CLAUDIA J. ZAMAN ATTORNEY AT LAW
27430 Riverside Lane
Valencia CA 91354
(661) 287-3772
(818) 475-1819 Facsimile
December 12, 2005
United States Securities and Exchange Commission
Division of Corporation Finance
450 Fifth Street, N.W.
Mail Stop 0407
Washington, D.C. 20549
Attention: Linda Cvrkel, Branch Chief
Re: Crown Partners, Inc. (the "Company")
Form 10-KB for the fiscal year ended December 31, 2004
File No. 33-11986-LA
Dear Ms. Cvrkel:
In response to your letter of October 5, 2005 regarding the
above-referenced issuer, please be advised that the issuer is responding to the
Staff's comments in this letter.
Form 10-KSB for the fiscal year ended December 31, 2004
Financial Statements
Consolidated Statements of Operations, page 3
1. We note your response to our previous comment no. 3, and your proposed
revised disclosure. Please expand the disclosure to indicate the methodology and
assumptions (for example, annual predicted changes), or estimates used in your
impairment analysis. Also, explain whether you believe these assumptions will
remain valid in the future or whether you expect to make any substantial
revisions.
RESPONSES: The Company has expanded its disclosure to indicate the methodology
and assumptions or estimates used in its impairment analysis. The Company
believes that these assumptions will remain valid in the future.
Policy to Be Added as modified:
IMPAIRMENT OF LONG-LIVED ASSETS - The Company reviews long-lived assets and
certain identifiable intangibles for impairment whenever events or changes in
circumstances indicate that the carrying amount of an asset may not be
recoverable. If the carrying amount is not recoverable and the fair value is
less than the carrying amount of the asset, a loss is recognized for the
difference. Fair value is determined based on market quotes, if available, or is
based on valuation techniques. An impairment charge of $374,385 was recognized
in fiscal year 2003. Management determined that there was no assurance of future
cash flows to support the carrying value of the assets. As such, 100% of the
carrying value of the assets were impaired.
Note 1- Summary of Significant Accounting Policies, Revenue Recognition, Page 7
2. We note your response to previous comment no. 6. Please revise the notes to
your financial statements to reflect the information included in your response
letter.
RESPONSE: The notes to the financial statements will be revised and an amended
Form 10-KSB will be filed.
Form 10-QSB for the Quarterly Period Ended June 30, 2005
Item 2. Management's Discussion and Analysis
Results of Operations
3. Please revise your discussion to ensure that the amounts discussed correspond
to amounts reflected in your financial statements. For example, you state that
your revenues, general and administrative expenses, and net loss for the three
months ended June 30, 2005 was $13,697, $52,036, and $38,339, respectively.
However, your statement of operations for the three months ended June 30, 2005
reflects revenues, general and administrative expenses, and net loss as $17,330,
$46,575 and $21,122, respectively. In addition, please ensure that you discuss
the particular reasons for material changes in each line item in your financial
statements that will enable a reader to assess material changes in your
financial condition and results of operations since the end of your last fiscal
year and for the comparable interim period in the preceding year. See Item
303(b)(2) of Regulation S-B.
RESPONSE: The Company will file an amended Form 10-QSB for the quarter ended
June 30, 2005 to correct its disclosure as described above and to expand its
discussion of the reasons for material changes for each line item in its
financial statements to ensure compliance with Item 303(b)(2) of Regulation S-B.
Liquidity and Capital Resources
4. Please discuss the nature of your revenues and the impact that the eviction
of Sanitec Services of Hawaii form its plant (as discussed in Note 5 to your
financial statements) will have on your future operations. See Item 303(b)(2) of
Regulation S-B.
RESPONSE: The Company received revenues from its waste disposal operations in
Hawaii. Since the Company's eviction from its plant in Hawaii, the Company has
ceased its waste disposal operations and will derive no future revenues from
that business. The revenues derived were not sufficient to fund the plant's
operations in Hawaii which meant that the Company's Hawaiian operations were
operating at a net loss. So while the Company has lost this revenue, it has also
reduced its expenses accordingly so that the Company's present operations will
have less of a net loss each quarter.
In connection with the Company's responses to your comments, please be advised
that the Company acknowledges the following:
o The Company is responsible for the adequacy and accuracy of the
disclosure in the filings;
o Staff comments or changes to disclosure in response to staff
comments do not foreclose the Commission from taking any action with
respect to the filings; and
o The Company may not assert staff comments as a defense in any
proceeding initiated by the Commission or any person under the
federal securities laws of the United States.
Please contact the undersigned with any questions or comments.
Sincerely,
CLAUDIA J. ZAMAN ATTORNEY AT LAW
/s/ Claudia Zaman
CLAUDIA J. ZAMAN
/CJZ
cc: Crown Partners, Inc.
Lopez, Blevins, Bork & Associates