Unassociated Document
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
10-KSB
(Mark
One)
x
ANNUAL
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For
the
fiscal year ended December 31, 2007
o
TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
For
the
transition period from ___________
to
___________.
Commission
File Number: 000-29935
CROWN
EQUITY HOLDINGS INC.
(Exact
name of Registrant as specified in its charter)
|
Nevada
|
|
33-0677140
|
|
(State
or other jurisdiction of
|
|
(IRS
Employer
|
|
incorporation
or organization)
|
|
Identification
Number)
|
9680
West Tropicana Avenue, Las Vegas, NV 89148
(Address
of principal executive offices)(Zip Code)
Company’s
telephone number, including area code: (702)
448-1543
Securities
registered pursuant to Section 12(b) of the Act: None.
Name
of
each exchange on which registered: None.
Securities
registered pursuant to Section 12(g) of the Act: Common Stock
Check
whether the Issuer (1) has filed all reports required to be filed by Section
13
or 15(d) of the Exchange Act during the preceding 12 months (or such shorter
period of that the Registrant was required to file such reports), and (2) has
been subject to such filing requirements for the past 90 days. Yes x No
o
Check
if
there is no disclosure of delinquent filers to Item 405 of Regulation S-B
contained in this form, and if no disclosure will be contained, to the best
of
the Registrant’s knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K. o
The
number of shares outstanding of the Company’s $.001 Par Value Common Stock, as
of December 31, 2007 were 68,572,984. The aggregate number of shares of the
voting stock held by non-affiliates on April 10, 2008 was 22,629,092 The market
value of these shares, computed by reference to the market closing price on
April 17, 2008 was $2,262,909. For the purposes of the foregoing calculation
only, all directors and executive officers of the registrant have been deemed
affiliates.
DOCUMENTS
INCORPORATED BY REFERENCE: None.
PART
I
ITEM
1.
BUSINESS
A) General
Crown
Equity Holdings Inc. formerly known as Micro Bio-Medical Waste Systems, Inc.
(the “Company”) was incorporated on August 31, 1995 as “Visioneering
Corporation” under the laws of the State of Nevada, to engage in any lawful
corporate undertaking, including, but not limited to, selected mergers and
acquisitions. None of the proposed business activities for which the Company’s
name was changed produced any revenues or created any appreciable business
activities for the Company.
In
2007,
the Company, through its wholly-owned subsidiary, Crown Trading Systems, Inc.
(“CTS”), a Nevada corporation, began to develop, sell and produce computer
systems which are capable of running multiple monitors from one computer. At
present, CTS is able to run 16 monitors off one CPU. In late 2007, CTS began
to
attend trade shows and starting selling these systems. In 2007, CTS had gross
revenues of approximately $14,000 from the sales of systems.
Additionally,
CTS has entered into reseller and distribution agreements with over 30 wholesale
and retail computer components to sell their products on CTS’s website,
www.crowntradingsystems.com.
The
Company is offering its services to companies or individuals looking to go
public in the United States. It has launched a website,
www.crownequityholdings.com, which offers its services in a wide range of
fields.
In
December, 2007, the Company issued ten million shares to Crown Partners, Inc.
in
satisfaction of approximately $145,000 in advances from Crown Partners.
Additionally, the Company issued 1,040,000 shares to shareholders, who included
two directors of the Company, who invested $104,000 to fund the Company’s
operations in December 2007. An additional 4,288,334 shares were issued in
December 2007 as compensation to consultants, officers and directors.
The
Company’s office is located at 9680 West Tropicana, Suite 117, Las Vegas, Nevada
89147.
As
of
December 31, 2007, the Company had no employees but was utilizing the services
of independent contractors and consultants.
Item
2.
Properties.
The
Company presently shares office space at a cost of $845 per month with its
majority shareholder, Crown Partners, Inc. The Company entered into this lease
in August 2007 and it expires in July 2007. The Company anticipates that this
space is sufficient for the near future.
Item
3
Legal Proceedings.
None.
Item
4.
Submission of Matters to a Vote of Security Holders
In
December 2007, the Company’s shareholders approved an amendment to the Company’s
Articles of Incorporation increasing the number of authorized shares of common
stock to 5,000,000,000 from 500,000,000. Additionally, the shareholders ratified
and approved the adoption of the 2007 Consultant and Employee Services Plan
which reserves ten million shares for issuance to consultants, employees,
officers and directors.
Item
5.
Market for Registrant’s Common Equity and Related Shareholder
Matters.
The
Company’s common stock is currently traded on the OTC Electronic Bulletin Board
in the United States, having the trading symbol “CRWE” and CUSIP #22834M107. The
Company’s stock is traded on the OTC Electronic Bulletin Board. As of December
31, 2007, the Company had 68,572,984 shares of its common stock issued and
outstanding, of which 22,629,092 were held by non-affiliates.
The
following table reflects the high and low quarterly bid prices for the fiscal
year ended December 31, 2007.
|
Period
|
|
High
Bid
|
|
Low
Bid
|
|
|
1st
Qtr 2007
|
|
|
.06
|
|
|
.03
|
|
|
2nd
Qtr 2007
|
|
|
.10
|
|
|
.03
|
|
|
3rd
Qtr 2007
|
|
|
.35
|
|
|
.05
|
|
|
4th
Qtr 2007
|
|
|
.48
|
|
|
.12
|
|
The
Internet provided the above information to the Company. These quotations may
reflect inter-dealer prices without retail mark-up/mark-down/commission and
may
not reflect actual transactions.
As
of
December 31, 2007, the Company estimates there are 50 “holders of record” of its
common stock and estimates that there are approximately 150 beneficial
shareholders of its common stock. The Company has authorized 5,000,000,000
shares of common stock, par value $.001.
Item
6.
Management’s Discussion and Analysis or Plan of Operation.
FORWARD-LOOKING
STATEMENTS MAY NOT PROVE ACCURATE
When
used
in this Form 10-KSB, the words “anticipated”, “estimate”, “expect”, and similar
expressions are intended to identify forward-looking statements. Such statements
are subject to certain risks, uncertainties and assumptions including the
possibility that the Company’s will fail to generate projected revenues. Should
one or more of these risks or uncertainties materialize, or should underlying
assumptions prove incorrect, actual results may vary materially from those
anticipated, estimated or projected.
OVERVIEW
The
following discussion of the financial condition, changes in financial condition
and results of operations of the Company for the fiscal years ended December
31,
2007 and 2006 should be read in conjunction with the financial statements of
the
Company and related notes included therein.
The
Company was incorporated on August 31, 1995 as Visioneering Corporation. On
January 12, 1996, the Company amended its Articles of Incorporation to change
its name to Asiamerica Energy Corporation, to Care Financial Corporation in
April 29, 1996 and to Trump Oil Corporation on May 15, 1997. In 1999, the
Company acquired 20/20 Web Design, Inc., a Colorado corporation wholly owned
by
Crown Partners, Inc. As part of that transaction, the Company issued 8,620,000
shares of its common stock to Crown Partners with the result that Crown Partners
owns 80% of the issued and outstanding shares of the Company. The Company also
approved a ten-for-one reverse stock split as part of that
transaction.
Since
the
agreements described above, the Company has financed its activities through
the
distribution of equity capital, including private placements of its common
stock
resulting in the Company raising capital of $853,494 from 1995 to the present.
The Company used the proceeds from these offerings to fund its proposed
operations, to pay salaries, to pay general and administrative expenses and
any
necessary expenses.
The
Company entered into an agreement to acquire Sanitec™ Services of Hawaii, Inc.
("SSH") from its majority shareholder, Crown Partners, in November, 2003. The
Company was unable to secure the funding necessary to complete this transaction
and SSH ceased operations in May, 2005. The Company paid a non-refundable
deposit to Crown Partners of $45,520, of which $20,000 was advanced to SSH
and
Crown allowed the Company to the retain the remaining $25,520 to pay the
Company's obligations. The Company issued shares of its common stock in
restricted form to Crown in December 2007, which cancelled this debt.
The
Company will attempt to carry out its business plan as discussed below. The
Company cannot predict to what extent its lack of liquidity and capital
resources will hinder its business plan prior to the consummation of a business
combination.
LIQUIDITY
AND CAPITAL RESOURCES
Since
inception, the Company has experienced no significant change in liquidity or
capital resources or stockholders’ equity other than receipts of proceeds from
offerings of its capital stock. The Company received $230,000 from an offering
conducted under Rule 504 of Regulation D in 1999. The Company also raised
$158,354 from the issuance of 7,200,000 shares of the Company’s common stock
prior to 1997. In 1997, the Company raised an additional $345,000 from the
sale
of its common stock. In December 2007, the Company raised an additional $104,000
from shareholders. The Company’s balance sheet as of December 31, 2007 reflects
very limited assets and substantial liabilities. Further, there exist no
agreements or understandings with regard to loan agreements by or with the
Officers, Directors, principals, affiliates or shareholders of the Company.
At
December 31, 2007, the Company had negative working capital of approximately
$104,000 which consisted of current assets of approximately $63,000 and current
liabilities of approximately $167,000. The current liabilities of the Company
at
December 31, 2007 are composed primarily of accounts payable of $18,033,
accounts payable to a related party for legal expenses of approximately $70,897,
a note payable of $12,700, a note payable from a related party of $36,875 and
advances from related parties of $28,871.
The
Company will attempt to carry out its plan of business as discussed above.
The
Company cannot predict to what extent its lack of liquidity and capital
resources will hinder its business plan. The Company needs to pay for its
proposed acquisition of SSH and will need additional capital to fund that
proposed operation.
NEED
FOR
ADDITIONAL FINANCING
The
Company’s existing capital is not sufficient to meet the Company’s cash needs,
including the costs of compliance with the continuing reporting requirements
of
the Securities Exchange Act of 1934, as amended. It is anticipated that Crown
Partners will likely continue to advance the funds necessary to insure that
the
Company is able to meet its reporting obligations under the 1934 Act and that
these loans will be repaid either when the Company’s business begins to generate
sufficient revenues. However, Crown Partners has not agreed in writing to
provide these funds and can only provide these funds to the extent that it
has
available funds to loan to the Company.
No
commitments to provide additional funds have been made by management or other
stockholders. Accordingly, there can be no assurance that any funds will be
available to the Company to allow it to cover its expenses.
The
Company might seek to compensate providers of services by issuances of stock
in
lieu of cash.
The
Company is presently inactive and since inception has experienced no significant
change in liquidity or capital resources or stockholders’ equity other than the
receipt of proceeds from offerings conducted under Rule 504 of Regulation D.
The
Company’s balance sheet as of December 31, 2007 reflects minimal assets and
extensive liabilities. Further, there exist no agreements or understandings
with
regard to loan agreements by or with the Officers, Directors, principals,
affiliates or shareholders of the Company.
RESULTS
OF OPERATIONS
During
the period from August 31, 1995 (inception) through December 31, 2007, the
Company engaged in limited operations and attempted to commence operations
in a
number of different fields, none of which was ultimately successful or resulted
in any appreciable revenues for the Company. For the year ended December 31,
2007, the Company had revenues of $14,003 compared to no revenues for the year
ended December 31, 2006. For the year ended December 31, 2007, the Company
had
general and administrative expenses of $3,002,369 and a net loss of $2,988,366.
For the year ended December 31, 2006, the Company had general and administrative
expenses of $138,623 resulting in a net loss of $138,623. The difference in
expenses between the two periods resulted from the Company's increased expenses
in beginning operations in 2007 as well as the issuance of stock as compensation
to consultants, officers and directors in 2007. An additional factor is the
increased cost of complying with its reporting obligations. The net loss per
share was $.06 and $.00, respectively, for the years ended December 31, 2007
and
2006.
As
of
December 31, 2007, the Company had assets of $131,708 and current liabilities
of
$167,376. Shareholders’ deficit as of December 31, 2007 was $35,668 compared to
shareholders’ deficit of $151,802 at December 31, 2006. Liabilities decreased in
2007 due to the Company issuing stock as payment for certain account payables
as
well as raising capital through the sale of stock.
The
Company anticipates that until its business operations increase along with
revenues, the revenues generated will not be sufficient to pay the Company’s
expenses and the Company will operate at a loss for the foreseeable future.
Item
7. Financial
Statements.
Financial
statements are audited and included herein beginning on Exhibit 1, page 1 and
are incorporated herein by this reference.
Item
8. Changes
in and Disagreements with Accountants on Accounting and Financial
Disclosure.
There
were no disagreements with accountants on accounting and financial disclosure
during the relevant period.
ITEM
8A. CONTROLS
AND PROCEDURES
Evaluation
of Disclosure Controls and Procedures
Disclosure
controls and procedures include, without limitation, controls and procedures
designed to ensure that information required to be disclosed by an issuer in
the
reports that it files or submits under the Securities Exchange Act of 1934,
as
amended (the "Act") is accumulated and communicated to the issuer's management,
including its principal executive and principal financial officers, or persons
performing similar functions, as appropriate to allow timely decisions regarding
required disclosure. It should be noted that the design of any system of
controls is based in part upon certain assumptions about the likelihood of
future events, and there can be no assurance that any design will succeed in
achieving its stated goals under all potential future conditions, regardless
of
how remote. As of the end of the period covered by this Annual Report, we
carried out an evaluation, under the supervision and with the participation
of
our Chief Executive Office and our Chief Financial Officer, of the effectiveness
of the design and operation of our disclosure controls and procedures.
Based on this evaluation, our CEO and CFO has concluded that the Company’s
disclosure controls and procedures are not effective because of the
identification of a material weakness in our internal control over financial
reporting which is identified below, which we view as an integral part of our
disclosure controls and procedures.
Changes
in Internal Controls over Financial Reporting
We
have
not yet made any changes in our internal controls over financial reporting
that
occurred during the period covered by this report on Form 10-KSB that has
materially affected, or is reasonably likely to materially affect, our
internal control over financial reporting.
Management’s
Annual Report on Internal Control Over Financial Reporting
Our
management is responsible for establishing and maintaining adequate internal
control over financial reporting, as such term is defined in
Rules 13a-15(f) and 15d-15(f) of the Exchange Act. Our internal control
system was designed to provide reasonable assurance regarding the reliability
of
financial reporting and the preparation of financial statements for external
purposes, in accordance with generally accepted accounting principles. Because
of inherent limitations, a system of internal control over financial reporting
may not prevent or detect misstatements. Also, projections of any evaluation
of
effectiveness to future periods are subject to the risk that controls may become
inadequate due to change in conditions, or that the degree of compliance with
the policies or procedures may deteriorate.
Our
management conducted an evaluation of the effectiveness of our internal control
over financial reporting using the criteria set forth by the Committee of
Sponsoring Organizations of the Treadway Commission (COSO) in Internal
Control—Integrated Framework. Based on its evaluation, our management concluded
that there is a material weakness in our internal control over financial
reporting. A material weakness is a deficiency, or a combination of control
deficiencies, in internal control over financial reporting such that there
is a
reasonable possibility that a material misstatement of the Company’s annual or
interim financial statements will not be prevented or detected on a timely
basis.
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 President does 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.
This
annual report does not include an attestation report of the Company’s registered
public accounting firm regarding internal control over financial
reporting. Management’s report was not subject to the attestation by the
Company’s registered public accounting firm pursuant to temporary rules of the
SEC that permit the Company to provide only management’s report in this annual
report.
The
Company’s management carried out an assessment of the effectiveness of the
Company’s internal control over financial reporting as of December 31, 2007. The
Company’s management based its evaluation on criteria set forth in the framework
in Internal Control—Integrated Framework issued by the Committee of Sponsoring
Organizations of theTreadway Commission. Based on that assessment, management
has concluded that the Company’s internal control over financial reporting was
not effective as of December 31, 2007
Item
8B
Other
Information
None.
Part
III
Item
9. Directors,
Executive Officers, Promoters and Control Persons; Compliance with Section
16(a)
of the Exchange Act.
Identification
of Directors and Executive Officers of the Company
The
following table sets forth the names and ages of all directors and executive
officers of the Company and all persons nominated or chosen to become a
director, indicating all positions and offices with the Company held by each
such person and the period during which he has served as a
director:
The
principal executive officers and directors of the Company are as
follows:
|
Name
|
|
Age
|
|
Positions
Held and Tenure
|
|
Arnulfo
Saucedo
|
|
35
|
|
CEO,
Director since February, 2008
|
| |
|
|
|
|
|
Steven
Onoue
|
|
51
|
|
Director
since July, 2002
|
| |
|
|
|
|
|
Dr.
Sadegh Salmassi
|
|
61
|
|
Director
since November, 2003
|
| |
|
|
|
|
|
Montse
Zaman
|
|
32
|
|
Secretary,
CFO since February, 2008
|
The
Directors named above will serve until the next annual meeting of the Company’s
stockholders. Thereafter, Directors will be elected for one-year terms at the
annual stockholders’ meeting. Officers will hold their positions at the pleasure
of the Board of Directors, absent any employment agreement, of which none
currently exist or is contemplated. There is no arrangement or understanding
between the Directors and Officers of the Company and any other person pursuant
to which any Director or Officer was or is to be selected as a Director or
Officer of the Company.
There
is
no family relationship between or among any Officer and Director except that
Arnulfo Saucedo and Montse Zaman are brother and sister.
The
Directors and Officers of the Company will devote their time to the Company’s
affairs on an “as needed” basis. As a result, the actual amount of time which
each will devote to the Company’s affairs is unknown and is likely to vary
substantially from month to month.
The
Company has no audit or compensation committee.
Business
Experience. The following is a brief account of the business experience during
at the least the last five years of the directors and executive officers,
indicating their principal occupations and employment during that period, and
the names and principal businesses of the organizations in which such
occupations and employment were carried out.
STEVEN
ONOUE. Mr. Onoue has been employed as vice president and manager of Sanitec
Services of Hawaii, Inc. since 2000. Prior to that, Mr. Onoue was the president
of Cathay Atlantic Trading Company in Honolulu, Hawaii which trades in hard
commodities and acted as a consultant to many construction and renovation
projects. Mr. Onoue acts as a community liaison and legislative analyst to
Rep.
Suzuki of the State of Hawaii. Mr. Onoue was a registered securities
professional as well as being involved in real estate in Hawaii for more than
15
years.
Mr.
Onoue
is an officer and director of Crown Partners, Inc., the majority shareholder
of
the Company and a publicly traded company traded on the OTC Electronic Bulletin
Board under “CRWP.”
SADEGH
SALMASSI, M.D. Dr. Salmassi is a physician in private practice in Delano,
California. Dr. Salmassi graduated from Pahlavi University School of Medicine
in
1973 and came to the United States in 1975 to complete his residency training
at
the University of Illinois in Chicago, Illinois. Dr. Salmassi began practicing
medicine in Illinois in 1978. Dr. Salmassi is Board Certified by the American
Board of Pathology in Anatomic and Clinical Pathology as well as being Board
certified by the American Board of General Practice in General Medicine and
Surgery. Dr. Salmassi is a Fellow in the College of American Pathologists,
a
Fellow of the American College of International Physicians and a Fellow in
the
American Academy of Family Physicians.
Dr.
Salmassi is a director of Crown Partners, Inc., the majority shareholder of
the
Company and a publicly traded company traded on the OTC Electronic Bulletin
Board under “CRWP.”
ARNULFO
SAUCEDO. Mr. Saucedo is a business man and developer and is self-employed.
Mr.
Saucedo is the brother of Montse Zaman.
Mr.
Saucedo is a director of Crown Partners, Inc., the majority shareholder of
the
Company and a publicly traded company traded on the OTC Electronic Bulletin
Board under “CRWP.”
MONTSE
ZAMAN, Montse Zaman is an administrative assistant for Crown Partners, Inc.
and
Crown Equity Holdings, Inc. She also works for Zaman & Company as an
administrative assistant. She has an extensive background in journalism and
has
a degree in Communications from Instituto Superior De Ciencia Y Technologia
A.C.
in Mexcio
Mrs.
Zaman is an officer of Crown Partners, Inc., the majority shareholder of the
Company and a publicly traded company traded on the OTC Electronic Bulletin
Board under “CRWP.”
CONFLICTS
OF INTEREST
The
Officers and Directors of the Company will devote only a small portion of their
time to the affairs of the Company, estimated to be no more than approximately
5
hours per month. There will be occasions when the time requirements of the
Company’s business conflict with the demands of their other business and
investment activities. Such conflicts may require that the Company attempt
to
employ additional personnel. There is no assurance that the services of such
persons will be available or that they can be obtained upon terms favorable
to
the Company.
There
is
no procedure in place which would allow the Officers and Directors to resolve
potential conflicts in an arms-length fashion. Accordingly, they will be
required to use their discretion to resolve them in a manner which they consider
appropriate.
The
Company’s Officers and Directors may actively negotiate or otherwise consent to
the purchase of a portion of their common stock as a condition to, or in
connection with, a proposed merger or acquisition transaction. It is anticipated
that a substantial premium over the initial cost of such shares may be paid
by
the purchaser in conjunction with any sale of shares by the Company’s Officers
and Directors which is made as a condition to, or in connection with, a proposed
merger or acquisition transaction. The fact that a substantial premium may
be
paid to the Company’s Officers and Directors to acquire their shares creates a
potential conflict of interest for them in satisfying their fiduciary duties
to
the Company and its other shareholders. Even though such a sale could result
in
a substantial profit to them, they would be legally required to make the
decision based upon the best interests of the Company and the Company’s other
shareholders, rather than their own personal pecuniary benefit.
Identification
of Certain Significant Employees. The Company does not employ any persons who
make or are expected to make significant contributions to the business of the
Company.
Item
10. Executive
Compensation.
During
fiscal 2007, and as of the date of the filing of this report, none of the
Company’s officers were paid compensation for their services as officers by the
Company.
Directors
are entitled to reimbursement for reasonable travel and other out-of-pocket
expenses incurred in connection with attendance at meeting of the Board of
Directors.
The
Company has no material bonus or profit-sharing plans pursuant to which cash
or
non-cash compensation is or may be paid to the Company’s directors or executive
officers.
The
Company has no compensatory plan or arrangements, including payments to be
received from the Company, with respect to any executive officer or director,
where such plan or arrangement would result in any compensation or remuneration
being paid resulting from the resignation, retirement or any other termination
of such executive officer’s employment or from a change-in-control of the
Company or a change in such executive officer’s responsibilities following a
change-in-control and the amount, including all periodic payments or
installments where the value of such compensation or remuneration exceeds
$100,000 per executive officer.
During
the last completed fiscal year, no funds were set aside or accrued by the
Company to provide pension, retirement or similar benefits for Directors or
Executive Officers.
The
Company has no written employment agreements.
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. As of December 31, 2007, no shares had been issued under the Plan.
Termination
of Employment and Change of Control Arrangement.
Except
as noted herein, the Company has no compensatory plan or arrangements, including
payments to be received from the Company, with respect to any individual named
above from the latest or next preceding fiscal year, if such plan or arrangement
results or will result from the resignation, retirement or any other termination
of such individual’s employment with the Company, or from a change in control of
the Company or a change in the individual’s responsibilities following a change
in control.
Section
16(a) Beneficial Ownership Reporting Compliance.
During
the year ended December 31, 2007, the following persons were officers, directors
and more than ten-percent shareholders of the Company’s common
stock:
|
Name
|
|
Position
|
|
Filed
Reports
|
|
Steven
Onoue
|
|
Director
|
|
No
|
|
Dr.
Sadegh Salmassi
|
|
Director
|
|
No
|
|
Crown
Partners, Inc.
|
|
Shareholder
|
|
No
|
Item
11. Security
Ownership of Certain Beneficial Owners and Management.
There
were 68,572,984 shares of the Company' common stock issued and outstanding
on
December 31, 2007. There are no preferred shares authorized. The following
tabulates holdings of shares of the Company by each person who, subject to
the
above, at the date of this Report, holds or record or is known by Management
to
own beneficially more than five percent (5%) of the Common Shares of the Company
and, in addition, by all directors and officers of the Company individually
and
as a group.
|
Names
and Addresses
|
|
Number
of Shares Owned Beneficially
|
|
Percent
of Beneficially Owned Shares
|
|
| |
|
|
|
|
|
|
Steven
Onoue (1)(2)
|
|
|
116,668
|
|
|
0.17
|
%
|
|
9680
W Tropicana #117
|
|
|
|
|
|
|
|
|
Las
Vegas NV 89147
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
Sadegh
Salmassi (1)(2)
|
|
|
210,000
|
|
|
0.31
|
%
|
|
9680
W Tropicana #117
|
|
|
|
|
|
|
|
|
Las
Vegas NV 89147
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
Arnulfo
Saucedo (1)(2)
|
|
|
0
|
|
|
0.00
|
%
|
|
9680
W Tropicana #117
|
|
|
|
|
|
|
|
|
Las
Vegas NV 89147
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
Montse
Zaman (1)(2)
|
|
|
1,500,000
|
|
|
2.19
|
%
|
|
9680
West Tropicana #117
|
|
|
|
|
|
|
|
|
Las
Vegas NV 89147
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
Crown
Partners, Inc.(2)
|
|
|
44,117,224
|
|
|
64.34
|
%
|
|
9680
W Tropicana #117
|
|
|
|
|
|
|
|
|
Las
Vegas NV 89147
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
All
directors and officers as a group (4)
|
|
|
1,826,668
|
|
|
2.65
|
%
|
(1)
Denotes officer or director. All officers and directors are also officers and
directors of Crown Partners, Inc. which is the majority shareholder of the
Company.
(2)
Three
of the control persons of Crown Partners, Dr. Salmassi, Mr. Saucedo and Mr.
Onoue, are directors of the Company. Mrs. Zaman, an officer of the Company,
is a
control person of Crown Partners, serving as an officer. These persons have
both
investment and voting power for the 44,117,224 shares beneficially owned by
Crown.
Changes
in Control. There are no arrangements known to the Company, including any pledge
by any person of securities of the Company, the operation of which may at a
subsequent date result in a change of control of the Company.
Item
12. Certain
Relationships and Related Transactions.
In
December, 2007, the Company issued ten million shares to Crown Partners, Inc.
in
satisfaction of approximately $145,000 it owed to Crown Partners, its majority
shareholder.
In
December, 2007, the Company issued 100,000 shares of its common stock each
for
services provided by Dr. Salmassi and Mr. Onoue, directors of the Company.
The
Company also issued 1,000,000 to Mrs. Zaman for services. The Company issued
an
additional 3,088,334 shares of its common stock to consultants and advisors
in
December, 2007.
In
the
last quarter of 2007, the Company sold 1,040,000 shares of its common stock
to
four shareholders for $.10 per share. These shareholders included Claudia Zaman,
a former officer and director, who invested $50,000 and Dr. Salmassi, a
director, who invested $10,000. The proceeds were used to pay the Company’s
operating expenses.
Item
13.
Exhibits and Reports on Form 8-K.
| |
(a)
|
Financial
Statements and Schedules
|
The
following financial statements and schedules are filed as part of this
report:
|
Independent
Auditors’ Report dated April 18, 2008
|
|
|
F-1
|
|
|
Balance
Sheet as of December 31, 2007
|
|
|
F-2
|
|
|
Statements
of Operations for the Years Ended December 31, 2007 and
2006
|
|
|
F-3
|
|
|
Statement
of Stockholders’ Deficit for the Years Ended December 31, 2007 and
2006
|
|
|
F-4
|
|
|
|
|
|
F-5
|
|
|
Notes
to Financial Statements
|
|
|
F-6
|
|
EXHIBITS
FILED WITH THIS REPORT
|
|
|
|
|
Number
|
|
Description
|
|
31.1
|
|
Certifications
Required by Rule 13a-14(a) of the Securities Exchange Act of 1934,
as
amended, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley
Act of
2002
|
| |
|
|
|
32.1
|
|
Certification
of Chief Executive Officer and Chief Financial Officer Pursuant to
18
U.S.C. Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002
|
(b)
There
was no reports filed on Form 8-K during the fourth quarter of the Company’s
fiscal year ended December 31, 2007.
Pursuant
to the requirements of Section 13 or 15(d) 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. |
| |
|
|
|
| |
|
|
|
| April
18,
2008 |
|
|
/s/
Arnulfo
Saucedo |
|
|
|
|
Arnulfo
Saucedo, CEO, Director |
| |
|
|
|
| April
18,
2008 |
|
|
/s/
Montse
Zaman |
|
|
|
|
Montse
Zaman, CFO |
| |
|
|
|
| April
18,
2008 |
|
|
/s/
Steven
Onoue |
|
|
|
|
Steven
Onoue,
Director |
| |
|
|
|
| April
18,
2008 |
|
|
/s/
Dr. Sadegh
Salmassi |
|
|
|
|
Dr.
Sadegh Salmassi, Director
|
REPORT
OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To
the
Board of Directors
Crown
Equity Holdings Inc.
Valencia,
California
We
have
audited the accompanying consolidated balance sheet of Crown Equity Holdings
Inc. as of December 31, 2007, and the related consolidated statements of
operations, shareholders’ deficit, and cash flows for the two years then ended.
These financial statements are the responsibility of the Crown Equity Holdings
Inc.'s management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We
conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that
we plan
and perform an audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. The Company is not required
to
have, nor were we engaged to perform, an audit of its internal control
over
financial reporting. Our audit included consideration of internal control
over
financial reporting as a basis for designing audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing
an
opinion on the effectiveness of the Company’s internal control over financial
reporting. Accordingly, we express no such opinion. An audit also includes
examining, on a test basis, evidence supporting the amounts and disclosures
in
the financial statements, assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that ours audits provide a
reasonable basis for our opinion.
In
our
opinion, the financial statements referred to above present fairly, in
all
material respects, the financial position of Crown Equity Holdings Inc.
as of
December 31, 2007 and the results of operations and cash flows for the
two years
then ended, in conformity with accounting principles generally accepted
in the
United States of America.
The
accompanying financial statements have been prepared assuming that Crown
Equity
Holdings Inc.
will
continue as a going concern. As discussed in Note 2 to the financial statements,
Crown Equity Holdings Inc. suffered losses from operations and has a working
capital deficiency, which raises substantial doubt about its ability to
continue
as a going concern. Management’s plans regarding those matters also are
described in Note 2. The financial statements do not include any adjustments
that might result from the outcome of this uncertainty.
Malone
& Bailey, PC
www.malone-bailey.com
Houston,
Texas
April
18,
2008
|
|
|
CONSOLIDATED
BALANCE SHEET
|
|
December
31, 2007
|
| |
|
|
|
Current
assets
|
|
|
|
|
Cash
|
|
$
|
48,952
|
|
|
Accounts
Receivable
|
|
|
14,003
|
|
|
Total
current assets
|
|
|
62,955
|
|
|
|
|
|
|
|
|
Fixed
Assets
|
|
|
|
|
|
Equipment,
net of accumulated depreciation
|
|
|
68,753
|
|
|
Total
Assets
|
|
$
|
131,708
|
|
|
|
|
|
|
|
|
LIABILITIES
AND STOCKHOLDERS’ DEFICIT
|
|
|
|
|
|
|
|
Current
liabilities
|
|
|
|
|
|
Accounts
payable and accrued expenses
|
|
$
|
18,033
|
|
|
Accounts
payable - related party
|
|
|
70,897
|
|
|
Advances
from related party
|
|
|
28,871
|
|
|
Note
payable - related party
|
|
|
36,875
|
|
|
Note
payable
|
|
|
12,700
|
|
|
Total
current liabilities
|
|
|
167,376
|
|
|
|
|
|
|
|
|
STOCKHOLDERS’
DEFICIT
|
|
|
|
|
|
|
|
|
|
|
|
Common
stock, $.001 par value, 5,000,000,000 shares authorized,
|
|
|
|
|
|
68,572,984
shares issued and outstanding
|
|
|
68,573
|
|
|
Additional-paid-in-capital
|
|
|
5,922,397
|
|
|
Accumulated
deficit
|
|
|
(6,026,638
|
)
|
|
Total
Stockholders’ Deficit
|
|
|
(35,668
|
)
|
|
TOTAL
LIABILITIES AND STOCKHOLDERS’ DEFICIT
|
|
$
|
131,708
|
|
See
summary of significant accounting policies and notes to financial
statements.
|
CROWN
EQUITY HOLDINGS, INC.
|
|
CONSOLIDATED
STATEMENT OF OPERATIONS
|
|
Years
Ended December 31, 2007 and 2006
|
|
|
|
2007
|
|
2006
|
|
|
Revenue:
|
|
|
|
|
|
|
Revenue
|
|
$
|
14,003
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
|
|
Expenses:
|
|
|
|
|
|
|
|
|
General
and administrative
|
|
|
3,002,369
|
|
|
138,623
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
loss
|
|
$
|
(2,988,366
|
)
|
$
|
(138,623
|
)
|
|
|
|
|
|
|
|
|
|
|
Net
loss per share:
|
|
$
|
(0.06
|
)
|
$
|
(0.00
|
)
|
|
Net
loss basic and diluted
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted
average shares outstanding:
|
|
|
|
|
|
|
|
|
Basic
and diluted
|
|
|
|
|
|
|
|
See
summary of significant accounting policies and notes to financial
statements.
|
|
|
CONSOLIDATED
STATEMENT OF STOCKHOLDER'S EQUITY
|
|
Years
Ended December 31, 2007 and 2006
|
|
|
|
|
|
|
|
Additonal
|
|
|
|
|
|
|
|
|
Common
Shares
|
|
Paid
In
|
|
Accumulated
|
|
|
|
|
|
|
Shares
|
|
Amount
|
|
Capital
|
|
Deficit
|
|
Total
|
|
|
Balance,
December 31, 2005
|
|
|
48,244,650
|
|
$
|
48,245
|
|
$
|
2,583,225
|
|
$
|
(2,899,649
|
)
|
$
|
(268,179
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issuance
of common stock for services
|
|
|
5,000,000
|
|
|
5,000
|
|
|
250,000
|
|
|
|
|
|
255,000
|
|
|
Net
loss
|
|
|
|
|
|
|
|
|
|
|
|
(138,623
|
)
|
|
(138,623
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance,
December 31, 2006
|
|
|
53,244,650
|
|
|
53,245
|
|
|
2,833,225
|
|
|
(3,038,272
|
)
|
|
(151,802
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock
sold for cash
|
|
|
1,040,000
|
|
|
1,040
|
|
|
102,960
|
|
|
|
|
|
104,000
|
|
|
Issuance
of common stock for services
|
|
|
4,288,334
|
|
|
4,288
|
|
|
896,212
|
|
|
|
|
|
900,500
|
|
|
Issuance
of common stock for services & debt
|
|
|
10,000,000
|
|
|
10,000
|
|
|
2,090,000
|
|
|
|
|
|
2,100,000
|
|
|
Net
loss
|
|
|
|
|
|
|
|
|
|
|
|
(2,988,366
|
)
|
|
(2,988,366
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance,
December 31, 2007
|
|
|
68,572,984
|
|
$
|
68,573
|
|
$
|
5,922,397
|
|
$
|
(6,026,638
|
)
|
$
|
(35,668
|
)
|
See
summary of significant accounting policies and notes to financial
statements.
|
|
|
CONSOLIDATED
STATEMENT OF CASH FLOWS
|
|
Years
Ended December 31, 2007 and 2006
|
|
|
|
2007
|
|
2006
|
|
|
|
|
|
|
|
|
|
CASH
FLOWS FROM OPERATING ACTIVITIES
|
|
|
|
|
|
|
Net
loss
|
|
$
|
(2,988,366
|
)
|
$
|
(138,623
|
)
|
|
Adjustments
to reconcile net loss to cash used
|
|
|
|
|
|
|
|
|
in
operating activities:
|
|
|
|
|
|
|
|
|
Depreciaiton
Expense
|
|
|
7,380
|
|
|
-
|
|
|
Common
Stock issued for Services
|
|
|
2,855,500
|
|
|
73,000
|
|
|
Net
Change in:
|
|
|
|
|
|
|
|
|
Accounts
receivable
|
|
|
(14,003
|
)
|
|
-
|
|
|
Accounts
payable and accrued expenses
|
|
|
(7,195
|
)
|
|
11,592
|
|
|
Accounts
payable - related party
|
|
|
45,904
|
|
|
42,000
|
|
|
TOTAL
CASH FLOWS USED IN OPERATING ACTIVITIES
|
|
|
(100,780
|
)
|
|
(12,031
|
)
|
|
|
|
|
|
|
|
|
|
|
CASH
FLOWS FROM INVESTING ACTIVITIES
|
|
|
|
|
|
|
|
|
Purchase
of fixed assets
|
|
|
(76,134
|
)
|
|
-
|
|
|
TOTAL
CASH FLOWS USED IN INVESTING ACTIVITIES
|
|
|
(76,134
|
)
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
CASH
FLOWS FROM FINANCING ACTIVITIES
|
|
|
|
|
|
|
|
|
Advances
from related party
|
|
|
72,264
|
|
|
12,058
|
|
|
Note
payable - related party
|
|
|
36,875
|
|
|
-
|
|
|
Proceeds
from note payable
|
|
|
12,700
|
|
|
-
|
|
|
Proceeds
for sale of stock
|
|
|
104,000
|
|
|
-
|
|
|
TOTAL
CASH FLOWS PROVIDED BY FINANCING ACTIVITIES
|
|
|
225,839
|
|
|
12,058
|
|
|
|
|
|
|
|
|
|
|
|
Net
Increase (Decrease) in Cash
|
|
|
48,925
|
|
|
27
|
|
|
Cash,
beginning of period
|
|
|
27
|
|
|
-
|
|
|
Cash,
end of period
|
|
$
|
48,952
|
|
$
|
27
|
|
See
summary of significant accounting policies and notes to financial
statements.
Crown
Equity Holdings Inc.
NOTES
TO
CONSOLIDATED FINANCIAL STATEMENTS
NOTE
1 -
SUMMARY OF ACCOUNTING POLICIES
Nature
of
Business
Crown
Equity Holdings Inc. (”Crown Equity”) was incorporated in August 1995 in Nevada.
Crown Equity is in the business of managing and acquiring subsidiary
corporations.
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.
Revenue
recognition
Crown
Equity recognizes revenue when persuasive evidence of an arrangement exists,
services have been rendered, the sales price is fixed or determinable,
and
collectibility is reasonably assured. This typically occurs when the product
is
shipped.
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 provided using the
straight-line method over the estimated useful lives of the assets, which
are 3
to 5 years.
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 2007 or 2006.
Basic
and
diluted net loss per share
Basic
and
diluted net loss per share calculations are presented in accordance with
Financial Accounting Standards Statement 128, and 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 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 bases 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.
Fair
Value of Financial Instruments
The
Company's financial instruments consist of cash 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.
Recent
Accounting Pronouncements
In
June 2006, the Financial Accounting Standards Board (FASB) issued FASB
Interpretation No. 48, “Accounting for Uncertainty in Income Taxes, an
interpretation of FASB Statement No. 109” (FIN 48). This Interpretation
provides guidance on recognition, classification and disclosure concerning
uncertain tax liabilities. The evaluation of a tax position requires recognition
of a tax benefit if it is more likely than not it will be sustained upon
examination. We adopted this Interpretation effective January 1, 2007. The
adoption did not have a material impact on our consolidated financial
statements
Crown
Equity does not expect the adoption of recently issued accounting pronouncements
to have a significant impact on Crown Equity's results of operations, financial
position or cash flow.
NOTE
2 -
GOING CONCERN
As
shown
in the accompanying financial statements, Crown Equity incurred recurring
net
losses, has an accumulated deficit and a working capital deficit as of
December
31, 2007. These conditions raise substantial doubt as to Crown Equity's
ability
to continue as a going concern. Management is trying to raise additional
capital
through sales of common stock. 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 -
PROPERTY AND EQUIPMENT
Property
and equipment consisted of the following at December 31, 2007:
| |
|
2007
|
|
|
Computer
equipment
|
|
$
|
76,134
|
|
|
Less:
accumulation depreciation
|
|
|
(7,381
|
)
|
|
Net
property and equipment
|
|
$
|
68,753
|
|
Depreciation
expense totaled $7,380 and $0 for the years ended December 31, 2007 and
2006.
NOTE
4 -
NOTE PAYABLE
During
the quarter ended March 31, 2007, we borrowed $12,700 from an unrelated
third
party. The loan is unsecured, due April 1, 2008 and accrues interest at
12% per
annum. Amounts outstanding under this agreement subsequent to April 1,
2008 are
subject to interest at 18% per annum.
NOTE
5 -
INCOME TAXES
The
Company follows FASB Statement Number 109, Accounting for Income Taxes.
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 cumulative tax effect at the expected tax rate of 34% of
significant items comprising the Company’s net deferred tax amounts as of
December 31, 2007 are as follows:
| |
|
12/31/07
|
|
|
Deferred
tax assets attributable to:
|
|
|
|
|
Prior
years
|
|
$
|
702,370
|
|
|
Tax
benefit (liability) for current year
|
|
|
43,404
|
|
| |
|
|
|
|
|
Total
Deferred Tax Benefit
|
|
$
|
745,774
|
|
| |
|
|
|
|
|
Valuation
Allowance
|
|
$
|
(745,774
|
)
|
| |
|
|
|
|
|
Net
Deferred Tax Benefit
|
|
$
|
0
|
|
The
realization of deferred tax benefits is contingent upon future earnings
and is
fully reserved at December 31, 2007.
NOTE
6 -
COMMON STOCK
In
May
2006, 5,000,000 shares of common stock valued at $255,000 were issued for
the
extinguishment of $182,000 in debt to a related party for services performed
in
previous periods. Accordingly, the value of the stock issued to the related
party was recorded as paid-in-capital and the value of the common stock
in
excess of the debt was recorded as expense.
During
the quarter ended June 30, 2007 the Company instituted a ten-for-one forward
split of our common stock. All references to common stock and per share
data
have been retroactively restated to account for the ten-for-one forward
stock
split as if it occurred on the first day of the first period
presented.
In
December 2007, 10,000,000 shares of common stock valued at $2,100,000 were
issued for the extinguishment of $145,000 in debt to a related party for
advances made in previous periods. Accordingly, the value of the stock
issued to
the related party was recorded as paid-in-capital and the value of the
common
stock in excess of the debt was recorded as expense.
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. As of December 31, 2007, no shares had been issued under the
Plan.
In
2007,
the Company sold 1,040,000 shares of common stock for cash.
In
2007,
the Company issued 4,288,334 shares of common stock valued at $900,500
for
services.
NOTE
7 -
RELATED PARTY TRANSACTIONS
Crown
Equity neither owns nor leases any real or personal property. The Company
shares
office space with its parent company. Such costs are immaterial to the
financial
statements and accordingly are not reflected herein.
Legal
services are provided by a related party of the company. For the years
ended
December 31, 2007 and 2006, Crown Equity recorded $60,500 and $42,000,
respectively, in related party legal fees. As of December 31, 2007, $70,897
was
outstanding for legal services. In addition, in 2006, $72,829 of additional
compensation expense was recorded in connection with the issuance of common
stock for the extinguishment of a $182,000 payable related to legal services
previously provided.
In
2007,
$18,000 was paid to a related party consultant.
Crown
Partners, Inc., the majority shareholder of Crown Equity, has advanced
the sum
of $19,910 and $101,607 to fund Crown Equity's operations with a balance
of
$28,871 due at December 31, 2007.
During
December 2007, Crown Equity’s Chief Financial Officer advanced the company
$60,500 for the purchase of fixed assets. As of December 31, 2007, $36,875
is
outstanding.
NOTE
8 -
MAJOR CUSTOMERS
In
2007
of 100% of revenues was from three customers. In 2006, Crown had no
revenues.