SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q/A10-Q

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

For the quarterly period ended September 30, 2010March 31, 2011

OR

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

From the transition period from ___________ to ____________.

Commission File Number 000-29935

CROWN EQUITY HOLDINGS INC.
(Exact name of registrant as specified in its charter)

Nevada
Nevada33-0677140
(State or other jurisdiction of incorporation or organization)(IRS Employer Identification No.)
(State or other jurisdiction of incorporation or organization)(IRS Employer Identification No.)

5440 West Sahara Avenue, Suite 205, Las Vegas, NV 89146
(Address of principal executive offices)

 (702) 448-1543
(Issuer's telephone number)

N/A
(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the Company (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the Company was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days: Yes :xNo: ¨o

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 ¨o
Non-accelerated filer ¨o
Accelerated filed ¨o
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 ¨o No x

As of November May 9 2010,, 2011, there were 753,453,509787,696,317 shares of Common Stock of the issuer outstanding.

 
 
TABLE OF CONTENTS
 
  Page
PART I: FINANCIAL INFORMATION  
   
Item 1.  Financial Statements (Unaudited)  
Consolidated Balance Sheets as of September 30, 2010March 31, 2011 and December 31, 20092010 (Unaudited) 3
Consolidated Statements of Operations For the Three and Nine Months Ended September 30,March 31, 2011 and 2010 and 2009 (Unaudited) 4
Consolidated Statements of Cash Flows For  the NineThree Months Ended September 30,March 31, 2011 and 2010 and 2009 (Unaudited) 5
Notes to (Unaudited)Consolidated Financial Statements (Unaudited) 6
   
Item 2.  Management’s Discussion and Analysis and Plan of Operation 10
   
Item 3.  Quantitative and Qualitative Disclosures About Market Risk 12
   
Item 4T.  Controls and Procedures 1312
   
PART II: OTHER INFORMATION  
   
Item 1.  Legal Proceedings 1312
   
Item 1A.  Risk Factors 1312
   
Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds 1312
   
Item 3.  Defaults upon Senior Securities 1312
   
Item 4.  Submission of Matters to a vote of Security HoldersRemove and Reserve 1412
   
Item 5.  Other Information 1412
   
Item 6.  Exhibits 14
   
Signatures 14
 
2
 
Crown Equity Holdings Inc.
CONSOLIDATED BALANCE SHEETS
(Unaudited)

  
March 31,
2011
  
December 31,
2010
 
ASSETS      
Current assets:      
  Cash and cash equivalents $630,990  $149,727 
  Marketable securities  768,068   1,295,751 
  Accounts receivable  9,920   10,665 
  Prepaid expenses  7,200   2,400 
    Total current assets  1,416,178   1,458,543 
         
Property and equipment, net of accumulated depreciation $15,982 and $86,657, respectively  55,629   56,212 
      Total Assets  1,471,807   1,514,755 
         
LIABILITIES AND STOCKHOLDERS’ EQUITY        
Current liabilities:        
  Accounts payable and accrued expenses $155,807  $185,498 
  Deferred revenue  577,193   216,095 
  Total current liabilities  733,000   401,593 
         
Notes payable – related parties  95,209   95,209 
    Total liabilities  828,209   496,802 
         
Stockholder's Equity:        
Preferred stock; $0.001 par value, 10,000,000 shares authorized, 9,000,000 undesignated authorized        
  Series A convertible preferred stock; $0.001 par value, 1,000,000 shares authorized, 600,000 shares issued and outstanding  600   - 
Common stock; $0.001 par value, 4,900,000,0000 shares authorized, 781,182,428 and 753,737,071 shares issued and outstanding, respectively  781,182   753,737 
Additional paid-in capital  7,321,301   6,222,775 
Accumulated deficit  (7,459,485)  (5,958,559)
  Total stockholder's equity  643,598   1,017,953 
      Total Liabilities and Stockholders’ Equity $1,471,807  $1,514,755 
  September 30, 2010  December 31, 2009 
Assets      
       
Current assets      
Cash and cash equivalents $218,292  $249,612 
Marketable securities  154,332   - 
Accounts receivable  4,000   - 
Prepaid expenses  3,220   8,102 
Total current assets  379,844   257,714 
         
Fixed assets        
Equipment, net of accumulated depreciation $81,420 and $58,141, respectively  61,449   17,993 
Restricted securities  48,000   204,500 
Total Assets  489,293   480,207 
         
Liabilities & Stockholder's Equity        
         
Current liabilities        
Accounts payable and accrued expenses $20,809  $14,332 
Salaries payable  88,651   — 
Taxes payable  —   16,990 
Deferred revenue  —   62,000 
Total current liabilities  109,460   93,322 
         
Notes payable –related parties  95,209   87,209 
Total liabilities  204,669   180,531 
         
Stockholder's Equity        
Preferred shares; $0.001 par value, 100,000,000 shares Authorized, none issued or outstanding  -   - 
Common stock; $0.001 par value, 4,900,000,0000 shares authorized, 751,237,134 and 728,806,320 shares issued and outstanding, respectively  751,237   728,810 
Additional paid-in capital  6,125,278   5,819,708 
Accumulated deficit  (6,591,891)  (6,248,842)
Total stockholder's equity  284,624   299,676 
Total Liabilities & Stockholders’ Equity $489,293  $480,207 

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

 
3
 

Crown Equity Holdings Inc.
CONSOLIDATED STATEMENTS OF OPERATIONS
Three and Nine months ended September 30, 2010 and 2009
 (Unaudited)

  Three Months Ended 
  March 31, 
  2011  2010 
       
Revenue $345,231  $324,776 
Direct material costs  —   (85,000)
  Gross profit  345,231   239,776 
         
Operating Expenses:        
  General and administrative  782,912   241,994 
  Depreciation  5,459   6,345 
    Loss from operations  (443,139)  (8,563)
         
Other Income (Expenses):        
  Other income  —   17,039 
  Interest income  —   31 
  Realized gain (loss) on marketable securities  (17,053)  1,700 
  Unrealized loss on marketable securities  (1,037,804)  (134,025)
  Other expense  —   (312)
  Interest expense  (2,930)  (2,916)
    Total other income (expenses)  (1,057,787)  (118,483)
         
Net loss  (1,500,926)  (127,046)
         
Deemed dividend on series A convertible preferred stock  (600,000)  — 
         
Net loss attributable to common stockholders $(2,100,926) $(127,046)
         
Loss per share attributable to common shareholders, basic and diluted $(0.00) $(0.00)
         
Weighted average common shares outstanding, basic and diluted  765,772,142   731,067,220 
  Three  Months  Nine Months 
  2010  2009  2010  2009 
Revenue $399,395  $334,602   1,073,383  $418,959 
Cost of revenue  —   —   85,000   1,893 
  Gross margin  399,395   334,602   988,383   417,066 
                 
Operating Expenses:                
  General and administrative  381,555   119,036   1,019,631   434,523 
  Depreciation  10,589   6,692   23,297   19,466 
    Operating income (loss)  7,251   208,874   (54,527)  (36,923)
                 
Other Income (Expense):                
  Other income  15   —   35,054   438 
  Interest income  11   81   77   81 
  Realized gain (loss) on securities  (6,211)  2,483   (5,386)  (7,242)
  Unrealized loss on securities  (138,349)  —   (307,544)  — 
  Gain on debt forgiveness  —   14,764   —   16,083 
  Investment expense  (606)  (100)  (1,389)  (100)
  Interest expense  (3,502)  (475)  (9,334)  (1,716)
    Total other income (expense)  (148,642)  16,753   (288,522)  7,544 
                 
Net income (loss) $( 141,391) $225,627  $(343,049) $(29,379)
                 
Net income (loss) per common share (basic and diluted): $(0.00) $0.00  $(0.00) $(0.00)
                 
Weighted average common shares outstanding (basic and diluted):  750,925,650   723,503,570   743,395,432   715,751,930 

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

 
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Crown Equity Holdings Inc.
CONSOLIDATED STATEMENTS OF CASH FLOWS
Nine months ended September 30, 2010 and September 30, 2009
(Unaudited)

  Three Months Ended 
  March 31, 
  2011  2010 
CASH FLOWS FROM OPERATING ACTIVITIES      
  Net loss $(1,500,926) $(127,046)
  Adjustments to reconcile net loss to net cash provided by (used in) operating activities:        
      Depreciation expense  5,459   6,345 
      Common stock issued for services  526,571   35,698 
      Unrealized loss on marketable securities  1,037,804   134,025 
      Realized (gain) loss on marketable securities  17,053   (1,700)
      Marketable securities received for revenue  (292,110)  (55,050)
      Changes in operating assets and liabilities:        
        Accounts receivable  745   (2,500)
        Prepaid expenses  (4,800)  5,702 
        Accounts payable and accrued expenses  (29,691)  1,728 
        Taxes payable  —   (16,990)
        Deferred revenue  (53,430)  (57,000)
        Accrued salaries  —   57,700 
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES  (293,325)  (19,088)
         
CASH FLOWS USED IN INVESTING ACTIVITIES        
  Cash paid for purchase of fixed assets  (4,876)  — 
  Proceeds from the sale of marketable securities  179,464   19,500 
NET CASH PROVIDED BY INVESTING ACTIVITIES  174,588   19,500 
         
CASH FLOWS FROM FINANCING ACTIVITIES        
  Proceeds from sale of series A convertible preferred stock  600,000   — 
  Borrowings on notes payable - related party  —   10,000 
NET CASH PROVIDED BY FINANCING ACTIVITIES  600,000   10,000 
         
Net increase in cash  481,263   10,412 
Cash, beginning of period  149,727   249,612 
Cash, end of period $630,990  $260,024 
         
SUPPLEMENTAL CASH FLOWS INFORMATION        
  Interest paid $14  $— 
  Income taxes paid  —   — 
         
Noncash Investing and Financing Activities:        
  Marketable securities received for deferred revenue $414,528   21,000 
  Deemed dividend beneficial conversion feature on convertible preferred stock  600,000   — 
   2010  2009 
CASH FLOWS FROM OPERATING ACTIVITIES      
  Net loss $(343,049) $(29,379)
  Adjustments to reconcile net loss to cash used in operating activities:        
    Depreciation expense  23,297   19,466 
    Stock for services  316,997   242,950 
    Gain on accounts payable forgiveness  —   (16,083)
    Unrealized loss on securities  307,544   — 
    Realized loss on securities  5,386   7,242 
    Changes in operating assets and liabilities:        
      Accounts receivable  (4,000)  — 
      Prepaid expenses  4,882   — 
      Marketable securities received for revenue  (376,225)  — 
      Restricted securities received for revenue  28,250   — 
      Accounts payable and accrued expenses  6,477   (1,148)
      Accounts payable - related party  —   37,480 
      Taxes payable  (16,990)  — 
      Deferred revenue  (62,000)  5,000 
      Accrued salaries  88,651   22,471 
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES  (20,798)  287,999 
         
CASH FLOWS USED IN INVESTING ACTIVITIES        
  Cash paid for purchase of fixed assets  (55,735)  (1,881)
NET CASH USED IN INVESTING ACTIVITIES  (55,735)  (1,881)
         
CASH FLOWS FROM FINANCING ACTIVITIES        
  Advances from related party, net  —   (63,226)
  Proceeds from sale of stock  37,213   25,000 
  Proceeds from notes payable  —   (1,000)
  Notes payable-related party  8,000   2,650 
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES  45,213   (36,576)
         
Net Increase (Decrease) in Cash  (31,320)  249,612 
Cash, beginning of period  249,612   2,898 
Cash, end of period $218,292  $252,510 
         
SUPPLEMENTAL CASH FLOW INFORMATION        
  Interest paid $576  $— 
  Income taxes paid  —   — 
         
Noncash Investing and Financing Activities:        
  Securities received for deferred revenue $56,250  $138,940 
  Stock issued for acquisition of fixed assets  11,000   — 
  Contributed capital  —   106,064 
  Common stock for accounts payable and accrued liabilities  —   29,000 
  Common Stock for vehicle  —   8,500 
         

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

 
5
 

Crown Equity Holdings Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

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, 20092010 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, 20092010 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 September 30, 2010.$7,459,485 as of March 31, 2011. 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.

NOTE 3 – MARKETABLE & RESTRICTED SECURITIES

Marketable securities are classified as available-for-sale and are presented in the balance sheet at fair market value.  Crown Equity classified certain securities as long-term due to restrictions on transfers.

Per Accounting Standards Codification 820 “Fair Value Measurement”, fair values defined establishes a framework for measuring fair value under generally accepted accounting principles and expands disclosures about fair value measurements. ASC 820 does not require any new fair value measurements.

ASC 820 establishes a valuation hierarchy for disclosure of the inputs to valuation used to measure fair value. This hierarchy prioritizes the inputs into three broad levels as follows:

Level 1: Quoted market prices in active markets for identical assets or liabilities
Level 2: Observable market based inputs or unobservable inputs that are corroborated by market data
 
 
6
 
 
Level 3: Unobservable inputs that are not corroborated by market data

Crown Equity has classified these marketable securities at level 1 with a fair value of $154,332$768,068 and restricted securities with a market value of $48,000$1,295,781 as of September 30, 2010.March 31, 2011 and December 31, 2010, respectively.

Per Accounting Standards Codification 825 “The Fair Value Option for Financial Assets and Financial Liabilities—Including an Amendment of FASB Statement No. 115”, an entity is permitted to irrevocably elect fair value on a contract-by-contract basis for new assets or liabilities within the scope of ASC 825 as the initial and subsequent measurement attribute for those financial assets and liabilities and certain other items including property and casualty insurance contracts. Entities electing the fair value option are required to (i) recognize changes in fair value in earnings and (ii) expense any up-front costs and fees associated with the item for which the fair value option is elected. Entities electing the fair value option are required to distinguish, on the face of the statement of financial position, the fair value of assets and liabilities for which it has elected the fair value option, and similar assets and liabilities measured using another measurement attribute. An entity can accomplish this either by reporting the fair value and non-fair-value carrying amounts as separate line items or by aggregating those amounts and disclosing parenthetically the amount of fair value included in the aggregate amount.

Crown Equity adopted ASC 825 thisduring the third quarter of fiscal 2009 and elected the fair value option for their marketable securities. The related gain/loss based on valuation on the mark to market each balance sheet date is reflected in the income statement.

NOTE 4 – REVENUE RECOGNITION

The Company provides various consulting services to companies and individuals dealing with corporate structure and operations globally. Crown Equity’s revenue is recognized pursuant to ASC 605 “Revenue Recognition.” The Company recognizes its revenue from services as those services are performed. Revenue recognition is limited to the amount that is not contingent upon delivery of any future product or service or meeting other specified performance conditions. Product sales, accounted for within fulfillment services, are recognized upon shipment to the customer and satisfaction of all obligations.

Contract revenues include royalties under license and collaboration agreements. Contract revenue related to technology licenses is fully recognized only after the license period has commenced, the technology has been delivered and no further involvement of Crown Equity is required.

Crown Equity receives payment for its services in both cash and equity instruments issued by the customer.  The equity instruments are accounted for in accordance with the provisions of ASC 718 “Compensation – Stock Compensation” and is based on the fair value of the consideration received or the fair value of the equity instrument issued, whichever is more reliably measurable. The measurement date of the fair value of the equity instrument issued is the date on which they are received by Crown Equity.
 
 
7
 

Amounts received for revenue not earned as of period end are accounted for as deferred revenues. As of September 30,March 31, 2011 and December 31, 2010, there was no$577,193 and $216,095, respectively of deferred revenue.
Restricted Securities

Crown Equity has classified the marketable securities they hold as of period-end as long-term in accordance with rule 144 due to restrictions on sale & transfers of unregistered shares. As of September 30, 2010 $48,000 of the marketable securities which are non controlling shares received from customers as consulting income has been classified as restricted securities in accordance with Accounting Standards Codification 825 and 718. The related gain/loss based on valuation on the mark to market each balance sheet date is reflected in the income statement.

NOTE 5 - RELATED PARTY TRANSACTIONS

On December 2, 2009, the Company signed a one year lease for 2,400 square feet of office space.  The rent for the space is $2,400 per month. The landlord is related to one of the officers of the Company. The lease was renewed on January 1, 2011 for one more year.

On November 20, 2009, the Company converted accounts payable and advances from Montse Zaman, a related party, of $71,184 to a three-year unsecured note maturing on November 19, 2012. As of June 30, 2010 the balance increased by $10,000 to $81,184. During the period ending September 30, 2010 the amount outstanding was reduced by a payment of $2,000 to $79,184. Interest is incurred at 12% per annum unless the principal and interest are not paid by maturity at which time the interest rate accelerates to 18% per annum.

During the quarter ended March 31, 2007, the Company borrowed $12,700 from Phoenix Consulting Services Inc. controlled by a related party. The loan is unsecured and matured on April 1, 2008 and accrued interest at 12% per annum. The note may be converted into common shares of the company at the holder’s option at a conversion price to be determined in the future.  Amounts outstanding under this agreement subsequent to April 1, 2008 accrued interest at 18% per annum. On November 20, 2009, the note including principal and interest totaling $16,025 was converted to a long term note due November 19, 2012 with principal and interest due at maturity.  If the principal and interest are not paid by maturity, the interest rate accelerates to 18% per annum.  As of September 30, 2010March 31, 2011 the outstanding principal balance due to the Montse Zaman and Phoenix Consulting Services was $95,209 plus accrued interest of $10,047$15,870 for a total of $105,256.$111,079.

NOTE 6 – EQUITY

OnDuring March 25, 2010, the Company filed Amended and Restated Articles2011, Crown Equity designated 1,000,000 of Incorporation authorizing 10,000,000 shares ofits authorized preferred shares withstock as Series A convertible preferred stock. The Series A has a par value of $0.001 and reducingeach share is convertible into 100 common shares at the authorizedoption of the holder.

During the three months ended March 31, 2011, Crown Equity issued 27,445,357 common shares for services with a total value of $526,571 as follows:
·
7,445,357 shares of common stock for compensation for $126,571;
·20,000,000 shares of common stock for consulting services for $400,000.

During the three months ending March 31, 2011 the Company issued 600,000 shares of Class A preferred shares for $600,000 cash. Each share is convertible into 100 common shares at the option of the holder. Crown Equity evaluated the convertible preferred stock from 500,000,000 sharesunder FASB ASC 470-20-30 and determined it contained a beneficial conversion feature. The intrinsic value of the beneficial conversion feature was determined to 490,000,000 shares.be $600,000. The beneficial conversion feature was fully amortized during the three months ended March 31, 2011 and recorded as a deemed dividend.

 
8
 
 
On June 22, 2010 the Company approved a forward split of common stock at a ratio of 10 shares for each one share outstanding.  The Company approved the increase of authorized shares of common stock from 490,000,000 to 4,900,000,000 and increased the authorized number of preferred shares from 10,000,000 to 100,000,000, with both common and preferred having a par value of $0.001 per share.

During the nine months ended September 30, 2010, Crown Equity issued 21,330,814 common shares for services with a total value of $316,997 as follows:
·20,030,814 shares of common stock for compensation for $278,998;
·1,000,000 shares of common stock for consulting services for $35,000:
·300,000 shares of common stock for a vehicle for an employee for $3,000.

During the nine months ended September 30, 2010, Crown Equity issued 1,100,000 common shares for the acquisition of fixed assets valued at $11,000.

NOTE 7 - CONTINGENCIES

On April 14,In November, 2010, the pending litigationCompany, along with other individuals and entities, was named in Arizona small claimsa lawsuit filed federal court - Strojnik v. Crown Equity Holdings, Inc. was dismissedfor the District of Nevada. The amended complaint alleges securities violations, breach of contract and defamation.  The Company has engaged legal representation and believes the complaint and its allegations to be wholly without prejudicemerit.  The Company has filed a motion to dismiss and intends to vigorously defend itself in this matter, which the Company believes to be wholly without further notice for lack of prosecution  merit.

NOTE 8 – SUBSEQUENT EVENTS

During October 2010,April 2011, Crown Equity issued an aggregate of 2,216,3756,513,889 common shares for compensation and consulting services.services accrued at March 31, 2011 valued at $117,250.

 
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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.

In 2007,December, 2010, the Company throughformed two wholly owned subsidiaries Crown Tele Services, Inc. and Crown Direct, Inc.  Crown Tele Inc. was formed to provide voice over internet services to clients at a wholly-owned subsidiary,competitive price and Crown Trading Systems,Direct, Inc. (“CTS”), a Nevada corporation, beganwas formed to develop, sell and produce computer systems which are capable of running multiple monitors from one computer.  CTS is ableprovide direct sales to run 16 monitors off one CPU. customers.  Both entities had minimum sales during the quarter.

In late 2007, CTS began to attend trade shows and starting selling these systems. In 2009, Crown Trading Systems was dissolved as a corporation and its business was absorbed into the Company.  At the present time,March, 2011, the Company is not engaged in developing, selling or marketing this concept dueformed a wholly owned subsidiary CRWE Real Estate, Inc. to provide an entity to hold real estate. The entity had minimal activity during the economic slump.  If demand develops again, the Company may attempt to sell its monitor systems again.

On September, 30, 2009 Crown Marketing, Inc acquired controlling interest of the Company from Crown Partners, Inc.

Crown Equity is offering its services to companies and their management 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.quarter.

At the present time, the Company is offering its services to domestic and global companies seeking to become public entities in the United States. It has launched a website, www.crownequityholdings.com, which offers its services in a wide range of fields. The Company provides various consulting services to companies and individuals dealing with corporate structure and operations globally.  The Company also provides public relations and news dissemination for publicly and privately held companies.

In 2009, theThe Company re-focusedhas 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.

 
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In July, 2009,
Crown Equity is offering its services to companies and their management seeking to become public entities in the Company grantedUnited States.  It has launched a non-exclusive license to Velvet International, Inc. allowing Velvet to use the Company’s system and methodwebsite, www.crownequityholdings.com, which offers its services in a wide range of rendering public financial relations over the Internet.  The Company was paid a one-time licensing fee of $250,000 for the license but will not receive any future royalty or license payments from Velvet. Revenue from this sale allowed the Company to expand its efforts in developing it normal course of business as describe above.fields.

Crown Equity’s office is located at 5440 West Sahara, Suite 205, Las Vegas, Nevada 89146.

As of September 30, 2010,March 31, 2011, Crown Equity had 19 employees and utilizing the services of 106 independent contractors and consultants.

RESULTS OF OPERATIONS

For the three months periods ending September 30,March 31, 2011 and 2010 and 2009 revenues were $ 399,395$345,231 and $334,602$324,776 with net loss of $141,391$1,500,926 and a net incomeloss of $225,627,$127,046, respectively. Revenue for the nine month period ending September 30, 2010 and 2009 was $1,073,383 and $418,959, respectively. The revenue increases in 2010 were from consulting services of approximately $654,424. The net loss for the ninethree month period ending September 30, 2010March 31, 2011 consisted of an operating loss of $54,527$443,139 and total other expenses of $288,522$1,057,787 of which $ 307,544$1,037,804 consisted of unrealized loss on securities. This compares to an operating loss of $36,923$8,563 and net loss of $29,379$127,046 for the same period in 2009.2010. General and administrative expense increased to $381,555$782,912 from $119,036$241,994 for the three month period ending September 30, 2010March 31, 2011 and 2009 and $1,109,631 for the nine months ended September 30, 2010 as compared to $434,523 for the nine months ended September 30, 2009.2010.  Interest expense incurred during the ninethree month period ending September 30, 2010March 31, 2011 was $9,334$2,930 compared $1,716$2,916 for the same period in 2009. Depreciation for the nine months period ending September 30, 2010 was $23,297 and $19,466 for the same periods in 2009.2010. 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.

LIQUIDITY AND CAPITAL RESOURCES

At September 30, 2010,March 31, 2011, Crown Equity had current assets of $379,844$1,416,178 and current liabilities of $109,460,$733,000, resulting in working capital of $270,384.$683,178.  Shareholders' equity as of September 30, 2010March 31, 2011 was $284,624.$643,598. Further, there exist no agreements or understandings with regard to future loan agreements by or with the Officers, Directors, principals, affiliates or shareholders of Crown Equity.  The Company is presently indebted to Montse Zaman, an officer and director, for loans and advances totaling $97,209.

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Net cash used in operations for the period ending September 30, 2010March 31, 2011 was $20,798$293,325 compared to net cash providedused of $287,999$19,088 for the same period in 2009,2010, a decreasechange of $308,797.$274,237. Net cash used inprovided by investing activities for the period ending September 30, 2010March 31, 2011 was $55,735$175,588 compared to $1,881$19,500 for the same period in 2009, an increase2010, a change of $53,854.$155,088. Net cash provided by financing activities during the period ended September 30, 2010March 31, 2011 was $45,213$600,000 compared to net cash usedprovided of $36,576$10,000 in 2009,2010, an increase of $81,789.

Our revenues for the quarter totaled $399,395 compared to $334,602 for the same period last year.$590,000. The increase ischange was due primarily to the Company’s change in direction from becoming an online computer and components reseller to providing advertising and marketing via the Internetissuance of Series A convertible preferred shares for small companies. Our general and administrative expenses for the quarter totaled $381,555, an increase from $119,036 for the same period last year.  The Company intends to continue offering its advertising and marketing services but cannot predict whether or not its efforts will continue to generate revenues.  It is a new entry into this competitive field.  The continuing economic downturn in the US and globally may affect the Company’s chance for continued growth and/or success in this endeavor.  As the Company hires employees, its operating costs and expenses are increasing.  If we cannot generate sufficient revenues to cover these expenses, the Company may have to terminate employees, making it difficult to continue to provide services in a timely manner to customers and affecting its ability to generate and service new and existing customers.

For the nine months ended September 30, 2010, revenues were $1,073,383 compared to $418,959 for the same nine month period last year.  Our general and administrative expenses totaled $1,019,631 for the nine months ended September 30, 2010 compared to $434,523 for the same period last year.  The increase is due to increased operating costs in servicing our customers.$600.000.

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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EMPLOYEES

As of September 30, 2010,March 31, 2011, Crown Equity had nineteen employees.

ITEM 3.   CONTROLS AND PROCEDURES

As a “smaller reporting company” as defined by Item 10 of Regulation S-K, Crown Equity  is not required to provide information required under this Item.

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ITEM 4T:    CONTROLS AND PROCEDURES
 
(a) Evaluation of Disclosure 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 a material weakness in our internal control over financial reporting which we view as an integral part of our disclosure controls and procedures. The material weakness relates to the lack of segregation of duties in financial reporting, as our financial reporting and all accounting functions are performed by an external consultant with no oversight by a professional with accounting expertise.  Our CEO and CFO 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
 
ThereExcept as noted above, there have been no changes in our internal control over financial reporting identified in connection with the evaluation required by paragraph (d) of Exchange Act Rules 13a-15 or 15d-15 that occurred during our first quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
 
PART II – OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS.

On April 14, 2010 theThe Company had pending litigation in Arizona small claims court - Strojnik v. Crown Equity Holdings, Inc. and Crown Partners, Inc. which was filed September 25, 2008.   On April 14, 2010 the case was dismissed without prejudice and without further notice for lack of prosecution.

In November, 2010, the Company, along with other individuals and entities, was named in a lawsuit filed federal court for the District of Nevada. The amended complaint alleges securities violations, breach of contract and defamation.  The Company has engaged legal representation and believes the complaint and its allegations to be wholly without merit.  The Company has filed a motion to dismiss and intends to vigorously defend itself in this matter, which the Company believes to be wholly without merit.
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ITEM 1A.  RISK FACTORS.

There have been no material changes to Crown Equity’s risk factors as previously disclosed in our most recent 10-K filing for the year ending December 31, 2009.2010.

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

During the ninethree months ended September 30, 2010March 31, 2011, Crown Equity issued 20,330,81427,445,357 common shares for services with a total value of $526,571 as follows:
·
7,445,357 shares of common stock for compensation for $126,571;
·20,000,000 shares of common stock for consulting services for $400,000.

During the three months ending March 31, 2011 the Company issued 600,000 shares of common stock at $0.045 to $0.01 per share with value of $281,998 for compensation, 1,000,000Class A preferred shares of common stock at $0.035 with a value of $35,000$600,000 for contracted services and 1,100,000cash. The preferred shares carry a conversion privilege of 100 common stock at $0.01 per share with a value of $11,000shares for the acquisition of fixed assets. The fixed assets acquisition was for furniture used to equip the office space leased as of January 1, 2010.each preferred share.

ITEM  3.  DEFAULTS UPON SENIOR SECURITIES.

None

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ITEM  4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.[REMOVE AND RESERVE]

None

ITEM  5.  OTHER INFORMATION.

On May 26, 2010 the Company filed an 8-K for the filing of the Certificate of Designation with the State of Nevada authorize 25,000 shares of Series A Preferred  Stock, each share being convertible into 10,000 shares of common stock.

On July 21, 2010 the Company filed an 8-K amending the Articles of Incorporation increasing the number of authorized shares of common stock to 4,900,000,000 and the number of authorized preferred shares to 100,000,000.  The Company also affected a 1 share for 10 shares forward split of its common stock.

On March 18, 2011 the Company filed an 8-K that the Board of Directors of the Company approved the filing of an amendment to the Company’s previously filed Certificate of Designation for its Series A Preferred Stock.  The amendment was filed on March 10, 2011.  Previously, the Company had authorized 25,000 shares of its Series A Preferred Stock with each Series A share convertible into ten thousand (10,000) shares of the Company’s common stock.  The Board of Directors amended the Series A Preferred Stock by increasing the number of shares of the class to 1,000,000 shares, each convertible into 100 shares of common stock at the holder’s option. The Company also reported that it sold 600,000 shares of its Series A Preferred Stock to an unrelated third-party for $600,000.   The terms of the Series A Preferred Stock provide that the holder can convert the Preferred A Shares to common at its option.  If the Series A Stock were converted to common stock, the number of common shares issuable would be 60,000,000 shares.
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ITEM 6. EXHIBITS

EXHIBIT 31.1 Certification of Principal Executive Officer and Principal Financial Officer

EXHIBIT 32 Certification of Compliance to Sarbanes-Oxley

SIGNATURES

In accordance with the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized.

CROWN EQUITY HOLDINGS INC.
 
By /s//s/ Kenneth Bosket
Kenneth Bosket, CEO
By/s/ Lowell Holden 
By /s/ Lowell Holden
Lowell Holden, CFO
Date:  January 31,
Date May 9, 2011
 
 
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