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 September 30, 20152016
OR
o 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
CROWN EQUITY HOLDINGS INC. |
(Exact name of registrant as specified in its charter) |
Nevada |
| 33-0677140 |
(State or other jurisdiction of |
| (IRS Employer
|
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 o¨ 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.
Large accelerated filer | ¨ | Accelerated filed | ¨ |
Non-accelerated filer | ¨ | Smaller reporting company | x |
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,November 17, 2016, there were 11,191,83111,195,831 shares of Common Stock of the issuer outstanding.
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PART I: FINANCIAL INFORMATION | |||||
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Consolidated Balance Sheets as of September 30, 2016 and December 31, 2015 (Unaudited) | 3 | ||||
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(Unaudited)
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| September 30, |
| December 31, |
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| September 30, |
| December 31, |
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| 2015 |
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| 2014 |
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| 2016 |
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| 2015 |
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Assets | Assets | Assets |
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Current Assets |
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Cash |
| $ | 2,150 |
| $ | 2,369 |
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| $ | 9,545 |
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| $ | 2,448 |
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Prepayment for services - Related party |
| 6,900 |
| - |
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Total Current Assets |
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| 9,050 |
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| 2,369 |
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| 9,545 |
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| 2,448 |
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Property, plant and equipment, net of accumulated depreciation of $73,992 and $73,374 |
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| 618 |
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Total Assets |
| $ | 9,050 |
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| $ | 2,987 |
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| $ | 9,545 |
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| $ | 2,448 |
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Liabilities and Stockholders’ Deficit | Liabilities and Stockholders’ Deficit | Liabilities and Stockholders’ Deficit | ||||||||||||||
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Current Liabilities |
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Accounts payable |
| $ | 43,759 |
| $ | 56,622 |
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| $ | 181,327 |
| $ | 187,567 |
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Accounts payable to related party |
| 5,026 |
| 5,026 |
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Accrued expenses |
| 181,603 |
| 155,886 |
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Accounts payable to related parties |
| 5,026 |
| 5,026 |
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Notes payable |
| 9,500 |
| 11,500 |
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Notes payable to related parties |
| 34,156 |
| 155,885 |
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| 10,116 |
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| 23,674 |
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Notes payable |
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| 24,500 |
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| 47,950 |
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Total Current Liabilities |
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| 289,044 |
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| 421,369 |
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| 205,969 |
| 227,767 |
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Stockholders' Deficit |
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Preferred Stock, 10,000,000 shares authorized, 9,000,000 undesignated authorized at $.001 par value, none issued or outstanding |
| - |
| - |
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| - |
| - |
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Series A Convertible Preferred Stock, $0.001 par value, 1,000,000 shares authorized, none issued or outstanding |
| - |
| - |
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| - |
| - |
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Common Stock, 490,000,000 authorized at $0.001 par value; 10,837,142 and 10,566,969 shares issued and outstanding |
| 10,822 |
| 10,567 |
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Common Stock, 490,000,000 authorized at $0.001 par value; 11,195,831 and 10,904,564 shares issued and outstanding |
| 11,196 |
| 10,905 |
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Additional paid-in capital |
| 10,227,530 |
| 9,760,054 |
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| 10,556,516 |
| 10,335,890 |
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Accumulated deficit |
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| (10,508,346 | ) |
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| (10,189,003 | ) |
| (10,764,136 | ) |
| (10,572,114 | ) | ||
Total Stockholders’ Deficit |
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| (279,994 | ) |
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| (418,382 | ) |
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| (196,424 | ) |
|
| (225,319 | ) |
Total Liabilities and Stockholders’ Deficit |
| $ | 9,050 |
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| $ | 2,987 |
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| $ | 9,545 |
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| $ | 2,448 |
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The accompanying notes are an integral part of these unaudited consolidated financial statements.
3 |
Table of Contents |
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
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| Three Months Ended |
| Nine Months Ended |
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| Three Months Ended |
| Nine Months Ended | |||||||||||||||||||||||
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| September 30, |
| September 30, |
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| Sept 30, |
| Sept 30, | |||||||||||||||||||||||
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| 2015 |
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| 2014 |
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| 2015 |
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| 2014 |
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| 2016 |
| 2015 |
| 2016 |
| 2015 | ||||||||||||
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Revenue |
| $ | 124 |
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| $ | - |
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| $ | 801 |
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| $ | - |
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| $ | 531 |
| $ | 124 |
| $ | 1,906 |
| $ | 801 | ||||
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Operating expenses |
| 12,369 |
| 61,525 |
| 287,498 |
| 475,310 |
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Depreciation |
| - |
| - |
| - |
| 618 |
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General and Administrative |
| 44,052 |
| 12,369 |
| 127,489 |
| 286,880 |
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Total Operating Expenses |
| 44,052 |
| 12,369 |
| 127,489 |
| 287,498 | ||||||||||||||||||||||||
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Loss from operations |
| (12,245 | ) |
| (61,525 | ) |
| (286,697 | ) |
| (475,310 | ) | ||||||||||||||||||||
Net Operating Loss |
| (43,521 | ) |
| (12,245 | ) |
| (125,583 | ) |
| (286,697 | ) | ||||||||||||||||||||
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Other (expense) income |
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Other income |
| 178 |
| - |
| 178 |
| - |
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Interest expense |
| (1,027 | ) |
| (16,937 | ) |
| (4,034 | ) |
| (32,021 | ) |
| (657 | ) |
| (1,027 | ) |
| (47,174 | ) |
| (4,034 | ) | ||||||||
Loss on debt conversion |
| (23,407 | ) |
| (370,806 | ) |
| (28,612 | ) |
| (370,806 | ) | ||||||||||||||||||||
Other (expense) income |
| - |
| 230 |
| - |
| (2,301 | ) | |||||||||||||||||||||||
Loss on debt settlement |
| - |
| (23,407 | ) |
| (19,443 | ) |
| (28,612 | ) | |||||||||||||||||||||
Settlement expense |
| - |
| - |
| (10,000 | ) |
| - |
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| - |
| - |
| - |
| (10,000 | ) | |||||||||||||
Loss on derivative |
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| - |
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| (36,696 | ) |
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| - |
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| (36,696 | ) | ||||||||||||||||
Unrealized (loss) gain on marketable securities |
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| - |
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| (6,500 | ) |
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| - |
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| (3,000 | ) | ||||||||||||||||
Total other expense |
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| (24,434 | ) |
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| (430,709 | ) |
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| (42,646 | ) |
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| (444,824 | ) |
| (479 | ) |
| (24,434 | ) |
| (66,439 | ) |
| (42,646 | ) | ||||
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Net loss |
| $ | (36,679 | ) |
| $ | (492,234 | ) |
| $ | (329,343 | ) |
| $ | (920,134 | ) |
| $ | (44,000 | ) |
| $ | (36,679 | ) |
| $ | (192,022 | ) |
| $ | (329,343 | ) |
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Net loss per share – basic and diluted |
| $ | (0.00 | ) |
| $ | (1.07 | ) |
| $ | (0.03 | ) |
| $ | (2.02 | ) |
| $ | (0.00 | ) |
| $ | (0.00 | ) |
| $ | (0.02 | ) |
| $ | (0.03 | ) |
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Weighted average number of common shares outstanding - basic and diluted |
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| 10,706,088 |
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| 459,596 |
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| 10,688,273 |
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| 455,766 |
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| 11,192,179 |
| 10,706,088 |
| 11,118,755 |
| 10,688,273 |
The accompanying notes are an integral part of these unaudited consolidated financial statements.
4 |
Table of Contents |
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(Unaudited)
Nine Months Ended Sept 30, 2016 2015 Cash flows from operating activities Net loss Adjustments to reconcile net loss to net cash used in operating activities: Depreciation Common stock issued for services Loss on debt settlement Amortization of beneficial conversion feature Changes in operating assets and liabilities: Prepayment for services - Related party Accounts payable and accrued expenses Net cash used in operating activities Cash flows from financing activities Proceeds from sale of common stock Payments on related party notes payable Borrowings on third-party notes payable Borrowings on third-party convertible notes payable Borrowings on related party notes payable Borrowings on related party convertible notes payable Net cash provided by financing activities Net increase (decrease) in cash Cash, beginning of period Cash, end of period Supplemental disclosure of cash flow information Interest paid Income taxes paid Noncash investing and financing activities Common stock issued for settlement of debt and interest Common stock issued for accounts payable and interest payable Forgiveness of debt – related party Common stock issued for conversion of debt and interest Beneficial conversion feature discount on convertible notes $ (192,022 ) $ (329,343 ) - 618 - 194,700 19,443 28,612 44,000 - - (6,900 ) (5,533 ) 53,448 (134,112 ) (58,865 ) 97,767 22,081 (13,558 ) - - 20,582 17,000 - - 15,983 40,000 - 141,209 58,646 7,097 (219 ) 2,448 2,369 $ 9,545 $ 2,150 $ - $ - - - $ 2,707 $ 103,523 - 19,495 - 99,320 57,000 - 44,000 -
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| Nine Months Ended |
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| September 30, |
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| 2015 |
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| 2014 |
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Cash flows from operating activities |
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Net loss |
| $ | (329,343 | ) |
| $ | (920,134 | ) |
Adjustments to reconcile net loss to net cash used in operating activities: |
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Depreciation |
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| 618 |
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| 1,686 |
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Common stock issued for services |
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| 194,700 |
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| 266,500 |
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Unrealized loss on marketable securities |
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| - |
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| 3,000 |
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Loss on derivative |
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| - |
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| 36,696 |
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Loss on conversion of related party debt |
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| - |
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| 370,806 |
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Amortization of debt discount |
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| - |
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| 9,373 |
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Loss on debt conversion |
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| 28,612 |
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| - |
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Changes in operating assets and liabilities: |
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Prepayment for services - related party |
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| (6,900 | ) |
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| - |
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Accounts payable and accrued expenses |
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| 53,448 |
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| 54,414 |
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Net cash used in operating activities |
|
| (58,865 | ) |
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| (177,659 | ) |
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Cash flows from investing activities |
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Advances to related parties |
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| - |
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| (16,140 | ) |
Net cash used in investing activities |
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| - |
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| (16,140 | ) |
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Cash flows from financing activities |
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Proceeds from sale of common stock |
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| 22,081 |
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| - |
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Payments on related party notes payable |
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| - |
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| (3,500 | ) |
Borrowings on notes payable |
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| 15,983 |
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| 103,100 |
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Borrowings on related party notes payable |
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| 20,582 |
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| 100,350 |
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Net cash provided by financing activities |
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| 58,646 |
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| 199,950 |
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Net increase (decrease) in cash |
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| (219 | ) |
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| 6,151 |
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Cash, beginning of period |
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| 2,369 |
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| 1,088 |
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Cash, end of period |
| $ | 2,150 |
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| $ | 7,239 |
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Supplemental disclosure of cash flow information |
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Interest paid |
| $ | - |
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| $ | 22 |
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Income taxes paid |
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| - |
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| - |
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Noncash investing and financing activities |
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Common stock issued for debt and interest |
| $ | 103,523 |
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| $ | 99,194 |
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Common stock issued for settlement of accounts payable |
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| 19,495 |
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| - |
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Forgiveness of debt – related party |
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| 99,320 |
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| - |
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Debt discount due to derivative liability |
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| - |
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| 40,000 |
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The accompanying notes are an integral part of these unaudited consolidated financial statements.
5 |
Table of Contents |
Crown Equity Holdings, Inc.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, 20142015 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, 20142015 as reported on Form 10-K, have been omitted. Certain prior period amounts have been reclassified to conform to current period presentation.
NOTE 2 – GOING CONCERN
As shown in the accompanying financial statements, Crown Equity has an accumulated deficit of $10,518,346$10,764,136 and a working capital deficit of $279,994$196,424 as of September 30, 2015.2016. Unless profitability and increase in shareholders’ equity continues, these conditions raise substantial doubt as to Crown Equity's ability to continue as a going concern. The financial statements do not include any adjustments that might be necessary if Crown Equity is unable to continue as a going concern.
Crown Equity continues to review its expense structure reviewing costs and their reduction to move towards profitability. The Company’s expenses are planned to decrease as a percent of revenue resulting in profitability and increased shareholders’ equity.
NOTE 3 – RELATED PARTY TRANSACTIONS
As of September 30, 2015 and 2014, the Company has prepayment of services to related parties of $6,900 and $0, respectively
The Company is provided office space by one of the officers and directors at no charge. The Company believes that this office space is sufficient for its needs for the foreseeable future.
As of September 30, 20152016 and December 31, 2014,2015, the Company had a payable of $5,026 to Montse Zaman, director. The payable is unsecured, bears no interest and due on demand.
As of December 31, 2014,2015, the Company had outstanding notes payable to related parties of $155,885.$23,674. During the nine months ended September 30, 2015,2016 the Company borrowed an additional $20,582issued a convertible note of $40,000 with conversion price at $0.50, and repaid $13,558 under other related party notes. A totalThe $40,000 convertible note has been converted to 80,000 shares of $98,550 or related party debt principal and $770common stock according to the term of related party accrued interest was forgiven by the note holders and accounted for as a capital transaction. $43,761 of the debt principal and $15,046 of accrued interest was settled by issuing common stock with fair value of $70,568 resulting in a loss of $11,761.agreement at $0.5 per share. As of September 30, 20152016 the aggregate outstanding balance under these related party notes payable was $34,156.$10,116. These notes payables are with various officers and directors of the Company and with entities controlled by officers or directors of the Company including Mike Zaman, Montse Zaman Phoenix Consulting Services Inc. and Ken Bosket and etc.
NOTE 4 – NOTES PAYABLE
As of September 30, 2015, the aggregate unpaid principal balance under notes payable to non-related party was $24,500. During the nine months ended September 30, 2015, the Company borrowed an aggregate of $15,983 from non-related third parties. $39,433 of the debt principal and $5,283 of the accrued interest were settled by issuing common stock with fair value of $57,668 resulting in a loss of $12,952. The notes are unsecured, due on demand.
During the nine month ended September 30, 2015, the Company settled an accounts payable of $19,495 by issuing common stock with fair value of $23,394 resulting in a loss of $3,899.
6 |
Table of Contents |
NOTE 5 – EQUITYThe Company evaluated embedded conversion features within convertible debt under ASC 815 "Derivatives and Hedging" and determine the embedded conversion feature(s) should not be bifurcated from the host instrument and not accounted for as a derivative. The Company further evaluated the instrument under ASC 470-20 "Debt with Conversion and Other Options" and determine the conversion option is a beneficial conversion feature (BCF). The intrinsic value of the BCF is determined to be $36,000, and is recognized as debt discount against additional paid in capital. Since the note is converted during the nine months ended September 30, 2016, the intrinsic value of the BCF is fully recognized as amortization of debt discount during the nine months ended September 30, 2016.
During the nine months ended September 30, 2015,2016, the Company issued:paid an aggregate of $5,830 of expenses on behalf of two related entities with common officers and directors. The Company holds investments in these entities.
22,081 common shares for cash at $1.00 per share forNOTE 4 – NOTES PAYABLE
As of September 30, 2016 and December 31, 2015, the aggregate unpaid principal balance under notes payable was $9,500 and $11,500 respectively. During the nine months ended September 30, 2016, the Company has a total additional borrowing of $22,081 cash,
$17,000 of convertible note from third parties. The notes payable are convertible into common stock at $0.50 per share. The $17,000 of convertible notes was fully converted into 34,000 shares of common stock during the period. $2,000 of non-convertible note and 110,000$707 of accrued interest were settled by issuing 5,000 shares of common shares for services valuedstock at $194,700.
fair value of $22,150, resulted in a $19,443 loss on settlement of debt. At September 30, 2016, the total outstanding short-term notes payable due to non-related third parties was $9,500. The notes were unsecured subject to annual interest ranging from 0% to 12%, due on demand.
DuringThe Company evaluated embedded conversion features within convertible debt under ASC 815 "Derivatives and Hedging" and determine the embedded conversion feature(s) should not be bifurcated from the host instrument and not accounted for as a derivative. The Company further evaluated the instrument under ASC 470-20 "Debt with Conversion and Other Options" and determine the conversion option is a beneficial conversion feature (BCF). The intrinsic value of the BCF is determined to be $8,000, and is recognized as debt discount against additional paid in capital. Since the note is converted during the nine month ended September 30, 2015,2016, the intrinsic value of the BCF is fully recognized as amortization of debt discount during the nine month ended September 30, 2016.
NOTE 5 – EQUITY
During the nine months ended September 30, 2016, the Company settled an accounts payableissued the following shares of $19,495 by issuing common stock with fair value of $23,394 resulting in a loss of $3,899.stock:
NOTE 6 – SUBSEQUENT EVENTS
Total common shares issued for the period from October 1, 2015 through September 15, 2016 was 354,689 shares which are broken down as follows:
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On June 1, 2016 the following executive changes occurred:
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7 |
Table of Contents |
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.websites
Crown Equity’s office is located at 11226 Pentland Down Street, Las Vegas, NV 89141.
As of September 30, 2015,2016, Crown Equity had no paid employees and was utilizing the services of one independent contractor and consultant.
RESULTS OF OPERATIONS
Three Months Ended September 30, 2015 Compared to the Three Months Ended September 30, 2014
For the three month period ended September 30, 2015, revenues were $124 and $0 for the same period in 2014. Net loss was $36,679 for the three month period ended September 30, 2015. Operating expenses were $12,369 for the three months ended September 30, 2015 and $61,525 for the same period in 2014. Other income and expenses for the three month period ended September 30, 2015 were $24,434 and $430,709 for the same quarter in 2014.
The Company incurred unrealized losses on its marketable securities during the three months ended September 30, 2015 of $0 compared to unrealized gains of $6,500 for the same period ended September 30, 2014.
Interest for the three months ended September 30, 2015 and 2014 was $1,027 and $16,937, respectively.
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RESULTS OF OPERATIONS
Three Months Ended September 30, 2016 Compared to the Three Months Ended September 30, 2015
For the three month period ended September 30, 2016, revenues were $531 and $124 for the same period in 2015. Net losses were $44,000 for the three month period ended September 30, 2016 and $36,679 were recorded for the three months ended September 30, 2015. Operating expenses were $44,052 for the three months ended September 30, 2016 and $12,369 for the same period in 2015. Other income and expenses for the three month period ended September 30, 2016 were other expenses of $479 and other expenses of $24,434 for the same quarter in 2015.
Interest for the three months ended September 30, 2016 and 2015 was $657 and $1,027, respectively.
Nine Months Ended September 30, 20152016 Compared to the Nine Months Ended September 30, 20142015
For the nine month period ended September 30, 2015,2016, revenues were $801$1,906 and $0$801 for the same period in 2014.2015. Net loss was $329,343losses were $192,022 for the nine month period ended September 30, 20152016 and net losses of $920,134$329,343 were recorded for the nine month period ended September 30, 2015. Operating expenses were $127,489 for the nine months ended September 30, 2014. Operating expenses were2016 and $287,498 for the nine months ended September 30, 2015 and $475,310 for the same period in 2014.2015. Other income and expenses for the nine month period ended September 30, 20152016 were other expenses of$66,439 and $42,646 and other expenses of $2,301 for the same nine monthsperiod in 2014.2015.
The Company incurred unrealized losses on its marketable securities duringdebt conversion of $19,443 for the nine months ended September 30, 20152016 of $0 compared to unrealized gains of $3,000 forin the same period ended September 30, 2014. The majority of our operating expenses in2015.
Interest for the nine months ended September 30, 2016 and 2015 was $194,700 in stock issued for services. Interest expense incurred during the nine month period ended September 30, 2015 was$47,174 and $4,034, compared to $32,021 for the same period in 2014.respectively.
LIQUIDITY AND CAPITAL RESOURCES
DuringThe Company incurred a settlement expense loss of $0 and $10,000 for the nine months ended September 30, 2016 and 2015 Company had cash provided by financing activities of $58,646 and $199,950 for the same period in 2014.respectively.
Cash flows used in investing activities for the year ended December 31, 2015 was $0. Cash flows used in investing activities for the year ended December 31, 2014 totaled $22,640.LIQUIDITY AND CAPITAL RESOURCES
At September 30, 2015,2016, Crown Equity had current assets of $9,050$9,545 and current liabilities of $289,044.$205,969 resulting in working capital deficit of $196,424. Stockholders' deficit as of September 30, 20152016 was $279,994.$196,424.
Net cash used inby operating activities for the nine months ended September 30, 20152016 was $58,865$134,112 compared to net cash used of $177,659$58,865 for the same period in 2014,2015, a net change of $154,403.$75,247.
Cash received from borrowings on notes payableNet cash used in investing activities was zero for the six months ended September 30, 2016 and notes payable2015.
Net cash provided by financing activities during the nine months ended September 30, 2016 was $141,209 compared to related parties constituted allnet cash provided of the funds raised$58,646 in both periods presented.2015, an increase of $82,563.
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.
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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.
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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 SeptemberJune 30, 2015. The amount was paid subsequently in first quarter of 2016.
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 endingended December 31, 2014.2015.
ITEM 2: SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.
During the nine months ended September 30, 2015,2016, Crown Equity issued:
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ITEM 3: DEFAULTS UPON SENIOR SECURITIES.
None
ITEM 4: MINE SAFETY INFORMATION.
None
None
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101.INS ** |
| XBRL Instance Document |
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101.SCH ** |
| XBRL Taxonomy Extension Schema Document |
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101.CAL ** |
| XBRL Taxonomy Extension Calculation Linkbase Document |
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101.DEF ** |
| XBRL Taxonomy Extension Definition Linkbase Document |
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101.LAB ** |
| XBRL Taxonomy Extension Label Linkbase Document |
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101.PRE ** |
| XBRL Taxonomy Extension Presentation Linkbase Document |
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** 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.
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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: | /s/ Mike Zaman | |
| Mike Zaman, CEO | ||
| By: | /s/ Kenneth Bosket | |
| Kenneth Bosket, CFO |
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