UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION


Washington,
D.C. 20549





FORM
10-K




(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, 2008





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: 33-11986-LA





CROWN
PARTNERS, INC.


(Exact
name of Registrant as specified in its charter)




Nevada
            
            91-2008803(State or other jurisdiction of
            
            (IRS
      Employerincorporation
      or organization)
            
            Identification Number)




9663 St Claude 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: None.





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 March 10, 2009 was 54,257,983. The aggregate number of shares of the voting
stock held by non-affiliates was 52,094,793. The market value of these shares,
computed by reference to the market closing price on March 10, 2009 was
$520,948. 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
Partners, Inc. (the “Company”), has been involved in several different
businesses. At present, it has three subsidiaries.





B)
Narrative Description of Business





The
Company has three subsidiaries of which it is the majority shareholder: Crown
Equity Holdings Inc. ("CRWE"), Universal Services & Acquisitions, Inc.
("USV"), and Sanitec Services Ltd. ("SSH").





The
Company owns 64% of CEQN, a Nevada corporation traded on the Electronic Bulletin
Board under "CEQN". In 2007, CRWE began selling computer systems for financial
traders and is also a licensed reseller for computer components, hardware and
software as well as computer accessories. In 2008, Crown continued to advance
funds to CRWE to pay CRWE's expenses. The Company anticipates that it will be
repaid these advances and loans at the time that CEQN acquires an operating
business. In December, 2007, CRWE issued a total of ten million shares of its
common stock in satisfaction of approximately $145,000 owed by CRWE to the
Company. After the issuance of the shares, the Company advanced an additional
$19,910 to CRWE.





The
Company owns 90% of the issued and outstanding shares of Universal Services
& Acquisitions, Inc. (“USV”), a Colorado corporation. USV is a dormant shell
company. The Company continues to seek merger candidates for USV.





In
November, 2001, the Company acquired Sanitec(TM) Services of Hawaii, Inc.
("SSH"), a privately held Hawaiian corporation, developed to engage in medical
waste collection and treatment in Honolulu, Hawaii. The operations of SSH ceased
in May, 2005 when SSH was evicted from its plant in Hawaii. At the present time,
the Company is utilizing its limited capital to fund its operations as it seeks
business opportunities.





In
December, 2007, the Company issued 170,000 shares of its common stock in
restricted form, to unrelated parties as compensation for services.





During
the year ended December 31, 2006, the Company issued 9,000,000 options to
certain officers, directors and consultants. The options are exercisable over a
five year period at $.10 per share. In accordance with SFAS No. 123R, the
Company recorded $625,880 of expense in connection with the issuance of these
options. There have been no options granted, exercised, transferred or forfeited
during the fiscal year 2008 or 2007.





Employees





As of
December 31, 2008, the Company had no employees.




Item 2.
Properties.





Prior to
August 2007, Crown used office space of a related party on a rent free month to
month basis. In August 2007, Crown began leasing office space for $845 per
month. The lease expired July 31, 2008. From that date through December 31,
2008, Crown used office space of a related party on a rent free month to month
basis. Rent expense for the years ended December 31, 2008 and 2007 were $8,450
and $6,338, respectively.





Item 3.
Legal Proceedings.





The
Company and its subsidiary have pending litigation in Arizona small claims court
- Strojnik v. Crown Equity Holdings, Inc. and Crown Partners,
Inc.  The Company has assessed the outcome of a loss as remote and
furthermore the maximum liability in small claims court is
$2,500.  The Company has not accrued any amounts related to this
contingency.





Item 4.
Submission of Matters to a Vote of Security Holders





None.









Item 5.
Market for Registrant’s Common Equity and Related Shareholder
Matters.





The
Company’s common stock has been traded on the OTC Electronic Bulletin Board
since Spring, 1996 under the symbol “TELM,” since April, 1999, under the symbol
“SNHS” and since January, 2002, under the symbol “CRWP”. The following table
reflects the high and low quarterly bid prices for 2008. This information was
provided to the Company by the National Association of Securities Dealers, Inc.
(the “NASD”) and the Internet. These quotations reflect inter-dealer prices,
without retail mark-up or mark-down or commissions. These quotations may not
necessarily reflect actual transactions.





Period
            
            High
      Bid
            
            
            Low
      Bid1
      st
      Qtr 2008
            
            
            .02
            
            
            
            .012
      nd
      Qtr 2008
            
            
            .02
            
            
            
            .013
      rd
      Qtr 2008
            
            
            .01
            
            
            
            .014
      th
      Qtr 2008
            
            
            .01
            
            
            
            .01





As of
December 31, 2008, the Company had 54,257,983 shares of its common stock issued
and outstanding, of which 10,891,343 were held by non-affiliates.





The
Company’s CUSIP number is 85847R108. The Company has authorized a total of
50,000,000 shares of common stock, par value $.001. The Company has authorized a
total of 10,000,000 shares of preferred stock, par value $10.00 and presently
has no shares of preferred stock issued and outstanding. The Company estimates
that it has in excess of 300 beneficial shareholders as of March 10,
2009.





Item 6.
Selected Financial Data





None




Item 7.
Management’s Discussion and Analysis or Plan of Operation.




FORWARD-LOOKING STATEMENTS
MAY NOT PROVE ACCURATE





When
used in this Form 10-K, 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





Due to
the present and ongoing instability in the financial markets, the Company
experienced substantial losses in its trading activities in 2008 and prior
years. The Company continues to seek business opportunities for itself and its
subsidiaries that will allow it and them to generate revenues to fund all their
operations but has no suitable candidates under review at the present time. The
Company, through its subsidiary, SSH, began generating revenues during 2003
which were not enough to fund and support its Hawaiian operations in the short
term and resulted in the Company ceasing its Hawaii operations when the landlord
evicted SSH for failing to pay its rent.





The
Company will continue to seek suitable merger candidates for its other
subsidiaries which should also result in revenues for the Company if mergers are
consummated.





In 2008,
CRWE had minimal income, although it was not sufficient to completely fund its
operations.





The
Company does not have adequate working capital for its current operations and
will need additional working capital in 2009.





NEED FOR
ADDITIONAL FINANCING





The
Company believes that its existing capital will not be 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, for
itself and its subsidiaries. The Company is seeking to locate other potential
acquisitions for its subsidiaries.





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’s balance sheet as of December 31, 2008 reflects limited assets and
limited 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





In
December, 2007, the Company’s subsidiary, Crown Equity Holdings Inc., issued ten
million shares of its common stock in restricted form in satisfaction of
$145,000 which it owed to the Company. Subsequently, the Company advanced an
additional $19,910 to Crown Equity.




In
December, 2007, the Company issued 170,000 shares of its common stock to
unrelated third parties as compensation for services to the
Company.  In 2008, the Company issued 4,500,000 shares of its common
stock for $22,500 and 26,000,000 shares to a related party for services and for
accounts payable.





For the
year ended December 31, 2008, the Company realized a net loss of $604,834, on
income of $23,190, interest income of $198, interest expense of $2,927, and
operating expenses of $607,954. For the year ended December 31, 2007, the
Company realized a net loss of $423,581, other income of $14,003 realized loss
from the sale of securities of $74,485, interest income of $4,133, and operating
expenses of $355,144. The net loss per share for the years ended December 31,
2008 and 2007 was $.01 and $.02, respectively.





At
December 31, 2008, shareholder’s deficit totaled $10,243,495 compared to
shareholder’s deficit of $9,638,661 at December 31, 2007. This increase in
shareholder’s deficit is due primarily to the Company’s continuing to pay its
subsidiaries’ expenses without sufficient income to support these
expenses.





LIQUIDITY AND CAPITAL
RESOURCES





At
December 31, 2008, the Company had total current assets of $3,293, which
consisted of cash of $2,943 and prepaid expenses of $350, resulting in negative
working capital of $448,242. The Company’s current liabilities of $451,535
consisted of accounts payable of $207, 039, accounts payable to a related party
of $113,897, advances of $42,689, notes payable to a related party of $51,210,
salaries payable of $ 23,000 and notes payable of $13,700.




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.





As a
result of these factors, Crown’s independent registered public accounting firm
has 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 8.   Financial
Statements.




Item 9.  
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 9A.
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 Officer 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-K 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 CEO and CFO do 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, 2008. 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 the Treadway Commission. Based on that assessment, management
has concluded that the Company’s internal control over financial reporting was
not effective as of December 31, 2008.





Item 9B
  Other Information





None.





Part
III




Item 10.
  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
            
            Position
            
            Term(s)
      of OfficeArnulfo
      Saucedo-Bardan
      age
      is 37
            
            Chairman
      of the Board, Director
            
            February,
      2008 to the presentKenneth
      Bosket
            
            CEO,
      Director
            
            June
      2008 to the presentSteven
      Onoue age is 50
            
            Director
            
            July,
      2002 to the presentMontse
      Zaman age is 34
            
            CFO,
      Secretary
            
            February,
      2008 to the present




Family
Relationships. There are no family relationships between any of the officers and
directors except that Mr. Saucedo-Bardan and Mrs. Zaman are brother and
sister.










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.





KENNETH
BOSKET. Kenneth Bosket has been working with Crown Trading Systems, Inc., a
wholly owned subsidiary of Crown Equity Holdings, Inc. for 9 months before being
appointed Crown Equity Holdings, Inc. CEO in June of 2008. Mr. Bosket retired in
2004 after 30 years with Sprint (Telecommunication Division). Mr. Bosket is
co-founder of JaHMa, a music company in Las Vegas, Nevada and a former Board
Member and President of Bridge Counseling Associates, a mental health and
substance abuse service company. His experience includes implementing
appropriate procedures for positioning his organization's goals with successful
teaming relationships, marketing and over 30 years of extensive customer
service, as well as managing various departments, and being a western division
facilitator working directly for a President of Sprint. Mr. Bosket has received
numerous awards, such as the Pinnacle Award for his exceptional service with his
former employer combined with his community service involvements. Mr. Bosket
earned a Masters of Business Administration from the University of Phoenix and a
Bachelor's of Business Administration from National University. Mr. Bosket is
also 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.”




STEVEN
ONOUE. Mr. Onoue has been employed as vice president and manager of SanitecTM
Services of Hawaii, Inc., a wholly-owned subsidiary of Crown Partners, Inc.,
since 2000. Prior to that, Mr. Onoue was the president of Cathay Atlantic
Trading Company in Honolulu, Hawaii which traded in hard commodities and acted
as 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 has been a registered securities professional as well as a being
involved in real estate in Hawaii for more than 15 years. Mr. Onoue is presently
an officer and director of Crown Equity Holdings Inc., a subsidiary of the
Company which trades on the OTC Electronic Bulletin Board under the symbol
“CRWE.”





ARNULFO
SAUCEDO-BARDAN. Mr. Saucedo-Bardan is a business man and developer and is
self-employed. Mr. Saucedo-Bardan is the brother of Montse Zaman. Mr.
Saucedo-Bardan is a director of Crown Equity Holdings Inc., a subsidiary of the
Company and a publicly traded company traded on the OTC Electronic Bulletin
Board under “CRWE.”




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 Equity Holdings Inc., a subsidiary
of the Company and a publicly traded company traded on the OTC Electronic
Bulletin Board under “CRWE.”





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.





CONFLICTS OF
INTEREST





Most of
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 10 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.





Item 11.
Executive Compensation.





During
year ended December 31, 2008, and as of the date of the filing of this report,
the following Company’s officers were paid compensation by the
Company.





·
            Montse
      Zaman CFO received $ 31,300 paid directly and $ 6,000 paid to the Montse
      Zaman Irrevocable Trust for a total of
$37,300.









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.





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 names 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.





Compensation Pursuant to
Plans. Other than disclosed above, the Company has no plan pursuant to
which cash or non-cash compensation was paid or distributed during the last
fiscal year, or is proposed to be paid or distributed in the future, to the
individuals and group described in this item.




Item 12.
  Security Ownership of Certain Beneficial Owners and
Management.





There
were 54,257,983 shares of the Company’s common stock issued and outstanding on
December 31, 2008. No preferred shares were issued and outstanding at December
31, 2008. 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 owns 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.





Name
      and Address of
              Beneficial
      Owner
            
            Amount
      of Common Shares Currently Owned
            
            
            PercentCede
      & Co
            
            
            8,712,088
            
            
            
            16.06
            %9663
      St Claude AvenueLas
      Vegas NV 89148Tisa
      Capital Corp.
            
            
            5,670,116
            
            
            
            10.45
            %9663
      St Claude AvenueLas
      Vegas NV 89148Steven
      Onoue (1)
            
            
            2,163,190
            
            
            
            3.99
            %9663
      St. Claude AvenueLas
      Vegas NV 89147Phoenix
      Consulting Services
            
            
            3,733,334
            
            
            
            6.88
            %9663
      St Claude AvenueLas
      Vegas NV 89148Zaman
      Family Trust
            
            
            26,000,000
            
            
            
            47.92
            %9663
      St Claude AvenueLas
      Vegas NV 89148Kenneth
      Bosket (1)
            
            
            0
            
            
            
            0.00
            %9663
      St Claude AvenueLas
      Vegas NV 89148Arnulfo
      Saucedo-Bardan (1)
            
            
            0
            
            
            
            0.00
            %9663
      St Claude
              Las
      Vegas NV 89148Montse
      Zaman (1)
            
            
            0
            
            
            
            0.00
            %9663
      St Claude AvenueLas
      Vegas NV 89148Nasrin
      Montazer
            
            
            4,500,000
            
            
            
            8.29
            %6993
      St Claude  AvenueLas
      Vegas NV 89148Officers
      & directors as aGroup
      (4 persons)
            
            
            2,163,190
            
            
            
            3.99
            %





(1)
            Denotes
      officer and/or director.





Change in
Control. There are no arrangements known to the Company, including any pledge of
securities of the Company, the operation of which may at a subsequent date
result in a change of control of the Company.









Item 13.
  Certain Relationships and Related Transactions; and Director
Independence.





In 2007,
the Company shared office space with its subsidiary, Crown Equity Holdings Inc.
The monthly rent was $845 and the parties would split the rent. The lease
expired in July, 2008. Currently, office space is provided free by a related
party on a month to month basis.





During
the year ended December 31, 2008, the Company continued to pay certain expenses
and obligations of its subsidiaries in order that they could continue to
operate. In the event that these subsidiaries are acquired or merged into other
entities, the Company anticipates being repaid for these advances. However, in
the event that these companies are never merged or acquired, the Company may
never be repaid. In addition, the Company may not continue to have the ability
to continue advancing funds for operations for these entities. In the event that
the Company cannot continue to fund their operations, these subsidiaries may
cease to operate and exist.





In
December, 2007, the Company’s subsidiary, Crown Equity Holdings Inc. issued ten
million shares of its common stock in restricted form to the Company in
satisfaction of approximately $145,000 which the Company was owed by Crown
Equity. At December 31, 2008, the Company’s to Crown Equity Holdings totaled
$63,226.





In
December, 2007, the Company issued 170,000 shares of its common stock in
restricted form to two unrelated parties for services provided to the
Company.





In April
2008 the Company issued 4,500,000 shares of restricted common stock to one
individual for cash.





In June
2008 the Company issued 26,000,000 shares of restricted common stock to legal
counsel and former director for accounts payable and services. Subsequent to the
issuance the shares were transferred to the Zaman Family Trust of which the
recipient claims no direct or indirect interest.





Item 14.
Principal Accounting Fees and Services





The
following table presents for each of the last two fiscal years the aggregate
fees billed in connection with the audits of our financial statements and other
professional services rendered by our independent registered public accounting
firm Malone & Bailey, PC, Certified Public Accountants and
Consultants.





2008
            
            
            2007Audit
      fees
            
            $
            18,715
            
            
            $
            30,350Audit
      related fees
            
            
            0
            
            
            
            0Tax
      fees
            
            
            0
            
            
            
            0All
      other fees
            
            
            0
            
            
            
            0








Audit
fees represent the professional services rendered for the audit of our annual
financial statements and the review of our financial statements included in
quarterly reports, along with services normally provided by the accounting firm
in connection with statutory and regulatory filings or
engagements.  Audit-related fees represent professional services
rendered for assurance and related services by the accounting firm that are
reasonably related to the performance of the audit or review of our financial
statements that are not reported under audit fees.










Tax fees
represent professional services rendered by the accounting firm for tax
compliance, tax advice, and tax planning.  All other fees represent
fees billed for products and services provided by the accounting firm, other
than the services reported for in the other categories.





Item 15.   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 March 10, 2009




Consolidated
Balance Sheet




Consolidated
Statements of Operations




Consolidated
Statement of Changes in Stockholders’ Deficit




Consolidated
Statements of Cash Flows




Notes to
Consolidated Financial Statements




List of
Exhibits





The
following exhibits are filed with this report.





Financial
Statements for the Year Ended December 31, 2008.




(b) There
were no Reports filed on Form 8-K during the fourth quarter of the Company’s
fiscal year ended December 31, 2008.




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 PARTNERS,
      INC.





March
      10, 2009
            
            /s/Arnulfo
      Saucedo-BardanArnulfo
      Saucedo-Bardan, Chairman of the Board, DirectorMarch
      10, 2009
            
            /s/
      Kenneth BosketKenneth
      Bosket, CEO, DirectorMarch
      10, 2009
            
            /s/Montse
      ZamanMontse
      Zaman, CFO, DirectorMarch
      10, 2009
            
            /s/Steven
      OnoueSteve
      Onoue, Director









REPORT OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM





To the
Board of Directors


Crown
Partners, Inc.


Las
Vegas, NV





We have
audited the accompanying consolidated balance sheet of Crown Partners, Inc.
(“the Company”) as of December 31, 2008 and 2007, and the consolidated
statements of operations, stockholders’ deficit, and cash flows for the two
years then ended. These consolidated financial statements are the responsibility
of Crown Partners, Inc.’s management. Our responsibility is to express an
opinion on these consolidated 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 our 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 Partners, Inc. as of December
31, 2008 and 2007, and the results of its operations and its cash flows for each
of the two years then ended, in conformity with accounting principles generally
accepted in the United States of America.





The
accompanying consolidated financial statements have been prepared assuming that
Crown Partner’s Inc. will continue as a going concern. As discussed in Note 3 to
the consolidated financial statements, The Company has incurred losses through
December 31, 2008 and at December 31, 2008 had negative working capital. These
conditions raise substantial doubt about the Company's ability to continue as a
going concern. Management's plans in regard to this matter are also described in
Note 3. The accompanying consolidated financial statements do not include any
adjustments that might result from the outcome of these
uncertainties.





Malone
& Bailey, PC


www.malone-bailey.com


Houston,
Texas


March
10,
2009




F-1




CROWN
      PARTNERS, INC.CONSOLIDATED
      BALANCE SHEETS




ASSETSCurrent
      assets
            
            December
      31, 2008
            
            
            December
      31, 2007Cash
            
            $
            2,943
            
            
            $
            180,182Accounts
      receivable
            
            
            --
            
            
            
            14,003Prepaid
      expenses
            
            
            350
            
            
            
            1,195Total current assets
            
            
            3,293
            
            
            
            195,380Fixed
      assetsEquipment,
      net of accumulated depreciation
            
            
            43,373
            
            
            
            68,753Total Assets
            
            $
            46,666
            
            
            $
            264,133LIABILITIES AND STOCKHOLDERS’
      DEFICITCurrent
      liabilitiesAccounts
      payable and accrued expenses
            
            $
            207,039
            
            
            $
            197,109Accounts
      payable - related party
            
            
            113,897
            
            
            
            267,428Advances
      - other
            
            
            42,689
            
            
            
            20,000Note
      payable - related party
            
            
            51,210
            
            
            
            36,875Salaries
      payable
            
            
            23,000
            
            
            
            -Note
      payable
            
            
            13,700
            
            
            
            12,700Total current liabilities
            
            
            451,535
            
            
            
            534,112Commitments
      and contingencies
            
            
            -
            
            
            
            -Stockholders’
      deficit:Convertible
      preferred stock, $10 par value, 10,000,000shares
      authorized, no shares issued and outstanding
            
            
            -
            
            
            
            -Common
      stock, $.001 par value, 5,000,000,000 sharesauthorized,
      54,257,983 and 23,757,983 shares issued and
              outstanding,
      respectively
            
            
            54,258
            
            
            
            23,758Additional
      paid in capital
            
            
            9,784,368
            
            
            
            9,344,924Accumulated
      deficit
            
            
            (10,243,495
            )
            
            
            (9,638,661
            )Total
      stockholder's deficit
            
            
            (404,869
            )
            
            
            (269,979
            )Total Liabilities & Stockholders’ Deficit
            
            $
            46,666
            
            
            $
            264,133




See
summary of significant accounting policies and notes to financial
statements.




F-2




CROWN
      PARTNERS, INC.CONSOLIDATED
      STATEMENTS OF OPERATIONSYears
      Ended December 31, 2008 and 2007




2008
            
            
            2007Revenues
            
            $
            23,190
            
            
            $
            -Cost
      of revenues
            
            
            17,341
            
            
            
            -Gross
      profit
            
            
            5,849
            
            
            
            -Operating
      expenses:Other
      general and administrative
            
            
            582,574
            
            
            
            347,764Depreciation
      expense
            
            
            25,380
            
            
            
            7,380Net
      loss from operations
            
            
            (607,954
            )
            
            
            (355,144
            )Other
      income (expense):Other
      income
            
            
            --
            
            
            
            14,003Interest
      income
            
            
            198
            
            
            
            4,133Investment/interest
      expense
            
            
            (2,927
            )
            
            
            (12,088
            )Realized
      (loss) on securities
            
            
            -
            
            
            
            (74,485
            )Total
      other income (expense)
            
            
            2,729
            
            
            
            (68,437
            )Net
      loss
            
            $
            (604,834
            )
            
            $
            (423,581
            )Net
      loss per share:
            
            $
            (0.01
            )
            
            $
            (0.02
            )Net
      loss basic and dilutedWeighted
      average shares outstanding:
            
            
            41,553,873
            
            
            
            23,587,983Basic
      and diluted




See
summary of significant accounting policies and notes to financial
statements.




F-3





CROWN
      PARTNERS, INC.CONSOLIDATED
      STATEMENT OF STOCKHOLDER'S DEFICITYears
      Ended December 31, 2008 and 2007




AdditionalCommon
      Shares
            
            
            Paid
      In
            
            
            AccumulatedShares
            
            
            Amount
            
            
            Capital
            
            
            Deficit
            
            
            TotalBalance,
      December 30, 2006
            
            
            23,587,983
            
            
            $
            23,588
            
            
            $
            9,237,694
            
            
            $
            (9,215,080
            )
            
            $
            46,202Issuance
      of common stock for services
            
            
            170,000
            
            
            
            170
            
            
            
            3,230
            
            
            
            
            
            
            
            3,400Issuance
      of common stock by subsidiary for cash
            
            
            
            
            
            
            
            
            
            
            104,000
            
            
            
            
            
            
            
            104,000Net
      loss
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            (423,581
            )
            
            
            (423,581
            )Balance,
      December 31, 2007
            
            
            23,757,983
            
            
            
            23,758
            
            
            
            9,344,924
            
            
            
            (9,638,661
            )
            
            
            (269,979
            )Issuance
      of common stock for accounts payable
            
            
            9,774,692
            
            
            
            9,775
            
            
            
            117,296
            
            
            
            
            
            
            
            127,071Issuance
      of common stock for notes payable
            
            
            1,221,925
            
            
            
            1,222
            
            
            
            14,663
            
            
            
            
            
            
            
            15,885Issuance
      of common stock for services
            
            
            15,003,383
            
            
            
            15,003
            
            
            
            180,041
            
            
            
            
            
            
            
            195,044Issuance
      of common stock for cash
            
            
            4,500,000
            
            
            
            4,500
            
            
            
            18,000
            
            
            
            
            
            
            
            22,500Issuance
      of common stock by subsidiary for
    accounts  payable
            
            
            
            
            
            
            
            
            
            
            15,000
            
            
            
            
            
            
            
            15,000Issuance
      of common stock by subsidiary for services
            
            
            
            
            
            
            
            
            
            
            94,134
            
            
            
            
            
            
            
            94,134Cancellation
      of common stock by subsidiary
            
            
            
            
            
            
            
            
            
            
            310
            
            
            
            
            
            
            
            310Net
      loss
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            (604,834
            )
            
            
            (604,834
            )Balance,
      December 31, 2008
            
            
            54,257,983
            
            
            $
            54,258
            
            
            $
            9,784,368
            
            
            $
            (10,243,495
            )
            
            $
            (404,869
            )





See
summary of significant accounting policies and notes to financial
statements.




F-4





CROWN
      PARTNERS, INC.CONSOLIDATED
      STATEMENTS OF CASH FLOWSYears
      Ended December 31, 2008 and 2007




2008
            
            
            2007CASH
      FLOWS FROM OPERATING ACTIVITIESNet
      Loss
            
            $
            (604,834
            )
            
            $
            (423,581
            )Adjustments
      to reconcile net loss to cash (used in) operating
    activities:Realized
      loss on sale of marketable securities
            
            
            --
            
            
            
            74,485Depreciation
      expense
            
            
            25,380
            
            
            
            7,380Common
      stock issued for services
            
            
            195,044
            
            
            
            3,400Common
      stock of subsidiary issued for services
            
            
            94,135
            
            
            
            -Stock
      cancelled
            
            
            310
            
            
            
            -Changes
      in operating assets and liabilities:Accounts
      Receivable
            
            
            14,003
            
            
            
            (14,003
            )Prepaid
            
            
            845
            
            
            
            (1,195
            )Investments
      in marketable securities
            
            
            --
            
            
            
            (41,534,260
            )Proceeds
      from sale of marketable securities
            
            
            --
            
            
            
            41,459,775Accounts
      payable and accrued expenses
            
            
            9,930
            
            
            
            (56,408
            )Accrued
      salaries payable
            
            
            23,000
            
            
            
            --Related
      party accounts payable
            
            
            13,387
            
            
            
            94,630Cash
      flows used in operating activities
            
            
            (228,801
            )
            
            
            (389,777
            )CASH FLOWS FROM INVESTING
      ACTIVITIESPurchase
      of Fixed Assets
            
            
            --
            
            
            
            (76,133
            )Cash
      flows used in investing activities
            
            
            --
            
            
            
            (76,133
            )CASH
      FLOWS FROM FINANCING ACTIVITIESAdvances
      from related party
            
            
            13,727
            
            
            
            24,846Note
      payable - related party, net
            
            
            14,335
            
            
            
            36,875Proceeds
      from note payable
            
            
            1,000
            
            
            
            12,700Proceeds
      from the sale of stock
            
            
            22,500
            
            
            
            --Proceeds
      from the sale of subsidiary stock
            
            
            --
            
            
            
            104,000Cash
      flows provided by financing activities
            
            
            51,562
            
            
            
            178,421Net
      (Decrease) in Cash
            
            
            (177,239
            )
            
            
            (287,489
            )Cash,
      beginning of period
            
            
            180,182
            
            
            
            467,671Cash,
      end of period
            
            $
            2,943
            
            
            $
            180,182Supplemental
      Disclosures:Cash
      paid for interest
            
            $
            -
            
            
            $
            -Cash
      paid for income taxes
            
            
            -
            
            
            
            -Noncash
      transactions:Common
      stock issued for accounts payable
            
            $
            127,071
            
            
            $
            -Common
      stock issued by subsidiary for subsidiary accounts payable
            
            
            15,000
            
            
            
            -Common
      stock issued in satisfaction of related party debt
            
            
            15,885
            
            
            
            -




See
summary of significant accounting policies and notes to financial
statements.




F-5




CROWN
PARTNERS, INC.


NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS





NOTE 1 -
DESCRIPTION OF BUSINESS





Crown
Partners, Inc., (“Crown”) a Nevada corporation, was incorporated on November 3,
1986. Crown was originally incorporated as Ed Phills, Inc. and its name was
changed to Vegas Ventures, Inc., Telemall Communications, Inc. and subsequently
to Stein's Holdings, Inc. Crown was a development stage company until 1999, when
it acquired the following companies and became an active company:





Multi-Source
Capital Ltd. - Merged into Stein's Holdings, Inc. in May 1999.





Micro
Bio-Medical Waste Systems, Inc. - Crown acquired 80% ownership in this company
in March 1999.





In
September 2000, Crown acquired 90% ownership in Universal Services and
Acquisitions, Inc.





In
November 2001, Crown acquired 100% of Sanitec Services of Hawaii,
Inc.  In May, 2005, Sanitec Services of Hawaii was evicted from its
premises in Honolulu and has ceased operations.





Nature of
Business





Crown
Partners, Inc.'s main activities and sources of income were derived from daily
trading in the stock markets and currently has no primary business
activity.





NOTE 2 -
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES





Principles
of Consolidation





The
consolidated financial statements include the accounts of Crown’s majority owned
subsidiaries. All significant intercompany transactions and balances 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.




Revenue
Recognition





Crown
recognizes revenue when persuasive evidence of an arrangement exists, services
have been rendered, the sales price is fixed or determinable, and collectability
is reasonably assured.





Cash and
Cash Equivalents





For
purposes of the statement of cash flows, Crown considers all highly liquid debt
instruments purchased with an original maturity of three months or less to be
cash equivalents.





Investments





Investments
are classified as investments in trading securities and are held for resale in
anticipation of short-term market movements or until such securities are
registered or are otherwise unrestricted. Trading account assets, consisting of
marketable equity securities, are stated at fair value. Unrealized gains or
losses are recognized in the statement of operations on a monthly basis based on
changes in the fair value of the security as quoted on national or inter-dealer
stock exchanges. Realized gains or losses are recognized in the statement of
operations as trading profits when the equity instruments are sold. There were
no investments as of December 31, 2008.


Concentrations
of Credit Risk





Crown
maintains its cash balances at financial institutions that are insured by the
federal deposit insurance Corporation (“FDIC”). At December 31, 2007, Crown’s
cash balances exceeded the amount insured by the FDIC. During the year ended
December 31, 2008 balances were less than the insured amount.




F-6




Property
and Equipment





Property
and equipment are stated at cost. Major renewals and improvements are charged to
the asset accounts while replacements, maintenance and repairs, which do not
improve or extend the lives of the respective assets, are expensed. At the time
property and equipment are retired or otherwise disposed of, the asset and
related accumulated depreciation accounts are relieved of the applicable
amounts. Gains or losses from retirements or sales are credited or charged to
income. Crown depreciates its property and equipment for financial reporting
purposes using the straight-line method based upon the following useful lives of
the assets which is typically 3-5 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 the years ended December 31,
2008 or 2007





Income
Taxes





The asset
and liability approach is used to account for income taxes by recognizing
deferred tax assets and liabilities for the expected future tax consequences of
temporary differences between the carrying amounts and the tax bases of assets
and liabilities. Crown records a valuation allowance to reduce the deferred tax
assets to the amount that is more likely than not to be realized.





Net Loss
Per Share





Crown
calculates earnings per share in accordance with Statement of Accounting
Standards No. 128, (“SFAS No. 128”). In accordance with SFAS No. 128, basic
earnings per share is computed using the weighted-average number of common stock
outstanding and diluted earnings per share is computed using the
weighted-average number of shares of common stock and the dilutive effect of
options and warrants outstanding, using the “Treasury Stock” method. Crown had
9,000,000 option outstanding at December 31, 2008.  Basic and diluted net
loss per share is the same due to the anti-dilutive effect of the
options.





Stock
Based Compensation





Crown
adopted SFAS No. 123(R), on January 1, 2006 using the modified
prospective method. SFAS 123(R) requires companies to measure the cost of
employee services received in exchange for an award of an equity instrument
based on the grant-date fair value of the award. For stock-based awards granted
on or after January 1, 2006, stock-based compensation expense is recognized on a
straight-line basis over the requisite service period. In prior years, we
accounted for stock-based awards under APB No. 25, “Accounting for Stock
Issued to Employees.” We account for non-employee share-based awards in
accordance with EITF No. 96-18, “Accounting for Equity Instruments That Are
Issued to Other Than Employees for Acquisition, or in Conjunction with Selling,
Goods or Services.”





Crown
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.




NOTE 3 -
FINANCIAL CONDITION AND GOING CONCERN





At
December 31, 2008, Crown had negative working capital. Because of recurring
negative equity, Crown will require additional working capital to develop and/or
renew its business operations.





Crown
intends to raise additional working capital either through private placements,
public offerings and/or bank financing. Crown is also identifying merger and/or
acquisition candidates. As of December 31, 2008, no acquisition or merger
agreements have been closed.




There are
no assurances that Crown will be able to either (1) achieve a level of revenues
adequate to generate sufficient cash flow from operations; or (2) obtain
additional financing through either private placement, public offerings and/or
bank financing necessary to support Crown's working capital requirements. To the
extent that funds generated from any private placements, public offerings and/or
bank financing are insufficient, Crown will have to raise additional working
capital. No assurance can be given that additional financing will be available,
or if available, will be on terms acceptable to Crown. If adequate working
capital is not available Crown may not renew its operations.





These
conditions raise substantial doubt about Crown's ability to continue as a going
concern. The consolidated financial statements do not include any adjustments
relating to the recoverability and classification of asset carrying amounts or
the amount and classification of liabilities that might be necessary should
Crown be unable to continue as a going concern.




F-7





NOTE 4 -
PROPERTY AND EQUIPMENT





Property
and equipment consist of the following:


2008
            
            
            2007Office
      and computer equipment
            
            
            76,134
            
            
            
            76,134Less
      accumulated depreciation
            
            
            (32,761
            )
            
            
            (7,380
            )$
            43,373
            
            
            
            68,753





The
depreciation expense for the years ended December 31, 2008 and 2006 was $25,380
and $7,380, respectively.





NOTE 5-
NOTE PAYABLE




During
the quarter ended March 31, 2007, a subsidiary borrowed $12,700 from an
unrelated third party. The loan is unsecured, due April 1, 2008 and accrues
interest at 12% per annum. The note can be converted into common shares of the
company at the holder’s option at a to be determined in the future conversion
price. Beginning April 1, 2008 the note accrues interest at 18% per annum. On
December 12, 2008 a subsidiary borrowed $1,000 from an unrelated party. The note
is an unsecured demand note bearing no interest.




NOTE
6 - RELATED PARTY TRANSACTIONS




In
December 2007, Crown Equity issued 10,000,000 shares of common stock valued at
$2,100,000 for the extinguishment of $145,000 in debt to Crown for advances made
in previous periods. Accordingly, the value of the stock issued to the parent
company was recorded as paid-in-capital and the value of the common stock in
excess of the debt was recorded as expense on Crown Equity’s books. These items
were eliminated upon consolidation.





Legal
services are provided by a related party of the company. For the years ended
December 31, 2008 and 2007, Crown recorded $15,000 and $204,425, respectively,
in related party legal fees. In June, 2008 the Company issued 26,000,000 to the
related party for accounts payable of $127,071, a note payable of $15,885 and
legal services of $195,044 for a total value of $338,000.  In October
2008 the party assigned the shares to the Zaman Family Trust of which the party
has no direct or indirect interest. The party resigned as director and officer
during 2008.





In 2007,
$18,000 was paid to a related party consultant. During the period ended December
31, 2008 the Company paid two related parties $49,800 in consulting
fees.  Consulting fees in the amount of $23,000 have been accrued for
related parties.





For the
year ended December 31, 2008, accounts payable related parties are due to in the
amount of $55,897, in the amount of $39,179, and Montse Zaman, Chief Financial
Officer, in the amount of $18,822.





For the
year ended December 31, 2008, advances from related parties are due to in the
amount of $20,000 to Nano and Montse Zaman, Chief Financial Officer, in the
amount of $22,689.





NOTE 7 -
COMMON STOCK





During
2007, Crown issued 170,000 shares for services valued at $3,400.





During
2007, Crown’s majority owned subsidiary, Crown Equity Holdings, Inc. issued
1,040,000 shares of Crown Equity’s common stock for cash. This is accounted for
as a contribution to capital on Crown’s books.





In
March of 2008, Crown sold 4,500,000 shares of common stock at $.005 for total
proceeds of $22,500, issued 9,774,692 common shares valued at $127,071 for
accounts payable, 15,003,383 common shares valued at $195,044 for services and
1,221,925 common shares valued at $15,885 for advances from related
parties.





In 2008
the Crown Equities, Inc. issued 836,668 shares of common stock valued at $94,135
for services, 100,000 shares of common stock valued at $15,000 for accounts
payable and cancelled 310,020 shares of common stock valued at par or
$310.





NOTE 8 -
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. Net operating losses estimated $6.8 million as of December
31, 2008 and expire 20 years from when incurred.




F-8





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, 2008 are as
follows:




Deferred
tax assets attributable to:





Total
      Deferred Tax Benefit
            
            $
            2,338,614Valuation
      Allowance
            
            
            (2,338,614
            )Net
      Deferred Tax Benefit
            
            $
            -




NOTE 9 -
COMMITMENTS AND CONTINGENCIES





Prior to
August 2007, Crown used office space of a related party on a rent free month to
month basis. In August 2007, Crown began leasing office space for $845 per
month. The lease expired February 23, 2008. Rent expense for the years ended
December 31, 2008 and 2007 were $8,450 and $6,338, respectively.





There is
pending litigation in Arizona small claims court - Strojnik v. Crown Equity
Holdings, Inc. and Crown Partners, Inc.  The Company has assessed the
outcome of a loss as remote and furthermore the maximum liability in small
claims court is $2,500.  Crown has not accrued any amounts related to
this contingency.





NOTE 10 -
STOCK BASED COMPENSATION





In 2006,
Crown adopted the Crown Partners, Inc. 2006 Stock Option Plan "2006 Plan"). The
Plan provides for the granting of stock options and other stock grants to
certain directors, key employees and certain independent contractors of Crown.
Options granted under the Plan may be either incentive stock options or
nonqualified stock options. Incentive stock options ("ISO") may be granted only
to Company employees (including officers and directors who are also employees).
Nonqualified stock options ("NSO") may be granted to Company employees and
consultants. Crown has reserved 10,000,000 shares of common stock for issuance
under the Plan.





Options
under the Plan may be granted for periods of up to ten years and at an exercise
price equal to the estimated fair value of the shares on the date of grant as
determined by the Board of Directors, provided, however, that the exercise price
of an ISO and NSO granted to a 10% shareholder shall not be less than 110% of
the estimated fair value of the shares on the date of grant. To date, options
granted generally are exercisable immediately as of the effective date of the
option agreement.





Summary
information regarding options is as follows:





Options
            
            
            Weighted
      Average Exercise Price
            
            
            Aggregate
      Intrinsic Value
            
            
            Weighted
      Average Contractual Life (Years)Outstanding
      at December 31, 2006
            
            
            9,000,000
            
            
            $
            .10
            
            
            $
            -
            
            
            
            5.0Granted
            
            
            -
            
            
            $
            -
            
            
            
            -
            
            
            
            -Forfeited
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -Expired
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -Outstanding
      at December 31, 2007
            
            
            9,000,000
            
            
            $
            .10
            
            
            
            -
            
            
            
            5.0Granted
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -Forfeited
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -Expired
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -Outstanding
      at December 31, 2008
            
            
            9,000,000
            
            
            $
            .10
            
            
            
            -
            
            
            
            5.0Exercisable
      at December 31, 2008
            
            
            9,000,000
            
            
            $
            .10
            
            
            
            -
            
            
            
            5.0




We
adopted SFAS No. 123R effective January 1, 2006. In our statement of operations
for the year ended December 31, 2008 and 2007, we recorded $0 and $0
respectively of compensation cost for stock option share-based payment
arrangements. No stock options were exercised during the year ended December 31,
2008 or the year ended December 31, 2007.





NOTE 11 – SUBSEQUENT EVENTS





On
January 5, 2009, a subsidiary of the Company issued a $ 2,000 demand note to a
non related party bearing no interest.




On
February 23, 2009 Crown Equity Holdings, Inc. issued 2,791,000 shares of common
stock for debt and services:


The Company issue 290,000 shares of
common stock to four individuals for debt and accrued expenses with a total
value of $29,000 ($0.10 per share).


The Company issued 2,501,000 shares of
common stock to 10 individuals with a total value of $ 250,100 ($0.10 per
share).




F-9