Crown Equity Holdings, Inc. - Quarter Report: 2009 March (Form 10-Q)
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
10-Q
(Mark
One)
x QUARTERLY REPORT PURSUANT TO SECTION
13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the
quarterly period ended March 31, 2009
OR
o TRANSITION REPORT UNDER SECTION 13 OF
15(d) OF THE EXCHANGE ACT OF 1934
From the
transition period from ___________ to ____________.
Commission
File Number 000-29935
CROWN EQUITY HOLDINGS
INC.
(Exact
name of small business issuer as specified in its charter)
Nevada
33-0677140
(State or
other jurisdiction of incorporation or organization)(IRS Employer Identification
No.)
9663 St Claude Avenue Las
Vegas NV 89148
(Address
of principal executive offices)
(702)
448-1543
(Issuer's
telephone number)
N/A
(Former name, former address and former
fiscal year, if changed since last report)
Indicate
by check mark whether the Company (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the Company was required to file such reports), and (2) has
been subject to such filing requirements for the past 90 days:
Yes: x No:
o
Indicate
by check mark whether the Company is a large accelerated filer, an accelerated
file, non-accelerated filer, or a smaller reporting company.
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Large
accelerated filer o
Non-accelerated
filer o
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Accelerated
filed o
Smaller
reporting company x
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Indicate
by check mark whether the Company is a shell company (as defined in Rule 12b-2
of the Exchange Act).
Yes o No
x
As of May 12, 2008, there were
71,990,632 shares of Common Stock of the issuer outstanding.
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TABLE
OF CONTENTS
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Page
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PART
I: FINANCIAL INFORMATION
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Item
1. Financial Statements (Unaudited)
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3
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Consolidated
Balance Sheets as of March 31, 2009 and December 31, 2008
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3
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Consolidated
Statements of Operations For the Three Months Ended March 31, 2009 and
2008
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4
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Consolidated
Statements of Cash Flows For the Three Months Ended March 31,
2009 and 2008
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5
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Notes
to Financial Statements
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6
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Item
2. Management’s Discussion and Analysis and Plan of
Operation
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7
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Item 3. Quantitative and Qualitative
Disclosures About Market Risk
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8
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Item 4T. Controls and
Procedures
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8
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PART
II: OTHER INFORMATION
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Item
1. Legal Proceedings
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9
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Item 1A. Risk
Factors
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9
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Item
2. Unregistered Sales of Equity Securities and Use of
Proceeds
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9
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Item
3. Defaults upon Senior Securities
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10
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Item
4. Submission of Matters to a vote of Security
Holders
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10
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Item
5. Other Information
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10
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Item
6. Exhibits
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10
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Signatures
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11
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Crown
Equity Holdings Inc.
CONSOLIDATED
BALANCE SHEETS
(Unaudited)
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March
31,
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December
31,
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2009
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2008
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Assets
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Current
assets
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Cash
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$ | 4,570 | $ | 2,898 | ||||
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Fixed
assets
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Equipment
(net)
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37,028 | 43,373 | ||||||
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Total
Assets
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$ | 41,598 | $ | 46,271 | ||||
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Liabilities
& Stockholder's Deficit
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Current
liabilities
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Accounts
payable and accrued expenses
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$ | 28,187 | $ | 40,393 | ||||
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Accounts
payable - related party
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74,886 | 74,718 | ||||||
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Advances
from related parties
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80,302 | 85,915 | ||||||
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Accrued
interest
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2,375 | -- | ||||||
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Salaries
payable
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4,850 | 23,000 | ||||||
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Note
payable - related party
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53,860 | 51,210 | ||||||
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Note
payable
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15,700 | 13,700 | ||||||
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Total
current liabilities
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260,160 | 288,936 | ||||||
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Stockholder's
Deficit
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Common
stock, $.001 par value, 500,000,0000 shares authorized,
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71,990,632
and 69,199,632 shares issued and outstanding
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71,991 | 69,200 | ||||||
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Additional-paid-in-capital
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6,307,213 | 6,030,904 | ||||||
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Accumulated
deficit
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(6,597,766 | ) | (6,342,769 | ) | ||||
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Total
stockholder's deficit
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(218,562 | ) | (242,665 | ) | ||||
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Total
Liabilities & Stockholders’ Deficit
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$ | 41,598 | $ | 46,271 | ||||
The
accompanying notes are an integral part of the financial statements
3
Crown
Equity Holdings Inc.
CONSOLIDATED
STATEMENTS OF OPERATIONS
Three
month periods ended March 31, 2009 and March 31, 2008
(Unaudited)
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2009
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2008
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Revenue
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$ | 6,144 | $ | 572 | ||||
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Cost
of revenues
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(1,364 | ) | - | |||||
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Gross
profit
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4,780 | 572 | ||||||
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Expenses:
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General
and administrative
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253,985 | 44,816 | ||||||
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Depreciation
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6,345 | 6,345 | ||||||
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Operating
loss
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(255,550 | ) | (50,589 | ) | ||||
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Other
Income (expense)
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Debt
forgiveness income
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1,319 | -- | ||||||
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Interest
expense
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(766 | ) | -- | |||||
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Total
other income
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553 | -- | ||||||
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Net
loss
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$ | (254,997 | ) | $ | (50,589 | ) | ||
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Net
loss per share (basic and diluted):
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$ | (0.00 | ) | $ | (0.00 | ) | ||
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Weighted
average shares outstanding (basic and diluted):
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70,808,676 | 68,572,984 | ||||||
The
accompanying notes are an integral part of the unaudited financial
statements
4
Crown
Equity Holdings Inc.
CONSOLIDATED
STATEMENTS OF CASH FLOWS
Three
month periods ended March 31, 2009 and March 31, 2008
(Unaudited)
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2009
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2008
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CASH
FLOWS FROM OPERATING ACTIVITIES
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Net
loss
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$ | (254,997 | ) | $ | (50,589 | ) | ||
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Adjustments
to reconcile net loss to cash used
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in
operating activities:
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Depreciation
expense
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6,345 | 6,345 | ||||||
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Stock
for services
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225,100 | -- | ||||||
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Debt
forgiveness income
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(1,319 | ) | -- | |||||
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Net
Change in:
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Accounts
payable and accrued expenses
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(3,089 | ) | 442 | |||||
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Accounts
payable - related party
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270 | -- | ||||||
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Accrued
salaries
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5,325 | -- | ||||||
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TOTAL
CASH FLOWS USED IN OPERATING ACTIVITIES
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(22,365 | ) | (43,802 | ) | ||||
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CASH
FLOWS FROM FINANCING ACTIVITIES
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Advances
from related party, net
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(5,613 | ) | 11,809 | |||||
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Proceeds
from sale of stock
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25,000 | -- | ||||||
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Proceeds
from notes payable
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2,000 | -- | ||||||
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Proceeds
(repayments) on notes payable-related party
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2,650 | (10,000 | ) | |||||
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TOTAL
CASH FLOWS PROVIDED BY FINANCING ACTIVITIES
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24,037 | 1,809 | ||||||
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Net
Increase (Decrease) in Cash
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1,672 | (41,993 | ) | |||||
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Cash,
beginning of period
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2,898 | 48,952 | ||||||
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Cash,
end of period
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$ | 4,570 | $ | 6,959 | ||||
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SUPPLEMENTAL
CASH FLOW INFORMATION
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Interest
paid
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$ | - | $ | - | ||||
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Income
taxes paid
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- | - | ||||||
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Non
Monetary transactions
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Common
stock issued for accounts payable and accrued liabilities
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29,000 | - | ||||||
The
accompanying notes are an integral part of the unaudited financial
statements
5
Crown
Equity Holdings Inc.
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE 1 -
BASIS OF PRESENTATION
The
accompanying unaudited interim financial statements of Crown Equity Holdings
Inc. (the “Company”) 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 (“SEC”), and should be read in conjunction
with the audited financial statements and notes thereto contained in the
Company’s December 31, 2008 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, 2008 as reported on Form 10-K, have been omitted.
Certain
prior year amounts have been reclassified to conform with the current year
presentation.
NOTE 2 -
GOING CONCERN
As shown
in the accompanying financial statements, we incurred a net loss during the
three months ended March 31, 2009, have an accumulated deficit and a working
capital deficit as of March 31, 2009. These conditions raise substantial doubt
as to our ability to continue as a going concern. Management is trying to raise
additional capital through sales of common stock. The financial statements do
not include any adjustments that might be necessary if we are unable to continue
as a going concern.
During
the quarter ended March 31, 2009 the Company issued 2,791,000 shares of common
stock at $0.10 per share. The shares were issued as follows:
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250,000
issued for cash of $25,000
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·
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60,000
issued for accounts payable of
$6,000
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·
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230,000
issued for accrued compensation payable of
$23,000
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·
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2,251,000
issued for compensation of $225,100 of which 1,810,000 shares valued at
$181,000 were issued to four related
parties
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Note 4 -
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.
6
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. The Company’s actual results could differ
materially from those set forth on the forward looking statements as a result of
the risks set forth in the Company’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. (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.
In 2007,
the Company, through its 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. At present, CTS is able to run 16 monitors off one
CPU. In late, 2007, CTS began to attend trade shows and started
selling these systems. For the three months ended March 31, 2009, CTS
had gross revenues of approximately $6,144.
Additionally,
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 companies or individuals looking to go
public in the United States. It has launched a website,
www.crownequityholdings.com, which offers its services in a wide range of
fields.
The
Company’s office is located at 9663 St Claude, Las Vegas, Nevada
89148.
As of
March 31, 2009, the Company had no employees but was utilizing the services of
independent contractors and consultants.
RESULTS
OF OPERATIONS
For the
three months ended March 31, 2009 and 2008, we had revenues of $6,144 and $572,
respectively, for a net loss of $254,997 and $50,589,
respectively. General and administrative expense increased to
$253,985 for the three months ended March 31, 2009 as compared to $44,816 for
the same period in 2008. Interest expense incurred during the period ending
March 31, 2009 was $766 compared zero for the same period for 2008. Depreciation
for both March 31, 2009 and 2008 was $6,345. The increase in general and
administrative expense was primarily attributable to the Company’s growing
operations and stock issued for services during the period ending March 31,
2009.
7
The
Company will attempt to carry out its business plan as discussed above; however,
it 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
At March
31, 2009, the Company had current assets of $4,570 and current liabilities of
approximately $260,160, resulting in a working capital deficit of
$255,590. Accumulated deficit as of March 31, 2009 was approximately
$6,597,766. 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.
Our
existing capital is not 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. As shown in the
accompanying consolidated financial statements, Crown Equity incurred a net loss
of $254,997 for the three months ended March 31, 2009, has an accumulated
deficit of $6,597,766 and a working capital deficit of $255,590 as of March 31,
2009. These conditions raise substantial doubt as to Crown Equity's ability to
continue as a going concern. Management is trying to raise additional capital
through sales of common stock. The financial statements do not include any
adjustments that might be necessary if Crown Equity is unable to continue as a
going concern.
EMPLOYEES
As of
March 31, 2009, the Company had no employees.
ITEM 3:
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
RISK
As a “smaller reporting company” as
defined by Item 10 of Regulation S-K, the Company is not required to provide
information required under
this
Item.
ITEM
4T: CONTROLS AND PROCEDURES
Evaluation
of Disclosure Controls and Procedures.
The
Company maintains disclosure controls and procedures (as defined in Rule
13a-15(e) and Rule 15d-15(e) under the Securities Exchange Act of 1934, as
amended) that are designed to ensure that information required to be disclosed
in our periodic reports filed under the Exchange Act is recorded, processed,
summarized and reported within the time periods specified in the SEC’s rules and
forms, and that such information is accumulated and communicated to our
management, including our principal executive officer, to allow timely decisions
regarding required disclosure.
Because
of the inherent limitations in all control systems, no evaluation of controls
can provide absolute assurance that all control issues and instances of fraud,
if any, will be or have been detected. These inherent limitations
include the realities that judgments in decision-making can be faulty, and that
breakdowns can occur because of simple error or
mistake. Additionally, controls can be circumvented by the individual
acts of some persons, by collusion of two or more people, and/or by management
override of the control. The design of any system of controls also 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; over time, controls may
become inadequate because of changes in conditions, and/or the degree of
compliance with the policies and procedures may deteriorate. Because of the
inherent limitations in a cost-effective internal control system, misstatements
due to error or fraud may occur and not be detected.
8
The
Company carried out an evaluation of the effectiveness of the design and
operation of its disclosure controls and procedures pursuant to Rule 13a-15
under the Securities Exchange Act of 1934, as amended (“Exchange Act”). This
evaluation was done under the supervision and with the participation of the
Company’s president. Based upon that evaluation, he concluded that the Company’s
disclosure controls and procedures are not effective in gathering, analyzing and
disclosing information needed to satisfy the Company’s disclosure obligations
under the Exchange Act.
Changes
in Disclosure Controls and Procedures.
There
were no significant changes in the Company’s disclosure controls and procedures,
or in factors that could significantly affect those controls and procedures,
since their most recent evaluation.
PART II –
OTHER INFORMATION
ITEM
1. LEGAL PROCEEDINGS.
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.
ITEM
1A. RISK FACTORS.
There
have been no material changes to the Company’s risk factors as previously
disclosed in our most recent 10-K filing for the year ending December 31,
2008.
ITEM
2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF
PROCEEDS.
During
the quarter ended March 31, 2009 the Company issued 2,791,000 shares of
restricted common stock as follows:
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·
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250,000
shares of common stock with a value of $ 25,000 ($0.10 per share) for
cash
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·
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60,000
shares of common stock with a value of $ 6,000 ($0.10 per share) for
accounts payable
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9
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·
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230,000
shares of common stock with a value of $ 23,000 ($0.10 per share) for
accrued compensation payable
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·
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2,251,000
shares of common stock with a value of $225,100 ($0.10 per share) for
compensation
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ITEM 3. DEFAULTS
UPON SENIOR SECURITIES.
None
ITEM 4. SUBMISSION
OF MATTERS TO A VOTE OF SECURITY HOLDERS.
None
ITEM 5. OTHER
INFORMATION.
There
were no reports on Form 8-K filed during the quarter ended March 31,
2009.
ITEM 6.
EXHIBITS
EXHIBIT
31.1 Certification of Principal Executive Officer and Principal Financial
Officer
EXHIBIT
32 Certification of Compliance to Sarbanes-Oxley
10
SIGNATURES
In
accordance with 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.
| CROWN EQUITY HOLDINGS INC. | |||
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By:
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/s/ Kenneth Bosket | |
| Kenneth Bosket, CEO | |||
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By:
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/s/ Montse Zaman | ||
| Montse Zaman, CFO | |||
Date:
May 12, 2009
11