Commission Halts Unregistered Activity by Java Raba, Inc. and Eric Cousens

HARRISBURG, Pa., Sept. 7, 2012 /PRNewswire-USNewswire/ --  To halt the offer and sale of unregistered securities in Pennsylvania, the Pennsylvania Securities Commission (Commission) issued a Summary Order to Cease and Desist against Java Raba, Inc. (Java), an entity, and Eric Cousens (Cousens), an individual, both with an address in West Palm Beach, Florida. Java was purportedly "a specialty Coffee and Yogurt beverage retailer" incorporating "a vitamin enhanced system that is new to the Coffee and Yogurt industry" and was offering for sale Convertible Notes (Notes) in Java. Cousens was the CEO of Java.

In or about August 2012, a representative (Representative) of Java cold-called at least one Pennsylvania resident (PA Resident) and offered the Notes for sale.  The Representative stated that Java's concept is very similar to vitamin waters and sports drinks but  Java will provide consumers with vitamin coffee; that "I can guarantee that you will make money in this deal"; and that the PA Resident will receive a "convertible note [Note]" in the amount of the investment.  The Representative further stated that Java will be going public in several weeks and the Note will convert when Java goes public; that "The day of the conversion, you make money"; and that "It's easy; when you go to convert you get 50% of the stock note value. You get double the stock. No matter what, you make money."  The Representative continued that he would send offering materials (Materials) to the PA Resident; that "If you are not accredited, it's no problem"; and that the PA Resident could leave the questions concerning status as an accredited investor blank.

The Representative followed up by e-mailing the PA Resident offering materials (Materials) and offered the Notes for sale.  The Materials included a Confidential Private Placement Memorandum and Non-Disclosure/Non Compete Agreement.  The Materials state that Java is "a specialty Coffee and Yogurt beverage retailer" incorporating "a vitamin enhanced system that is new to the Coffee and Yogurt industry"; that Java is offering "$5 Million Principal Amount of Convertible Notes [Notes]"; that the Notes mature "one year from the date of issuance"; and that the return on the Notes is "10% per year (calculated using a 360-day year), adjusted monthly."  The Materials further state that the minimum denomination for the Notes is $25,000; that the Notes are convertible "into the common stock of the Company [Java] at the rate set equal to 50% of the closing price of the company's [Java's] common stock at the time of each conversion"; that the Notes include a detachable warrant providing "the holder the right to purchase common stock of the company [Java]"; and that the proceeds of the offering will be used "to pay for planned expenditures, research and development, and operating expenses."

The PA Resident was not an accredited investor under Rule 501 of Regulation D, and did not have sufficient knowledge and experience in financial and business matters to be capable of evaluating the merits and risks of the investment. The PA Resident had no substantive, pre-existing relationship with Java, Cousens or the Representative.

The Commission ordered Java Raba, Inc. and Eric Cousens to stop offering or selling the Notes in the Commonwealth of Pennsylvania in violation of the Pennsylvania Securities Act of 1972, and in particular Sections 201 thereof.

Any further solicitations or sales made by Java, Cousens, or their affiliates in Pennsylvania will constitute further violations of the 1972 Act.  Any person who is solicited by or has information about Java or Cousens is asked to immediately notify the Pennsylvania Securities Commission by calling the toll-free line 800-600-0007 (PA only); in Harrisburg: (717) 787-8061; in Pittsburgh: (412) 565-5083; or, in Philadelphia: (215) 560-2088. 

SOURCE Pennsylvania Securities Commission (PSC)