UNITED STATES
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
☒ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period endedMarch 31, 20162021
OR
¨ TRANSITION REPORT UNDER SECTION 13 OF 15(d) OF THE EXCHANGE ACT OF 1934
☐ | 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 incorporation or organization) |
| (IRS Employer Identification No.) |
11226 Pentland Downs Street, Las Vegas, NV 89141
(Address of principal executive offices)
(702) 683-8946
(Issuer'sIssuer’s telephone number)
(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 ¨ ☐ No x☒
Indicate by check mark whether the Companyregistrant is a large accelerated filer, an accelerated file,filer, a non-accelerated filer, or a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer", "accelerated filer", "smaller reporting company", and "emerging growth company" in Rule 12b-2of the Exchange Act.
Large accelerated filer |
| Accelerated |
|
Non-accelerated filer |
| Smaller reporting company |
|
Emerging growth company | ☐ |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
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 November 17, 2016, there were 11,195,831May 6, 2021, the number of shares of Common Stockoutstanding of the issuer outstanding.registrant’s class of common stock was 12,918,293.
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2 |
Table of Contents |
DEFINITIONS
In this Quarterly Report on Form 10-Q, the words “Crown Equity”, the “Company”, the “Registrant”, “we”, “our”, “ours” and “us” refer to Crown Equity Holdings, Inc.
DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q includes certain statements that may be deemed “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, all of which are based upon various estimates and assumptions that the Company believes to be reasonable as of the date hereof. In some cases, you can identify forward-looking statements by terminology such as “may,” “will,” “could,” “should,” “expect,” “plan,” “project,” “intend,” “anticipate,” “believe,” “seek,” “estimate,” “predict,” “potential,” “pursue,” “target,” “continue,” the negative of such terms or other comparable terminology. These statements involve risks and uncertainties that could cause the Company’s actual future outcomes to differ materially from those set forth in such statements. Such risks and uncertainties include, but are not limited to:
· | the possibility that certain tax benefits of our net operating losses may be restricted or reduced in a change in ownership or a further change in the federal tax rate; | |
· | the inability to carry out plans and strategies as expected | |
· | limitations on the availability of sufficient credit or cash flow to fund our working capital needs and capital expenditures and debt service; | |
· | difficulty in fulfilling the terms of our convertible note payables, which could result in a default and acceleration of our indebtedness under our convertible note payables; | |
· | the possibility that we issue additional shares of common stock or convertible securities that will dilute the percentage ownership interest of existing stockholders and may dilute the book value per share of our common stock; | |
· | the relatively low trading volume of our common stock, which could depress our stock price; | |
· | competition in the industries in which we operate, both from third parties and former employees, which could result in the loss of one or more customers or lead to lower margins on new projects; | |
· | a general reduction in the demand for our services; | |
· | our ability to enter into, and the terms of, future contracts; | |
· | uncertainties inherent in estimating future operating results, including revenues, operating income or cash flow; | |
· | complications associated with the incorporation of new accounting, control and operating procedures; | |
· | the recognition of tax benefits related to uncertain tax positions; |
You should understand that the foregoing, as well as other risk factors discussed in this document and in Part I, of our Annual Report on Form 10-K for the fiscal year ended December 31, 2020, could cause future outcomes to differ materially from those experienced previously or those expressed in such forward-looking statements. We undertake no obligation to publicly update or revise any information, including information concerning our controlling shareholder, net operating losses, borrowing availability or cash position, or any forward-looking statements to reflect events or circumstances that may arise after the date of this report. Forward-looking statements are provided in this Quarterly Report on Form 10-Q pursuant to the safe harbor established under the Private Securities Litigation Reform Act of 1995 and should be evaluated in the context of the estimates, assumptions, uncertainties and risks described herein.
3 |
Table of Contents |
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
March 31, December 31, 2016 2015 Assets Current Assets Cash Total Current Assets Total Assets Liabilities and Stockholders’ Deficit Current Liabilities Accounts payable Accounts payable to related parties Notes payable Notes payable to related parties Total Current Liabilities Stockholders' Deficit Preferred Stock, 10,000,000 shares authorized, 9,000,000 undesignated authorized at $.001 par value, none issued or outstanding Series A Convertible Preferred Stock, $0.001 par value, 1,000,000 shares authorized, none issued or outstanding Common Stock, 490,000,000 authorized at $0.001 par value; 11,164,564 and 10,904,564 shares issued and outstanding Additional paid-in capital Accumulated deficit Total Stockholders’ Deficit Total Liabilities and Stockholders’ Deficit $ 81,658 $ 2,448 81,658 2,448 $ 81,658 $ 2,448 $ 182,497 $ 187,567 5,026 5,026 10,500 11,500 21,444 23,674 219,467 227,767 - - - - 11,165 10,905 10,512,630 10,335,890 (10,661,604 ) (10,572,114 ) (137,809 ) (225,319 ) $ 81,658 $ 2,448
|
| March 31, |
|
| Dec 31, 2020 |
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| (Unaudited) |
|
|
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| |||||||
Assets |
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Current assets |
|
|
|
|
|
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Cash |
| $ | 4,355 |
|
| $ | 3,047 |
| |||||
Brokerage Account |
|
| 138,200 |
|
|
| 180,587 |
| |||||
Total Current Assets |
|
| 142,555 |
|
|
| 183,634 |
| |||||
Property and Equipment, net |
|
| 13,677 |
|
|
| 15,505 |
| |||||
Total Assets |
| $ | 156,232 |
|
| $ | 199,139 |
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Liabilities and Stockholders’ Deficit | |||||||||||||
Current liabilities |
|
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Accounts payable and accrued expenses |
| $ | 138,821 |
|
| $ | 137,793 |
| |||||
Accounts payable and accrued expenses to related party |
|
| 532,290 |
|
|
| 444,246 |
| |||||
Deferred revenue related party |
|
| 7,083 |
|
|
| 11,333 |
| |||||
Convertible notes payable to related parties, net of debt discount |
|
| 6,066 |
|
|
| 5,508 |
| |||||
Notes payable to related party |
|
| 9,333 |
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|
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Current Portion of long-term debt |
|
| 22,472 |
|
|
| 29,010 |
| |||||
Total Current Liabilities |
| $ | 716,065 |
|
| $ | 627,890 |
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Non-Current liabilities |
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Long-term debt |
|
| 17,114 |
|
|
| 15,045 |
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Total Liabilities |
| $ | 733,179 |
|
| $ | 642,935 |
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Stockholders’ deficit |
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Preferred Stock, 20,000,000 shares authorized, authorized at $0.001 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 shares authorized, 1,000 issued and outstanding |
|
| 1 |
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| 1 |
| |||||
Common Stock, 450,000,000 authorized at $0.001 par value; 12,914,543 and 12,901,753 shares issued and outstanding as of March 31, 2021 and December 31, 2020, respectively |
|
| 12,914 |
|
|
| 12,902 |
| |||||
Stock Payable |
|
| 3,750 |
|
|
| 3,000 |
| |||||
Additional paid-in capital |
|
| 12,525,894 |
|
|
| 12,506,375 |
| |||||
Accumulated deficit |
|
| (13,119,506 | ) |
|
| (12,966,074 | ) | |||||
Total stockholders’ deficit |
|
| (576,947 | ) |
|
| (443,796 | ) | |||||
Total liabilities and stockholders’ deficit |
| $ | 156,232 |
|
| $ | 199,139 |
|
The accompanying notes are an integral part of these unaudited consolidated financial statements.Condensed Consolidated Financial Statements.
4 |
Table of Contents |
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended March 31, 2016 2015 Revenues Operating expenses Depreciation General and Administrative Total Operating Expenses Net Operating Loss Other (expense) income Interest expense Loss on debt settlement Settlement expense Total other expense Net loss Net loss per share – basic and diluted Weighted average number of common shares outstanding - basic and diluted $ 934 $ 363 - 618 42,194 228,560 42,194 229,178 (41,260 ) (228,815 ) (45,230 ) (777 ) (3,000 ) (5,205 ) - (10,000 ) (48,230 ) (15,982 ) $ (89,490 ) $ (244,797 ) $ (0.01 ) $ (0.02 ) 10,975,927 10,602,560
|
| Three Months Ended |
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| March 31, |
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| 2021 |
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| 2020 |
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Revenue |
| $ | 2,905 |
|
| $ | 577 |
|
Revenue – related party |
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| 3,825 |
|
|
| - |
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Total Revenue |
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| 6,730 |
|
|
| 577 |
|
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|
|
|
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Operating expenses |
|
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General and Administrative |
|
| 137,236 |
|
|
| 43,395 |
|
Depreciation |
|
| 1,828 |
|
|
| 8,033 |
|
Total Operating Expenses |
|
| 139,064 |
|
|
| 51,428 |
|
Net Operating Income (Loss) |
|
| (132,334 | ) |
|
| (50,851 | ) |
|
|
|
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Other (expense) |
|
|
|
|
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Interest expense |
|
| (942 | ) |
|
| (3,700 | ) |
Loss on Stock Held |
|
| (12,053 | ) |
|
| - |
|
Loss on AP Settlement – related party |
|
| - |
|
|
| (426,987 | ) |
Investment expense |
|
| (751 | ) |
|
| - |
|
Debt discount amortization |
|
| (7,352 | ) |
|
| - |
|
Total other (expense) |
|
| (21,098 | ) |
|
| (430,687 | ) |
Net (loss) |
| $ | (153,432 | ) |
| $ | (481,538 | ) |
|
|
|
|
|
|
|
|
|
Net (loss) per common share – basic and diluted |
| $ | (0.01 | ) |
| $ | (0.04 | ) |
Weighted average number of common shares outstanding - basic and diluted |
|
| 12,910,238 |
|
|
| 12,006,830 |
|
The accompanying notes are an integral part of these unaudited consolidated financial statements.Condensed Consolidated Financial Statements.
5 |
Table of Contents |
CROWN EQUITY HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWSCHANGES IN STOCKHOLDERS’ DEFICIT
(Unaudited)
Three Months Ended March 31, 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 debt discount 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 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 Forgiveness of debt – related party Common stock issued for conversion of debt and interest Beneficial conversion feature discount on convertible notes For the Three Months Ended March 31, 2021$ (89,490 ) $ (244,797 ) - 618 - 187,000 3,000 5,205 44,000 - - (6,000 ) (5,070 ) 34,718 (47,560 ) (23,256 ) 72,000 22,081 (2,230 ) - - 983 17,000 40,000 - 126,770 23,064 79,210 (192 ) 2,448 2,369 $ 81,658 $ 2,177 $ - $ - - - $ 1,000 $ 5,983 - 97,720 57,000 - 44,000 -
|
| Preferred Stock |
|
| Common Stock |
|
| Common Stock |
|
| Additional Paid-In |
|
| Accumulated |
|
| Total Stockholders' |
| ||||||||||||||
|
| Shares |
|
| Amount |
|
| Shares |
|
| Amount |
|
| Payable |
|
| Capital |
|
| Deficit |
|
| (Deficit) |
| ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
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|
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|
|
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| ||||||||
Balances at December 31, 2020 |
|
| 1,000 |
|
| $ | 1 |
|
|
| 12,901,753 |
|
| $ | 12,902 |
|
|
| 3,000 |
|
| $ | 12,506,375 |
|
| $ | (12,966,074 | ) |
| $ | (443,796 | ) |
Common Stock Subscribed for services – Third Party |
|
| - |
|
|
| - |
|
|
| 1,286 |
|
|
| 1 |
|
|
| 750 |
|
|
| 2,249 |
|
|
| - |
|
|
| 3,000 |
|
Warrant Subscriptions |
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 25 |
|
|
| - |
|
|
| 25 |
|
Settlement of AP |
|
| - |
|
|
| - |
|
|
| 11,504 |
|
|
| 11 |
|
|
| - |
|
|
| 17,245 |
|
|
| - |
|
|
| 17,256 |
|
Net loss |
|
| - |
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| (153,432 | ) |
|
| (153,432 | ) |
Balances at March 31, 2021 |
|
| 1,000 |
|
| $ | 1 |
|
|
| 12,914,543 |
|
| $ | 12,914 |
|
|
| 3,750 |
|
| $ | 12,525,894 |
|
| $ | (13,119,506 | ) |
| $ | (576,947 | ) |
For the Three Months Ended March 31, 2020
|
| Preferred Stock |
|
| Common Stock |
|
| Common Stock |
|
| Additional Paid-In |
|
| Accumulated |
|
| Total Stockholders' |
| ||||||||||||||
|
| Shares |
|
| Amount |
|
| Shares |
|
| Amount |
|
| Payable |
|
| Capital |
|
| Deficit |
|
| (Deficit) |
| ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Balances at December 31, 2019 |
|
| 1,000 |
|
| $ | 1 |
|
|
| 11,766,766 |
|
| $ | 11,766 |
|
| $ | 43,764 |
|
| $ | 11,418,103 |
|
| $ | (11,792,059 | ) |
| $ | (318,425 | ) |
Common stock issued for cash |
|
| - |
|
|
| - |
|
|
| 40,000 |
|
| $ | 40 |
|
| $ | - |
|
| $ | 19,960 |
|
| $ | - |
|
| $ | 20,000 |
|
Common Stock Subscribed for services – related party |
|
| - |
|
|
| - |
|
|
| 148,419 |
|
| $ | 148 |
|
| $ | (42,264 | ) |
| $ | 49,868 |
|
| $ | - |
|
| $ | 7,752 |
|
Settlement of AP – related party |
|
| - |
|
|
| - |
|
|
| 204,933 |
|
| $ | 205 |
|
| $ | - |
|
| $ | 63,819 |
|
| $ | - |
|
| $ | 64,024 |
|
Warrant Subscriptions |
|
| - |
|
|
| - |
|
|
| - |
|
| $ | - |
|
| $ | - |
|
| $ | 75 |
|
| $ | - |
|
| $ | 75 |
|
Loss on AP Settlement – related party |
|
| - |
|
|
| - |
|
|
| - |
|
| $ | - |
|
| $ | - |
|
| $ | 426,987 |
|
| $ | - |
|
| $ | 426,987 |
|
Forgiveness of AP by CEO |
|
| - |
|
|
| - |
|
|
| - |
|
| $ | - |
|
| $ | - |
|
| $ | 7,200 |
|
| $ | - |
|
| $ | 7,200 |
|
Net loss |
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| (481,538 | ) |
|
| (481,538 | ) |
Balances at March 31, 2020 |
|
| 1,000 |
|
| $ | 1 |
|
|
| 12,160,118 |
|
| $ | 12,159 |
|
| $ | 1,500 |
|
| $ | 11,986,012 |
|
| $ | (12,273,597 | ) |
| $ | (273,925 | ) |
The accompanying notes are an integral part of these unaudited consolidated financial statements.Condensed Consolidated Financial Statements.
6 |
Table of Contents |
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
|
| Three Months Ended |
| |||||
|
| March 31, |
| |||||
|
| 2021 |
|
| 2020 |
| ||
Cash flows from operating activities |
|
|
|
|
|
| ||
Net loss |
| $ | (153,432 | ) |
| $ | (481,538 | ) |
Adjustments to reconcile net loss to net cash used in operating activities: |
|
|
|
|
|
|
|
|
Common stock issued for services |
|
| - |
|
|
| 7,752 |
|
Common stock issued for debt conversion |
|
| - |
|
|
| - |
|
Depreciation |
|
| 1,828 |
|
|
| 8,033 |
|
Loss on investment |
|
| 751 |
|
|
| - |
|
Loss on marketable securities |
|
| 12,053 |
|
|
| 426,987 |
|
Amortization of beneficial conversion feature |
|
| 7,352 |
|
|
| - |
|
Changes in operating assets and liabilities: |
|
|
|
|
|
|
|
|
Marketable securities or brokerage account |
|
| 29,583 |
|
|
| - |
|
Deferred revenue – related party |
|
| (4,250 | ) |
|
| - |
|
Accounts payable and accrued expenses – related party |
|
| 88,044 |
|
|
| (57,772 | ) |
Accounts payable and accrued expenses |
|
| 18,284 |
|
|
| 79,797 |
|
Net cash (used in) operating activities |
|
| 213 |
|
|
| (16,741 | ) |
|
|
|
|
|
|
|
|
|
Cash used in investing activities |
|
|
|
|
|
|
|
|
Cash paid to brokerage account |
|
| - |
|
|
| - |
|
Net cash (used in) investing activities |
|
| - |
|
|
| - |
|
|
|
|
|
|
|
|
|
|
Cash flows from financing activities |
|
|
|
|
|
|
|
|
Payments on convertible notes payable, related party |
|
| (6,794 | ) |
|
| (760 | ) |
Borrowings from convertible notes payable, related party |
|
| 9,333 |
|
|
| 5,000 |
|
Proceeds from Sale of Stock |
|
| - |
|
|
| 20,000 |
|
Principal payments on debt |
|
| (4,469 | ) |
|
| (5,311 | ) |
Warrant Subscriptions |
|
| 25 |
|
|
| 75 |
|
Shares subscribed for cash |
|
| 3,000 |
|
|
| - |
|
Net cash provided by financing activities |
|
| 1,095 |
|
|
| 19,004 |
|
|
|
|
|
|
|
|
|
|
Net increase (decrease) in cash |
|
| 1,308 |
|
|
| 2,263 |
|
Cash, beginning of period |
|
| 3,047 |
|
|
| 997 |
|
Cash, end of period |
| $ | 4,355 |
|
| $ | 3,260 |
|
|
|
|
|
|
|
|
|
|
Supplemental disclosure of cash flow information |
|
|
|
|
|
|
|
|
Interest paid |
| $ | 942 |
|
| $ | 3,700 |
|
Income taxes paid |
|
| - |
|
|
| - |
|
|
|
|
|
|
|
|
|
|
Non-Cash Transactions |
|
|
|
|
|
|
|
|
Forgiveness of AP by CEO |
| $ | - |
|
| $ | 7,200 |
|
Convertible debt for payment of AP |
| $ | - |
|
| $ | 17,633 |
|
RP-AP Converted into common stock |
| $ | 17,256 |
|
| $ | 64,024 |
|
Shares issued for stock payable |
| $ | 2,250 |
|
| $ | 43,764 |
|
The accompanying notes are an integral part of these unaudited Condensed Consolidated Financial Statements.
7 |
Table of Contents |
CROWN EQUITY HOLDINGS, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 – BASISNATURE OF PRESENTATIONBUSINESS AND SUMMARY OF ACCOUNTING POLICIES
Nature of Business
Crown Equity Holdings Inc. ("Crown Equity" or the "Company") was incorporated in August 1995 in Nevada. The Company offers through its digital network of websites, advertising branding, marketing solutions and other services to boost customer awareness, as well as merchant visibility as a worldwide online multi-media publisher. The Company focuses on the distribution of information for the purpose of bringing together its audience with the advertisers that want to reach them. Its advertising services cover and connect a range of marketing specialties, as well as provide search engine optimization for clients interested in online media awareness. Crown Equity Holdings' objective is making its endeavor known as CRWE WORLD into a global online news and information source, as well as a global one stop shop for various distinct products and services. The Company also offers services to companies seeking to become public entities in the United States, as well as providing various consulting services to companies and individuals dealing with corporate structure and operations globally.
On January 27, 2020, the Company re-acquired from AVOT the online business iB2BGlobal.com and since company had not received the shares promised during the original sale.
Basis of Preparation
The accompanying unaudited interim consolidated financial statements include the financial information of Crown Equity Holdings Inc. (“Crown Equity”, the “Company”) have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules ofinstructions to financial reporting as prescribed by the Securities and Exchange Commission and should be read in conjunction with the audited consolidated(the “SEC”). The preparation of these financial statements and accompanying notes thereto contained in Crown Equity’s December 31, 2015 Annual Report filedconformity with the SEC on Form 10-K.U.S. generally accepted accounting principles (“GAAP”). In the opinion of management, the financial statements contained in this report include all adjustments, consisting of normal recurringknown accruals and adjustments necessary for a fair presentation of the financial position, and the results of operations, and cash flows for the interim periods presented have been reflectedreported 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, 2015 as reported on Form 10-K, have been omitted.
Reclassifications
Certain prior period amounts have been reclassified to conform to current period presentation.
Adoption of New Accounting Standard
In February 2016, the FASB issued ASU 2016-02 “Leases”, which is codified in ASC 842 “Leases” and supersedes current lease guidance in ASC 840. These provisions require lessees to put a right-of-use asset and lease liability on their balance sheet for operating and financing leases that have a term of more than one year. Expense will be recognized in the income statement similar to current accounting guidance. For lessors, the ASU modifies the classification criteria and the accounting for sales-type and direct financing leases. Entities will need to disclose qualitative and quantitative information about their leases, including characteristics and amounts recognized in the financial statements. These provisions are effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Early adoption is permitted. We adopted the provisions on January 1, 2019, including interim periods subsequent to the date of adoption. Entities are required to use a modified retrospective approach upon adoption to recognize and measure leases at the beginning of the earliest comparative period presented in the financial statements. Since all the leases were finance leases, there was no effect on the financial statements when ASC 842 was adopted.
In June 2018, the FASB issued ASU No. 2018-07, Compensation—Stock Compensation, to simplify the accounting for share-based payments to nonemployees by aligning it with the accounting for share-based payments for employees, with certain exceptions. Under the new guidance, the cost for nonemployee awards may be lower and less volatile than under current US GAAP because the measurement generally will occur earlier and will be fixed at the grant date. This update is effective for annual financial reporting periods, and interim periods within those annual periods, beginning after December 15, 2018, although early adoption is permitted. The Company adopted the standard effective January 1, 2019 and found the adoption did not have a material effect on our 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.
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Accounting Standards not yet Adopted
In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (ASU 2016-13), which requires measurement and recognition of expected credit losses for financial assets held. ASU 2016-13 is effective for us in our first quarter of fiscal 2023, and earlier adoption is permitted. We are currently evaluating the impact of our pending adoption of ASU 2016-13 on our financial statements.
Use of Estimates
The preparation of financial statements in conformity with GAAP requires the use of estimates and assumptions by management in determining the reported amounts of assets and liabilities, disclosures of contingent liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Estimates are primarily used in our revenue recognition, long-lived asset impairments and adjustments, deferred tax, stock-based compensation, and reserves for legal matters.
Cash and Cash Equivalents
Crown Equity considers all highly liquid investments purchased with an original maturity of three months or less to be cash and cash equivalents.
Stock-Based Compensation
The Company accounts for stock-based compensation to employees in accordance with 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 and is recognized as expense over the requisite employee service period. The Company accounts for stock-based compensation to other than employees in accordance with ASC 505-50. Equity instruments issued to other than employees are valued at the earlier of a commitment date or upon completion of the services, based on the fair value of the equity instruments and is recognized as expense over the service period. The Company estimates the fair value of share-based payments using the Black-Scholes option-pricing model for common stock options and the closing price of the company's common stock for common share issuances.
Revenue Recognition
The core principles of revenue recognition under ASC 606 include the following five criteria:
1. | Identify the contract with the customer | |
Contract with our customers may be oral, written, or implied. A written and signed invoice stating the terms and conditions is the Company’ preferred method. The terms of a written contract may be contained within the body of an invoice or in an email. No work is commenced without an understanding between the Company and our client that a valid contract exists. |
2. | Identify the performance obligations in the contract | |
Our sales and account management teams define the scope of services to be offered, to ensure all parties are in agreement and obligations are being delivered to the customer as promised. The performance obligation may not be fully identified in a mutually signed contract, but may be outlined in email correspondence, face-to-face meetings, additional proposals or scopes of work, or phone conversations. |
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3. | Determine the transaction price | |
Pricing is discussed and identified by the operations team prior to submitting an invoice to the customer. |
4. | Allocate the transaction price to the performance obligations in the contract | |
If a contract involves multiple obligations, the transaction pricing is allocated accordingly, during the performance obligation phase. |
5. | Recognize revenue when (or as) we satisfy a performance obligation | |
The Company uses digital marketing that includes digital advertising, SEO management and digital ad support. We provide whether presenting a vibrant but simple message about our clients that will enlighten their audience or deploying an influential digital marketing campaign on our online site or across one or multiple social media platforms. Revenue is recognized when ads are run on Company’s advertising platform. The company generates analytical reports monthly or as required to show how the ad dollars were spent and how the targeting resulted in click-through. The report satisfies the performance obligation, regardless of the outcome or effectiveness of the campaign. |
Sales are recognized when promised services are started in an amount that reflects the consideration the Company expects to be entitled to in exchange for those services. Sales for service contracts generally are recognized as the services are being provided.
|
| Three Months Ended Mar 31, 2021 |
|
| Three Months Ended March 31, 2020 |
| ||||||||||||||||||
|
| Third Party |
|
| Related Party |
|
| Total |
|
| Third Party |
|
| Related Party |
|
| Total |
| ||||||
Advertising |
| $ | - |
|
| $ | 3,825 |
|
| $ | 3,825 |
|
| $ | - |
|
| $ | - |
|
| $ | - |
|
Click Based and Impressions Ads |
|
| - |
|
|
| - |
|
|
| - |
|
|
| 222 |
|
|
| - |
|
|
| 222 |
|
Domain Registrations |
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
Publishing and Distribution |
|
| 2,905 |
|
|
| - |
|
|
| 2,905 |
|
|
| 355 |
|
|
| - |
|
|
| 355 |
|
Server |
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| $ | 2,905 |
|
| $ | 3,825 |
|
| $ | 6,730 |
|
| $ | 577 |
|
| $ | - |
|
| $ | 577 |
|
Revenue is based on providing through the Company’s server services, Managed Information Technology, 24/7 support, which includes designing, developing, testing, maintaining functionality, infrastructure monitoring, managing and hosting, combined with revenue received from the display of click based and impressions ads located on the Company’s websites, domain name registration, publishing and distribution of news and press releases.
|
| Mar 31, |
|
| Mar 31 |
| ||
|
| 2021 |
|
| 2020 |
| ||
|
|
|
|
|
|
| ||
Deferred Revenue |
| $ | 7,083 |
|
| $ | - |
|
Deferred revenue is based on cash received or billings in excess of revenue recognized until revenue recognition criteria are met. Client prepayments are deferred and recognized over future periods as services are delivered or performed.
Accounts Receivable and Allowance for Doubtful Accounts
The Company establishes an allowance for bad debts through a review of several factors including historical collection experience, current aging status of the customer accounts, and financial condition of our customers. The Company does not generally require collateral for our accounts receivable. There were no accounts receivable and allowance for doubtful accounts as of March 31, 2021 and December 31, 2020.
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Risk Concentrations
The Company does not hold cash in excess of federally insured limits.
During the period ending March 31, 2021, 57% of the Company’s revenues were from press releases, article publishing and distribution by the Company and 43% of the Company’s revenues being received through advertisements, which 100% of the advertisement revenue was received through a related party by the Company.
General and Administrative Expenses
Crown Equity's general and administrative expenses consisted of the following types of expenses during 2021 and 2020: Compensation expense, auto, travel and entertainment, legal and accounting, utilities, web sites, office expenses, depreciation and other administrative related expenses.
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 calculated using the straight-line method over the estimated useful lives of the assets.
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 determined based on either expected future cash flows at a rate we believe incorporates the time value of money. No indications of impairments were identified in 2021 or 2020.
Basic and Diluted Net (Loss) per Share
|
| Three Months Mar 31, 2021 |
|
| Three Months Mar 31, 2020 |
| ||
Numerator: |
|
|
|
|
|
| ||
Net (Loss) attributable to common shareholders of Crown Equity Holdings, Inc. |
| $ | (153,432 | ) |
| $ | (481,538 | ) |
Net (Loss) attributable to Crown Equity Holdings, Inc. |
| $ | (153,432 | ) |
| $ | (481,538 | ) |
|
|
|
|
|
|
|
|
|
Denominator: |
|
|
|
|
|
|
|
|
Weighted average common and common equivalent shares outstanding – basic and diluted |
|
| 12,910,238 |
|
|
| 12,006,830 |
|
|
|
|
|
|
|
|
|
|
Earnings (Loss) per Share attributable to Crown Equity Holdings, Inc.: |
|
|
|
|
|
|
|
|
Basic |
| $ | (0.01 | ) |
| $ | (0.04 | ) |
Diluted |
| $ | (0.01 | ) |
| $ | (0.04 | ) |
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When an entity has a net loss, it is prohibited from including potential common shares in the computation of diluted per share amounts. Accordingly, we have utilized basic shares outstanding to calculate both basic and diluted loss per share for the periods ended March 31, 2021 and 2020. The number of potential anti-dilutive shares excluded from the calculation shares for the period ended March 31, 2021 is 21,400,000.
Income Taxes
In December 2017, the Tax Cuts and Jobs Act (the “Act”) was enacted, which, among other changes, reduced the federal statutory corporate tax rate from 35% to 21%, effective January 1, 2018. As a result of this change, the Company’s statutory tax rate for fiscal 2020 and 2021 will be 21%. 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. As of March 31, 2021, and December 31, 2020, the Company has not reflected any amounts as a deferred tax asset due to the uncertainty of future profits to offset any net operating loss.
The Company’s deferred tax assets consisted of the following as of March 31, 2021 and December 31, 2020:
|
| Mar 31, 2021 |
|
| Dec 31, 2020 |
| ||
Net operating loss |
| $ | 692,385 |
|
| $ | 1,174,015 |
|
Valuation allowance |
|
| (692,385 | ) |
|
| (1,174,015 | ) |
Net deferred tax asset |
|
| - |
|
|
| - |
|
Uncertain tax position
The Company also follows the guidance related to accounting for income tax uncertainties. In accounting for uncertainty in income taxes, the Company recognizes the financial statement benefit of a tax position only after determining that the relevant tax authority would more likely than not sustain the position following an audit. For tax positions meeting the more likely than not threshold, the amount recognized in the financial statements is the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement with the relevant tax authority. No liability for unrecognized tax benefits was recorded as of March 31, 2021 and December 31, 2020.
Fair Value of Financial Instruments
The Company's financial instruments consist of cash and cash equivalents, accounts payable 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 financial statements.
Research and Development
The Company spent no money for research and development cost for the periods ended March 31, 2021 and December 31, 2020.
Advertising Cost
The Company spent $0 for advertisement for the periods ended March 31, 2021 and 2020.
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NOTE 2 – GOING CONCERN
As shown in the accompanying condensed consolidated financial statements, Crown Equity has an accumulated deficit of $10,661,604$13,119,506 since its inception and had a working capital deficit of $137,809$573,510 negative cash flows from operations and limited business operations as of March 31, 2016. Unless profitability and increase in shareholders’ equity continues, these2021. 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 plannedManagement plans to decreasecontinue raising funds through debt and equity financing to grow the business to profitability. This financing may be insufficient to fund expenditures or other cash requirements. There can be no assurance that additional financing will be available to the Company on acceptable terms or at all. These financial statements do not give effect to adjustments to assets would be necessary for the Company be unable to continue as a percent of revenue resulting in profitability and increased shareholders’ equity.going concern.
NOTE 3 – PROPERTY AND EQUIPMENT
The Company’s policy is to capitalize all property purchases over $1,000 and depreciates the assets over their useful lives of 3 to 7 years.
Property consists of the following at March 31, 2021 and December 31, 2020:
|
| Mar 31, 2021 |
|
| Dec 31, 2020 |
| ||
Computers – 3 year estimated useful life |
| $ | 108,622 |
|
| $ | 108,622 |
|
Less – Accumulated Depreciation |
|
| (94,945 | ) |
|
| (93,117 | ) |
Property and Equipment, net |
| $ | 13,677 |
|
| $ | 15,505 |
|
Depreciation has been provided over each asset’s estimated useful life. Depreciation expense was $1,828, and $8,033 for the three months ended March 31, 2021 and 2020, respectively.
NOTE 4 – BROKERAGE ACCOUNT
As of March 31, 2021, the market value of the Company’s account portfolio was $138,200. During the period ending March 31, 2021, $59,583 was transferred from the brokerage account to operating account. The opening value of the account was $180,587, resulting in losses in portfolio investment as follows:
Net loss on investment in securities account for the three months ended March 31, 2021 |
| $ | 12,053 |
|
Less – Net gain and losses recognized during 2021 on equity securities sold during the period |
| $ | 0 |
|
Unrealized losses recognized during 2021 on equities securities still held at March 31, 2021 |
| $ | 12,053 |
|
NOTE 5 – FINANCE LEASES
During 2019 and 2020, the Company borrowed an aggregate $7,357 and $9,985 under the following third-party and related party finance lease transactions:
A $9,985 note from a third party for the lease of fixed assets, bearing interest at 22%, amortized over 24 months with a payments of $498 in additional to a $22 management fee for a total monthly payment of $520. The lease has a bargain purchase option of $1 at the end of the lease term.
A $6,168 note from a third party for the purchase of fixed assets, bearing interest at 16.60% amortized over 36 months with payments of $219.
A $1,188 note from a third party for the purchase of fixed assets, bearing interest at 16.60%, amortized over 36 months with payments of $42.
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The following is a schedule of the net book value of the finance lease.
Assets |
| March 31, 2021 |
| |
Leased equipment under finance lease, |
| $ | 108,622 |
|
less accumulated amortization |
|
| (94,945 | ) |
Net |
| $ | 13,677 |
|
Liabilities |
| Mar 31, 2021 |
| |
Obligations under finance lease (current) |
| $ | 22,472 |
|
Obligations under finance lease (noncurrent) |
|
| 13,114 |
|
Total |
| $ | 35,586 |
|
Below is a reconciliation of leases to the financial statements.
|
| Finance Leases |
| |
Leased asset balance |
| $ | 13,677 |
|
Liability balance |
|
| 35,586 |
|
Cash flow (operating) |
|
| - |
|
Cash flow (financing) |
|
| - |
|
Interest expense |
| $ | 942 |
|
The following is a schedule, by years, of future minimum lease payments required under finance leases.
Years ended December 31 | Finance Leases | |||
2021 | 21,922 | |||
2022 | 14,990 | |||
2023 | 2,869 | |||
Thereafter | - | |||
Total | 39,781 | |||
Less: Imputed Interest | (4,195 | ) | ||
Total Liability | 35,586 |
Other information related to leases is as follows:
Lease Type | Weighted Average Remaining Term | Weighted Average Discount Rate (1) | ||||
Finance Leases | 2.01 years | 17 | % |
Based on average interest rate of 17%, average term remaining (months) 21.5 Average term remain (years) 2.01
(1) This discount rate is consistent with our borrowing rates from various lenders.
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NOTE 6 – NOTES PAYABLE AND CONVERTIBLE NOTE PAYABLES
As of March 31, 2021, and December 31, 2020, the Company had unamortized discount of $0 and $0 respectively.
The Company analyzed the below convertible notes for derivatives noting none.
|
| Original |
| Due |
| Interest |
|
| Conversion |
|
| Mar 31, |
| |||
Name |
| Note Date |
| Date |
| Rate |
|
| Rate |
|
| 2021 |
| |||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Related Party Convertible Notes Payable: |
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Montse Zaman |
| 03/25/2020 |
| 03/25/2021 |
|
| 12 | % |
| $ | - |
|
|
| - |
|
Montse Zaman |
| 04/28/2020 |
| 04/28/2021 |
|
| 12 | % |
| $ | - |
|
|
| - |
|
Montse Zaman |
| 05/22/2020 |
| 05/22/2021 |
|
| 12 | % |
| $ | - |
|
|
| - |
|
Willy A Saint-Hilaire |
| 09/29/2020 |
| 09/29/2021 |
|
|
|
|
|
| - |
|
|
| 13,418 |
|
Total Convertible Related Party Notes Payable |
|
|
|
|
|
|
|
|
|
|
|
|
|
| 13,418 |
|
Less: Debt Discount |
|
|
|
|
|
|
|
|
|
|
|
|
|
| 7,352 |
|
Convertible Notes Payable, net of Discount - Related Party |
|
|
|
|
|
|
|
|
|
|
|
|
|
| 6,066 |
|
|
|
|
|
|
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Third Party Convertible Notes Payable: |
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|
|
|
|
|
|
Willy A. Saint-Hilaire |
| 02/27/2020 |
| 02/27/2021 |
|
| 12 | % |
| $ | - |
|
|
| - |
|
Willy A. Saint-Hilaire |
| 03/08/2020 |
| 03/08/2021 |
|
| 12 | % |
| $ | - |
|
|
| - |
|
Willy A. Saint-Hilaire |
| 03/24/2020 |
| 03/24/2021 |
|
| 12 | % |
| $ | - |
|
|
| - |
|
Willy A. Saint-Hilaire |
| 03/24/2020 |
| 03/24/2021 |
|
| 12 | % |
| $ | - |
|
|
| - |
|
Willy A. Saint-Hilaire |
| 03/24/2020 |
| 03/24/2021 |
|
| 12 | % |
| $ | - |
|
|
| - |
|
Total Convertible Third Party Notes Payable |
|
|
|
|
|
|
|
|
|
|
|
|
|
| - |
|
Less: Debt Discount |
|
|
|
|
|
|
|
|
|
|
|
|
|
| - |
|
Convertible Notes Payable, net of Discount - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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Third Party |
|
|
|
|
|
|
|
|
|
|
|
|
|
| - |
|
|
|
|
|
|
|
|
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|
|
|
|
|
|
|
|
Related Party Non-Convertible Notes Payable: |
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|
|
|
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|
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|
|
|
|
|
|
|
|
Willy A Saint-Hilaire |
| 03/12/2021 |
| 03/12/2022 |
|
| 16 | % |
|
|
|
|
|
| 9,333 |
|
Total Related Party Non-Convertible Notes Payable |
|
|
|
|
|
|
|
|
|
|
|
|
|
| 9,333 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Third Party Non-Convertible Notes Payable: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Small Business Administration – EIDL |
| 04/30/2020 |
| 04/30/2050 |
|
| 3.75 | % |
|
|
|
|
| $ | 4,000 |
|
Total Third Party Non-Convertible Notes Payable |
|
|
|
|
|
|
|
|
|
|
|
|
|
| 4,000 |
|
In April 2020, Crown Equity Holdings executed the standard loan documents required for securing a loan (the “EIDL Loan”) from the SBA under its Economic Injury Disaster Loan (“EIDL”) assistance program in light of the impact of the COVID-19 pandemic on the Company’s business.
The balance of principal and interest is payable thirty years from the date of the SBA Note. In connection therewith, the Company received a $4,000 advance.
Mike Zaman
As of December 31, 2019, the Company owed Mike Zaman a total of $760 and remaining accrued interest of $3,503. The balance of $760 was paid on January 13, 2020 and the remaining accrued interest of $3,503 were not converted as of March 31, 2021.
Montse Zaman
On March 27, 2020, the Company entered into a convertible promissory note with Montse Zaman in the amount of $5,000. The note carries interest at 12% per annum. The holder has the right to convert principal of the note and accrued interest into Common shares. During the period ending December 31,2020, the Company made principal payments of $1,000, $3,000 and $1,000. As of March 31, 2021, the balance on this note was $0.
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On April 28, 2020, the Company entered into a convertible promissory note with Montse Zaman in the amount of $4,000. The note carries interest at 12% per annum. The holder has the right to convert principal of the note and accrued interest into Common shares. During the period ending December 31, 2020, the Company made principal payments of $2,00 and $2,000. As of March 31, 2021, the balance on this note was $0.
On May 22, 2020, the Company entered into a convertible promissory note with Montse Zaman in the amount of $1,500. The note carries interest at 12% per annum. The holder has the right to convert principal of the note and accrued interest into Common shares. The Company made payments of $700 and $800 on May 22, 2020 and July 31, 2020 respectively. As of March 31, 2021, the balance on this note was $0.
Willy Ariel Saint-Hilaire
On February 27, 2020, the Company entered into a promissory note with Willy Ariel Saint-Hilaire in the amount of $14,500. The note carries interest at 12% per annum. On July 31, 2020, the principal balance of $14,500 and accrued interest of $744 for a total of $15,244 were converted into 30,488 common shares at a conversion rate of $0.50 per share.
On March 8, 2020, the Company entered into a promissory note with Willy Ariel Saint--Hilaire in the amount of $1,581. The note carry interest at 12% per annum. On July 31, 2020, the principal balance of $1,581 and accrued interest of $75 for a total of 1,656 were converted into 3,312 common shares at a conversion rate of $.50 per share.
On March 24, 2020, the Company entered into promissory notes with Willy Ariel Saint-Hilaire in the amounts of $500, $400, and $652. The notes carry interest at 12% per annum. On July 31, 2020, the principal balance of $500, $400, $652 and accrued interest of $21, $17, $2 respectively for a total of $1,592 were converted into 3,184 common shares at a conversion rate of $0.50 per share.
On September 20, 2020, the Company entered into a promissory note with Willy A Saint-Hilaire in the amount of $23,175 payable in 12 equal monthly installments of $1,931.25. As original issuance discount for the note, the Company issued Common Stock for a total of 23,175 shares. The fair market value of the shares were in excess of the note and the company recorded a debt discount of $23,175.
On March 12, 2021, the Company entered into a promissory note with Willy A Saint-Hilaire in the amount of $9,332 at 16% interest, payable in 12 equal month principal installments of $778.
NOTE 7 – COMMITMENTS AND CONTINGENCIES
The Company is obligated for payments under related party notes payable and automobile lease payments.
The Company agreed to pay the automobile lease of $395 a month, on a month to month basis and can be cancelled at any time but expects to continue lease payments for the full 2021 year.
The Company entered into an agreement, effective January 1, 2020, to pay Arnulfo Saucedo-Bardan $5,000 per month for website development, design maintenance and other IT services and solutions.
On February 13, 2020, Munti Consulting LLC was issued a warrant at a price of $0.000025 per share ($25 total) to purchase 1,000,000 shares of common stock at the exercise price of $0.60 per share. Exercisable after the first (1st) anniversary of the date of filing of the first Form S-1 filed with the U.S. Securities and Exchange Commission after the issuance of this Warrant.
On March 13, 2020, BBCKQK Trust Kevin Wiltz was issued a warrant at a price of $0.000025 per share ($25.00 total) to purchase 1,000,000 shares of common stock at the exercise price of $0.60 per share.
On March 13, 2020, Willy Ariel Saint--Hilaire was issued a warrant at a price of $0.000025 per share ($25.00 total) to purchase 1,000,000 shares of common stock at the exercise price of $0.60 per share.
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On April 1, 2020, Addicted 2 Marketing LLC was issued a warrant at a price of $0.000025 per share ($2.50 total) to purchase 100,000 shares of common stock at the exercise price of $0.60 per share.
On April 28, 2020, Shahram Khial was issued a warrant at a price of $0.000025 per share ($12.50 total) to purchase 500,000 shares of common stock at the exercise price of $0.60 per share.
On May 4, 2020, Arnulfo Saucedo- Bardan was issued a warrant at a price of $0.000025 per share ($25.00 total) to purchase 1,000,000 shares of common stock at the exercise price of $0.60 per share.
On May 7, 2020, Arnold F. Sock was issued a warrant at a price of $0.000025 per share ($12.50 total) to purchase 500,000 shares of common stock at the exercise price of $0.60 per share.
On May 7, 2020 Rudy Chacon was issued a warrant at a price of $0.000025 per share ($5.00 total) to purchase 200,000 shares of common stock at the exercise price of $0.60 per share.
On May 7, 2020, Sadegh Salmassi was issued a warrant at a price of $0.000025 per share ($5.00 total) to purchase 200,000 shares of common stock at the exercise price of $0.60 per share.
On May 8, 2020, Glen J. Rineer was issued a warrant at a price of $0.000025 per share ($5.00 total) to purchase 200,000 shares of common stock at the exercise price of $0.60 per share.
On May 8, 2020 Barry Cohen was issued a warrant at a price of $0.000025 per share ($5.00 total) to purchase 200,000 shares of common stock at the exercise price of $0.60 per share.
On May 8, 2020, Malcolm Ziman was issued a warrant at a price of $0.000025 per share ($5.00 total) to purchase 200,000 shares of common stock at the exercise price of $0.60 per share.
On May 8, 2020 Brett Matus was issued a warrant at a price of $0.000025 per share ($5.00 total) to purchase 200,000 shares of common stock at the exercise price of $0.60 per share.
On May 8, 2020 Brian D Colvin was issued a warrant at a price of $0.000025 per share ($25.00 total) to purchase 1,000,000 shares of common stock at the exercise price of $0.60 per share.
On May 8, 2020 Jacob Colvin was issued a warrant at a price of $0.000025 per share ($5.00 total) to purchase 200,000 shares of common stock at the exercise price of $0.60 per share.
On May 11, 2020, Mohammad Sadrolashrafi was issued a warrant at a price of $0.000025 per share ($12.50 total) to purchase 500,000 shares of common stock at the exercise price of $0.60 per share.
On May 13, 2020 Steven A. Fishman was issued a warrant at a price of $0.000025 per share ($5.00 total) to purchase 200,000 shares of common stock at the exercise price of $0.60 per share.
On May 13, 2020 Wendell and Sharon Piper was issued a warrant at a price of $0.000025 per share ($5.00 total) to purchase 200,000 shares of common stock at the exercise price of $0.60 per share.
On May 19, 2020 Joan R. Saint-Hilaire was issued a warrant at a price of $0.000025 per share ($2.50 total) to purchase 100,000 shares of common stock at the exercise price of $0.60 per share.
On May 19, 2020 Marvin A Saint-Hilaire was issued a warrant at a price of $0.000025 per share ($2.50 total) to purchase 100,000 shares of common stock at the exercise price of $0.60 per share.
On May 20, 2020 Willy Rafael Saint-Hilaire was issued a warrant at a price of $0.000025 per share ($5.00 total) to purchase 200,000 shares of common stock at the exercise price of $0.60 per share.
On May 27, 2020 James Bobrik was issued a warrant at a price of $0.000025 per share ($5.00 total) to purchase 200,000 shares of common stock at the exercise price of $0.60 per share.
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On May 28, 2020 Richard R Shehane was issued a warrant at a price of $0.000025 per share ($5.00 total) to purchase 200,000 shares of common stock at the exercise price of $0.60 per share.
On May 29, 2020 Ybelka-Saint Hilaire was issued a warrant at a price of $0.000025 per share ($5.00 total) to purchase 200,000 shares of common stock at the exercise price of $0.60 per share.
On June 3, 2020, Jeffery Connell was issued a warrant at a price of $0.000025 per share ($2.50 total) to purchase 100,000 shares of common stock at the exercise price of $0.60 per share.
On June 8, 2020 Hassan M. Oji was issued a warrant at a price of $0.000025 per share ($7.50 total) to purchase 300,000 shares of common stock at the exercise price of $0.60 per share.
On June 9, 2020, Kim Smith was issued a warrant at a price of $0.000025 per share ($12.50 total) to purchase 500,000 shares of common stock at the exercise price of $0.60 per share.
On June 12, 2020 Violet Gewerter was issued a warrant at a price of $0.000025 per share ($12.50 total) to purchase 500,000 shares of common stock at the exercise price of $0.60 per share.
On June 16, 2020, Roy S Worbets was issued a warrant at a price of $0.000025 per share ($5.00) to purchase 200,000 shares of common stock at the exercise price of $0.60 per share.
On June 19, 2020, Elvis E. Saint-Hilaire was issued a warrant at a price of $0.000025 per share ($5.00 total) to purchase 200,000 shares of common stock at the exercise price of $0.60 per share.
On June 30, 2020, Chris Knudsen was issued a warrant at a price of $0.000025 per share ($5.00 total) to purchase 200,000 shares of common stock at the exercise price of $0.60 per share.
On July 1, 2020, Theresa Kitt was issued a warrant at a price of $0.000025 per share ($5.00 total) to purchase 200,000 shares of common stock at the exercise price of $0.60 per share.
On July 1, 2020, Donald Kitt was issued a warrant at a price of $0.000025 per share ($5.00 total) to purchase 200,000 shares of common stock at the exercise price of $0.60 per share.
On July 10, 2020, Shahram Khial was issued a warrant at a price of $0.000025 per share ($12.50 total) to purchase 500,000 shares of common stock at the exercise price of $0.60 per share.
On August 13, 2020, Monireh Sepahpour was issued a warrant at a price of $0.000025 per share ($12.50 total) to purchase 500,000 shares of common stock at the exercise price of $0.60 per share.
On August 18, 2020, Monica Shayestehpour was issued a warrant at a price of $0.000025 per share ($25.00 total) to purchase 1,000,000 shares of common stock at the exercise price of $0.60 per share.
On September 2, 2020, Hongsing Phou was issued a warrant at a price of $0.000025 per share ($5.00 total) to purchase 200,000 shares of common stock at the exercise price of $0.60 per share.
On September 8, 2020, Pejham Khial was issued a warrant at a price of $0.000025 per share $12.50 total) to purchase 500,000 shares of common stock at the exercise price of $0.60 per share.
On September 15, 2020, Salvatore Marasa was issued a warrant at a price of $0.000025 per share ($5.00 total) to purchase 200,000 shares of common stock at the exercise price of $0.60 per share.
On September 21, 2020, Richard W LeAndro was issued a warrant at a price of $0.000025 per share ($12.50 total) to purchase 500,000 shares of common stock at the exercise price of $0.60 per share.
On September 21, 2020, Richard W LeAndro Jr was issued a warrant at a price of $0.000025 per share ($12.50 total) to purchase 500,000 shares of common stock at the exercise price of $0.60 per share.
On September 25, 2020, Seyed M Javad was issued a warrant at a price of $0.000025 per share ($5.00 total) to purchase 200,000 shares of common stock at the exercise price of $0.60 per share.
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On October 6, 2020, Nasrin Montazer was issued a warrant at a price of $0.000025 per share ($12.50 total) to purchase 500,000 shares of common stock at the exercise price of $0.60 per share.
On October 13, 2020, Jagjit Dhaliwal was issued a warrant at a price of $0.000025 per share ($25.00 total) to purchase 1,000,000 shares of common stock at the exercise price of $0.60 per share.
On January 3, 2021, Marjan Tina Suwarno & Reno Suwarno were issued a warrant at a price of $0.000025 per share ($25.00 total) to purchase 1,000,000 shares of common stock at the exercise price of $0.60 per share.
Summary of Warrants Issued:
Issue Date |
| Issued To |
| Shares |
|
| Exercise price per share |
|
| Warrant price per share |
|
| Total Paid for Warrants |
| ||||
02/13/2020 |
| Munti Consulting LLC |
|
| 1,000,000 |
|
| $ | .060 |
|
| $ | 0.000025 |
|
| $ | 25.00 |
|
03/13/2020 |
| BBCKQK Trust Kevin Wiltz |
|
| 1,000,000 |
|
| $ | 0.60 |
|
| $ | 0.000025 |
|
| $ | 25.00 |
|
04/01/2020 |
| Addicted 2 Marketing LLC |
|
| 100,000 |
|
| $ | 0.60 |
|
| $ | 0.000025 |
|
| $ | 2.50 |
|
05/07/2020 |
| Arnold F Sock |
|
| 500,000 |
|
| $ | 0.60 |
|
| $ | 0.000025 |
|
| $ | 12.50 |
|
05/07/2020 |
| Rudy Chacon |
|
| 200,000 |
|
| $ | 0.60 |
|
| $ | 0.000025 |
|
| $ | 5.00 |
|
05/07/2020 |
| Sadegh Salmassi |
|
| 200,000 |
|
| $ | 0.60 |
|
| $ | 0.000025 |
|
| $ | 5.00 |
|
05/08/2020 |
| Glen J Rineer |
|
| 200,000 |
|
| $ | 0.60 |
|
| $ | 0.000025 |
|
| $ | 5.00 |
|
05/08/2020 |
| Barry Cohen |
|
| 200,000 |
|
| $ | 0.60 |
|
| $ | 0.000025 |
|
| $ | 5.00 |
|
05/13/2020 |
| Steven A Fishman |
|
| 200,000 |
|
| $ | 0.60 |
|
| $ | 0.000025 |
|
| $ | 5.00 |
|
05/13/2020 |
| Wendell & Sharon Piper |
|
| 200,000 |
|
| $ | 0.60 |
|
| $ | 0.000025 |
|
| $ | 5.00 |
|
05/27/2020 |
| James Bobrik |
|
| 200,000 |
|
| $ | 0.60 |
|
| $ | 0.000025 |
|
| $ | 5.00 |
|
05/28/2020 |
| Richard R Shehane |
|
| 200,000 |
|
| $ | 0.60 |
|
| $ | 0.000025 |
|
| $ | 5.00 |
|
06/03/2020 |
| Jeffery Connell |
|
| 100,000 |
|
| $ | 0.60 |
|
| $ | 0.000025 |
|
| $ | 2.50 |
|
06/08/2020 |
| Hassan M Oji |
|
| 300,000 |
|
| $ | 0.60 |
|
| $ | 0.000025 |
|
| $ | 7.50 |
|
06/09/2020 |
| Kim Smith |
|
| 500,000 |
|
| $ | 0.60 |
|
| $ | 0.000025 |
|
| $ | 12.50 |
|
06/12/2020 |
| Violet Gewerter |
|
| 500,000 |
|
| $ | 0.60 |
|
| $ | 0.000025 |
|
| $ | 12.50 |
|
06/16/2020 |
| Roy S Worbets |
|
| 200,000 |
|
| $ | 0.60 |
|
| $ | 0.000025 |
|
| $ | 5.00 |
|
06/30/2020 |
| Chris Knudsen |
|
| 200,000 |
|
| $ | 0.60 |
|
| $ | 0.000025 |
|
| $ | 5.00 |
|
07/01/2020 |
| Donald Kitt |
|
| 200,000 |
|
| $ | 0.60 |
|
| $ | 0.000025 |
|
| $ | 5.00 |
|
08/13/2020 |
| Monireh Sepahpour |
|
| 500,000 |
|
| $ | 0.60 |
|
| $ | 0.000025 |
|
| $ | 12.50 |
|
08/18/2020 |
| Monica Shayestehpour |
|
| 1,000,000 |
|
| $ | 0.60 |
|
| $ | 0.000025 |
|
| $ | 25.00 |
|
09/02/2020 |
| Hongsing Phou |
|
| 200,000 |
|
| $ | 0.60 |
|
| $ | 0.000025 |
|
| $ | 5.00 |
|
09/08/2020 |
| Pejham Khial |
|
| 500,000 |
|
| $ | 0.60 |
|
| $ | 0.000025 |
|
| $ | 12.50 |
|
09/15/2020 |
| Salvatore Marasa |
|
| 200,000 |
|
| $ | 0.60 |
|
| $ | 0.000025 |
|
| $ | 5.00 |
|
09/21/2020 |
| Richard W LeAndro |
|
| 500,000 |
|
| $ | 0.60 |
|
| $ | 0.000025 |
|
| $ | 12.50 |
|
09/21/2020 |
| Richard W LeAndro Jr |
|
| 500,000 |
|
| $ | 0.60 |
|
| $ | 0.000025 |
|
| $ | 12.50 |
|
09/25/2020 |
| Seyed M Javad |
|
| 200,000 |
|
| $ | 0.60 |
|
| $ | 0.000025 |
|
| $ | 5.00 |
|
10/06/2020 |
| Nasrin Montazer |
|
| 500,000 |
|
| $ | 0.60 |
|
| $ | 0.000025 |
|
| $ | 12.50 |
|
10/13/2020 |
| Jagit Dhaliwal |
|
| 1,000,000 |
|
| $ | 0.60 |
|
| $ | 0.000025 |
|
| $ | 25.00 |
|
01/03/2021 |
| Marjan Tina Suwarno & Reno Suwarno |
|
| 1,000,000 |
|
| $ | 0.60 |
|
| $ | 0.000025 |
|
| $ | 25.00 |
|
|
| Total: |
|
| 12,300,000 |
|
|
|
|
|
|
|
|
|
| $ | 307.50 |
|
Related Party: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
03/13/2020 |
| Willy A Saint-Hilaire |
|
| 1,000,000 |
|
| $ | 0.60 |
|
| $ | 0.000025 |
|
| $ | 25.00 |
|
04/28/2020 |
| Shahram Khial |
|
| 500,000 |
|
| $ | 0.60 |
|
| $ | 0.000025 |
|
| $ | 12.50 |
|
05/01/2020 |
| Mike Zaman |
|
| 1,000,000 |
|
| $ | 0.60 |
|
| $ | 0.000025 |
|
| $ | 25.00 |
|
05/01/2020 |
| Montse Zaman |
|
| 1,000,000 |
|
| $ | 0.60 |
|
| $ | 0.000025 |
|
| $ | 25.00 |
|
05/08/2020 |
| Malcolm Ziman |
|
| 200,000 |
|
| $ | 0.60 |
|
| $ | 0.000025 |
|
| $ | 5.00 |
|
05/08/2020 |
| Brett Matus |
|
| 200,000 |
|
| $ | 0.60 |
|
| $ | 0.000025 |
|
| $ | 5.00 |
|
05/11/2020 |
| Mohammad Sadrolashrafi |
|
| 500,000 |
|
| $ | 0.60 |
|
| $ | 0.000025 |
|
| $ | 12.50 |
|
05/04/2020 |
| Arnulfo Saucedo-Bardan |
|
| 1,000,000 |
|
| $ | 0.60 |
|
| $ | 0.000025 |
|
| $ | 25.00 |
|
05/08/2020 |
| Brian D Colvin |
|
| 1,000,000 |
|
| $ | 0.60 |
|
| $ | 0.000025 |
|
| $ | 25.00 |
|
05/08/2020 |
| Jacob Colvin |
|
| 200,000 |
|
| $ | 0.60 |
|
| $ | 0.000025 |
|
| $ | 5.00 |
|
05/19/2020 |
| Joan R Saint-Hilaire |
|
| 100,000 |
|
| $ | 0.60 |
|
| $ | 0.000025 |
|
| $ | 2.50 |
|
05/19/2020 |
| Marvin A Saint-Hilaire |
|
| 100,000 |
|
| $ | 0.60 |
|
| $ | 0.000025 |
|
| $ | 2.50 |
|
05/20/2020 |
| Willy Rafael Saint-Hilaire |
|
| 200,000 |
|
| $ | 0.60 |
|
| $ | 0.000025 |
|
| $ | 5.00 |
|
05/29/2020 |
| Ybelka Saint-Hilaire |
|
| 200,000 |
|
| $ | 0.60 |
|
| $ | 0.000025 |
|
| $ | 5.00 |
|
06/09/2020 |
| Kenneth Cornell Bosket |
|
| 1,000,000 |
|
| $ | 0.60 |
|
| $ | 0.000025 |
|
| $ | 25.00 |
|
06/19/2020 |
| Elvis E Saint-Hilaire |
|
| 200,000 |
|
| $ | 0.60 |
|
| $ | 0.000025 |
|
| $ | 5.00 |
|
07/01/2020 |
| Theresa Kitt |
|
| 200,000 |
|
| $ | 0.60 |
|
| $ | 0.000025 |
|
| $ | 5.00 |
|
07/10/2020 |
| Shahram Khial |
|
| 500,000 |
|
| $ | 0.60 |
|
| $ | 0.000025 |
|
| $ | 12.50 |
|
|
| Total Related Party: |
|
| 9,100,000 |
|
|
|
|
|
|
|
|
|
| $ | 227.50 |
|
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NOTE 8 – RELATED PARTY TRANSACTIONS
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.
AsOn March 1, 2020, Willy A Saint-Hilaire was issued a warrant at a price of $0.000025 per share ($25.00 total) to purchase 1,000,000 shares of common stock at the exercise price of $0.60 per share.
On April 28, 2020, 2020, Shahram Khial was issued a warrant at a price of $0.000025 per share ($12.50 total) to purchase 500,000 shares of common stock at the exercise price of $0.60 per share.
On May 1, 2020, Mike Zaman was issued a warrant at a price of $0.000025 per share ($25.00 total) to purchase 1,000,000 shares of common stock at the exercise price of $0.60 per share.
On May 1, 2020, Montse Zaman was issued a warrant at a price of $0.000025 per share ($25.00 total) to purchase 1,000,000 shares of common stock at the exercise price of $0.60 per share.
On May 4, 2020 Arnulfo Saucedo-Bardan was issued a warrant at a price of $0.000025 per share ($25.00 total) to purchase 1,000,000 shares of common stock at the exercise price of $0.60 per share.
On May 8, 2020, Malcolm Ziman was issued a warrant at a price of $0.000025 per share ($5.00total) to purchase 200,000 shares of common stock at the exercise price of $0.60 per share.
On May 8, 2020 Brian D Colvin was issued a warrant at a price of $0.000025 per share ($25.00 total) to purchase 1,000,000 shares of common stock at the exercise price of $0.60 per share.
On May 8, 2020 Jacob Colvin was issued a warrant at a price of $0.000025 per share ($5.00 total) to purchase 200,000 shares of common stock at the exercise price of $0.60 per share.
On May 8, 2020 Brett Matus was issued a warrant at a price of $0.000025 per share ($5.00 total) to purchase 200,000 shares of common stock at the exercise price of $0.60 per share.
On May 11, 2020, Mohammad Sadrolashrafi was issued a warrant at a price of $0.000025 per share ($12.50 total) to purchase 500,000 shares of common stock at the exercise price of $0.60 per share.
On May 19, 2020 Joan R Saint-Hilaire was issued a warrant at a price of $0.000025 per share ($2.50 total) to purchase 100,000 shares of common stock at the exercise price of $0.60 per share.
On May 19, 2020 Marvin A Saint-Hilaire was issued a warrant at a price of $0.000025 per share ($2.50 total) to purchase 100,000 shares of common stock at the exercise price of $0.60 per share.
On May 20, 2020 Willy Rafael Saint-Hilaire was issued a warrant at a price of $0.000025 per share ($5.00 total) to purchase 200,000 shares of common stock at the exercise price of $0.60 per share.
On May 29, 2020 Ybelka Saint-Hilaire was issued a warrant at a price of $0.000025 per share ($5.00 total) to purchase 200,000 shares of common stock at the exercise price of $0.60 per share.
On June 9, 2020 Kenneth Cornell Bosket was issued a warrant at a price of $0.000025 per share ($25.00 total) to purchase 1,000,000 shares of common stock at the exercise price of $0.60 per share.
On July 1, 2020 Theresa Kitt was issued a warrant at a price of $0.000025 per share ($5.00 total) to purchase 200,000 shares of common stock at the exercise price of $0.60 per share.
On July 10, 2020, Shahram Khial was issued a warrant at a price of $0.000025 per share ($12.50 total) to purchase 500,000 shares of common stock at the exercise price of $0.60 per share.
On September 1, 2020, the Company entered into a Services Agreement with American Video Teleconferencing Corp (AVOT) to provide advertising, branding and marketing solutions. The Company was compensated $17,000 for services to be rendered for a period of 12 months. Total compensation of $17,000 was converted to 17,000,000 million shares of AVOT restricted common stock The Company recognized $3,825 in revenue for the three month period ended March 31, 2021. There is remaining $7,083 in deferred revenue as of March 31, 2016 and December 31, 2015,2021.
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On September 29, 2020, the Company hadentered into a payablePromissory Note Agreement with Willy A Saint-Hilaire for $23,175. As original issuance discount for the note, the Company issued Common Stock for a total of $5,026 to Montse Zaman, director.23,175 shares. The payable is unsecured, bears no interestfair market value of the shares were in excess of the note and due on demand.the company recorded a debt discount of $23,175.
As of December 31, 2015, theThe Company had outstanding notes payable tois periodically advanced operating funds from related parties of $23,674.with convertible notes payable. During the three months ended March 31, 2016 the2021, total convertible notes from related parties was $22,751. The Company issued a convertible note of $40,000 with conversion price at $0.50, and repaid $2,230 under other related party notes. The $40,000 convertible note has been convertedis also periodically advanced funds to 80,000 shares of common stock according to the termcover account payables by direct payment of the note agreement at $0.5 per share. As of March 31, 2016 the aggregate outstanding balance under theseaccount payables from related party notes payable was $21,444. 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 and etc.parties.
The 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 accountedentered into an agreement, effective January 1, 2020, to pay Mike Zaman $20,000 per month for as a derivative. managerial services.
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). entered into an agreement, effective January 1, 2020, to pay Kenneth Bosket $5,000 per month for administrative services.
The intrinsic valueCompany entered into an agreement, effective January 1, 2020, to pay Montse Zaman $5,000 per month for administrative services.
As 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 quarter ended March 31, 2016,2021, the intrinsic valueCompany has a balance of the BCF is fully recognized as amortization$532,290 of debt discount during the quarter ended March 31, 2016.accounts and accrued expenses payable with related parties.
NOTE 9 – STOCK HOLDERS’ DEFICIT
Common Stock
During the three months endedending March 31, 2016,2021, the Company paidissued the following:
· | 1,286 shares issued to third parties for services rendered. | |
· | 11,504 shares issued to Vinoth Sambandan for settlement of debt. |
On February 13, 2020, the Company granted non-qualified stock warrants purchasing up to 1,000,000 shares of common stock at an aggregateexercise price of $2,504$0.60 per share. The option to purchase can be exercised at or after the date of expenses on behalfthe Company’s S1 registration filing of two related entities with common officers and directors. The Company holds investments in these entities.which date is yet to be determined.
On March 13, 2020, the Company granted non-qualified stock warrants purchasing up to 2,000,000 shares of common stock at an exercise price of $0.60 per share. The option to purchase can be exercised at or after the date of the Company’s S1 registration filing.
Equity Incentive Plan
The Company’s 2006 Equity Incentive Plan, as amended and restated (the “Equity Incentive Plan”), provides for grants of stock options as well as grants of stock, including restricted stock. Approximately 3.0 million shares of common stock are authorized for issuance under the Equity Incentive Plan, of which 3.0 million shares were available for issuance as of March 31, 2021.
Preferred Stock
The Company has designated 1,000 shares of its preferred stock as Series A Preferred Stock. Each share of Series A Preferred shall have no dividend, voting or other rights except for the right to elect Class I Directors. As of March 31,2021, the Company has 1,000 shares of Series A Preferred Stock outstanding.
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NOTE 10 – INCOME TAXES
NOTE 4 – NOTES PAYABLEThe Company follows ASC 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 Company did not have taxable income during 2021.
The Company's deferred tax assets consisted of the following as of March 31, 2021 and December 31, 2020:
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| 2021 |
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| 2020 |
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Net operating loss |
| $ | 692,385 |
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| $ | 661,701 |
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Valuation allowance |
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| (692,385 | ) |
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| (661,701 | ) |
Net deferred tax asset |
| $ | - |
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| $ | - |
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As of March 31, 20162021, and December 31, 2015,2020, the aggregate unpaid principal balance under notes payableCompany's accumulated net operating loss carry forward was $10,500approximately $3,304,389 and $11,500 respectively. During$3,150,957 respectively and will begin to expire in the three months ended March 31, 2016,year 2032. The deferred tax assets have been adjusted to reflect the recently enacted corporate tax rate of 21%.
NOTE 11 – SUBSEQUENT EVENTS
On April 5, 2021, the Company has a total additional borrowing of $17,000 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 34,000issued 3,750 shares of common stock during the period. $1,000 of non-convertible note was settled by issuing 2,000 shares of common stock at fair value of $4,000, resulted in a $3,000 loss on settlement of debt. At March 31, 2016, the total outstanding short-term notes payable due to non-related third parties was $10,500. The notes were unsecured subject to annual interest ranging from 0% to 12%, due on demand.
The 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 accountedLuisa Damgaard 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 quarter ended March 31, 2016, the intrinsic value of the BCF is fully recognized as amortization of debt discount during the quarter ended March 31, 2016.
NOTE 5 – EQUITY
During the three months ended March 31, 2016, the Company issued the following shares of common stock:
NOTE 6 - SUBSEQUENT EVENTS
Total common shares issued for the period from April 1, 2016 through November 21, 2016 was 31,267 shares which are broken down as follows:
On June 1, 2016April 6, 2021, the following executive changes occurred:Company entered into a convertible promissory note with Willy A Saint-Hilaire in the amount of $2,500 at an interest rate of 12% due within 12 months of the loan date.
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On April 12, 2021, the Company received from the Securities and Exchange Commission its Notice of Effectiveness date of April 21, 2021, 4:30 PM in reference to its S-1 registration filing of 10,000,000 units at $5.00 per unit on March 29, 2021.
On April 21, 2021, the Company entered into a convertible promissory note with Willy A Saint-Hilaire in the amount of $1,109.83 at an interest rate of 12%, due within 12 months of the loan date.
On April 22, 2021, the Company entered into a convertible promissory note with Shahram Khial in the amount of $3,500.00 at an interest rate of 12%, due within 12 months of the loan date.
On April 30, 2021, the Company entered into a convertible promissory note with Willy A Saint-Hilaire in the amount of $2,750.00 at an interest rate of 15.15%, due within 12 months of the loan date.
On May 4, 2021, the Company entered into a convertible promissory note with Willy A Saint-Hilaire in the amount of $750.00 at an interest rate of 15.15% due within 12 months of the loan date.
Management has evaluated subsequent events as of the date of the Financial Statements and has determined that all events are disclosed herein.
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ITEM 2: MANAGEMENT’S DISCUSSION AND ANALYSIS
This report contains forward looking statements withinThe following discussion and analysis should be read in conjunction with our Financial Statements and 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 risksnotes thereto, set forth in Crown Equity’s filings withItem 8. “Financial Statements” as set forth in our Annual Report on Form 10-K for the Securitiesyear ended December 31, 2020, and Exchange Commission, general economic conditions,the Condensed Consolidated Financial Statements and changesnotes thereto included in the assumptions used in making suchPart I of this Quarterly Report on Form 10-Q. The following discussion may contain forward looking statements. For additional information, see “Disclosure Regarding Forward Looking Statements” in Part I of this Quarterly Report on Form 10-Q.
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
CRWE 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.websites
Crown Equity’s office is located at 11226 Pentland DownDowns Street, Las Vegas, NV 89141.
As of March 31, 2016,2021 Crown Equity had no paidhas 4 employees and was utilizing the services of onethree independent contractorcontractors and consultant.the following seven officers, Mike Zaman, Kenneth Bosket, Montse Zaman, Malcolm Ziman, Mohammad Sadrolashrafi, Vinoth Sambandam and Shahram Khial.
RESULTS OF OPERATIONS
Three months ended March 31, 2021 Compared to the Three months ended March 31, 2020
For the three month period endingmonths ended March 31, 2016,2021, revenues were $934$6,730 of which $3,825 was from related parties, and revenues were $363$577 for the same period in 2015. Net loss was $89,490 for the three month periods ending March 31, 2016 and $244,7972020.
Revenues for the three months ended March 31, 2015. 2021 was higher primarily due increase in advertising and publishing revenue recognized for the period.
Operating expenses were $42,194$139,064 for the three months ended March 31, 20162021 and $229,178$51,428 for the same period in 2015. 2020. Increase in operating expenses was primarily due to increase of $105,000 in quarterly officer compensation.
Other income and expenses for the three month periodsthree-month period ended March 31, 20162021 were other expense of $48,230$21,098 and other expenses were $15,982$430,687 for the same periodquarter in 2015.2020. The decrease in other expenses was primarily due to loss of shares issued to settle accounts payable recognized for the first quarter in the prior year.
Interest expense incurred duringfor the three period endingmonths ended March 31, 20162021 and 2020 was $45,230 compared to $777 for the same period in 2015.$942 and $3,700, respectively.
Crown Equity will attempt to carry out its business plan as discussed above; however, it cannot predict to what extent its capital resources could hinder its business plan.
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LIQUIDITY AND CAPITAL RESOURCES
AtAs of March 31, 2016,2021, Crown Equity had total current assets of $81,658$142,555 and current liabilities of $219,467,$716,065 resulting in working capital deficit of $137,809.
$573,510. Net cash used inby operating activities for the three months ended March 31, 20162021 was $47,560$187 compared to $23,256net cash used of $19,004 for the same period in 2015, a net change of $24,304.2020.
Net cash used in investing activities was $0 and $0 for the three months ended March 31, 2016 was $0 compared to net cash used of $0 for the same period in 2015.2021 and 2020, respectively.
Net cash provided by financing activities during the three months ended March 31, 20162021 was $126,770$1,095 compared to net cash provided of $23,064$19,004 for the same period in 2015, an increase of $103,706. Cash received2020. For the three months ended March 31, 2021, we borrowed $9,333 from borrowings on notes payable and notes payable to related parties constituted all of the funds raised in both periods presented.parties.
Our existing capital may not be sufficient to meet Crown Equity'sEquity’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'sEquity’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"“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"“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 relatesrelate 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 Companycompany does not have an audit committee. This weakness isThese material weaknesses are 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 subjectFor information regarding legal proceedings, see Note 7, “Commitments and Contingencies – Legal Matters” in the Notes to the following judgment:our Condensed Consolidated Financial Statements set forth in Part I, Item 1 of this Quarterly Report on Form 10-Q, which is incorporated herein by reference.
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 March 31, 2015. The amount was paid during the three months ended March 31, 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 ended December 31, 2015.2020.
ITEM 2: SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.
During the three months ended March 31, 2016,2021, Crown Equity issued 260,000 common12,790 shares with a total valuefor services and settlement of $133,000 as follows:debt..
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ITEM 3: DEFAULTS UPON SENIOR SECURITIES.
None
ITEM 4: MINE SAFETY INFORMATION.
None
None
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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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Date: | By: | /s/ Mike Zaman | |
| Mike Zaman, CEO | ||
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| By: | /s/ Kenneth Bosket | |
| Kenneth Bosket, CFO |
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