Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2015 | Sep. 15, 2016 | Jun. 30, 2015 | |
Document And Entity Information | |||
Entity Registrant Name | Crown Equity Holdings, Inc. | ||
Entity Central Index Key | 1,103,833 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2015 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Is Entity a Well-known Seasoned Issuer? | No | ||
Is Entity a Voluntary Filer? | No | ||
Is Entity's Reporting Status Current? | No | ||
Entity Filer Category | Smaller Reporting Company | ||
Entity Public Float | $ 286,173 | ||
Entity Common Stock, Shares Outstanding | 11,191,831 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2,015 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) | Dec. 31, 2015 | Dec. 31, 2014 |
Current assets: | ||
Cash | $ 2,448 | $ 2,369 |
Total Current Assets | 2,448 | 2,369 |
Property, Plant and Equipment, net of accumulated depreciation of $73,992 and $73,374 | 618 | |
TOTAL ASSETS | 2,448 | 2,987 |
Current Liabilities: | ||
Accounts Payable | 187,567 | 212,508 |
Accrued Expenses to Related Parties | 5,026 | 5,026 |
Notes payable | 11,500 | 47,950 |
Notes Payable to Related Parties | 23,674 | 155,885 |
Total Current Liabilities | 227,767 | 421,369 |
Stockholders' Deficit: | ||
Preferred Stock | ||
Common Stock, 490,000,000 authorized at $0.001 par value; shares issued and outstanding 10,904,564 and 10,566,969 | 10,905 | 10,567 |
Additional paid-in capital | 10,335,890 | 9,760,054 |
Accumulated deficit | (10,572,114) | (10,189,003) |
Total Stockholder's Deficit | (225,319) | (418,382) |
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT | 2,448 | 2,987 |
Series A Preferred Stock [Member] | ||
Stockholders' Deficit: | ||
Preferred Stock |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) | Dec. 31, 2015 | Dec. 31, 2014 |
Accumulated depreciation | $ 73,992 | $ 73,374 |
Stockholders' Equity (Deficit): | ||
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, undesignated authorized | 9,000,000 | 9,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 490,000,000 | 490,000,000 |
Common stock, shares issued | 10,904,564 | 10,566,969 |
Common stock, shares outstanding | 10,904,564 | 10,566,969 |
Series A Preferred Stock [Member] | ||
Stockholders' Equity (Deficit): | ||
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 1,000,000 | 1,000,000 |
Preferred stock, undesignated authorized | 0 | 0 |
Preferred stock, shares issued | 0 | 0 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Consolidated Statements Of Operations | ||
Revenue | $ 1,916 | $ 183 |
OPERATING EXPENSES | ||
Depreciation | 618 | 2,248 |
General and Administrative | 321,051 | 531,837 |
TOTAL OPERATING EXPENSES | 321,669 | 534,085 |
NET OPERATING LOSS | (319,753) | (533,902) |
OTHER INCOME (EXPENSE) | ||
Loss on impairment of marketable securities | (77,600) | |
Loss on derivatives | (32,124) | |
Loss on Debt Extinguishment | (58,612) | (406,690) |
Other Expense | (5,590) | |
Unrealized Loss on Marketable Securities | (2,900) | |
Interest expense | (4,746) | (70,905) |
TOTAL OTHER INCOME (EXPENSE) | (63,358) | (595,809) |
NET LOSS BEFORE INCOME TAXES | (383,111) | (1,129,711) |
Provision for Income Tax Expense | ||
NET LOSS | $ (383,111) | $ (1,129,711) |
EARNINGS PER SHARE | ||
Weighted average number of common shares outstanding - basic and diluted | 10,716,486 | 3,188,766 |
Net Loss per Common Share, basic and diluted | $ (0.03) | $ (0.35) |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) | Preferred Stock | Common Stock | Additional Paid-In Capital | Accumulated Deficit | Total |
Beginning Balance, Shares at Dec. 31, 2013 | 439,469 | ||||
Beginning Balance, Amount at Dec. 31, 2013 | $ 439 | $ 8,818,705 | $ (9,059,292) | $ (240,148) | |
Common stock issued for services, Shares | 20,500 | ||||
Common stock issued for services, Amount | $ 21 | 266,479 | 266,500 | ||
Common stock issued for cash, Shares | 21,000 | ||||
Common stock issued for cash, Amount | $ 21 | 20,979 | 21,000 | ||
Common stock issued for debt and interest, Shares | 86,000 | ||||
Common stock issued for debt and interest, Amount | $ 86 | 121,767 | 121,853 | ||
Preferred stock issued for debt and interest, Shares | 100,000 | ||||
Preferred stock issued for debt and interest, Amount | $ 100 | 469,900 | 470,000 | ||
Preferred stock converted to common stock, Shares | (100,000) | 10,000,000 | |||
Preferred stock converted to common stock, Amount | $ (100) | $ 10,000 | (9,900) | ||
Resolution of derivative liabilities | 72,124 | 72,124 | |||
Issuance of common stock for services, Shares | |||||
Issuance of common stock for services, Amount | |||||
Conversion of accounts payable to common stock, Shares | |||||
Conversion of accounts payable to common stock, Amount | |||||
Sale of common stock for cash, Shares | |||||
Sale of common stock for cash, Amount | |||||
Conversion of debt to common stock, Shares | |||||
Conversion of debt to common stock, Amount | |||||
Forgiveness of related party debt | |||||
Net loss | (1,129,711) | (1,129,711) | |||
Ending Balance, Shares at Dec. 31, 2014 | 10,566,969 | ||||
Ending Balance, Amount at Dec. 31, 2014 | $ 10,567 | 9,760,054 | (10,189,003) | (418,382) | |
Common stock issued for services, Shares | |||||
Common stock issued for services, Amount | |||||
Common stock issued for cash, Shares | |||||
Common stock issued for cash, Amount | |||||
Common stock issued for debt and interest, Shares | |||||
Common stock issued for debt and interest, Amount | |||||
Preferred stock issued for debt and interest, Shares | |||||
Preferred stock issued for debt and interest, Amount | |||||
Preferred stock converted to common stock, Shares | |||||
Preferred stock converted to common stock, Amount | |||||
Resolution of derivative liabilities | |||||
Issuance of common stock for services, Shares | 152,496 | ||||
Issuance of common stock for services, Amount | $ 152 | 240,170 | 240,322 | ||
Conversion of accounts payable to common stock, Shares | 19,495 | ||||
Conversion of accounts payable to common stock, Amount | $ 20 | 23,374 | 23,394 | ||
Sale of common stock for cash, Shares | 22,081 | ||||
Sale of common stock for cash, Amount | $ 22 | 22,059 | 22,081 | ||
Conversion of debt to common stock, Shares | 143,523 | ||||
Conversion of debt to common stock, Amount | $ 144 | 178,092 | 178,236 | ||
Forgiveness of related party debt | 112,141 | 112,141 | |||
Net loss | (383,111) | (383,111) | |||
Ending Balance, Shares at Dec. 31, 2015 | 10,904,564 | ||||
Ending Balance, Amount at Dec. 31, 2015 | $ 10,905 | $ 10,335,890 | $ (10,572,114) | $ (225,319) |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net loss | $ (383,111) | $ (1,129,711) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation | 618 | 2,248 |
Common stock issued for services | 240,322 | 266,500 |
Unrealized Loss on Marketable Securities | 2,900 | |
Loss on Marketable Securities | 77,600 | |
Loss on derivative liability | 32,124 | |
Amortization of debt discount | 40,000 | |
Loss (Gain) on Debt Extinguishment | 58,612 | 406,690 |
Loss on Write Off of Related Party Loans | 24,140 | |
Changes in operating assets and liabilities: | ||
Accounts payable and accrued expenses | 15,653 | 64,880 |
Net cash used in operating activities | (67,906) | (212,629) |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Loans to related parties | (14,700) | |
Loans to third party | (7,940) | |
Net cash used in investing activities | (22,640) | |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Proceeds from sale of stock | 22,081 | 21,000 |
Proceeds from notes payable | 22,983 | 114,700 |
Proceeds from Notes Payable - Related Party | 22,921 | 104,350 |
Payments on Related Party Notes Payable | (3,500) | |
Net Cash Provided by Financing Activities | 67,985 | 236,550 |
NET INCREASE IN CASH AND CASH EQUIVALENTS | 79 | 1,281 |
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR | 2,369 | 1,088 |
CASH AND CASH EQUIVALENTS AT END OF THE PERIOD | 2,448 | 2,369 |
SUPPLEMENTAL DISCLOSURE: | ||
Cash Paid for Interest | ||
Cash Paid for Income Taxes | ||
NONCASH INVESTING AND FINANCING ACTIVITIES: | ||
Common stock issued for debt and interest | 123,523 | 85,969 |
Issuance of common stock for accounts payable conversions | 19,495 | |
Preferred stock issued for debt and interest | 99,194 | |
Debt discount due to derivative liability | 40,000 | |
Preferred stock converted to common stock | 10,000 | |
Forgiveness of debt - related party | 112,141 | |
Resolution of derivative liabilities | $ 72,124 |
NATURE OF BUSINESS AND SUMMARY
NATURE OF BUSINESS AND SUMMARY OF ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2015 | |
Notes to Financial Statements | |
NOTE 1 - NATURE OF BUSINESS 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. In 2010, the Company formed two subsidiaries Crown Tele Services, Inc. and CRWE Direct, Inc. Crown Tele Services Inc. will provide voice over IP messaging at a competitive price to other competitors and CRWE Direct will provide its client with direct sales of products. In 2011, the Company formed a wholly owned subsidiary CRWE Real Estate Inc. CRWE Real Estate Inc. will hold real estate. Principles of Consolidation The consolidated financial statements include the financial information of Crown Equity Holdings and its wholly owned subsidiaries, Crown Tele Services Inc., CRWE Direct Inc. and CRWE Real Estate, Inc. All significant inter-company accounts and transactions have been eliminated. Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the balance sheet. Actual results could differ from those estimates. Cash and Cash Equivalents Crown Equity considers all highly liquid investments purchased with an original maturity of three months or less to be 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 FASB 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 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 service or meeting other specified performance conditions. The Company recognizes its revenue from the display of impression and click based ads, as well as from its publishing distribution service and domain name registration products and recognizes revenue when the service is provided. Services are normally completed as described on the sales invoice issued for the service provided. In most cases the services is a one-time completion and recognized when the service is completed. 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 was no allowance for doubtful accounts as of December 31, 2015 and 2014. During 2014, the Company loaned $7,940 to a third party service provider. This loan and $16,200 of loans to related parties (see Note 5) were written-off during 2014 as they were deemed uncollectible. This resulted in a total loss of $24,140 in 2014. Concentrations In 2015, 52%, 45% and 3% of the Companys total revenue was generated from the display of impression and click based ads, as well as from its publishing distribution service and domain name registration product, respectively. During 2014, 100% of total revenue was generated from a single customer. General and Administrative Expenses Crown Equity's general and administrative expenses consisted of the following types of expenses during 2015 and 2014: Compensation expense, payroll expense, rent, travel and entertainment, legal and accounting, utilities, web sites, office expenses, depreciation and other administrative related expenses. Marketable Securities In accordance with Accounting Standards Codification 825 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 upfront 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 in the third quarter of fiscal 2009 and elected the fair value option for all their marketable securities. Management has elected the fair value option as management believes it best reflects the true market value of the securities at the date of valuation. The Company reports the change in value of the securities as realized or unrealized gains or losses on a quarterly basis against earnings. The gain or loss is calculated as the difference between the acquiring value and the closing market value at the end of the reporting period. For securities purchased, the acquiring value is the fair value of the securities on the date they are acquired. For securities received as payment for revenue transactions, the acquiring value is the fair value of the securities on the date the Company receives the shares as this is the date the company is fully vested in the stock. Equity Method Investments For investments that represent significant influence in the investee, the Company follows ASC 323 InvestmentsEquity Method and Joint Ventures when recognizing these investments in the consolidated financial statements. Under this method, any net income or net loss must be recorded against the Company's investment, not to exceed the original investment and recognized as additional income or loss on the Company's income statement. Crown evaluates the carrying value of its equity method investments for impairment. During 2012, the Company's ownership percentage in Cleantech Transit, Inc., a related party due to common officers and directors, increased to more than 20% and the Company began accounting for this investment under the equity method. The Company's ownership percentage in Cleantech Transit, Inc. was 42% as of December 31, 2015 and 2014. Cleantech has had no revenues since inception. As of December 31, 2015 and 2014, the carrying value of the equity method investment held in related party was zero. 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, which are 3 to 5 years. Depreciation expense during the years ended December 31, 2015 and 2014 totaled $618 and $2,248, respectively. 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 estimated based upon either discounted cash flow analysis or estimated salvage value. No impairment charge was recorded in 2015 or 2014. Basic and Diluted Net Loss per Share Basic and diluted net loss per share calculations are calculated on the basis of the weighted average number of common shares outstanding during the year. They include the dilutive effect of common stock equivalents in years with net income. Basic and diluted net loss per share are the same due to the absence of common stock equivalents. Income Taxes 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. Crown Equity provides a valuation allowance for deferred tax assets for which it does not consider realization of such assets to be more likely than not. 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 December 31, 2015 and 2014. Fair Value of Financial Instruments The Company's financial instruments consist of cash, marketable securities 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 consolidated financial statements. Reclassifications Certain prior period amounts have been reclassified to conform to current period presentation. Recently Issued Accounting Pronouncements 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. |
GOING CONCERN
GOING CONCERN | 12 Months Ended |
Dec. 31, 2015 | |
Notes to Financial Statements | |
NOTE 2 - GOING CONCERN | As shown in the accompanying consolidated financial statements, Crown Equity has historically suffered losses from operations and had a working capital deficit of $215,319 as of December 31, 2015. These conditions raise substantial doubt as to Crown Equity's ability to continue as a going concern. The consolidated financial statements do not include any adjustments that might be necessary if Crown Equity is unable to continue as a going concern. Crown Equity continues to review its expense structure reviewing costs and their reduction to move towards profitability. The Company's expenses are planned to decrease as a percent of revenue resulting in profitability and increased shareholders' equity. |
MARKETABLE SECURITIES
MARKETABLE SECURITIES | 12 Months Ended |
Dec. 31, 2015 | |
Notes to Financial Statements | |
NOTE 3 - MARKETABLE SECURITIES | Marketable securities are classified as available-for-sale and are presented in the consolidated balance sheets at fair market value. Per Accounting Standards Codification 820 " Fair Value Measurement 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 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 $0 as of December 31, 2015 and December 31, 2014, respectively. The Company has fully impaired the marketable securities as of December 31, 2014 due to the investments' lack of an active trading market and decline in fair value which was considered other than temporary. This resulted in an impairment loss of $77,600 during 2014. Unrealized losses on marketable securities totaled $2,900 during 2014. The Company does not have such activities during 2015. |
NOTES PAYABLE
NOTES PAYABLE | 12 Months Ended |
Dec. 31, 2015 | |
Notes to Financial Statements | |
NOTE 4 - NOTES PAYABLE | During 2014 the Company borrowed an aggregate $114,700 under the following third party transactions: · A demand, unsecured, 12% interest bearing note for $10,000 funded during 2014 from a non-related party. Principal and accrued interest were later converted into 10,200 common shares valued at $12,240. · A demand, unsecured, 12% interest bearing convertible note for $40,000 funded during 2014 from a non-related party. The note was convertible into common stock of the Company at a 50% discount to the quoted market price for the Company's common stock. This conversion option qualifies as a derivative liability and was accounted for as such (see Note 9). Principal and accrued interest were later converted into 41,200 common shares valued at $72,100. · A demand, unsecured, non-interest bearing note for $9,500 from a non-related party and was outstanding at December 31, 2014. · A demand, unsecured, 12% interest bearing note for $5,500 funded during 2014 from a non-related party. Principal and accrued interest were later converted into 5,555 common shares valued at $6,666. · An increase in an existing demand, unsecured, non-interest bearing note for $17,500 funded during 2014 from a non-related party. $25,068 of the total principal, and accrued interest were later converted into 27,589 common shares valued at $29,493 leaving the balance at $5,000outstanding at December 31, 2014. · An increase in an existing demand, unsecured, note bearing interest between 0% and 12% for $32,200 funded during 2014 from a non-related party. $33,450 was outstanding at December 31, 2014. Also during 2014, an existing demand, unsecured, non-interest bearing note for $1,250 from a non-related party, principal and accrued interest were converted into 1,425 shares of common stock valued at $1,354. The conversion of non-related party notes payable in 2014 resulted in a loss on extinguishment of debt of $35,884. During 2015 the Company borrowed an aggregate $22,983 under the following third party transactions: · A demand, unsecured, 12% interest bearing note for $1,000 from a non-related party. · A demand, unsecured, 12% interest bearing note for $983 from a non-related party. · A demand, unsecured, 12% interest bearing note for $20,000 from a non-related party. · A demand, unsecured, 12% interest bearing note for $1,000 from a non-related party. During 2015, third party debt of $59,433 was settled through the issuance of common stock resulting in loss of $42,952. As of December 31, 2015 and 2014, the aggregate outstanding principal on third party notes payable was $11,500 and $47,950, respectively. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 12 Months Ended |
Dec. 31, 2015 | |
Notes to Financial Statements | |
NOTE 5 - 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. As of December 31, 2015 and 2014, the Company had a payable of $5,026 to Montse Zaman, director. The payable is unsecured, bears no interest and due on demand. As of December 31, 2015 and 2014, the aggregate outstanding balance of notes payable to related parties was $23,674 and $155,885, respectively consisting of loans described below. During the year ended December 31, 2014, a related party converted debt of $79,184 and accrued interest of $20,010 into 100,000 shares of Series A preferred stock. The fair value of the preferred stock was determined to be $470,000 based upon the estimated fair value of the Company resulting in a loss on the extinguishment of debt of $370,806. This preferred stock was later converted into 10,000,000 shares of common stock during 2014. During 2014, Arnulfo Saucedo-Bardan, a Director of the Company, made multiple advances due from the Company of $50,100. During 2015, Arnulfo Saucedo-Bardan, made additional advances due from the Company of $14,421. The debt is unsecured, carries 12% interest rate and is due on demand. Mr. Saucedo-Bardan cancelled the $64,521 debt and interest of $770 during 2015 which was recognized as a capital transaction. During 2014, Mark Vega, a Director of the Company, made multiple advances due from the Company of $21,300. The debt is unsecured, carries 12% interest rate and is due on demand. Mr. Vega cancelled the $21,300 debt during 2015 which was recognized as a capital transaction. On October 18, 2013 the Company borrowed an additional $8,550 from Ken Bosket our CEO. This is a demand note is unsecured and contains a zero percent stated interest rate. The total due to Ken Bosket at December 31, 2014 was $25,550. Mr. Bosket cancelled $8,550 of the total debt during 2015 which was recognized as a capital transaction. During 2015, the Company repaid the $17,000 balance of the debt and interest of $2,607 through the issuance of 19,607 common shares resulting in a loss of $3,921. During 2014, a related party of the Company, made advances due from the Company of $4,000 and still outstanding as of December 31, 2014 and 2015. The debt is unsecured, carries 12% interest rate and is due on demand. During 2014, Montse Zaman, a Director of the Company, made multiple advances and received payments for a net amount advanced to the Company of $16,900. The debt is unsecured, carries zero interest and is due on demand. The total outstanding balance under these advances was $36,910 at December 31, 2014. Ms. Zaman cancelled $17,000 of the $36,910 debt during 2015 which was recognized as a capital transaction. During 2015, Montse, made additional aggregate advances to the Company that totaled $8,270, for an outstanding balance of $28,180, of which the Company repaid $8,736 and interest of $685 in 2015 through the issuance of 9,421 common shares resulting in a loss of $1,884. The total outstanding balance under these advances was $19,444 at December 31, 2015. As of December 31, 2014, the Company had $17,025 due to Phoenix Consulting Services, a company controlled by Montse Zaman, as three year unsecured notes due on November 19, 2012, with interest accruing at 12% per annum. As of December 31, 2014, the notes were in default and accrue interest at the rate of 18% per annum. During 2015 the Company repaid the $17,025 note and interest of 11,381 through the issuance of 28,406 common shares resulting in a loss of $5,681. During 2015, the Company made additional borrowings of $230 under a related party note and $1,000 of related party loans and interest of $373 was converted to 1,373 common shares resulting in a loss of $275. During 2014, the Company loaned $14,700 to iB2B Global, Inc. (f.k.a EQCO2, Inc.). The Company wrote off the loan as it was deemed not collectable as of December 31, 2014. During 2013, the Company loaned $1,500 to Cleantech Transit. The loan is unsecured, bears no interest and is due on demand. The Company wrote off the loan as it was deemed not collectable as of December 31, 2014. In July 2013 the Company entered into a management consultant contract with Cleantech Transit, Inc., a related party, for consulting services through June 30, 2014. There were no cash receipts and there was no revenue recognized under this agreement during the years ended December 31, 2015 and 2014. As of December 31, 2015 and December 31, 2014, the Company held an aggregate of 7,000,000 common shares of American Video Teleconferencing, Inc. American Video Teleconferencing, Inc. became a related party in 2014 due to common officers and Directors. The investment was fully impaired during 2014. |
STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY | 12 Months Ended |
Dec. 31, 2015 | |
Notes to Financial Statements | |
NOTE 6 - STOCKHOLDERS' EQUITY | In December, 2007, the Company adopted the Crown Equity Holdings, Inc. Consultants and Employees Stock Plan for 2007. Under the Plan, 10,000,000 shares are reserved for issuance to employees, officers, directors, advisors and consultants. The Company effected a 2,000 for 1 reverse split of its common stock on June 9, 2014 and amended its authorized stock to include 490,000,000 shares of common stock and 10,000,000 shares of preferred stock. All share and per share amounts herein have been retroactively restated to reflect the split. The Company issued 100,000 shares of Series A preferred stock on September 23, 2014 to a related party for the conversion of debt and accrued interest (see Note 5). These shares carry a conversion right of 100 shares of common stock for each preferred share held. During 2015, the Company issued: · 22,081 common shares issued for cash proceeds of $22,081, · 152,496 common shares issued for services with a value of $240,322, · 143,523 shares issued with fair value of $178,236 for the settlement of $123,523 in debt and interest resulting in a loss of $54,713, · and 19,495 shares issued with fair value of $23,394 for the settlement of $19,495 in accounts payable resulting in a loss of $3,899. During 2014, the Company issued: · 20,500 common shares for services with a value of $266,500, · 21,000 common shares for cash of $21,000, · 86,000 common shares for the conversion of notes payable and interest valued at $121,853, · and 10,000,000 common shares for the conversion of 100,000 preferred shares. |
DERIVATIVE LIABILITY
DERIVATIVE LIABILITY | 12 Months Ended |
Dec. 31, 2015 | |
Notes to Financial Statements | |
NOTE 7 - DERIVATIVE LIABILITY | The Company accounts for derivative financial instruments in accordance with ASC 815, which requires that all derivative financial instruments be recorded in the balance sheets either as assets or liabilities at fair value. The Company's derivative liability is an embedded derivative associated with the Company's convertible promissory notes. The convertible promissory note was issued on July 14, 2014 and contains an embedded derivative feature which would individually warrant separate accounting as a derivative instrument under Paragraph 815-10-05-4. The embedded derivative feature includes the conversion feature to the Note. Pursuant to Paragraph 815-10-05-4, the value of the embedded derivative liability have been bifurcated from the debt host contract and recorded as a derivative liability resulting in a reduction of the initial carrying amount (as unamortized discount) of the notes, which are amortized as debt discount to be presented in other (income) expenses in the statements of operations using the effective interest method over the life of the notes. The embedded derivative within the note have been valued using the Black Scholes approach, recorded at fair value at the date of issuance; and marked-to-market at each reporting period end date with changes in fair value recorded in the Company's statements of operations as "change in the fair value of derivative instrument". For the year ending December 31, 2015, there is no derivative liability. As of July 14, 2014 and December 31, 2014, the estimated fair value of derivative liability was determined to be $76,162 and $0, respectively. On July 14, 2014, the derivative liability was recognized with a debt discount of $40,000 and a loss on derivative liabilities of $36,162. During the year ended December 31, 2014, amortization of $40,000 was recorded against the discount. The change in the fair value of derivative liabilities for the year ended December 31, 2014 was a gain of $4,038 resulting in an aggregate loss on derivative liabilities of $32,124. Summary of Fair Value of Financial Assets and Liabilities Measured on a Recurring Basis Financial assets and liabilities measured at fair value on a recurring basis are summarized below and disclosed on the balance sheets: Fair Value Measurement Using Carrying Value Level 1 Level 2 Level 3 Total Derivative liabilities on conversion feature - - - - - Total derivative liabilities $ - $ - $ - $ - $ - Summary of the Changes in Fair Value of Level 3 Financial Liabilities The table below provides a summary of the changes in fair value, including net transfers in and/or out, of all financial assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) during the year ended December 31, 2014: Derivative Liability Fair value, December 31, 2013 $ - Additions recognized as debt discount 40,000 Additions recognized as derivative loss 36,162 Change in fair value (4,038 ) Resolution due to conversion of debt (72,124 ) Fair value, December 31, 2014 $ - |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2015 | |
Notes to Financial Statements | |
NOTE 8 - INCOME TAXES | The 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 2015 or 2014. The Company's deferred tax assets consisted of the following as of December 31, 2015 and 2014: 2015 2014 Net operating loss $ 530,300 $ 510,000 Valuation allowance (530,300 ) (510,000 ) Net deferred tax asset $ - $ - As of December 31, 2015, the Company's accumulated net operating loss carry forward was approximately $1,527,000 and will begin to expire in the year 2032. Federal income tax returns have not been examined and reported upon by the Internal Revenue Service; returns of the years since 2013 are still open. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Dec. 31, 2015 | |
Notes to Financial Statements | |
NOTE 9 - SUBSEQUENT EVENTS | Total common shares issued for the period from January 1, 2016 through September 15, 2016 was 287,267 shares which are broken down as follows: · 168,267 shares were issued for cash proceeds of $93,767 and · 119,000 shares were issued for the settlement of promissory notes and interest of $59,707. On June 1, 2016 the following executive changes occurred: · Appointed its CFO, Rudy Chacon to Vice President, its Chairman, Kenneth Bosket to Chief Financial Officer and appointed Mike Zaman as Chairman of the Board, who also remained as the corporations President/ CEO and Arnulfo Saucedo-Bardan as it Chief Operations Officer. · During January, 2016, John Scrudato resigned as a director and officer and Rudy Chacon appointed as director and officer.. · During February, 2016, Harold Gewerter resigned as director/chairman and Mark Vegas resigned as director and officer. · During May, 2016, Brett Matus resigned as a director. |
NATURE OF BUSINESS AND SUMMAR16
NATURE OF BUSINESS AND SUMMARY OF ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2015 | |
Notes to Financial Statements | |
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. In 2010, the Company formed two subsidiaries Crown Tele Services, Inc. and CRWE Direct, Inc. Crown Tele Services Inc. will provide voice over IP messaging at a competitive price to other competitors and CRWE Direct will provide its client with direct sales of products. In 2011, the Company formed a wholly owned subsidiary CRWE Real Estate Inc. CRWE Real Estate Inc. will hold real estate. |
Principles of Consolidation | The consolidated financial statements include the financial information of Crown Equity Holdings and its wholly owned subsidiaries, Crown Tele Services Inc., CRWE Direct Inc. and CRWE Real Estate, Inc. All significant inter-company accounts and transactions have been eliminated. |
Use of Estimates | The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the balance sheet. Actual results could differ from those estimates. |
Cash and Cash Equivalents | Crown Equity considers all highly liquid investments purchased with an original maturity of three months or less to be 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 FASB 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 | 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 service or meeting other specified performance conditions. The Company recognizes its revenue from the display of impression and click based ads, as well as from its publishing distribution service and domain name registration products and recognizes revenue when the service is provided. Services are normally completed as described on the sales invoice issued for the service provided. In most cases the services is a one-time completion and recognized when the service is completed. |
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 was no allowance for doubtful accounts as of December 31, 2015 and 2014. During 2014, the Company loaned $7,940 to a third party service provider. This loan and $16,200 of loans to related parties (see Note 5) were written-off during 2014 as they were deemed uncollectible. This resulted in a total loss of $24,140 in 2014. |
Concentrations | In 2015, 52%, 45% and 3% of the Companys total revenue was generated from the display of impression and click based ads, as well as from its publishing distribution service and domain name registration product, respectively. During 2014, 100% of total revenue was generated from a single customer. |
General and Administrative Expenses | Crown Equity's general and administrative expenses consisted of the following types of expenses during 2015 and 2014: Compensation expense, payroll expense, rent, travel and entertainment, legal and accounting, utilities, web sites, office expenses, depreciation and other administrative related expenses. |
Marketable Securities | In accordance with Accounting Standards Codification 825 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 upfront 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 in the third quarter of fiscal 2009 and elected the fair value option for all their marketable securities. Management has elected the fair value option as management believes it best reflects the true market value of the securities at the date of valuation. The Company reports the change in value of the securities as realized or unrealized gains or losses on a quarterly basis against earnings. The gain or loss is calculated as the difference between the acquiring value and the closing market value at the end of the reporting period. For securities purchased, the acquiring value is the fair value of the securities on the date they are acquired. For securities received as payment for revenue transactions, the acquiring value is the fair value of the securities on the date the Company receives the shares as this is the date the company is fully vested in the stock. |
Equity Method Investments | For investments that represent significant influence in the investee, the Company follows ASC 323 InvestmentsEquity Method and Joint Ventures when recognizing these investments in the consolidated financial statements. Under this method, any net income or net loss must be recorded against the Company's investment, not to exceed the original investment and recognized as additional income or loss on the Company's income statement. Crown evaluates the carrying value of its equity method investments for impairment. During 2012, the Company's ownership percentage in Cleantech Transit, Inc., a related party due to common officers and directors, increased to more than 20% and the Company began accounting for this investment under the equity method. The Company's ownership percentage in Cleantech Transit, Inc. was 42% as of December 31, 2015 and 2014. Cleantech has had no revenues since inception. As of December 31, 2015 and 2014, the carrying value of the equity method investment held in related party was zero. |
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, which are 3 to 5 years. Depreciation expense during the years ended December 31, 2015 and 2014 totaled $618 and $2,248, respectively. |
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 estimated based upon either discounted cash flow analysis or estimated salvage value. No impairment charge was recorded in 2015 or 2014. |
Basic and Diluted Net Loss per Share | Basic and diluted net loss per share calculations are calculated on the basis of the weighted average number of common shares outstanding during the year. They include the dilutive effect of common stock equivalents in years with net income. Basic and diluted net loss per share are the same due to the absence of common stock equivalents. |
Income Taxes | 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. Crown Equity provides a valuation allowance for deferred tax assets for which it does not consider realization of such assets to be more likely than not. |
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 December 31, 2015 and 2014. |
Fair Value of Financial Instruments | The Company's financial instruments consist of cash, marketable securities 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 consolidated financial statements. |
Reclassifications | Certain prior period amounts have been reclassified to conform to current period presentation. |
Recently Issued Accounting Pronouncements | 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. |
DERIVATIVE LIABILITY (Tables)
DERIVATIVE LIABILITY (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Derivative Liability Tables | |
Summary of Fair Value of Financial Assets and Liabilities Measured on a Recurring Basis | Financial assets and liabilities measured at fair value on a recurring basis are summarized below and disclosed on the balance sheets: Fair Value Measurement Using Carrying Value Level 1 Level 2 Level 3 Total Derivative liabilities on conversion feature - - - - - Total derivative liabilities $ - $ - $ - $ - $ - |
Summary of the Changes in Fair Value of Level 3 Financial Liabilities | The table below provides a summary of the changes in fair value, including net transfers in and/or out, of all financial assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) during the year ended December 31, 2014: Derivative Liability Fair value, December 31, 2013 $ - Additions recognized as debt discount 40,000 Additions recognized as derivative loss 36,162 Change in fair value (4,038 ) Resolution due to conversion of debt (72,124 ) Fair value, December 31, 2014 $ - |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Notes to Financial Statements | |
Schedule of deferred tax assets | The Company's deferred tax assets consisted of the following as of December 31, 2015 and 2014: 2015 2014 Net operating loss $ 530,300 $ 510,000 Valuation allowance (530,300 ) (510,000 ) Net deferred tax asset $ - $ - |
NATURE OF BUSINESS AND SUMMAR19
NATURE OF BUSINESS AND SUMMARY OF ACCOUNTING POLICIES (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Loans to third party | $ (7,940) | |
Loans to related parties | 16,200 | |
Loss on write-off of related party loans and loans receivable | (24,140) | |
Depreciation | $ 618 | $ 2,248 |
Cleantech Transit, Inc [Member] | ||
Ownership percentage in subsidiary | 42.00% | 42.00% |
GOING CONCERN (Details Narrativ
GOING CONCERN (Details Narrative) | Dec. 31, 2015USD ($) |
Going Concern Details Narrative | |
Working capital deficit | $ 215,319 |
MARKETABLE SECURITIES (Details
MARKETABLE SECURITIES (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Marketable Securities Tables | ||
Marketable securities | $ 0 | $ 0 |
Loss on marketable securities | (77,600) | |
Unrealized (gain) loss on marketable securities | $ 2,900 |
NOTES PAYABLE (Details Narrativ
NOTES PAYABLE (Details Narrative) - USD ($) | Dec. 31, 2015 | Dec. 31, 2014 |
Notes Payable Details Narrative | ||
Third party Notes payable | $ 11,500 | $ 47,950 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Outstanding notes payable to related parties | $ 23,674 | $ 155,885 |
Additional Advances from Related parties | $ 4,000 | $ 4,000 |
Interest rate | 12.00% | |
Aggregate common shares | 7,000,000 | 7,000,000 |
Monste Zaman [Member] | ||
Payable of the company | $ 5,026 | $ 5,026 |
Outstanding advance balance | $ 19,444 | |
Phoenix Consulting Services Inc [Member] | ||
Additional Advances from Related parties | $ 17,025 | |
Interest rate | 18.00% |
DERIVATIVE LIABILITY (Details)
DERIVATIVE LIABILITY (Details) | Dec. 31, 2015USD ($) |
Derivative liabilities on conversion feature | |
Total derivative liabilities | |
Carrying Value [Member] | |
Derivative liabilities on conversion feature | |
Total derivative liabilities | |
Level 1 [Member] | |
Derivative liabilities on conversion feature | |
Total derivative liabilities | |
Level 2 [Member] | |
Derivative liabilities on conversion feature | |
Total derivative liabilities | |
Level 3 [Member] | |
Derivative liabilities on conversion feature | |
Total derivative liabilities |
DERIVATIVE LIABILITY (Details 1
DERIVATIVE LIABILITY (Details 1) - Derivative Liability [Member] | Dec. 31, 2014USD ($) |
Fair value, December 31, 2013 | |
Additions recognized as debt discount | 40,000 |
Additions recognized as derivative loss | 36,162 |
Change in fair value | (4,038) |
Resolution due to conversion of debt | (72,124) |
Fair value, December 31, 2014 |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) | Dec. 31, 2015 | Dec. 31, 2014 |
Income Taxes Details | ||
Net operating loss | $ 530,300 | $ 510,000 |
Valuation allowance | (530,300) | (510,000) |
Net deferred tax asset |
INCOME TAXES (Details Narrative
INCOME TAXES (Details Narrative) | 12 Months Ended |
Dec. 31, 2015USD ($) | |
Income Taxes Details Narrative | |
Net operating loss carry forward | $ 1,527,000 |
Net operating loss carry forward expiration date | 2,032 |