10QSB 1 v075257.htm Unassociated Document

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-QSB


(Mark One)

[ X ]QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2007

OR

[ ]TRANSITION REPORT UNDER SECTION 13 OF 15(d) OF THE EXCHANGE ACT OF 1934

From the transition period from ___________ to ____________.

Commission File Number 33-11986-LA

CROWN PARTNERS, INC.
(Exact name of small business issuer as specified in its charter)

Nevada 91-2008803
(State or other jurisdiction of incorporation or organization)(IRS Employer Identification No.)

27430 Riverside Lane, Valencia, California 91354
(Address of principal executive offices)

 (661) 287-3772
(Issuer's telephone number)

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

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

Yes : No 9

As of May 7, 2007, there were 23,587,983 shares of Common Stock of the issuer outstanding.

 
 
 

CROWN PARTNERS, INC.
CONSOLIDATED BALANCE SHEETS
(Unaudited)

   
March 31, 2007
 
December 31, 2006
  
           
ASSETS
              
Cash
  
$
66
  
$
467,671
  
Marketable securities
    
793,180
    
-
 
Total current assets
  
$
793,246
  
$
467,671
  
               
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
              
               
Accounts payable and accrued expenses
  
$
230,299
  
$
273,517
  
Accounts payable - related party
    
184,909
    
147,952
  
Notes payable
    
12,700
    
-
  
Margin liability
   
432,735
    
-
  
Total current liabilities
    
860,643
    
421,469
  
               
Stockholders’ equity (deficit):
              
Convertible preferred stock, $10 par value, 10,000,000 shares
authorized, no shares issued and outstanding
    
-
    
-
  
Common stock, $.001 par value, 50,000,000 shares
authorized, 23,587,983 shares issued and outstanding
    
23,588
    
23,588
  
Additional paid in capital
    
9,237,194
    
9,237,194
  
Accumulated deficit
    
(9,328,179
)
  
(9,214,580
)
Total stockholders’ equity (deficit)
    
(67,397
)
  
46,202
  
Total liabilities and stockholders’ equity
  
$
793,246
  
$
467,671
  

 

See accompanying notes to the financial statements

 
 
 

CROWN PARTNERS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)


 
    Three Months Ended March 31, 
   
2007
  
2006
  
               
Operating expenses:
              
General and administrative
  
$
75,366
  
$
46,769
  
               
Loss from continuing operations
    
(75,366
)
  
(46,769
)
               
Other income (expense):
              
Interest income
    
2,028
    
1,329
  
Realized gain on sale of securities
    
14,958
    
16,648
 
Unrealized gains/(losses) on securities
    
(50,397
)
  
33,915
  
Interest expense
    
(4,822
)
  
(1,309
)
Total other income (expense)
    
(38,233
)
  
50,583
  
 
              
Net income (loss)
  
$
(113,599
)
$
3,814
  
               
Net per share:
              
Basic and diluted
  
$
(0.00
)
$
(0.00
)
               
Weighted average shares outstanding:
              
Basic and diluted
    
23,587,983
    
19,582,293
  

 
See accompanying notes to the financial statements

 
 
 

CROWN PARTNERS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)


 
    Three Months Ended March 31,   
   
2007
  
2006
  
CASH FLOWS FROM OPERATING ACTIVITIES
              
Net income (loss)
  
$
(113,599
)
$
3,814
  
Adjustments to reconcile net loss to cash provided
by (used in) continuing operations:
              
Unrealized loss (gain) on securities
    
50,397
    
(33,915
)
Realized gain on marketable securities
    
(14,958
)
  
(16,648
)
Changes in assets and liabilities:
              
Accounts payable and accrued liabilities
    
(63,218
)
  
12,078
  
Accounts payable - related party
    
56,957
        
Purchases of marketable equity securities
    
(4,204,317
)
  
(8,083,537
)
Proceeds from sale of marketable equity securities
    
3,378,747
    
8,540,519
  
Cash flows provided by operating activities
    
(909,991
)
  
422,311
  
               
CASH FLOWS FROM FINANCING ACTIVITIES
              
Borrowings on margin
   
432,735
    
-
  
Borrowings on debt
    
12,700
    
-
  
Cash flows provided by financing activities
    
445,435
   
-
  
               
Net increase (decrease) in cash
    
(464,556
)
  
422,311
  
Cash, beginning of period
    
464,622
    
341,833
  
Cash, end of period
  
$
66
    
764,144
  
               
               
Supplemental cash flow information:
              
Interest paid
  
$
-
  
$
-
  
Income taxes paid
   
-
    
-
  
 
          

 
See accompanying notes to the financial statements

 
 
 

CROWN PARTNERS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)


NOTE 1 - BASIS OF PRESENTATION

The accompanying unaudited interim financial statements of Crown Partners, Inc. 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 (“SEC”), and should be read in conjunction with the audited financial statements and notes thereto contained in the Company’s December 31, 2006 Annual Report filed with the SEC on Form 10-KSB. 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 2006 as reported on Form 10-KSB, have been omitted.

 
Reclassification - Certain prior year amounts have been reclassified to conform to the current year's presentation.
 
NOTE 2 - GOING CONCERN
 
As shown in the accompanying financial statements, Crown incurred a net loss of $113,599 for the three months ended March 31, 2007 and had an accumulated deficit of $9,328,179 at March 31, 2007. These conditions raise substantial doubt as to Crown's ability to continue as a going concern. Management is trying to raise additional capital through sales of common stock or merger. The financial statements do not include any adjustments that might be necessary if Crown is unable to continue as a going concern.
 

NOTE 3 - RECENT ACCOUNTING PRONOUNCEMENTS


NOTE 4 - MARGIN LIABILITY
 
At March 31, 2007, had a margin liability of $432,735 related to the purchase of marketable securities. This liability is secured by the marketable securities owned by the Company and is payable upon the sale of these securities. The Company recorded interest expense of $4,822 for the three months ended March 31, 2007 related this margin liability.

 
 
 

Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS

This report contains forward looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended. The Company’s actual results could differ materially from those set forth on the forward looking statements as a result of the risks set forth in the Company’s filings with the Securities and Exchange Commission, general economic conditions, and changes in the assumptions used in making such forward looking statements.

OVERVIEW

 
Crown Partners, Inc. (the "Company"), has been involved in several different businesses. We have three subsidiaries of which we are the majority shareholder: Crown Equity Holdings Inc. ("CEQN"), Universal Services & Acquisitions, Inc. ("USV"), and Sanitec Services Ltd. ("SSH"). We are currently utilizing our limited capital to fund operations until we can find a suitable merger.
 
Employees
 
As of March 31, 2007, the Company had no employees.
 
RESULTS OF OPERATIONS

For the three months ended March 31, 2007 and 2006, we had no revenues and a net loss of $113,599 and net income of $3,814, respectively. General and administrative expense increased $28,597 to $75,366 for the three months ended March 31, 2007 compared to the same period for 2006. This increase is primarily attributable to an increase in accounting and legal fees.

We incurred $50,397 of unrealized loss on securities for the three months ended March 31, 2007 compared to unrealized gains of $33,915 for the same period in 2006. This decrease is primarily due to a decline in the overall financial market during the first quarter of 2007.

LIQUIDITY AND CAPITAL RESOURCES

At March 31, 2007, the Company had negative working capital of approximately $67,397. At March 31, 2007, the Company had current assets of approximately $793,246 which consisted of cash and marketable securities. The current liabilities of the Company at March 31, 2007 were approximately $860,643 which consisted of accounts payable, a margin loan, a note payable, and accounts payable to a related party.

Crown will attempt to increase its operating liquidity by exploring the availability of outside debt and equity financing, to the extent that such funding is available under reasonable terms and conditions. There can be no assurances that these measures will result in an improvement in Crown's operations or liquidity. To the extent that Crown's operations or liquidity do not improve, Crown may be forced to reduce operations to a level consistent with its available working capital resources. Crown may also have to consider a formal or informal restructuring or reorganization.

 
 
 
The Company's balance sheet as of March 31, 2007 reflects limited 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.

As a result of these factors, Crown's independent accountants have expressed substantial doubt about Crown's ability to continue as a going concern. The accompanying consolidated financial statements have been prepared assuming that Crown will continue as a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The carrying amounts of assets and liabilities presented in the consolidated financial statements do not purport to represent the realizable or settlement values, nor include any adjustments that might result from the outcome of this uncertainty.

Item 3. CONTROLS AND PROCEDURES
 
(a)  
Evaluation of Disclosure Controls and Procedures
 
Based on their evaluation of our disclosure controls and procedures(as defined in Rule 13a-15e under the Securities Exchange Act of 1934 the "Exchange Act"), our principal executive officer and principal financial officer have concluded that as of the end of the period covered by this annual report on Form 10-QSB such disclosure controls and procedures were not effective to ensure that information required to be disclosed by us in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms. We are in the process of improving our internal controls in an effort to remediate these deficiencies through the implementation of better controls and procedures over expense recognition and stock and stock option issuances, and improving supervision and training of our accounting staff. We are continuing our efforts to improve and strengthen our control processes and procedures to fully remedy these deficiencies. Our management and directors will continue to work with our auditors and other outside advisors to ensure that our controls and procedures are adequate and effective.
 
Changes in Internal Control over Financial Reporting
 
Except as noted above, there have been no changes in our internal control over financial reporting identified in connection with the evaluation required by paragraph (d) of Exchange Act Rules 13a-15 or 15d-15 that occurred during our first fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
 
PART II

Items No. 1, 2, 3, 4, 5 - Not Applicable.
 
Item No. 6 - Exhibits and Reports on Form 8-K

(a) No reports on Form 8-K were filed during the three months ended March 31, 2007.

(b) Exhibits

None

 
 
 

SIGNATURES

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

CROWN PARTNERS, INC.
By /s/ Claudia Zaman
--------------------------
Claudia Zaman, CEO, CFO

Date: May 14, 2007