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TABLE OF CONTENTS

		Page
PART I: FINANCIAL INFORMATION
Item 1.  Financial Statements (Unaudited)		3
Balance Sheets as of June 30, 2010 and December 31, 2009(Unaudited)		3
Statements of Operations For the Three and Six Months Ended June 30, 2010 and 2009 (Unaudited)		4
Statements of Cash Flows For  the Six Months Ended June 30, 2010 and 2009 (Unaudited)		5
Notes to (Unaudited) Financial Statements		6
Item 2.  Management’s Discussion and Analysis and Plan of Operation		10
Item 3.  Quantitative and Qualitative Disclosures About Market Risk		11
Item 4T.  Controls and Procedures		11
PART II: OTHER INFORMATION
Item 1.  Legal Proceedings		12
Item 1A.  Risk Factors		12
Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds		12
Item 3.  Defaults upon Senior Securities		12
Item 4.  Submission of Matters to a vote of Security Holders		12
Item 5.  Other Information		13
Item 6.  Exhibits		13
Signatures		13

 

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Crown Equity Holdings Inc.

BALANCE SHEETS

(Unaudited)

		June 30, 2010				December 31, 2009
Assets
Current assets
Cash and cash equivalents		$	280,330			$	249,612
Marketable securities			206,824				-
Accounts receivable			12,000				-
Prepaid expense			2,400				8,102
Total current assets			501,554				257,714
Fixed assets
Equipment net, of depreciation $70,831			5,303				17,993
Restricted securities			85,000				204,500
Total Assets			591,857				480,207
Liabilities & Stockholder's Equity
Current liabilities
Accounts payable and accrued expenses		$	17,652			$	14,332
Salaries payable			85,951				—
Taxes payable			—				16,990
Deferred revenue			100,000				62,000
Total current liabilities			203,603				93,322
Long term liabilities
Notes payable –related parties			97,209				87,209
Total liabilities			300,812				180,531
Stockholder's Equity
Preferred shares $0.001 par value, 100,000,000 shares authorized  None issued or outstanding			-				-
Common stock, $.001 par value, 4,900,000,0000 shares authorized, 748,108,860, and 728,806,320 shares issued and outstanding			748,109				728,810
Additional-paid-in-capital			5,993,436				5,819,708
Accumulated deficit			(6,450,500	)			(6,248,842	)
Total stockholder's equity			291,045				299,676
Total Liabilities & Stockholders’ Equity		$	591,857			$	480,207

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

 

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Crown Equity Holdings Inc.

STATEMENTS OF OPERATIONS

Three and Six month periods ended June 30, 2010 and 2009

 (Unaudited)

		Three Months								Six Months
		2010				2009				2010				2009
Revenue		$	349,212			$	78,213			$	673,988			$	84,357
Cost of revenue			—				(529	)			(85,000	)			(1,893	)
Gross margin			349,212				82,464				588,988				82,464
Expenses:
General and administrative			378,083				61,503				603,037				351,487
Depreciation			6,345				6,428				12,690				12,773
Operating income(loss)			(35,216	)			9,753				(26,739	)			(245,796	)
Other Income (expense):
Other income			-				438				-				438
Interest income			35				-				66				-
Realized (loss) on securities			(875	)			(9,724	)			825				(9,274	)
Unrealized gain(loss) on securities			(35,170	)							(169,195	)
Gain on debt forgiveness			—				—				—				1,319
Investment expense			(470	)							(783	)
Interest expense			(2,916	)			(475	)			(5,832	)			(1,243	)
Total other income(expense)			(39,396	)			(9,761	)			(174,919	)			(9,210	)
Net loss		$	(74,612	)		$	(8	)		$	(201,658	)		$	(255,006	)
Net loss per common share (basic and diluted):		$	(0.00			$	(0.00	)		$	(0.00			$	(0.00	)
Weighted average common shares outstanding (basic and diluted):			747,935,973				720,389,840				739,567,918				711,905,550

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

 

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Crown Equity Holdings Inc.

STATEMENTS OF CASH FLOWS

Six month periods ended June 30, 2010 and June 30, 2009

 (Unaudited)

		2010				2009
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss		$	(201,658	)		$	(255,006	)
Adjustments to reconcile net loss to cash used in operating activities:
Depreciation expense			12,690				12,773
Stock for services			193,026				225,100
Gain on accounts payable forgiveness			—				(1,319	)
Unrealized (gain) loss on securities			169,195				—
Realized (gain) loss on securities			(825	)			—
Net Change in:
Prepaid expenses			5,702				—
Accounts receivable			(12,000	)			—
Marketable securities received for revenue			(367,503	)			—
Accounts payable and accrued expenses			4,702				(4,203	)
Accounts payable - related party			—				(5,981	)
Taxes payable			(16,990	)			—
Restricted securities received for revenue			150,750				—
Deferred revenue			(27,000	)			—
Accrued salaries			85,951				20,150
TOTAL CASH FLOWS USED IN OPERATING ACTIVITIES			(3,960	)			(8,486	)
CASH FLOWS USED IN INVESTING ACTIVITIES
Cash paid for purchase of fixed assets			—			(`1,881)
CASH FLOWS FROM FINANCING ACTIVITIES
Advances from related party, net			—				(10,163	)
Proceeds from sale of stock			24,678				25,000
Proceeds from notes payable			—				2,000
Notes payable-related party			10,000				2,650
TOTAL CASH FLOWS PROVIDED BY FINANCING ACTIVITIES			34,678				19,487
Net Increase (Decrease) in Cash			30,718				9,190
Cash, beginning of period			249,612				2,898
Cash, end of period		$	280,330			$	12,088
SUPPLEMENTAL CASH FLOW INFORMATION
Interest paid			-				-
Income taxes paid			-				-
Non Monetary transactions
Securities received for deferred revenue			65,000				-
Reclass from restricted to marketable			39,000				-
Common stock for accounts payable and accrued liabilities			—				29,000
Common Stock for vehicle			—				2,000

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

 

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Crown Equity Holdings Inc.

NOTES TO FINANCIAL STATEMENTS

(Unaudited)

NOTE 1 - BASIS OF PRESENTATION

The accompanying unaudited interim consolidated financial statements of Crown Equity Holdings Inc. (“Crown Equity”) have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules of the Securities and Exchange Commission, and should be read in conjunction with the audited consolidated financial statements and notes thereto contained in Crown Equity’s December 31, 2009 Annual Report filed with the SEC on Form 10-K. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations for the interim periods presented have been reflected herein. The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year. Notes to the financial statements which would substantially duplicate the disclosure contained in the audited financial statements for the most recent fiscal year end December 31, 2009 as reported on Form 10-K, have been omitted.

NOTE 2 - GOING CONCERN

As shown in the accompanying financial statements, Crown Equity has an accumulated deficit of June 30, 2010. Unless profitability and increase in shareholders equity continues, these conditions raise substantial doubt as to Crown Equity's ability to continue as a going concern. The financial statements do not include any adjustments that might be necessary if Crown Equity is unable to continue as a going concern.

NOTE 3 – MARKETABLE & RESTRICTED SECURITIES

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

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

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

Level 1: Quoted market prices in active markets for identical assets or liabilities

Level 2: Observable market based inputs or unobservable inputs that are corroborated by market data

Level 3: Unobservable inputs that are not corroborated by market data

 

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Crown Equity has classified these marketable securities at level 1 with a fair value of $207,085 and restricted securities with a market value of $85,000 as of June 30, 2010.

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

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

NOTE 4 – REVENUE RECOGNITION

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

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

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

Amounts received for revenue not earned as of period end are accounted for as deferred revenues.

 

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Restricted Securities

Crown Equity has classified the marketable securities they hold as of yearend as long-term in accordance with rule 144 due to restrictions on sale & transfers of unregistered shares. As of June 30, 2010 $85,000 of the marketable securities which are non controlling shares received from customers as consulting income has been classified as restricted securities in accordance with Accounting Standards Codification 825 and 718. The related gain/loss based on valuation on the mark to market each balance sheet date is reflected in the income statement.