America Great Health - Annual Report: 2013 (Form 10-K)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-K

[x]

Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the fiscal year ended June 30, 2013

[ ]

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 0-27873

CROWN MARKETING

(Exact name of registrant as specified in its charter)

Wyoming

98-0178621

(State or other jurisdiction of incorporation or organization)

(IRS Employer Identification No.)

1340 Environ Way, Chapel Hill, North Carolina                                                    27517

(Address of principal executive offices)                                                           (Zip Code)

Registrant's telephone number, including area code: (919) 9134762

Securities registered pursuant to Section 12(b) of the Act:              None             

Securities registered pursuant to Section 12(g) of the Act:  Common Stock, no par value

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

YES       NO   X

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. YES            NO   X   

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Secur­ities Exchange Act of 1934 during the preceding 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   X        NO      

Indicate by check mark whether the registrant has submitted electronically and posted on its corporation Web site, if any , every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or such shorter period that the registrant was required to submit and post such files).  YES   X        NO      

Indicate by check mark if the disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. YES           NO  X   

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer or a small reporting company. See definition of “large accelerated filer”, “accelerated filer” and “small reporting company” in Rule 12b-2 of the Securities Exchange Act of 1934.

Large accelerated filer [ ]   Accelerated filer [ ] Non-accelerated filer [ ] Smaller reporting company [ X ]

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes  [   ]    No  [  X ]

State issuer's revenues for its most recent fiscal year: $6,627

The aggregate market value of the voting stock held by non-affiliates of the registrant as of December 31, 2012 was $11,469,492 based on a closing sale price on the OTC Bulletin Board of $.17.

The number of shares outstanding of the issuer's classes of Common Stock as of  September 30, 2013 was 190,067,600

DOCUMENTS INCORPORATED BY REFERENCE - NONE

PART I

Item 1. BUSINESS

When used in this Form 10-K, the words "expects," "anticipates," "estimates" and similar expressions are intended to identify forward-looking statements. Such statements are subject to risks and uncertainties, including those set forth below under "Risks and Uncertainties," that could cause actual results to differ materially from those projected. These forward-looking statements speak only as of the date hereof. Crown Marketing expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in the Company's expectations with regard thereto or any change in events, conditions or circumstances on which any statement is based. This discussion should be read together with the financial statements and other financial information included in this Form 10-K. Readers should carefully review the risk factors described  in  other  documents  the Company files from time  to  time  with  the  Securities  and Exchange Commission,  including  the Quarterly Reports on Form 10-Q to be filed  by the Company subsequent to this Annual Report on Form 10-K and any Current Reports  on  Form 8-K filed by the Company.

Background

Crown Marketing, a Wyoming corporation (the "Company" “us” or “we”) was incorporated on July 6, 2010 and is the successor by merger to Space Launch Financial, Inc.  ("SPCL").  SPCL had its stated objective the funding of satellite launches, but did not generate any revenues in this proposed business.  In July 2010, SPCL underwent a holding company reorganization under Delaware law, pursuant to which it became a wholly-owned subsidiary of SPCL Holding Corporation, and SPCL, together with its assets and liabilities, was sold to a non-affiliated third party. SPCL Holding Corporation subsequently reincorporated in Wyoming by merger into the Company.  

The Company carries on all of its operations through its Wyoming subsidiary, Green4Green, which was formed on July 8, 2009, and Crown Nutraceuticals, which was incorporated on March 28, 2013. The Company, which then had 890,800 shares outstanding (including 317,100 shares held by management), acquired Green4Green (wholly owned by then Management)  pursuant to an Agreement and Plan of Reorganization (the “Agreement”).  The Company acquired all of the outstanding shares of Green4Green in exchange for 40,000,000 newly issued shares of the Company's Common Stock.  Pursuant to the Agreement, the issued and outstanding common shares of Green4Green were exchanged on a one-for-one basis for common shares of the Company.  After the merger was completed, the Green4Green shareholders owned approximately 98% of the outstanding shares of common stock of the Company.  The transaction was accounted for as a reverse merger (recapitalization) with Green4Green deemed to be the accounting acquirer and the Company deemed to be the legal acquirer. As a result of the reverse merger, the historical accumulated deficit of SPCL was eliminated.  Green 4Green is a wholesale distributor of generic pharmaceuticals. On September 9, 2013, the Company filed a Registration Statement on Form S-1, file no. 333-176776 containing complete "Form 10" information.

In June 2013, we acquired patent rights related to controlled release technology from an unaffiliated party. In September, 2013, the Company acquired two additional patents and related intellectual property from Farrington Pharmaceuticals, LLC, a company controlled by our President and Chief Financial Officer,  by the issuance of a promissory note in the amount of $140,000 and 122,600,000 restricted shares of common stock. The intellectual property will be held by the Company's wholly-owned licensing subsidiary. The patents protect broad claims for novel controlled release technology applicable to oral and transdermal pharmaceuticals and nutraceuticals, and other applications.  In March 2013, we commenced operating our nutraceutical division.

Our Business

Historically we have been engaged in the wholesale distribution of non-addictive generic pharmaceutical products to non-US distributors.  With the September 2013 acquisition of the controlled release technology (CDDT), we have devoted most of our resources to (a) seeking to license CDDT to pharmaceutical companies, (b) developing one or more proprietary applications of CDDT to generic pharmaceuticals and/or over-the-counter medications, and (c) developing other applications of CDDT including the nutraceuticals market.  In the last quarter of 2013, we also expanded into the nutraceutical market, by financing the marketing of diet products.  

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The US Pharmaceutical Industry

The following italicized text is taken from the US government website at www. www.selectusa.commerce.gov/industry-snapshots/pharmaceutical-industry-united-states:

The U.S. Pharmaceutical Industry

The United States is the world’s largest market for pharmaceuticals and the world leader in biopharmaceutical research. U.S. firms conduct 80 percent of the world’s research and development in biotechnology and hold the intellectual property rights to most new medicines. In 2010, the pharmaceutical sector employed approximately 272,000 people (source:  Bureau of Labor Statistics), and according to the Pharmaceutical Research and Manufacturers of America (PhRMA), those manufacturers spent $67.4 billion on research and development in 2010.

The markets for biologics, over-the-counter (OTC) medicines, and generics show the most potential for growth and have become increasingly competitive. Biologics, valued at $67 billion in 2010 (source:  IMS Health), account for a quarter of all new drugs in clinical trials or awaiting Food and Drug Administration approval. OTC market growth will be driven by a growing aging population and consumer trend to self-medication, and the conversion of drugs from prescription to non-prescription or OTC status. Generic drug sales in the United States were valued at $78  billion in 2010 (source:  IMS Health).

The U.S. market is the world’s largest free-pricing market for pharmaceuticals and has a favorable patent and regulatory environment.  Product success is largely based on competition in product quality, safety and efficacy, and price. U.S. government support of biomedical research, along with its unparalleled scientific and research base and innovative biotechnology sector, make the U.S. market the preferred home for growth in the pharmaceutical industry.  

Industry Subsectors

Originator chemically synthesized drugs and biotechnology-derived drugs are developed as a result of extensive research and development (R&D) and clinical trials in both humans and animals.  The originator relies on patents and other forms of intellectual property rights to justify the investment required tobring a product to market.

Generic drugs are duplicative copies of originator chemically-synthesized drugs that contain the same active ingredient, are identical in strength, dosage form, and route of administration.  The prices of generic drugs are typically lower than the prices of originator drugs, particularly in the U.S. market where they are typically sold at a substantial discount from originator drug prices. 

Over-the-Counter (OTC) drugs are distinguished from originator and generic drugs in that consumers do not need a prescription to purchase the drug.  OTC drugs are considered by regulators to be safe for self-diagnosis and self-medication. 

Active Pharmaceutical Ingredients (APIs) and Excipients. Medication, in dosage form, is composed of active pharmaceutical ingredients (APIs) and excipients.  APIs are the ingredients that make drugs effective.  Excipients are inert substances that give a medication its form, such as cornstarch (to make a tablet) or sterile water (to make a liquid) and serve as a delivery vehicle to transport the active ingredient to the site in the body where the drug is intended to exert its action. 

3

Biosimilars, or Follow-on Biologics, are versions of biological products that reference the originator product in applications submitted to a regulatory body.   With the signing into law of healthcare reform legislation in March 2010, the FDA is authorized to approve biosimilars or follow-on versions of biologic drugs that were approved under the Public Health Service Act. The FDA is in the process of developing implementing guidelines and procedures to determine the extent of testing necessary to establish similarity of a follow-on product with a reference originator biologic. 

US pharmaceutical market sales were $279 billion in 2009.  Pharmaceutical companies are believed to be under tremendous pressure from generics: from 2011 to 2014, drugs representing sales of $95 billion will go off patent. We believe that our technology can be viewed by the industry as a way for pharmaceutical companies to extend the value of their products using our CDDT.

Controlled Drug Delivery Issues

Our controlled drug delivery technology is patented and, we believe, revolutionizes drug delivery. Although compressed medicine tablets and medicine capsules were invented in the 19th century, the medicine pill dates from ancient times.  Tablets or capsules deliver their active ingredients to the bloodstream  by first dissolving in the stomach. For every drug there is an optimal therapeutic level. Too little, and the drug is less effective and even harmful (eg, with antibiotics, low amounts merely build resistance). Too much can be toxic and cause undesirable side effects. The rate at which the active ingredient is made available to the bloodstream depends on physiological factors such as stomach pH levels and the chemical characteristics of the active ingredient. Typically, drugs enter the bloodstream at a high level and the plasma concentration declines over time according to the plasma half life of the drug and the individual patient.  For example, after 18-50 hours after ingestion, the blood plasma concentration of the muscle relaxant Clonazapam is half of the initial plasma concentration. Ibuprofen has a half life of 2-3 hours. Chemotherapy drug Oxaliplatin has a half life of 14 minutes.

Generally speaking, the shorter the half life, the more frequent of an administration is required; and the larger variation in blood plasma concentration (high concentration upon initial ingestion and low concentration after the passage of time). In order to ensure sufficient therapeutic levels of the drug, dosage is often a compromise between the toxicity of the initial concentration and the minimum therapeutic level required. Until CDDT, controlled drug delivery was largely accomplished primarily by chemical means. Either the active ingredient is given a dissolvable coating, is combined with fillers or excipients which slow absorption, or is provided as part of another chemical compound which metabolizes over time into the active ingredient. The principal drawbacks with using chemical means to control oral or transdermal drug delivery are that the rate of the chemical reaction varies among individuals, so that it is not precise, and secondly, formulating, testing, and regulatory approval of the chemical compound can be very expensive and lengthy, since the manufacturer must account for the interaction of the active ingredient and the chemical compound. This extended regulatory process means that a manufacturer may need to obtain regulatory approval twice: once for the original formulation of the drug, and again for the controlled release formula.

CDDT ensures that the optimum therapeutic level of the drug is available to the human body, over a longer time, often 24 hours, and does so in a simple, elegant fashion which is uniform among individuals and usually does not interact with the active ingredient, simplifying regulatory approvals.   

4

How our CDDT Works.

The Company's CDDT works using the principle of diffusion, not via chemical means. No chemical compound or coating is required for water soluble drugs utilizing CDDT; non-soluble drugs only require employment of an emulsifier. The tablet is formed in the shape set forth in the diagram above, and covered with an impermeable coating. An orifice is then laser drilled through the coating on the top of the tablet. The rate at which the drug exits the pill is a mathematical formula derived based on the angle of the gradient, the size of the drug molecule, and the size of the orifice. Much like gravity causes an hourglass to empty at a constant rate and time, diffusion causes our CDDT pill to release the drug at an exact, constant rate during the its passage through the gastrointestinal tract--regardless of the individual patient's gastrointestinal chemistry. Having delivered its contents, the pill is harmlessly eliminated by the body.  

Since CDDT does not require the use of any chemical agent to accomplish controlled delivery, troublesome interactions with controlled release chemicals are simplified and completely eliminated with the majority of drugs which are water soluble.  We believe that we can license CDDT to pharmaceutical manufacturers which seek to introduce a controlled release version of their drugs, in a more timely and cost effective manner.  

We are also engaged in preliminary development of applications of CDDT to generics and over-the-counter medications and  nutraceuticals which we may market and sell under our own label. The development of our own product lines would be much more costly and complicated than licensing, but would probably result in higher revenues to the Company.

Veterinary and Other Applications

We intend to develop applications of our CDDT to the veterinary industry, focusing on the home companion animals (dogs and cats). Since pet owners at times have difficulty administering medications to their pets, we believe that CDDT can enable the prescribing of one pill a day and ease patient compliance.

CDDT is also applicable to any situation in which a dosage is desired to be administered on a measured level over time, such as mosquito control in lakes and ponds.

Existing Generic Pharmaceutical Business

We will continue to devote a limited amount of our resources to developing our generic distribution business as it can eventually be synergistic with our CDDT products.

Nutraceutical Business

In March 2013, we began a venture with a non affiliated party, to market diet products including extracts of green coffee bean and raspberry ketone. Under the venture, the other party developed and paid for the product, and we paid all the media marketing costs. We received the net proceeds after the cost of the product. In the three months ended June 30, 2013, we had sales of $6,627. Sales have continued in fiscal 2014 at approximately the same level.

5

Employees and Outside Services

The Company's only employee at the present time is its sole executive officer and director, who devotes full time to the affairs of the Company.  (See "Management"). Remaining administrative (non-policy making) officers  and consultants and technical personnel such as marketing specialists are being compensated as independent contractors.  We pay these persons on a contract basis as required. Manufacturing of our proprietary products will also be contracted out to independent third parties.

Intellectual Property

We currently are the assignee on two US patents relating to CDDT, both entitled “Sustained Release Delivery Systems for Solutes,” patent number -2001-0039414, expiring in 2018 and 2003-06569152, expiring in 2020.

The intellectual property supporting the CDDT is comprehensively formulated to allow for the broad application of the technology with regard to the mode of administration, the desired release pattern, the type of compounds employed and the dosage form.  The resulting platform encompasses the medicinal use of the technology for the enteral and parenteral administration of drugs with provisions made for local and systemic parenteral uses.  In addition, the technology can be employed to regulate time to first release of drug, extent of initial bolus release and duration of controlled release, with considerations given to the different gastric and intestinal environments.  The technology is suited for the formulation of ethical and OTC drugs, including the branding of generics.  Non-medicinal applications, though not explicitly addressed in this document, include the use of the technology in the areas of water treatment, odor control and experimental research.

In particular, the patent applications cover drug delivery devices that allow for linear, sustained-release of solutes with adjustable initial release kinetics.  The drug delivery device is comprised of at least one dispenser having a solute reservoir element defined by a fluid-impervious or solute-impervious wall and having an orifice, source element, in fluid registry with a gradient forming element that has a release orifice.  It is the gradient forming element that prevents an initial burst and release of solute while promoting controlled, prolonged near-zero-order release.

We are also in the process of developing other intellectual property and are the assignee on an additional provisional patent application relating to controlled release on a weight loss formulation

Maintaining patents, defending patents against infringement claims, and prosecuting competitors who might seek to infringe upon our patents can be costly. We have limited resources for patent litigation.

Competition

CDDT will compete with existing technologies, primarily chemical based, for the controlled release of drugs. Our competitors generally have more financial resources and longer operating history than we do. We believe that we can compete on the basis of better technology, but there can be no assurance that competitors will not attempt to design around our patent nor that new technologies could be invented. The worldwide generic pharmaceutical distribution industry is highly competitive and largely fragmented. Some of the strongest competition will likely arise from the countless online distributors that cater to regional markets.

Item 1A. RISK FACTORS.

This item is inapplicable because we are a "smaller reporting company" as defined in Exchange Act Rule 12b-2.

6

Item 1B.  UNRESOLVED STAFF COMMENTS

This item is inapplicable because we are a "smaller reporting company" as defined in Exchange Act Rule 12b-2.

Item 2. PROPERTIES

We use a limited amount of office space from our officer and director. We plan to locate approximately 500 to 1,000 square feet of dedicated office space in or near the Research Triangle area near Chapel Hill in the future.

 

Item 3. LEGAL PROCEEDINGS

Not Applicable.

Item 4. MINE SAFETY DISCLOSURES

Not Applicable.

7

PART II

Item 5.

MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCK­HOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

(a)

Market information and issuance of unregistered securities

The Company's Common Stock has traded on the OTC Bulletin Board under the symbol CWNM.OB since June 8, 2013. There has been limited trading of the common stock through June 30, 2013. The shares traded in the following quarters:

Quarter Ending

High

Low

September 30, 2012

$

.50

$

.50

December 31, 2012

1.01

.10

March 31, 2013

 .31

.05

June 30, 2013

.07

.04

 

The above quotations reflect inter-dealer prices, without retail markup, markdown, or commission and may not necessarily represent actual transactions. The last sale price of our common stock on September 27, 2013 was $.01 per share.

(b)

Holders

As of September 30, 2013, there were approximately 100 record holders of Company common stock.

(c)

Dividends

The Company has not paid any dividends on its common stock.  The Company currently intends to retain any earnings for use in its business, and therefore does not anticipate paying cash dividends in the foreseeable future.

(d)

Equity Compensation Plans

Equity Compensation Plan Information as of June 30, 2013

Number of Securities

remaining available

(a)

(b)

for future issuance

Number of Securities

Weighted Average

under equity

To be issued upon

exercise price of

compensation plans

      exercise of existing  outstanding options,   (excluding securities

Options, warrants

warrants and

reflected in

Plan Category

and rights

rights

column (a)

Equity compensation

  

 --

$

--                         

--

plans approved by

security holders

Equity compensation

_-

  

 ­

--                  

--

plans not approved

by security holders

          

Total

--

--

--

8

Company repurchases of common stock during the years ended June 30, 2013 and 2012.

None

(e)

Performance Graphic.  The Company is not required to provide a performance graph since it is a "smaller reporting company" as defined in Regulation S-K Rule 10(f).

Share issuances in 2013

All share issuances have been previously reported.

 Item 6.

SELECTED FINANCIAL DATA

As a smaller reporting company we are not required to respond to this item.

Item 7.

MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS

MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS

Disclaimer Regarding Forward-Looking Statements

This Current Report on Form 10-K contains forward-looking statements within the meaning of the federal securities laws. These include statements about our expectations, beliefs, intentions or strategies for the future, which we indicate by words or phrases such as “anticipate,” “expect,” “intend,” “plan,” “will,” “we believe,” “believes,” “management believes” and similar language.  Except for the historical information contained herein, the matters discussed in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and elsewhere in this report are forward-looking statements that involve risks and uncertainties. The factors listed in the section captioned “Risk Factors,” as well as any cautionary language in this report; provide examples of risks, uncertainties and events that may cause our actual results to differ materially from those projected. Except as may be required by law, we undertake no obligation to update any forward-looking statement to reflect events after the date of this Form 10-K.

Critical Accounting Policies and Estimates

Principles of consolidation. The condensed consolidated financial statements include the accounts of the Company and its subsidiary. All significant inter-company balances and transactions are eliminated on consolidation.

Use of estimates. In preparing financial statements in conformity with accounting principles generally accepted in the United States of America, management makes estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the dates of the financial statements, as well as the reported amounts of revenues and expenses during the reporting periods. These accounts and estimates include, but are not limited to, the valuation of accounts receivable, inventories, deferred income taxes and the estimation on useful lives of property, plant and equipment. Actual results could differ from those estimates.

Results of Operations

 We had losses of $108,800 and $56,261 for the years ended June 30, 2013 and 2012. The increase in loss is due to the increase in operating expenses, primarily related to the costs of the new nutraceuticals division, which commenced in the third fiscal quarter, as well as increased operating costs related to developing and marketing the controlled release technology acquired in September 2012. . In contrast, our business in fiscal 2012 was primarily focused on wholesaling generic pharmaceuticals.. We expect that our level of operating expenses will continue at the current level for fiscal 2013, and may possibly increase if we are able to exploit the controlled release technology, which is being evaluated at this time by our industry consultants.

9

Revenue

. We had limited sales of $6,627 in the June 30, 2013 quarter (from the nutraceuticals division) and as compared $4,500  for the year ended June 30, 2012 (from resales of generic pharamaceuticals). The 2013 sales represented sales in a new division, financing the marketing of nutraceuticals, and we cannot predict whether results will continue in future quarters.

General and Administrative expenses.

  

 General Administrative expenses were $114,001  for the year ended June 30, 2013 as compared to $60,305  for the year ended June 30, 2012.  General and administrative costs were primarily composed of   costs related to our status as a public company, which were legal and accounting expenses of $29,799, and press releases and  transfer agent fees of $8,709; rent expense of $2,541 and telephone and other office expenses of $9,272; patent costs of $666, and travel costs of $25,069 incurred in marketing the Company's products.  In addition,  under the contract, Crown Nutraceuticals pays all the advertisting costs for the products (green tea extract and raspberry ketone diet products) while the other party developed the product, packaging and marketing materials, and is responsible for all the costs of inventory and fulfillment.  The advertisingcosts paid by this division were $28,986 in fiscal 2013. In comparison, operating expenses in the 2012 fiscal year primarily comprised of $44,871 in filing fees on our patents, and public company-related costs of $5,127. The Company believes that the new nutraceutical  enterprise will recoup all of the advertising costs by December 31, 2013.  We cannot predict whether this new business segment will be profitable nor whether the controlled release technology will be successfully exploited. Should we be able to obtain additional funding to market the controlled release technology, our marketing expenses will increase substantially as well in fiscal 2014.

Liquidity

The accompanying financial statements have been prepared in conformity with generally accepted accounting principles in the United States of America, which contemplate continuation of the Company as a going concern.  However, the Company is still in development stage and has not yet been successful in establishing profitable operations. The Company incurred a net loss of $108,800 for the year ended June 30, 2013, and the Company's liabilities exceed its assets by $227,273 as of June 30, 2013.  The Company has received limited revenues to date.  These factors create substantial doubt about the Company's ability to continue as a going concern.  As such, the  accompanying financial statements do not include any adjustments that might be necessary if  the  Company  is  unable  to  continue  as  a  going  concern.

The  Company's  management  plans to continue as a going concern  revolves  around  its  ability  to  achieve,  as  well  as  raise  necessary  capital  to pay ongoing general and administrative expenses  of  the  Company. The  ability  of  the  Company  to  continue  as a going concern is dependent on securing  additional  sources  of capital and the success of the Company's plan.  There is no assurance that the Company will be successful in raising this additional capital or in achieving profitable operations. 

Our cash needs in the year ended June 30, 2013 were primarily met by extension of loans of $44,694 from a shareholder, increase in accounts payable from an office director, and the exercise of warrants.  As of June 30, 2013 we had cash on hand of $19,746., During the quarter ended September 30, 2012, 24,000,000 warrants were exercised that entitled us to receive proceeds of $168,000.   During the year ended June 30, 2013 we received $804000 from the proceeds of the exercise of warrants. Subsequently  we received $79,000 in July 2013  that were due us from on the warrant subscription receivable and we  believe we will be able to receive, prior to December 31, 2013,  the remaining  due us from warrants exercised, and that this amount will cover our operating expenses through that time. After December 31, 2013, we will need approximately $750,000 for marketing and development to fully fund our marketing plans. Due to our limited operating history, we believe that we will need to sell common equity to raise the required funds. We have no arrangement or understanding pursuant to which we might obtain such funding.

10

Our officer/shareholder is providing all of our working capital other than those from warrant exercises and will continue to do so until at least June 30, 2014. During the year ended June 30, 2012, the Company issued an unsecured promissory note to an entity owned by a shareholder and former director of the Company for the aggregate principal sum of $9,666.  The unpaid principal sum, together with all other amounts advanced to the Company by the lender from time to time, shall bear interest at 4% per annum until paid, and shall be due and payable on demand.  In September 2012, the lender advanced an additional $700 to the Company under the same terms.  As of June 30, 2013, notes payable to this related party had a balance of $10,366.

In September 2012, the Company issued an unsecured promissory note to an entity controlled by Mr. Learned Hand, the Company’s Chief Executive and Financial Officer and director, for the principal sum of $140,000. The promissory note was issued in connection with the assignment of two patents and the related intellectual property (see Note 6).  The unpaid principal sum of the promissory note bears interest at 4% per annum until paid.  The unpaid principal sum and all accrued but unpaid interest thereon shall be due and payable five years from the date of the promissory note (September 2017).  As of June 30, 2013, the promissory note of $140,000 remained outstanding.

In March 2013, Mr. Hand loaned the Company $25,000 to capitalize the Crown Nutraceuticals subsidiary. This loan is represented by a demand note bearing interest at a rate of 4% per annum.  As of June 30, 2013, the loan of $25,000 remained outstanding.

Recent Accounting Pronouncements

There are recent accounting pronouncements issued by the FASB (including its Emerging Issues Task Force), the American Institute of Certified Public Accountants (“AICPA”)and the SEC; however these pronouncements are not believed by management to have a material impact on the Company’s present or future financial statements.

 Forward Looking Statements

Information included in this report includes forward looking statements, which can be identified by the use of forward-looking terminology such as may, expect, anticipate, believe, estimate, or continue, or the negative thereof or other variations thereon or comparable terminology. The statements in "Risk Factors" and other statements and disclaimers in this report constitute cautionary statements identifying important factors, including risks and uncertainties, relating to the forward-looking statements that could cause actual results to differ materially from those reflected in the forward-looking statements.

Since we have generated limited revenues, we are a development stage company as that term is defined in Section 915 - Development Stage Entities, of the FASB Accounting Standards Codification.   Our activities have mostly been devoted to seeking capital; seeking supply contracts and development of a business plan.  Our auditors have included an explanatory paragraph in their report on our financial statements, relating to the uncertainty of our business as a going concern, due to our lack of operating history or current revenues, its nature as a start up business, management's limited experience and limited funds.  We do not believe that conventional financing, such as bank loans, is available to us due to these factors.  We have no bank line of credit available to us.  Management believes that it will be able to raise the required funds for operations from one or more future offerings, in order to effect our business plan.

Our future operating results are subject to our attaining certain milestones, including:

o     our success in entering into favorable arrangements  with pharmaceutical licensees;

o     the success of our develop and marketing efforts for our own products;

o     our ability to obtain additional financing; and

o     other risks which we identify in future filings with the SEC.

11

Any or all of our forward looking statements in this prospectus and in any other public statements we make may turn out to be wrong. They can be affected by inaccurate assumptions we might make or by known or unknown risks and uncertainties. Consequently, no forward looking statement can be guaranteed. In addition, we undertake no responsibility to update any forward-looking statement to reflect events or circumstances which occur after the date of this prospectus.

Contractual Obligations and Off-Balance Sheet Arrangements

We do not have any contractual obligations or off balance sheet arrangements.

Item 7A.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

This item is not applicable since the Company is a smaller reporting company.

12

Item 8.

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

CROWN MARKETING

(A Development Stage Company)

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

           Page

Report of Independent Registered Public Accounting Firm

14

                    

Consolidated Balance Sheets as of  June 30, 2013 and 2012

15

Consolidated Statements of Operations for the years ended June 30, 2013 and 2012,  and

   for the period July 8, 2009 (inception) to June 30, 2013

16

Consolidated Statements of Changes in Stockholders’ Deficiency for the period

July 8, 2009 (inception)  to June 30, 2013

17

Consolidated Statements of Cash Flows for the  years ended June 30, 2013 and 2012,  and

   for the period July 8, 2009 (inception) to June 30, 2013

18

Notes to Consolidated Financial Statements

19

13

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors

Crown Marketing

(A Development Stage Company)

Chapel Hill, North Carolina

We have audited the accompanying consolidated balance sheets of Crown Marketing, a development stage company, (the “Company”) as of June 30, 2013 and 2012, and the related consolidated statements of operations, stockholders’ deficiency and cash flows for the years then ended, and for the period July 8, 2009 (inception) to June 30, 2013. These consolidated financial statements are the responsibility of the Company’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 standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated 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 audits 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 includes examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall consolidated financial statement presentation. We believe that our audits provide reasonable basis for our opinion.

 

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of June 30, 2013 and 2012, and the results of its operations and its cash flows for the years then ended, and for the period July 8, 2009 (inception) to June 30, 2013, in conformity with accounting principles generally accepted in the United States of America.

 

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the consolidated financial statements, the Company has suffered recurring losses, and has received limited revenues to date, which have resulted in a negative working capital and a stockholders’ deficit.  These conditions raise substantial doubt about the Company’s ability to continue as a going concern.  Management’s plans in regard to these matters are also described in Note 2 to the consolidated financial statements.  The accompanying consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Weinberg & Company, P.A.

Los Angeles, California

October 2, 2013

14

CROWN MARKETING

(A Development Stage Company)

CONSOLIDATED BALANCE SHEETS

See accompanying Notes to Consolidated Financial Statements.

15

CROWN MARKETING

(A Development Stage Company)

CONSOLIDATED STATEMENTS OF OPERATIONS

CROWN MARKETING

(A Development Stage Company)

CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS’ DEFICIENCY

FOR THE PERIOD JULY 8, 2009 (INCEPTION) TO JUNE 30, 2013

		Common Stock						Subscription			Accumulated
		Shares			Amount			Receivable			Deficit			Total
Balances, July 8, 2009		--		$	--		$	--		$	--		$	--
Issuance of Shares for organization expenses of $300
and cash of $100		40,000,000			400			--			--			400
Net loss		--			--			--			(1,975)			(1,975)
Balance, June 30, 2010		40,000,000			400			--			(1,975)			(1,032)
Effect of reverse merger transaction		957,600			400			--			--			400
Issuance of shares and warrants, for cash of $0.05 per unit		2,400,000			12,000			--			--			12,000
Contribution to capital by officer		--			7,200			--			--			7,200
Issuance of shares for cash at $0.10 per share		110,000			1,100			--			--			1,100
Net loss		--			--			--			(22,024)			(22,024)
Balance, June 30, 2011		43,467,600			21,100			--			(23,999)			(2,899)
Contribution to capital by officer					60			--						60
Net loss for the year ended June 30, 2012		--			--			--			(56,261)			(56,261)
Balance, June 30, 2012		43,467,600			21,160			--			(80,260)			(59,100)
Common stock issued to related party for acquired license		122,600,000			(139,900)			--			--			(139,900)
Issuance of shares on exercise of warrants at $.007 per share		24,000,000			168,000			(87,473)			--			80,527
Net loss for the year ended  June 30, 2013		--			--			--			(108,800)			(108,800)
Balance, June 30, 2013		190,067,600		$	49,260		$	(87,473)		$	(189,060)		$	(227,273)

Name and Principal Position	Year	Salary	Other	Total
Learned J. Hand Chief Executive/Financial Officer	2013	$-	-	$ -
Igor Produn Chief Executive/Financial Officer	2012	$-	-	$-