company’s Officers
and Directors which is made as a condition to, or in connection with, a proposed
merger or acquisition transaction. The fact that a substantial premium may be
paid to the Company’s Officers and Directors to acquire their shares creates a
potential conflict of interest for them in satisfying their fiduciary duties to
the Company and its other shareholders. Even though such a sale could result in
a substantial profit to them, they would be legally required to make the
decision based upon the best interests of the Company and the Company’s other
shareholders, rather than their own personal pecuniary benefit.
Identification
of Certain Significant Employees. The Company does not employ any persons who
make or are expected to make significant contributions to the business of the
Company.
Item 11.
Executive Compensation.
During
fiscal 2009 the Company paid 4 officers an aggregate of $61,750 plus issued
2,270,000 shares of common stock worth $227,000 for an aggregate value of $
288,750 for their services.
Directors
are entitled to reimbursement for reasonable travel and other out-of-pocket
expenses incurred in connection with attendance at meeting of the Board of
Directors.
The
Company has no material bonus or profit-sharing plans pursuant to which cash or
non-cash compensation is or may be paid to the Company’s directors or executive
officers.
The
Company has no compensatory plan or arrangements, including payments to be
received from the Company, with respect to any executive officer or director,
where such plan or arrangement would result in any compensation or remuneration
being paid resulting from the resignation, retirement or any other termination
of such executive officer’s employment or from a change-in-control of the
Company or a change in such executive officer’s responsibilities following a
change-in-control and the amount, including all periodic payments or
installments where the value of such compensation or remuneration exceeds
$100,000 per executive officer.
During
the last completed fiscal year, no funds were set aside or accrued by the
Company to provide pension, retirement or similar benefits for Directors or
Executive Officers.
The
Company has no written employment agreements.
In
December, 2007, the Company adopted the Crown Equity Holdings, Inc. Consultants
and Employees Stock Plan for 2007. Under the Plan, 10,000,000 shares are
reserved for issuance to employees, officers, directors, advisors and
consultants. As of December 31, 2009, 2,981,000 shares had been issued under the
Plan.
Termination of Employment and Change
of Control Arrangement. Except as noted herein, the Company has no
compensatory plan or arrangements, including payments to be received from the
Company, with respect to any individual named above from the latest or next
preceding fiscal year, if such plan or arrangement results or will result from
the resignation, retirement or any other termination of such individual’s
employment with the Company, or from a change in control of the Company or a
change in the individual’s responsibilities following a change in
control.
Section 16(a) Beneficial Ownership
Reporting Compliance. During the year ended December 31, 2009, the
following persons were officers, directors and more than ten-percent
shareholders of the Company’s common stock:
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Name
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Position
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|
Filed Reports
|
|
Steven
Onoue
|
Director
|
Yes
|
||
|
Kenneth
Bosket
|
Officer,
Director
|
Yes
|
||
|
Arnulfo
Saucedo-Bardan
|
Officer,
Director
|
Yes
|
||
|
Montse
Zaman
|
Officer,
Director
|
Yes
|
||
|
Lowell
Holden
|
Officer,
Director
|
Yes
|
||
|
Crown
Marketing
|
Shareholder
|
Yes
|
Item 12.
Security Ownership of Certain Beneficial Owners and
Management.
There
were 72,880,632 shares of the Company' common stock issued and outstanding on
December 31, 2009. There are 10,000,000 shares of preferred stock, par value
$.001, authorized but none issued. The following tabulates holdings of shares of
the Company by each person who, subject to the above, at the date of this
Report, holds or record or is known by Management to own beneficially more than
five percent (5%) of the Common Shares of the Company and, in addition, by all
directors and officers of the Company individually and as a
group.
|
Names and Addresses
|
Number of
Shares
Owned
Beneficially
|
Percent of
Beneficially
Owned
Shares
|
||||||
|
Steven
Onoue (1)
|
350,000 | 0.48 | % | |||||
|
5440
Sahara, Suite 205
|
||||||||
|
Las
Vegas, NV 89146
|
||||||||
|
Kenneth
Bosket (1)
|
510,002 | 0.7 | % | |||||
|
5440
Sahara, Suite 205
|
||||||||
|
Las
Vegas, NV 89146
|
||||||||
|
Arnulfo
Saucedo-Bardan (1)
|
680,000 | 0.93 | % | |||||
|
5440
Sahara, Suite 205
|
||||||||
|
Las
Vegas, NV 89146
|
||||||||
|
Montse
Zaman (1)
|
1,082,000 | 1.48 | % | |||||
|
5440
Sahara, Suite 205
|
||||||||
|
Las
Vegas, NV 89146
|
||||||||
|
Lowell
Holden(1)
|
156,000 | .22 | % | |||||
|
5440
Sahara, Suite 205
|
||||||||
|
Las
Vegas, NV 89146
|
||||||||
|
Crown
Marketing Corporation
|
44,079,410 | 60.48 | ||||||
|
9663
St Claude Avenue
|
||||||||
|
Las
Vegas NV 89148
|
||||||||
|
All
directors and officers as a group (5)
|
2,778,002 | 3.81 | % | |||||
(1)
Denotes officer or director. All officers and directors are also officers and
directors of Crown Partners, Inc. which is the majority shareholder of the
Company.
Change in
Control. There are no arrangements known to the Company, including any pledge by
any person of securities of the Company, the operation of which may at a
subsequent date result in a change of control of the Company.
Item 13.
Certain Relationships and Related Transactions.
In 2009,
the Company paid the following related parties:
|
|
·
|
Ken
Bosket - $19,500 cash and 410,000 shares of restricted stock for a total
value of $37,100
|
|
|
·
|
Arnulfo
Saucedo-Bardan - $21,800 cash and 680,000 shares of restricted stock for a
total value of $63,200.
|
|
|
·
|
Montse
Zaman - $20,450 cash and 1,080,000 shares of restricted stock for a total
value of $108,000
|
|
|
·
|
Steven
Onoue- 100,000 shares of restricted stock for a total value of
$10,000
|
Item 14.
Principal Accounting Fees and Services
The
following table presents for each of the last two fiscal years the aggregate
fees billed in connection with the audits of our financial statements and other
professional services rendered by our independent registered public accounting
firm MaloneBailey, LLP, Certified Public Accountants and
Consultants.
|
2009
|
2008
|
|||||||
|
Audit
fees
|
$ | 13,828 | $ | 12,223 | ||||
|
Audit
related fees
|
0 | 0 | ||||||
|
Tax
fees
|
6,000 | 0 | ||||||
|
All
other fees
|
0 | 0 | ||||||
Audit
fees represent the professional services rendered for the audit of our annual
financial statements and the review of our financial statements included in
quarterly reports, along with services normally provided by the accounting firm
in connection with statutory and regulatory filings or
engagements. Audit-related fees represent professional services
rendered for assurance and related services by the accounting firm that are
reasonably related to the performance of the audit or review of our financial
statements that are not reported under audit fees.
Tax fees
represent professional services rendered by the accounting firm for tax
compliance, tax advice, and tax planning. All other fees represent
fees billed for products and services provided by the accounting firm, other
than the services reported for in the other categories.
On
October 1, 2009 an 8-K was filed reporting the change of control of the Company
from Crown Partners, Inc. to Crown Marketing, Inc.
|
(a)
|
Financial
Statements and Schedules
|
|
Report
of Independent Registered Public Accounting Firm
|
F-1
|
|
Balance
Sheets as of December 31, 2009 and 2008
|
F-2
|
|
Statements
of Operations for the Years Ended December 31, 2009 and
2008
|
F-3
|
|
Statement
of Stockholders’ Equity for the Years Ended December 31, 2009 and
2008
|
F-4
|
|
F-5
|
|
|
Notes
to Financial Statements
|
F-6
|
EXHIBITS
FILED WITH THIS REPORT
|
Number
|
Description
|
|
|
31.1
|
Certifications
Required by Rule 13a-14(a) of the Securities Exchange Act of 1934, as
amended, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of
2002
|
|
|
32.1
|
Certification
of Chief Executive Officer and Chief Financial Officer Pursuant to 18
U.S.C. Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of
2002
|
(b) There
was one report on Form 8-K during the fourth quarter of the Company’s fiscal
year ended December 31, 2009.
SIGNATURES
Pursuant
to the requirements of Section 13 or 15(d) 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, in the City of Las Vegas, State of
Nevada, on March 9, 2010.
|
CROWN
EQUITY HOLDINGS, INC.
|
|
|
By:/s/
Kenneth Bosket
|
|
|
Kenneth
Bosket, Chief Executive
Officer
|
Pursuant to the requirements of the
Securities Exchange Act of 1934, this report has been signed below by the
following persons on behalf of the registrant and in the capacities indicated on
March 9, 2010.
|
Signature
|
Title
|
|
|
/s/
Arnulfo Saucedo-Bardan
|
Chairman,
Director
|
|
|
Arnulfo
Saucedo-Bardan
|
||
|
/s/
Kenneth Bosket
|
Director,
Chief Executive Officer
|
|
|
Kenneth
Bosket
|
||
|
/s/
Steven Onoue
|
Director
|
|
|
Steven
Onoue
|
||
|
/s/
Montse Zaman
|
Director,
Secretary, Treasurer
|
|
|
Montse
Zaman
|
||
|
/s/
Lowell Holden
|
Director, Chief Financial Officer (Principal Financial | |
|
Lowell
Holden
|
Officer), Principal Accounting Officer |
REPORT OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the
Board of Directors
Crown
Equity Holdings Inc.
Las
Vegas, Nevada
We have
audited the accompanying balance sheets of Crown Equity Holdings Inc. (“the
Company”) as of December 31, 2009 and 2008, and the related statements of
operations, shareholders’ equity (deficit), and cash flows for the years then
ended. These financial statements are the responsibility of Crown Equity
Holdings Inc.'s management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We
conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform an audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. The Company is not required to
have, nor were we engaged to perform, an audit of its internal control over
financial reporting. Our audit included consideration of internal control over
financial reporting as a basis for designing audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Company’s internal control over financial
reporting. Accordingly, we express no such opinion. An audit also includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements, assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our
opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Crown Equity Holdings Inc. as of
December 31, 2009 and 2008 and the results of operations and cash flows for the
years then ended, in conformity with accounting principles generally accepted in
the United States of America.
The
accompanying financial statements have been prepared assuming that Crown Equity
Holdings Inc. will continue as a going concern. As discussed in Note 2 to the
financial statements, Crown Equity Holdings Inc. has historically suffered
losses from operations which raise substantial doubt about its ability to
continue as a going concern. Management’s plans regarding those matters also are
described in Note 2. The financial statements do not include any adjustments
that might result from the outcome of this uncertainty.
MaloneBailey,
LLP
www.malonebailey.com
Houston,
Texas
March 8,
2010
BALANCE
SHEETS
|
December
31, 2009
|
December
31, 2008
|
|||||||
|
ASSETS
|
||||||||
|
Current
assets
|
||||||||
|
Cash
and cash equivalents
|
$ | 249,612 | $ | 2,898 | ||||
|
Prepaid
Expenses
|
8,102 | — | ||||||
|
Total
current assets
|
257,714 | 2,898 | ||||||
|
Fixed
assets
|
||||||||
|
Equipment,
net of accumulated depreciation
|
17,993 | 43,373 | ||||||
|
Restricted
securities
|
204,500 | — | ||||||
|
Total
Assets
|
$ | 480,207 | $ | 46,271 | ||||
|
LIABILITIES
AND STOCKHOLDERS’ EQUITY(DEFICIT)
|
||||||||
|
Current
liabilities
|
||||||||
|
Accounts
payable and accrued expenses
|
$ | 14,332 | $ | 40,393 | ||||
|
Accounts
payable - related party
|
— | 74,718 | ||||||
|
Salaries
payable
|
— | 23,000 | ||||||
|
Advances
from related party
|
— | 85,915 | ||||||
|
Note
payable - related party
|
51,210 | |||||||
|
Notes
payable
|
— | 13,700 | ||||||
|
Tax
payable
|
16,990 | — | ||||||
|
Deferred
revenue
|
62,000 | — | ||||||
|
Total
current liabilities
|
93,322 | 288,936 | ||||||
|
Long
term liabilities
|
||||||||
|
Notes
payable – related parties
|
87,209 | — | ||||||
|
Total
liabilities
|
180,531 | 288,936 | ||||||
|
STOCKHOLDERS’
EQUITY(DEFICIT)
|
||||||||
|
Preferred
stock, $001 par value, 10,000,000 authorized, none issued
|
||||||||
|
Common
stock, $.001 par value, 490,000,000 shares authorized, 72,880,632
and 69,199,632 shares issued and outstanding,
respectively
|
72,881 | 69,200 | ||||||
|
Additional-paid-in-capital
|
6,475,637 | 6,030,904 | ||||||
|
Accumulated
deficit
|
(6,248,842 | ) | (6,342,769 | ) | ||||
|
Total
stockholders’ equity(deficit)
|
299,676 | (242,665 | ) | |||||
|
Total
Liabilities and Stockholders’ Equity(Deficit)
|
$ | 480,207 | $ | 46,271 | ||||
See
summary of significant accounting policies and notes to financial
statements.
CROWN
EQUITY HOLDINGS, INC.
STATEMENT
OF OPERATIONS
Years
Ended December 31, 2009 and 2008
|
2009
|
2008
|
|||||||
|
Revenues
|
$ | 659,907 | $ | 23,190 | ||||
|
Cost
of revenues
|
2,805 | 17,341 | ||||||
|
Operating
expenses:
|
||||||||
|
General
and administrative
|
568,643 | 293,675 | ||||||
|
Depreciation
|
25,380 | 25,380 | ||||||
|
Operating
income(loss)
|
63,079 | (313,204 | ) | |||||
|
Other
income
|
||||||||
|
Gain
on debt forgiveness
|
16,083 | — | ||||||
|
Interest
income
|
225 | — | ||||||
|
Realized
gain(loss)
|
9,515 | — | ||||||
|
Unrealized
gain(loss)
|
26,387 | — | ||||||
|
Total
other income
|
52,210 | — | ||||||
|
Other
expenses:
|
||||||||
|
Interest
expense
|
(3,015 | ) | (2,927 | ) | ||||
|
Other
expense
|
(1,357 | ) | — | |||||
|
Total
other expense
|
(4,372 | ) | (2,927 | ) | ||||
|
Total
other income(expense)
|
(47,838 | ) | (2,927 | ) | ||||
|
Net
income(loss) before taxes
|
$ | 110,917 | $ | (316,131 | ) | |||
|
Tax
|
$ | 16,990 | — | |||||
|
Net
income (loss)
|
$ | 93,927 | $ | (316,131 | ) | |||
|
Net
income(loss) per share:
|
||||||||
|
Net
income(loss) basic and diluted
|
$ | 0.00 | $ | (0.00 | ) | |||
|
Weighted
average shares outstanding:
|
||||||||
|
Basic
and diluted
|
71,881,265 | 68,793,729 | ||||||
See
summary of significant accounting policies and notes to financial
statements.
CROWN
EQUITY HOLDINGS, INC.
STATEMENT
OF STOCKHOLDER’S EQUITY
Years
Ended December 31, 2009 and 2008
|
Additional
|
||||||||||||||||||||
|
Common Shares
|
Paid In
|
Accumulated
|
||||||||||||||||||
|
Shares
|
Amount
|
Capital
|
Deficit
|
Total
|
||||||||||||||||
|
Balance,
December 31, 2007
|
68,572,984 | $ | 68,573 | $ | 5,922,397 | $ | (6,026,638 | ) | $ | (35,668 | ) | |||||||||
|
Issuance
of common stock for accounts payable
|
100,000 | 100 | 14,900 | 15,000 | ||||||||||||||||
|
Issuance
of common stock for services
|
836,668 | 837 | 93,297 | 94,134 | ||||||||||||||||
|
Cancellation
of common stock
|
(310,020 | ) | (310 | ) | 310 | — | ||||||||||||||
|
Net
loss
|
(316,131 | ) | (316,131 | ) | ||||||||||||||||
|
Balance,
December 31, 2008
|
69,199,632 | $ | 69,200 | $ | 6,030,904 | $ | (6,342,769 | ) | $ | (242,665 | ) | |||||||||
|
Issuance
of common stock for cash
|
250,000 | 250 | 24,750 | 25,000 | ||||||||||||||||
|
Issuance
of common stock for accounts payable
|
60,000 | 60 | 5,940 | 6,000 | ||||||||||||||||
|
Issuance
of common stock for service
|
896,000 | 896 | 72,024 | 72,920 | ||||||||||||||||
|
issuance
of common stock for service to related parties
|
2,475,000 | 2,475 | 227,255 | 229,730 | ||||||||||||||||
|
Common
stock issued at greater than market value to related
parties
|
8,700 | 8,700 | ||||||||||||||||||
|
Debt
forgiveness related party
|
106,064 | 106,064 | ||||||||||||||||||
|
Net
income
|
93,927 | 93,927 | ||||||||||||||||||
|
Balance
, December 31, 2009
|
72,880,632 | 72,881 | 6,457,637 | (6,248,842 | ) | 299,676 | ||||||||||||||
See
summary of significant accounting policies and notes to financial
statements
CROWN
EQUITY HOLDINGS, INC.
STATEMENT
OF CASH FLOWS
Years
Ended December 31, 2009 and 2008
|
2009
|
2008
|
|||||||
|
CASH
FLOWS FROM OPERATING ACTIVITIES
|
||||||||
|
Net
income(loss)
|
$ | 93,927 | $ | (316,131 | ) | |||
|
Adjustments
to reconcile net loss to cash used in operating
activities:
|
||||||||
|
Depreciation
expense
|
25,380 | 25,380 | ||||||
|
Common
stock issued for services
|
302,650 | 94,135 | ||||||
|
Unrealized
(gain)/loss on securities
|
(26,387 | ) | ||||||
|
Realized
(gain)/loss on securities
|
(9,515 | ) | ||||||
|
Difference
in FV for stock for services to related parties
|
8,700 | — | ||||||
|
Net
Change in:
|
||||||||
|
Accounts
receivable
|
— | 14,004 | ||||||
|
Accounts
payable and accrued expenses
|
(16,736 | ) | 22,357 | |||||
|
Accounts
payable and accrued expense- related party
|
(14,187 | ) | 32,861 | |||||
|
Prepaid
expenses
|
(8,102 | ) | — | |||||
|
Restricted
Securities
|
(106,597 | ) | — | |||||
|
Income
Tax Payable
|
16,990 | |||||||
|
Accrued
salaries
|
(23,000 | ) | — | |||||
|
TOTAL
CASH FLOWS PROVIDED IN OPERATING ACTIVITIES
|
243,123 | (127,394 | ) | |||||
|
CASH
FLOWS FROM FINANCING ACTIVITIES
|
||||||||
|
Advances-
related party
|
(10,409 | ) | 66,005 | |||||
|
Note
payable payments to - related party
|
(10,000 | ) | 14,335 | |||||
|
(Payments
on) note payable
|
(1,000 | ) | 1,000 | |||||
|
Proceeds
for sale of stock
|
25,000 | — | ||||||
|
TOTAL
CASH FLOWS PROVIDED BY FINANCING ACTIVITIES
|
3,591 | 81,340 | ||||||
|
Net
Increase (Decrease) in Cash
|
246,714 | (46,054 | ) | |||||
|
Cash,
beginning of period
|
2,898 | 48,952 | ||||||
|
Cash,
end of period
|
$ | 249,612 | $ | 2,898 | ||||
|
SUPPLEMENTAL
DISCLOSURES:
|
||||||||
|
Cash
paid for interest
|
$ | - | $ | - | ||||
|
Cash
paid for income taxes
|
- | - | ||||||
|
NONCASH
TRANSACTIONS:
|
||||||||
|
Common
stock issued for stock payable
|
$ | — | $ | 15,000 | ||||
|
Securities
received for deferred revenue
|
$ | 62,000 | $ | — | ||||
|
Stock
for accounts payable and accrued liabilities
|
$ | 6,000 | $ | — | ||||
|
Related
party liabilities converted to long term debt-related
party
|
$ | 97,209 | $ | — | ||||
See
summary of significant accounting policies and notes to financial
statements.
CROWN
EQUITY HOLDINGS, INC.
NOTES TO
FINANCIAL STATEMENTS
NOTE 1 –
NATURE OF BUSINESS AND SUMMARY OF ACCOUNTING POLICIES
Nature of
Business
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.
In 2007,
the Company, through a wholly-owned subsidiary, Crown Trading Systems, Inc.
(“CTS”), a Nevada corporation, began to develop, sell and produce computer
systems which are capable of running multiple monitors from one
computer. CTS is able to run 16 monitors off one CPU. In late 2007,
CTS began to attend trade shows and starting selling these systems. In 2009,
Crown Trading Systems was dissolved as a corporation and its business was
absorbed into the Company.
On
September, 30, 2009 Crown Marketing, Inc acquired controlling interest of the
Company from Crown Partners, Inc.
Use of
Estimates
The
preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities at the date of the balance sheet. Actual results could differ from
those estimates.
Cash and
Cash Equivalents
Crown
Equity considers all highly liquid investments purchased with an original
maturity of three months or less to be cash equivalents.
Stock
Based Compensation
The
company adopted the provisions of ASC 718 requiring employee equity awards to be
accounted for under the fair value method. Accordingly, share-based compensation
is measured at grant date, based on the fair value of the award.
Revenue
recognition
Crown
Equity’s revenue is recognized pursuant to ASC 605 “Revenue Recognition.” The
Company recognizes its revenue from services as those services are performed.
Revenue recognition is limited to the amount that is not contingent upon
delivery of any future product or service or meeting other specified performance
conditions. Product sales, accounted for within fulfillment services, are
recognized upon shipment to the customer and Satisfaction of all
obligations.
Contract
revenues include royalties under license and collaboration agreements. Contract
revenue related to technology licenses is fully recognized only after the
license period has commenced, the technology has been delivered and no further
involvement of Crown Equity is required.
Crown
Equity receives payment for its services in both cash and equity instruments
issued by the customer. T he equity instruments are accounted for in accordance
with the provisions of ASC 718 “Compensation – Stock Compensation” and is based
on the fair value of the consideration received or the fair value of the equity
instrument issued, whichever is more reliably measurable. The measurement date
of the fair value of the equity instrument issued is the date on which the
equity instruments are received or the date on which the contract is issued for
the services to be preformed related to the payments received by Crown
Equity.
Amounts
received for revenue not earned as of period end are accounted for as deferred
revenues.
Marketable
Securities
In
accordance with Accounting Standards Codification 825 an entity is permitted to
irrevocably elect fair value on a contract-by-contract basis for new assets or
liabilities within the scope of ASC 825 as the initial and subsequent
measurement attribute for those financial assets and liabilities and certain
other items including property and casualty insurance contracts. Entities
electing the fair value option are required to (i) recognize changes in fair
value in earnings and (ii) expense any upfront costs and fees associated with
the item for which the fair value option is elected. Entities electing the fair
value option are required to distinguish, on the face of the statement of
financial position, the fair value of assets and liabilities for which it has
elected the fair value option, and similar assets and liabilities measured using
another measurement attribute. An entity can accomplish this either by reporting
the fair value and non-fair-value carrying amounts as separate line items or by
aggregating those amounts and disclosing parenthetically the amount of fair
value included in the aggregate amount.
Crown
Equity adopted ASC 825 in the third quarter and elected the fair value option
for their marketable securities; all current securities obtained during the year
were sold prior to year end. Securities classified as long term are classified
as restricted securities.
Property
and equipment
Property
and equipment are carried at the cost of acquisition or construction and
depreciated over the estimated useful lives of the assets. Costs associated with
repair and maintenance are expensed as incurred. Costs associated with
improvements which extend the life, increase the capacity or improve the
efficiency of our property and equipment are capitalized and depreciated over
the remaining life of the related asset. Gains and losses on dispositions of
equipment are reflected in operations. Depreciation is provided using the
straight-line method over the estimated useful lives of the assets, which are 3
to 5 years.
Impairment
of long-lived assets
The
Company reviews the carrying value of its long-lived assets annually or whenever
events or changes in circumstances indicate that the historical-cost carrying
value of an asset may no longer be appropriate. The Company assesses
recoverability of the asset by comparing the undiscounted future net cash flows
expected to result from the asset to its carrying value. If the carrying value
exceeds the undiscounted future net cash flows of the asset, an impairment loss
is measured and recognized. An impairment loss is measured as the difference
between the net book value and the fair value of the long-lived asset. Fair
value is estimated based upon either discounted cash flow analysis or estimated
salvage value. No impairment charge was recorded in 2009 or
2008.
Basic and
diluted net income (loss) per share
Basic and
diluted net income (loss) per share calculations are calculated on the basis of
the weighted average number of common shares outstanding during the year. They
include the dilutive effect of common stock equivalents in years with net
income. Basic and diluted net income (loss) per share are the same due to the
absence of common stock equivalents.
Income
Taxes
Crown
Equity recognizes deferred tax assets and liabilities based on differences
between the financial reporting and tax basis of assets and liabilities using
the enacted tax rates and laws that are expected to be in effect when the
differences are expected to be recovered. Crown Equity provides a valuation
allowance for deferred tax assets for which it does not consider realization of
such assets to be more likely than not.
Fair
Value of Financial Instruments
The
Company's financial instruments consist of cash, marketable securities and debt.
The carrying amount of these financial instruments approximates fair value due
either to length of maturity or interest rates that approximate prevailing
market rates unless otherwise disclosed in these consolidated financial statements.
Crown
Equity does not expect the adoption of any recently issued accounting
pronouncements to have a significant impact on their financial position, results
of operations or cash flows.
NOTE 2 -
GOING CONCERN
As shown
in the accompanying financial statements, Crown Equity has an accumulated
deficit of December 31, 2009. Crown Equity had an increase in equity of $542,341
from the prior year. Although the equity increased substantially in year 2009
compared to year 2008 the Company has had an accumulated deficit and losses for
numerous years prior to 2009. Unless profitability and increase
in shareholders equity continues, these conditions raises 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.
NOTE 3 –
PROPERTY AND EQUIPMENT
Property
and equipment consisted of the following at December 31, 2009:
|
2009
|
2008
|
|||||||
|
Computer
equipment
|
$ | 76,134 | 76,134 | |||||
|
Less:
accumulation depreciation
|
(58,141 | ) | (32,761 | ) | ||||
|
Net
property and equipment
|
$ | 17,993 | 43,373 | |||||
Depreciation
expense totaled $25,380 and $25,380 for the years ended December 31, 2009
and 2008.
NOTE 4 –
INCOME TAXES
The
Company follows Accounting Standards Codification 740, Accounting for Income
Taxes. During 2009 there was a change in control of the Company.
Under
section 382 of the Internal Revenue Code such a change in control negates much
of the tax loss carry forward and deferred income tax. Deferred income taxes
reflect the net tax effects of (a) temporary differences between the carrying
amounts of assets and liabilities for financial reporting purposes and the
amounts used for income tax reporting purposes, and (b) net operating loss carry
forwards. For federal income tax purposes, the Company uses the accrual basis of
accounting, the same that is used for financial reporting purposes.
The
following schedule provides a reconciliation of the statutory income tax rate in
effect as of December 31, 2009, to the effective rate as presented in the
financial statements:
|
Description
|
2009
|
|||
|
Tax
provision at statutory rates
|
$ | 20,948 | ||
|
Unrealized
gain on securities (temporary difference)
|
(3,958 | ) | ||
|
–
|
||||
|
Total
income tax provision
|
$ | 16,990 | ||
The
Company had net income of $93,927 for the year ending December 31, 2009. Based
on the unknown amount of NOL that may be applied to earnings no provision was
made for the NOL and a tax liability of $16,990 has been accrued.
NOTE 5 –
COMMON STOCK
In
December, 2007, the Company adopted the Crown Equity Holdings, Inc. Consultants
and Employees Stock Plan for 2007. Under the Plan, 10,000,000 shares are
reserved for issuance to employees, officers, directors, advisors and
consultants. As of December 31, 2009, 3,371,000 shares had been issued under the
Plan.
In 2008
the Company issued 836,668 shares of common stock valued at $94,134 for
services, 100,000 shares of common stock valued at $15,000 for accounts payable
and cancelled 310,020 shares of common stock valued at par or $310.
In 2009
the Company issued 250,000 shares of common stock valued at $25,000 for cash,
60,000 shares of common stock valued at $6,000 for accounts payable and
3,371,000 shares of common stock valued at $302,650 for services.
NOTE 6 -
RELATED PARTY TRANSACTIONS
Crown
Equity shared office space at a cost of $845 per month with its majority
shareholder, Crown Partners, Inc. Crown Equity entered into this lease in August
2007 and it expired in July 2008. Since the expiration of the lease and through
December 31, 2009, Crown Equity office space was provided by one of the
officers.
On
December 2, 2009, the Company signed a one year lease for 2,400 square feet of
office space. The rent for the space is $2,400 per month or $28,800
due in 2010. The landlord is related to one of the officers of the
Company.
In the
year ending December 31, 2009 the Company paid four related parties $61,750 and
issued $227,000 of restricted stock to the same parties for
services. In 2008, $13,450 was paid and $23,000 was accrued for
services to two related party consultants.
On
September 29, 2009 Crown Marketing, Inc acquired from TaxMasters, Inc a majority
of the outstanding shares of Crown Equity. As part of this transaction effective
August 4, 2009, all outstanding balances due from Crown Equity to TaxMasters
(Crown Partners) were forgiven. Just prior to the merger, Crown Equity owed
Crown Partners $50,167 in advances and $55,897 in accounts payable. Crown Equity
recognized this reduction of debt as contributed capital.
During
December 2008, Crown Equity’s Chief Financial Officer advanced the company
$24,335 in notes payable. As of December 31, 2009 and 2008, $0 and $51,210 were
outstanding.
As of
December 31, 2008, amounts were due to Crown Partners of $55,897 and Montse
Zaman, Chief Financial Officer, of $18,822. During 2009, $10,000 was paid, and
as of December 31, 2009, the amount outstanding was zero.
On
November 20, 2009, the Company converted accounts payable and advances from
Montse Zaman, a related party, of $71,184 to a three year unsecured note
maturing on November 19, 2012. Interest is incurred at 12% per annum unless the
principal and interest are not paid by maturity at which time the interest rate
accelerates to 18% per annum.
During
the quarter ended March 31, 2007, the Company borrowed $12,700 from Phoenix
Consulting Services Inc. controlled by a related party. The loan is unsecured
and matured on April 1, 2008 and accrued interest at 12% per annum. The note can
be converted into common shares of the company at the holder’s option at a to be
determined in the future conversion price. Amounts outstanding under
this agreement subsequent to April 1, 2008 accrued interest at 18% per annum. On
November 20, 2009, the note including principal and interest totaling $16,024
was converted to a long term note due November 19, 2012 with principal and
interest due at maturity. If the principal and interest are not paid
by maturity, the interest rate accelerates to 18% per annum.
During
the quarter ended December 31, 2008, the Company borrowed $ 1,000 from an
unrelated third party. The note was unsecured, due on demand bearing
no interest. The note was repaid during 2009.
Note 7 -
CONTINGENCIES
There is
pending litigation in Arizona small claims court - Strojnik v. Crown Equity
Holdings, Inc. and Crown Partners, Inc. The Company has assessed the
outcome of a loss as remote and furthermore the maximum liability in small
claims court is $2,500. Crown has not accrued any amounts related to
this contingency.
Note 8-
RESTRICTED SECURITIES
Crown
Equity has classified the marketable securities they hold as of yearend as
long-term in accordance with rule 144 due to restrictions on sale &
transfers of unregistered shares. As of December 31, 2009 $204,500 of the
marketable securities which are non controlling shares received from customers
as consulting income has been classified as restricted securities in accordance
with Accounting Standards Codification 825 and 718. The related gain
is reflected in the income statement.
Note 9 –
SUBSEQUENT EVENTS
Crown
Equity evaluated all subsequent events from January 1, 2010 to March 8_, 2010
and concluded that there are no significant or material transactions to be
reported for the subsequent period.