Crown Equity Holdings, Inc. - Quarter Report: 2015 June (Form 10-Q)

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

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

For the quarterly period ended June 30, 2015

OR

¨ TRANSITION REPORT UNDER SECTION 13 OF 15(d) OF THE EXCHANGE ACT OF 1934

For the transition period from ___________ to ____________.

Commission File Number 000-29935

11226 Pentland Downs Street, Las Vegas, NV 89141

(Address of principal executive offices)

(702) 683-8946

(Issuer's telephone number)

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 ¨ No x  

Indicate by check mark whether the Company is a large accelerated filer, an accelerated file, non-accelerated filer, or a smaller reporting company.

Indicate by check mark whether the Company is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No x

As of September 15, 2016, there were 11,191,831 shares of Common Stock of the issuer outstanding.

TABLE OF CONTENTS

Crown Equity Holdings, Inc.

CONSOLIDATED BALANCE SHEETS

(Unaudited)

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

Crown Equity Holdings, Inc.

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

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

Crown Equity Holdings, Inc.

CONSOLIDATED STATEMENTS OF CASH FLOWS

 (Unaudited)

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

Crown Equity Holdings, Inc.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 – BASIS OF PRESENTATION

The accompanying unaudited interim consolidated financial statements of Crown Equity Holdings Inc. (“Crown Equity”) have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules of the Securities and Exchange Commission, and should be read in conjunction with the audited consolidated financial statements and notes thereto contained in Crown Equity’s December 31, 2013 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, 2013 as reported on Form 10-K, have been omitted. Certain prior period amounts have been reclassified to conform to current period presentation.

NOTE 2 – GOING CONCERN

As shown in the accompanying financial statements, Crown Equity has an accumulated deficit of $10,481,667 and a working capital deficit of $391,457 as of June 30, 2015. Unless profitability and increase in shareholders’ equity continues, these conditions raise substantial doubt as to Crown Equity's ability to continue as a going concern. The financial statements do not include any adjustments that might be necessary if Crown Equity is unable to continue as a going concern.

Crown Equity continues to review its expense structure reviewing costs and their reduction to move towards profitability. The Company’s expenses are planned to decrease as a percent of revenue resulting in profitability and increased shareholders’ equity.

NOTE 3 – RELATED PARTY TRANSACTIONS

As of June 30, 2015 and 2014, the Company has prepayment of services to related parties of $6,900 and $0, respectively.

The Company is provided office space by one of the officers and directors at no charge. The Company believes that this office space is sufficient for its needs for the foreseeable future.

As of June 30, 2015 and December 31, 2014, the Company had a payable of $5,026 to Montse Zaman, director. The payable is unsecured, bears no interest and due on demand.

The Company issued 100,000 common shares for service valued at $187,000 to a related party.

As of December 31, 2014, the Company had outstanding notes payable to related parties of $155,885. During the six months ended June 30, 2015 there was a total of $17,013 related party debt borrowings, and a total of $98,550 of related party debt principal and $770 of related party accrued interest was forgiven by the note holders and accounted for as a capital transaction. As of June 30, 2015, the aggregate outstanding balance under these related party notes payable was $74,348. These notes payable are with various officers and directors of the Company and with entities controlled by officers or directors of the Company including Montse Zaman, Phoenix Consulting Services Inc., Ken Bosket, Mark Vega and Almulfo Saucedo.

NOTE 4 – NOTES PAYABLE

During the six months ended June 30, 2015, the Company borrowed $5,983 from non-related third parties. Total of $5,983 of debt principal was settled by issuing common stock with fair value of $11,888 resulting in a loss of $5,205. The notes are unsecured, due on demand. As of June 30, 2015, the aggregate unpaid principal balance under these notes was $47,950. The notes are unsecured subject to annual interest ranging from 0% to 12%, due on demand.

NOTE 5 – EQUITY

During the six months ended June 30, 2015, the Company issued:

22,081 common shares for cash at $1.00 per share for total of $22,081 cash.
100,000 common shares for services valued at $187,000.

The Company converted Chris Knudsen debt of $5,983 for 5,983 shares of common stock at a fair value of $11,188, resulting a loss on debt settlement of $5,205.

NOTE 6 – SUBSEQUENT EVENTS

Total common shares issued for the period from July 1, 2015 through September 15, 2016 was 496,798 shares which are broken down as follows:

On June 1, 2016 the following executive changes occurred:

ITEM 2: MANAGEMENT’S DISCUSSION AND ANALYSIS

This report contains forward looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended. Crown Equity’s actual results could differ materially from those set forth on the forward looking statements as a result of the risks set forth in Crown Equity’s filings with the Securities and Exchange Commission, general economic conditions, and changes in the assumptions used in making such forward looking statements.

OVERVIEW

Crown Equity Holdings Inc. (”Crown Equity”) was incorporated in August 1995 in Nevada. The Company is offering its services to companies seeking to become public entities in the United States. It has launched a website, www.crownequityholdings.com, which offers its services in a wide range of fields. The Company provides various consulting services to companies and individuals dealing with corporate structure and operations globally. The Company also provides public relations and news dissemination for publicly and privately held companies.

In December, 2010, the Company formed two wholly owned subsidiaries Crown Tele Services, Inc. and Crown Direct, Inc. Crown Tele Services, Inc. was formed to provide voice over internet (“VoIP”) services to clients at a competitive price and Crown Direct, Inc. was formed to provide direct sales to customers. Both entities had minimum sales during the quarter.

In March, 2011, the Company formed a wholly owned subsidiary CRWE Real Estate, Inc. as a subsidiary to engage in potential real estate holdings. The entity had minimal activity during the quarter.

The Company has focused its primary vision to using its network of websites to provide advertising and marketing services, as a worldwide online media advertising publisher, dedicated to the distribution of quality branding information. The Company offers Internet media-driven advertising services, which cover and connect a wide range of marketing specialties, as well as search engine optimization for clients interested in online media awareness. As part of its operations, the Company has utilized the services of software and hardware technicians in developing its websites and adding additional websites. This allows the Company to disseminate news and press releases for its customers as well as general news and financial information on a much bigger scale than it did previously. The Company markets its services to companies seeking market awareness of them and the services or goods that they offer. The Company then publishes information concerning these companies on its many websites. The Company is paid in cash and/or stock of the customer companies. The Company has numerous consulting and service customers and is therefore not dependent on any particular customer for a majority of its revenue.

Crown Equity’s office is located at 11226 Pentland Down Street, Las Vegas, NV 89141.

As of June 30, 2015, Crown Equity had no paid employees and was utilizing the services of one independent contractor and consultant.

RESULTS OF OPERATIONS

Three Months Ended June 30, 2015 Compared to the Three Months Ended June 30, 2014

For the three month period ended June 30, 2015, revenues were $314 and $0 for the same period in 2014. Net losses were $47,867 for the three month period ended June 30, 2015 and $93,995 were recorded for the three months ended June 30, 2014. Operating expenses were $45,951 for the three months ended June 30, 2015 and $74,730 for the same period in 2014. Other income and expenses for the three month period ended June 30, 2015 were other expenses of $2,230 and other expenses of $19,265 for the same quarter in 2014.

The Company incurred unrealized losses on its marketable securities during the three months ended June 30, 2015 of $0 compared to unrealized losses of $11,550 for the same period ended June 30, 2014. The Company incurred unrealized losses on its marketable securities during the six months ended June 30, 2015 of $0 compared to unrealized losses of $3,500 for the same period ended June 30, 2014.

Interest for the three months ended June 30, 2015 and 2014 was $2,230 and $7,542, respectively.

Six Months Ended June 30, 2014 Compared to the Six Months Ended June 30, 2013

For the six month period ended June 30, 2015, revenues were $677 and $0 for the same period in 2014. Net losses were $292,664 for the six month period ended June 30, 2015 and $427,900 were recorded for the six months ended June 30, 2014. Operating expenses were $275,129 for the six months ended June 30, 2015 and $413,785 for the same period in 2014. Other income and expenses for the six month period ended June 30, 2015 were other expenses of $18,212 and other expenses of $14,115 for the same six months in 2014.

The Company incurred unrealized gains on its marketable securities during the six months ended June 30, 2015 of $0 compared to unrealized losses of $3,500 for the same period ended June 30, 2014. In addition, the Company incurred losses from equity method investments in related party of $0 in the three months ended June 30, 2015 and $11,550 in the three months ended June 30, 2014.

The majority of our operating expenses in the six months ended June 30, 2015 were $187,000 in stock issued for services. Other operating expenses have remained relatively constant for both periods presented. Interest expense incurred during the six month period ended June 30, 2015 was $3,007 compared to $15,084 for the same period in 2014.

LIQUIDITY AND CAPITAL RESOURCES

At June 30, 2015, Crown Equity had current assets of $8,624 and current liabilities of $400,081 resulting in working capital deficit of $391,457. Stockholders' deficit as of June 30, 2015 was $391,457.

Net cash used by operating activities for the six months ended June 30, 2015 was $45,722 compared to net cash provided of $125,886 for the same period in 2014, a net change of $80,164.

Net cash used in investing activities was zero for the six months ended June 30, 2015 and 2014.

Net cash provided by financing activities during the six months ended June 30, 2015 was $45,077 compared to net cash used of $131,050 in 2014, a decrease of $85,973.

Our existing capital may not be sufficient to meet Crown Equity's cash needs, including the costs of compliance with the continuing reporting requirements of the Securities Exchange Act of 1934, as amended. This condition raises substantial doubt as to Crown Equity's ability to continue as a going concern. The financial statements do not include any adjustments that might be necessary if Crown Equity is unable to continue as a going concern.

ITEM 3: QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

As a “smaller reporting company” as defined by Item 12b-2 of the securities exchange act of 1934 (the "exchange act") and are not requires to provide information required under this Item.

ITEM 4: CONTROLS AND PROCEDURES

(a) Evaluation of Disclosure Controls and Procedures

Based on their evaluation of our disclosure controls and procedures(as defined in Rule 13a-15e under the Securities Exchange Act of 1934 the "Exchange Act"), our principal executive officer and principal financial officer have concluded that as of the end of the period covered by this quarterly report on Form 10-Q such disclosure controls and procedures were not effective to ensure that information required to be disclosed by us in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms because of the identification of material weaknesses in our internal control over financial reporting which we view as an integral part of our disclosure controls and procedures. The material weaknesses relate 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 CEO and CFO also do 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.

Changes in Internal Control over Financial Reporting

There have been no changes in our internal control over financial reporting identified in connection with the evaluation required by paragraph (d) of Exchange Act Rules 13a-15 or 15d-15 that occurred during our first quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II – OTHER INFORMATION

ITEM 1: LEGAL PROCEEDINGS.

The Company was subject to the following judgment:

Lowell Holden vs. Kenneth Bosket, Crown Equity Holdings Inc.

On March 3, 2015, Lowell Holden received a judgment for $39,965 in the Hennepin County District Court in Minneapolis, MN in reference to monies owed for prior services rendered. The judgment was settled with the plaintiff for $10,000. The Company accrued the $10,000 as settlement expense at June 30, 2015. The amount was paid subsequently in 2016.

ITEM 1A: RISK FACTORS.

There have been no material changes to Crown Equity’s risk factors as previously disclosed in our most recent 10-K filing for the year ending December 31, 2014.

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

During the six months ended June 30, 2015, Crown Equity issued:

ITEM 3: DEFAULTS UPON SENIOR SECURITIES.

None

ITEM 4: MINE SAFETY INFORMATION.

None

ITEM 5: OTHER INFORMATION.

None

ITEM 6: EXHIBITS

 _____________________

** XBRL (Extensible Business Reporting Language) information is furnished and not filed or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections.

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.