SecProbe.io

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<FILENAME>filename1.txt
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Mail Stop 3561

									August 5, 2005

Mr. Cody C. Ashwell
Chairman and Chief Executive Officer
Javo Beverage Company, Inc.
1311 Specialty Drive
Vista, CA 92081

      RE:		   Javo Beverage Company, Inc.
            	        	Form 10-KSB for Fiscal Year Ended
      December 31, 2004
      Filed March 31, 2005
	  	Form 10-QSB for Fiscal Quarter Ended
		March 31, 2005
		Filed May 16, 2005
		Form 10-KSB/A for Fiscal Year Ended
		December 31, 2004
		Filed July 27, 2005
		Form 10-QSB/A for Fiscal Quarter Ended
		March 31, 2005
		Filed July 28, 2005
	File No. 0-26897

Dear Mr. Ashwell:

	We have reviewed your responses contained in the letter dated
July 26, 2005 and upon reviewing those responses issue the
following
comments.

	We welcome any questions you may have about our comments or
on
any other aspect of our review.  Feel free to call us at the
telephone numbers listed at the end of this letter.

Form 10-KSB for Fiscal Year Ended December 31, 2004

Item 7.  Financial Statements

Statements of Cash Flows, page F-6
1. We read your responses to comments 1 and 15 in our letter dated
June 9, 2005.  We also reviewed your amended Form 10-KSB for the
year
ended December 31, 2004 and your amended Form 10-QSB for the
period
ended March 31, 2005.  It appears that you have revised your
statements of cash flows in the amended documents to address the
noted comments.  However, it is unclear from your response letter
the
revisions you determined were necessary based on our comments.
Please respond again to the prior comments and clarify in your
response the revisions to the statements of cash flows arising
from
your review of the matters subject to the comments.  Ensure we
understand how you determined that revisions were necessary.
   Additionally, with respect to the amended documents and the
restated statements of cash flows, please re-amend these documents
to
clearly label the restated financial statements as restated.
Please
also provide detailed footnote disclosure regarding the nature of
the
error(s) in the previously issued financial statements and the
effect
of their correction on net income and the related per share
amounts.
In this connection, the revised disclosures should include a table
illustrating "previously reported" and "as restated" cash flows
from
operating, financing, and investing activities.  Refer to
paragraph
37 of APB 20.  Please also have your auditors revise their audit
report to refer to the restatement(s) and the footnote(s)
describing
the restatement(s).

	Finally, please note that the re-amended documents should
include an explanatory note at the front of the documents clearly
indicating why the documents have been amended and also the
sections
of the documents that were revised.  You may wish to provide us
copies of your proposed amendments for review before re-amending.
Note 8.  Long-Term Debt, page F-10
2. Based on your response to comments 4 and 5 in our letter dated
June 9, 2005, it does not appear that you have properly accounted
for
your debt issuances that were accompanied by the issuance of
restricted common stock.  In particular, we believe you should
revise
your accounting for each debt/stock issuance to comply with the
following:
a. First, determine the fair value of the restricted shares
issued.
b. Second, determine the fair value of the debt issuance (on a
stand-
alone basis).

c. Third, using relative fair values, determine the amount of the
proceeds of the debt/stock issuance that relate to the debt versus
the stock.
d. Fourth, record the amount of the proceeds that relate to the
stock
as a discount on the debt issuance.  Amortize this discount over
the
life of the debt using the effective interest method.
   With respect to item a., please tell us in more detail how you
determined the amount of discount to apply to the market value of
your unrestricted common shares in determining the fair value of
the
restricted shares.
   With respect to item b., please tell us in detail how you
determine the fair value of the debt instruments.
   With respect to item c., please provide us your calculation of
1)
the relative fair values of the instruments and 2) the amount of
proceeds related to the restricted stock.
   With respect to item d., please note that this amount
represents
the entire discount on the debt issuance and this entire amount
should be amortized over the life of the debt.  We are not aware
of
any provisions in GAAP which would require you to bifurcate the
discount into portions representing a stock discount versus a debt
discount.  Likewise, we are not aware of any provisions in GAAP
which
would require you to immediately recognize one portion of the
discount and amortize the rest.

   Finally, please note we do not believe that SFAS 84 is
applicable
to your accounting for these debt/stock issuances, thus your
references to SFAS 84 in your response letter do not appear to be
appropriate.

   Please show us how you intend to revise your filing(s) to
comply
with the above.

Note 10.  Stock Transactions, page F-12
3. Based on our review of your responses to prior comments 7 and 8
from our letter dated June 9, 2005, we understand that you
determine
the fair value of warrants and stock issued in exchange for
employee
and non-employee services, as well as stock issued for cash or
financing such as in the case of the private debt issuances, based
on
your average stock price for the calendar month of the grant date.
In view of the guidance in APB 25 (with respect to employee
issuances) as well as SFAS 123 (with respect to non-employee
issuances), please tell us your basis for using the average stock
price for the calendar month of the grant date to value stock and
warrant issuances, as opposed to using the fair value of your
stock
on the date of grant.  In this regard, please note that averages
of
values over several days are generally not acceptable.  Refer, for
example, to paragraph 10 of APB 25.  Also, please be advised with
respect to any restricted shares that you may have issued or
intend
to issue in the future to employees, that APB 25 precludes
adjustments to fair value measurements for restrictions on
transferability of the stock.   Finally, please confirm that you
will
disclose in future filings the information you provided in your
response with respect to your accounting policy for determining
the
fair value of common and restricted common stock issued in
exchange
for employee and non-employee services.

Item 8A.  Controls and Procedures, page 12
4. We note your revisions in response to comment 13 in our letter
dated June 9, 2005, but do not believe the revisions adequately
addressed the comment.  As previously noted, Item 308(c) of
Regulation S-B requires that you disclose any change in your
"internal control over financial reporting" that occurred during
the
most recent fiscal quarter that has "materially affected, or is
reasonably likely to materially affect, the registrant`s internal
control over financial reporting."  Please revise your disclosure
accordingly in your Forms 10-KSB and 10-QSB.

      As appropriate, please amend your filings and respond to
these
comments within 10 business days or tell us when you will provide
us
with a response.  Please furnish a letter that keys your responses
to
our comments and provides any requested information.  Detailed
response letters greatly facilitate our review.  Please file your
response letter on EDGAR.  Please understand that we may have
additional comments after reviewing your amendments and responses
to
our comments.

	You may contact David DiGiacomo at (202) 551-3319, or in his
absence, Robyn Manuel at (202) 551-3823 if you have questions
regarding comments on the financial statements and related
matters.
Please contact me at (202) 551-3843 with any other questions.

                  Sincerely,

            George F. Ohsiek, Jr.
    					          Branch Chief

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Mr. Cody Ashwell
Javo Beverage Company, Inc.
August 5, 2005
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