<PAGE>

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-KSB

                                   ----------

[X]      ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
         EXCHANGE ACT OF 1934 for the fiscal year ended:

                                DECEMBER 31, 2004

                                       OR

[ ]      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 0-26897

                           JAVO BEVERAGE COMPANY, INC.
                 (Name of small business issuer in its charter)

                DELAWARE                                 48-1264292
     (State or other jurisdiction of                  (I.R.S. Employer
     incorporation or organization)                   Identification No.)

                              1311 SPECIALTY DRIVE
                             VISTA, CALIFORNIA 92081
          (Address of principal executive offices, including zip code)

                                 (760) 560-5286
                           (Issuer's telephone number)

         Securities registered under Section 12(b) of the Exchange Act:

                                      NONE

         Securities registered under Section 12(g) of the Exchange Act:

                      COMMON STOCK, WITH PAR VALUE: $.001,
    SERIES-A JUNIOR PARTICIPATING PREFERRED STOCK, PAR VALUE $.001 PER SHARE,
           AND RIGHTS TO PURCHASE SHARES SERIES-A JUNIOR PARTICIPATING
                   PREFERRED STOCK, PAR VALUE $.001 PER SHARE
                                (Title of class)

         Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934 during the past 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 [ ]



<PAGE>


Check if there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B contained in this Form 10-KSB, and no disclosure will 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-KSB
or any amendment to this Form 10-KSB. [ ]

Issuer's revenues for its most recent fiscal year were $2,083,810.

The aggregate market value of the voting stock held by non-affiliates of the
registrant as of February 28, 2005 was $37,067,000 based on the $0.36 per share
price at which the stock was sold as of February 28, 2005.

The number of shares outstanding of the registrant's Common Stock, $0.001 par
value per share, ("Common Stock") was 149,292,467 as of March 15, 2005.

Transitional Small Business Disclosure Format:   Yes [ ]   No [X]



<PAGE>


                                     PART I

ITEM 1.  BUSINESS

IMPORTANT FACTORS RELATED TO FORWARD-LOOKING STATEMENTS AND ASSOCIATED RISKS
----------------------------------------------------------------------------

This report on Form 10-KSB contains certain forward-looking statements that are
based on current expectations and involve a number of risks and uncertainties.
All of the non-historical information herein is forward-looking. The
forward-looking statements included herein and elsewhere in this filing are
based on, among other items, current assumptions that the Company will reach a
point at which it will be able to meet its operating cash and debt service
requirements with internally generated funds, that it will be able to
successfully resolve disputes and other business matters as anticipated, that
competitive conditions within the coffee and ingredient industries will not
change in a manner that materially and adversely affects the Company's current
or future operations, that the Company will retain existing key personnel, that
the Company's forecasts will reasonably anticipate market demand for its
products, and that there will be no materially adverse changes affecting the
Company's operations or business. Related or other factors that could cause
results to vary materially from current expectations are discussed below in this
Part 1, Item 1 entitled "Risk Factors" and elsewhere in this report on Form
10-KSB. Assumptions relating to forward-looking statements involve judgments
about matters that are difficult to predict accurately and are subject to many
factors that can materially affect results. Forecasting and other management
decisions are subjective in many respects and thus susceptible to
interpretations and periodic revisions based on actual experience and business
developments, the impact of which may cause the Company to alter its forecasts,
which may in turn affect the Company's results. The Company does not undertake
to update any forward-looking statements made herein, and shall do so only as
and when the Company determines to do so. In light of the factors that can
materially affect the forward-looking information included herein, the inclusion
of such information should not be regarded as a representation by the Company or
any other person that the objectives or plans of the Company will be achieved.
Readers are cautioned against giving undue weight to forward-looking statements
and are asked to consider all of the factors referred to herein, in subsequent
filings by the Company with the Securities and Exchange Commission or elsewhere.

CORPORATE HISTORY

Javo(R) Beverage Company, Inc. (the "Company" or "Javo") was originally
incorporated in Washington as North West Converters, Inc. on February 9, 1987.
In June of 1999, the Company changed its name to La Jolla Fresh Squeezed
Coffee(TM) Co., Inc. and its Board of Directors ratified the acquisition of the
assets of Stephen's Coffee, Inc. and the merger with Stephen's Coffee Holding,
Inc. On February 22, 2000, the Company acquired all the outstanding shares of
Sorisole Acquisition Corp. to become successor issuer to Sorisole pursuant to
Rule 12g-3 of the Securities Exchange Act of 1934 and subject to the reporting
requirements of the Securities & Exchange Commission. On August 21, 2002, the
Company reincorporated from Washington State to the state of Delaware and
simultaneously changed its name from La Jolla Fresh Squeezed Coffee Company,
Inc. to Javo Beverage Company, Inc.

BUSINESS DESCRIPTION

Javo Beverage Company is a manufacturer of coffee and tea concentrates,
extracts, and beverages serving the foodservice, food and beverage
manufacturing, and retail industries. For foodservice operators, Javo combines
great tasting coffees, teas and specialty beverages with the added convenience
and efficiency of dispenser-based systems. For food and beverage processors and
retailers looking for authentic coffee and tea flavor for their packaged foods
and ready-to-drink beverages, Javo supplies customized beverage formulations,
extracts and flavors.


                                       1

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PRODUCTS

Javo has significant expertise in the extraction of coffees and teas and,
moreover, in the formulation of flavored beverages based on these ingredients.
The Company has actively employed its technology across three major product
categories: dispensed coffee, specialty coffee & tea beverages and industrial
flavor systems. At a time when coffeehouse style beverages are proliferating,
these unique capabilities have equipped the Company to deliver on its business
mission of removing the operational barriers for foodservice operators desiring
to serve specialty coffee and tea beverages.

To address the needs of high volume food service operators like: hospitals,
casinos, hotels, sports parks, universities, military bases and caterers who are
challenged to serve a consistent, high quality cup of coffee in the volumes that
their businesses require, Javo offers a variety of coffee concentrates that may
be conveniently served "on-demand" from dispensing equipment (similar to
fountain juice and soda machines). Javo brand coffee concentrates arrive to the
operator in refrigerated bag-in-box packages ready for loading into coffee
concentrate dispensers that prepare hot coffee on an as-needed basis.

For food service operators and specialty coffee shops looking for ways to offer
increasingly popular specialty iced coffee and tea flavored beverages, Javo
offers a line of coffee and tea products. These products are offered in packages
fitting a range of commonly used beverage formats. To service non-dispensing
operating systems, Javo offers convenient coffee and tea-based mixes in shelf
stable packages. Operators may easily combine these products with water, milk
and ice to serve specialty beverages without the requirement of expensive
brewing equipment.

Finally, Javo enables food and beverage processors to better align their coffee
and tea flavored product portfolios to the elevated quality standards of today's
consumer. Javo supplies industrial coffee and tea extracts and, increasingly,
flavor systems, product formulation and production services for it customers'
retail and food service products, like ready to drink lattes, meal replacement
drinks, ice cream and yogurt.

DISTRIBUTION

The Company distributes its products through multiple, established food
distribution methods. Javo's dispensed on-demand coffee and coffee/tea beverages
utilize broad line foodservice distributors who supply a complete range of food,
beverage and consumables to foodservice operators. These distributors own and
manage inventories of Javo's products, receive orders and deliver products, as
needed, to clients for use in their operations. In the case of chain restaurant
operators, designated captive distribution providers operate in a similar
fashion. Javo supplies its industrial flavor systems to its food and beverage
manufacturing customers by shipping truck-load sized orders of product directly
to the food processing location.

SALES AND SERVICE ORGANIZATIONS

The Company continues to expand its sales force to more broadly communicate its
product propositions on a national basis within its primary sales channels. Javo
employs a direct sales force to make direct operator sales calls and service its
direct customer distributor base in its key markets. Javo's service organization
manages all aspects of it equipment program, including: installations, asset
tracking, emergency service and preventive maintenance. To supplement its
service capabilities, Javo frequently employs the services of contract service
partners such as BunnServe.

Javo, additionally, employs direct, dedicated sales staff to sell and service
coffeehouses, chain restaurants and beverage manufacturers wishing to utilize
the Company's coffee and tea products. In many cases, Javo receives sales
assistance from its distributors, equipment suppliers and partner brands in
initiating and completing sales efforts.


                                       2

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COMPETITION

For its on-demand coffee business, Javo has only a few significant direct
competitors in the United States. The largest is Douwe Egberts Coffee Systems, a
division of Sara Lee Corporation. Douwe Egberts began its business in Europe
where, compared to the United States, the market for dispensed coffee is more
established and greater than three times the size. The Douwe Egberts' products
are frozen at the point of manufacture, shipped via frozen distribution
facilities in the United States and dispensed from proprietary dispensers at
their clients foodservice locations. Douwe Egberts' competitive strength lies in
its size, financial resources and long history in the coffee business. In
multiple head-to-head competitive selling situations, however, Javo has
demonstrated its superiority in flavor delivery, operational ease of use and
favorable pricing.

A testament to the growing prospects for the category of dispensed coffee is
that two very large food companies, Nestle S. A. and Kraft Foods, Inc., have
recently introduced liquid coffee concentrate products in the foodservice
market. While there has not been sufficient time in the marketplace to
adequately measure their competitiveness, preliminary feedback from customers is
that Javo continues to command a lead in product quality and operating systems.
Even though these companies are likely to dedicate substantial resources toward
the launch of their new products, management believes that any progress that is
made converting customers from traditional roast and ground solutions and
expanding the market for liquid coffee concentrates is, long term, a positive
development for Javo's high quality coffee program.

The Company's coffee and tea flavored beverages and beverage mixes have a small
and fragmented group of direct competitors, the largest of which is Kerry
Foodservice (Jet Tea(R), Oregon Chai(R) and other brands). Javo's products
compete more broadly with a variety of syrups and powdered mixes that have
traditionally been used to prepare specialty coffee drinks. Management believes
that its products in this category generally offer superior coffee flavor and
greater ease in preparation than its competitors.

Javo has no known large, direct competitors for high quality liquid coffee/tea
extracts and flavor systems. The food and beverage industry has typically relied
upon heavily flavored and heat processed ingredients from industrial suppliers
that require the customer to make a frequently unacceptable flavor tradeoff in
their finished product. The Company's high quality, flavorful extracts work
extremely well in flavoring new consumer products that are attempting to take
advantage of unique, refined flavors coming out of the specialty coffee
industry.

OPERATIONS

The Company operates an approximately 40,000 square foot facility in Vista,
California in San Diego County, which houses all of the Company's operations
including its corporate office and manufacturing infrastructure. At this
facility, coffee and teas are received, roasted and ground as necessary,
extracted, and finally packaged into the appropriate format. The Company also
uses off-site distribution and storage facilities where necessary.

During 2004, the Company upgraded and expanded various aspects of its
manufacturing infrastructure including its filling and packaging lines, dry
handling and blending, and liquid storage and handling systems. This effort is
expected to continue during 2005 and is expected to continue to both
significantly improve product quality and expand the Company's manufacturing
capacity.

The Vista facility also houses the Company's laboratory where the Company
performs product design and formulation work both for its own products and for
those of its customers.

INTELLECTUAL PROPERTY

The Company is the owner of certain trademarks, principally Javo(R), which it
has registered with the United States Patent and Trademark Office. The Company
also owns its proprietary extraction processes and equipment as well as product
formulas and other trade secrets that it has developed.

EMPLOYEES

As of March 15, 2005, the Company employs 23 full-time employees. The Company
also uses outside consultants, brokers and other independent contractors from
time to time. Additional employees in sales, manufacturing and other areas are
planned during 2005 in response to the Company's anticipated continued growth.


                                       3

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GOVERNMENT REGULATION

Javo's facility, operations and products are subject to various laws and
regulations relating to health and safety and environmental issues. The
operations of our roasters are subject to various air quality and environmental
laws and our products are subject to various laws and regulations to insure food
safety. While the Company believes that its operations are compliant with these
laws, a finding of non-compliance could potentially interfere with the Company's
operations.

RISK FACTORS

THE COMPANY MAY NOT BE ABLE TO RETAIN OR HIRE KEY PERSONNEL.

To operate successfully and manage our potential future growth, the Company must
attract and retain qualified managerial, sales, and other personnel. We face
competition for and cannot assure that we will be able to attract and retain
such qualified personnel. If Javo loses its key personnel or is unable to hire
and retain additional qualified personnel in the future, its business, financial
condition and operating results could be adversely affected.

THE COMPANY HAS NOT PAID DIVIDENDS TO ITS SHAREHOLDERS IN THE PAST, AND DOES NOT
ANTICIPATE PAYING DIVIDENDS TO ITS SHAREHOLDERS IN THE FORESEEABLE FUTURE.

The Company has not declared or paid cash dividends on its Common Stock. The
Company presently intends to retain all future earnings, if any, to fund the
operation of its business, and therefore the Company does not anticipate paying
dividends on Common Stock in the foreseeable future.

THE COMPANY HAS NEAR-TERM CAPITAL NEEDS AND MAY BE UNABLE TO OBTAIN ADDITIONAL
FUNDING NECESSARY TO ENABLE IT TO CONTINUE TO EXECUTE ITS BUSINESS PLAN.

Presently, the Company has a relatively fixed amount of liquid assets with which
to pay its expenses. Management's current business plans rely on growth in
future revenue to supplement its liquid assets. There can be no assurance that
additional capital, if necessary, will be available to the Company, or if
available, on favorable terms. If adequate funds are required and not available,
the Company may be required to curtail operations or to obtain funds on
unfavorable terms.

THE COMPANY HAS A LIMITED OPERATING HISTORY.

The Company has a limited operating history upon which an evaluation of its
prospects can be made. The Company's prospects must be considered speculative
considering the risks, expenses, and difficulties frequently encountered in the
establishment of a new business, specifically, the risk inherent in the
development of specialty coffee products such as liquid coffee concentrates.
Over the course of 2002, the Company began its transition from a largely
research and development based operation into a manufacturing company and
continues to expand and improve its manufacturing infrastructure. There can be
no assurance that unanticipated problems will not occur that would result in
material delays in future product commercialization or that our efforts will
result in successful product and service commercialization. There can be no
assurance that the Company will be able to achieve profitable operations.

THE COMPANY DEPENDS ON ACCESS TO COMMODITY GOODS AND SERVICES AT COMPETITIVE
PRICES.

As the Company grows, it must be able to obtain at competitive prices
substantial amounts of certain green coffee beans and manage roasting and
grinding costs. The Company's coffee bean and roasting and grinding costs make
up a large component of its overall cost of goods sold. Commodity agricultural
goods such as coffee can and do experience significant fluctuations in
availability and prices which could in turn cause significant interruptions in
the manufacturing output and sales of the Company. Typically these additional
costs are passed through to customers as price increases.


                                       4

<PAGE>

THE COMPANY IS IN A VERY COMPETITIVE INDUSTRY.

Competition to provide coffee products is intense and Javo expects the
competition to increase. The Company competes directly with other companies that
have developed and are in the process of developing products that will be
competitive with the products developed and offered by Javo. There can be no
assurance that other products that are functionally equivalent or similar to
Javo products have not been developed or are not in development. We expect that
there are companies or businesses that may have developed or are developing such
products. There are other companies and businesses that have the expertise to do
so and significant success in the marketplace could encourage them to develop
and market products directly competitive with those developed and marketed by
Javo. As a result of the size and breadth of certain of Javo's competitors, such
competitors have been and will be able to establish managed accounts by which
they seek to gain a disproportionate share of users for their products. Such
managed accounts can present significant competitive barriers to Javo.

THE COMPANY RELIES ON A RELATIVELY NEW AND PROPRIETARY EXTRACTION PROCESS.

Over roughly the past decade, the Company has developed what management believes
is a new and novel method of extracting roasted, ground coffee into a liquid
concentrate. The Company also believes that it derives a competitive advantage
versus other liquid concentrate manufacturers from the quality of concentrate
that this process produces. The Company currently relies on trade secret
protection to prevent others from using this process. Trade secret protection is
only as effective as the Company's ability to keep the essential and material
aspects of its process secret using contractual and physical measures. There is
no guarantee that the Company's efforts in this regard can or will prevent a
competitor from obtaining the Company's secrets or from independently developing
the same or similar process.

TRADING VOLUME IN THE COMPANY'S SECURITIES IS LIMITED AND SPORADIC.

The Company's Common Stock is traded on the Over the Counter Bulletin Board
under the trading symbol "JAVO." While currently there is an existing limited
and sporadic public trading market for the Company's securities, the price paid
for the Company's Common Stock on the Over the Counter market and the amount of
stock traded are volatile. There can be no assurance that these markets will
improve in the future.


                                       5

<PAGE>

FORWARD LOOKING STATEMENTS

Some statements and information contained in this Annual Report are not
historical facts, but are forward-looking statements. They can be identified by
the use of forward-looking words such as "believes," "expects," "plans," "may,"
"will," "would," "could," "should," or "anticipates," or other comparable words,
or by discussions of strategy, plans or goals that involve risks and
uncertainties that could cause actual results to differ materially from those
currently anticipated. We warn you that these forward-looking statements are
only predictions, subject to risks and uncertainties. Actual events or results
can differ materially from those expressed or implied as a result of a variety
of factors, including those set forth above under "Risk Factors."

ITEM 2.  PROPERTY

Javo's facilities, including its principal executive offices are located in
Vista, California in San Diego County. The Company entered into a seven-year
lease of an approximately 40,000 square foot building on June 30, 2002. The
Vista facility houses Javo's entire operation as well as those of its principal
roaster.

ITEM 3.  LEGAL PROCEEDINGS

At the present time the Company has no outstanding legal proceedings.

From time to time, the Company is involved in various minor litigation matters
arising out of the normal conduct of its business, including litigation relating
to commercial transactions, contracts and other matters. In the opinion of
management, the final outcome of such routine litigation will not have a
material adverse effect on our financial position, results of operations or cash
flows.

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

The Company did not submit any matters to a vote of stockholders
final quarter of fiscal year 2004.

                                     PART II

ITEM 5.  MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

MARKET INFORMATION

The Company's Common Stock is traded over-the-counter and quoted on the OTC
Electronic Bulletin Board under the symbol "JAVO." The reported highest and
lowest prices for the Common Stock for each quarter as reported by the NASDAQ
OTC Bulletin Board are shown below for fiscal years 2003 and 2004 and February
28 of the first quarter of 2005. These quotations represent prices between
dealers and do not include retail markup, markdown or commission nor do they
represent actual transactions.

         2003                                           HIGH        LOW
         First Quarter                                $0.2800     $0.1600
         Second Quarter                               $0.3600     $0.1500
         Third Quarter                                $0.3200     $0.1800
         Fourth Quarter                               $0.1900     $0.1500

         2004
         First Quarter                                $0.5300     $0.1600
         Second Quarter                               $0.4500     $0.2600
         Third Quarter                                $0.4300     $0.2100
         Fourth Quarter                               $0.4300     $0.2700

         2005
         First Quarter thru February 28               $0.4400     $0.3500


                                       6

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SHAREHOLDERS

As of December 31, 2004, the Company had approximately 540 holders of record of
its Common Stock and 149,367,467 shares of Common Stock outstanding.

DIVIDENDS

The Company has not declared a dividend during the past two fiscal years or
since the end of the last fiscal year.

SALES AND ISSUANCES OF UNREGISTERED SECURITIES

From January through December 2003 pursuant to a $6,000,000 Debt Offering
Private Placement Memorandum, the Company issued a total of 36,000,000 shares of
Common Stock at an average value of $0.13 per share. The
36,000,000 shares comprising the equity portion of the offering had been
contributed to the Company's stock treasury by members of executive management
of the Company. In connection with the stock issuance for this debt offering,
the Company capitalized a non-cash discount against the debt of $2,880,000 and
recorded a non-cash expense for stock issuance of $1,800,000. The Company relied
on exemption from registration pursuant to Rule 506 of Regulation D of the
Securities Act of 1933.

From January through December 2004 pursuant to a $2,700,000 Debt Offering
Private Placement Memorandum, the Company issued a total of
6,750,000 shares of Common Stock at an average value of $0.25 per
share. In connection with the stock issuance for this debt offering, the Company
had received $2,250,000 by the end of 2004. The Company capitalized a non-cash
discount against the debt of $1,080,000 and recorded a non-cash expense for
stock issuance of $664,500 in 2004. The Company's management has agreed to
contribute certain shares of common stock to the Company's stock treasury to
facilitate this debt offering. The Company is relying on exemption from
registration pursuant to Rule 506 of Regulation D of the Securities Act of 1933.

2004 EXECUTIVE ISSUANCE

None

STOCK ISSUANCES FOR DISPUTE SETTLEMENTS

None in 2003 or 2004.

STOCK ISSUANCES FOR THIRD PARTY SERVICES

In March 2003, the Company issued 100,000 shares of common stock at $0.13 per
share to a consulting firm for services. The Company recorded a non-cash expense
for the issuances of $13,000. The issuance was exempt from registration pursuant
to Section 4(2) of the Securities Act of 1933.

In April 2003, the Company issued 500,000 shares of common stock at $0.13 per
share to an independent consultant for services. The Company recorded a non-cash
expense for the issuances of $65,000. The issuance was exempt from registration
pursuant to Section 4(2) of the Securities Act of 1933.

In September 2003, the Company issued 500,000 shares of common stock at $0.14
per share to a consulting firm and an individual for services. The Company
recorded a non-cash expense for the issuances of $70,000. The issuance was
exempt from registration pursuant to Section 4(2) of the Securities Act of 1933.

In January 2004, the Company issued 1,200,000 shares at $0.14 per share, or
150,000 shares to each outside member of the Board of Directors for services.
The Company is amortizing a non-cash expense of $168,000 over the two year term
of the directors. The 2004 expense recognized was $90,563. The issuance was
exempt from registration pursuant to Section 4(2) of the Securities Act of 1933.


                                       7

<PAGE>

STOCK ISSUANCES TO EMPLOYEES FOR SERVICES

In January 2003, the Company issued 275,000 shares of common stock at $0.16 per
share to two employees pursuant to an employment agreement. The Company recorded
a non-cash expense for the issuances of $44,000. The issuance was exempt from
registration pursuant to Section 4(2) of the Securities Act of 1933.

In February 2003, the Company issued 121,000 shares of common stock at $0.13 per
share to two employees pursuant to an employment agreement. The Company recorded
a non-cash expense for the issuances of $15,730. The issuance was exempt from
registration pursuant to Section 4(2) of the Securities Act of 1933.

In April 2003, the Company issued 4,000 shares of common stock at $0.13 per
share to an employee pursuant to an employment agreement. The Company recorded a
non-cash expense for the issuances of $520. The issuance was exempt from
registration pursuant to Section 4(2) of the Securities Act of 1933.

In May 2003, the Company issued 50,000 shares of common stock at $0.13 per share
to two employees pursuant to an employment agreement. The Company recorded a
non-cash expense for the issuances of $6,500. The issuance was exempt from
registration pursuant to Section 4(2) of the Securities Act of 1933.

In May 2003, the Company cancelled 85,000 shares of common stock previously
issued to four employees pursuant to their employment agreements. The issuance
was exempt from registration pursuant to Section 4(2) of the Securities Act of
1933.

In November 2003, the Company issued 215,000 shares of common stock at $0.12 per
share to three employees pursuant to an employment agreement. The Company
recorded a non-cash expense for the issuances of $25,800. The issuance was
exempt from registration pursuant to Section 4(2) of the Securities Act of 1933.

In November 2003, the Company cancelled 165,000 shares of common stock
previously issued to two employees pursuant to their employment agreements.

In December 2003, the Company cancelled 40,000 shares of common stock previously
issued to one employee pursuant to their employment agreement.

STOCK ISSUANCES TO EXECUTIVES FOR CONTRIBUTION OF EXPENSES AND CASH

None in 2003 or 2004.

WARRANTS ISSUED AND EXERCISED

In January 2003, the Company issued 250,000 shares for $50,000 in connection
with the exercise of warrants held at $0.085 per share. The Company is relying
on exemption from registration pursuant to Section 4(2) of the Securities Act of
1933.

In 2003, the Company issued warrants for the purchase of 62,355 shares of common
stock at $0.085 earned pursuant to a consulting agreement. The Company recorded
a non-cash expense of $10,959 for the issuance of the warrants.

In 2004, the Company issued warrants for the purchase of 151,144 shares of
common stock at $0.085 earned pursuant to a consulting agreement. The Company
recorded a non-cash expense of $26,333 for the issuance of the warrants.

In 2004, the Company issued 371,033 shares for $17,378 in connection with the
exercise of warrants at strike prices ranging from $0.085 to $0.1875 per share.
The Company is relying on exemption from registration pursuant to Section 4(2)
of the Securities Act of 1933.


                                       8

<PAGE>

ITEM 6.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS

The following discussion and analysis should be read in conjunction with the
Company's financial statements and related notes included in this report and,
except for historical information, may contain forward-looking statements within
the meaning of applicable federal securities law.

For years ended December 31, 2004 and 2003

REVENUES

The revenues in 2004 increased to $2,083,810 from $661,594 in 2003. The increase
of $1,422,216 or 215% in sales is primarily due to increased sales of our
dispensed coffee, specialty coffee and latte products. The Company anticipates a
significant increase in its revenues in 2005 as it rolls out its products to
foodservice chains and continues to add national and international distribution.

RESEARCH AND DEVELOPMENT EXPENSES

Research and development expenses were $433,523 in 2004 compared to $443,042 in
2003, a slight reduction of $9,519 or 2.1%. The reduction was due to use of
slightly less raw materials in the Company's product development and formulation
efforts. The Company anticipates it will continue expenditure at this level in
2005 as it formulates additional coffee and tea extracts and beverages.

SELLING AND MARKETING EXPENSES

Selling and marketing expenses for 2004 were $963,010 compared to $1,006,213 in
2003. The decrease of $43,204 or 4.2% is primarily attributed to the increase in
marketing & promotion of $87,739 offset by the reduction in expenses incurred by
in-house sales personnel of $133,584. The Company anticipates adding two or
three additional sales personnel as it expands its national sales roll out in
2005.

GENERAL AND ADMINISTRATIVE EXPENSES

General and administrative expenses for 2004 were $2,213,152 compared to
$1,826,340 in 2003. The increase of $386,812 or 21.1% is primarily due to an
increase in non-cash depreciation expense of $100,000, an increase in warehouse
& maintenance expenses of $83,000, an increase in outside audit fees for finance
& accounting of $34,000, increase in payroll taxes & benefits for the executive
department of $64,000, an increase in legal for the annual shareholders meeting
of $18,000, an increase in occupancy expense of $30,000, an increase in
allowance for doubtful accounts of $20,000, an increase in quality assurance
expenses of $7,000 and an increase in property taxes of $6,200. The Company
anticipates general and administration expenses will remain relatively constant
subject to the normal inflation increases in 2005.

OTHER INCOME/EXPENSES

Other income/expenses were $3,042,033 in 2004 compared to $3,190,029 in 2003.
The decrease in other income/expenses of $147,996 or 4.6% is primarily
attributable to a decrease in the non-cash expense for its 2004 debt offering
loan fee of $138,301, an increase in interest income of $10,425, and a decrease
in other expenses of $730. The Company anticipates that net other expenses will
decrease in 2005.

NET LOSS

The net loss for the Company for 2004 was $5,963,869 compared to $6,251,452 in
2003, a decrease of $287,583 or 4.6%. The decrease was primarily due to
increased gross profit of $473,676 and operating expenses of $334,089, offset by
the decrease in other expenses of $147,996. The Company anticipates its net loss
will decrease significantly with its anticipated increase in revenue, related
increase in gross profit and relatively stable research & development and
general and administrative expenses in 2005.


                                       9

<PAGE>

LIQUIDITY AND CAPITAL RESOURCES

The Company has experienced net losses and negative cash flow from operations
each year since inception. Through December 31, 2004, it had incurred an
accumulated deficit of $29,079,005 and had consumed cash from operations and
financing in excess of $13 million. It had financed operations since inception
primarily through capital contributions from its founder, related-party loans,
and private-placements of its Common Stock and debt offerings. The Company is
currently completing a $2,700,000 funding through a private placement of units
of debt with Common Stock in the fourth quarter 2004 and the first quarter 2005.
The Company currently anticipates that its cash in bank, the remaining proceeds
from its $2,700,000 debt offering and cash flow from increased sales and gross
profits in 2005 should provide adequate capital to fund operations, sales growth
and any required capital expenditures needs through the Company's cash flow
breakeven. The Company anticipates it will reach cash flow breakeven before the
end of 2005.

See `Risk Factors' in Item 1.



OFF-BALANCE SHEET ARRANGEMENTS

The Company has no off-balance sheet arrangements.


                                       10

<PAGE>

ITEM 7.  FINANCIAL STATEMENTS

                           JAVO BEVERAGE COMPANY, INC.
                          INDEX TO FINANCIAL STATEMENTS
                                DECEMBER 31, 2004
                                                                           PAGE
                                                                           ----
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM                    F-1

FINANCIAL STATEMENTS

     Balance Sheet                                                         F-2

     Statements of Operations                                              F-3

     Statements of Stockholder's Deficit                                   F-4

     Statements of Cash Flows                                              F-6

     Notes to Financial Statements                                         F-7


                                       11

<PAGE>

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM


To the Board of Directors and Shareholders of
Javo Beverage Company, Inc.
Vista, California


We have audited the accompanying balance sheet of Javo Beverage Company, Inc. as
of December 31, 2004 and 2003, and the related of operations, stockholders'
deficit, and cash flows for each of the two years then ended. These financial
statements are the responsibility of Javo Beverage Company, Inc.'s management.
Our responsibility is to express an opinion on these 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 the audits to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes 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 opinions.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Javo Beverage Company, Inc. as
of December 31, 2004 and 2003, 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.



Hurley & Company
Granada Hills, California
January 28, 2005




                                       F-1

<PAGE>
<TABLE>
                              JAVO BEVERAGE COMPANY, INC.
                                     BALANCE SHEET
                                   DECEMBER 31, 2004

ASSETS
------
<S>                                                                          <C>

CURRENT ASSETS:
  Cash and cash equivalents                                                  $  2,092,172
  Accounts receivable, net of allowance for doubtful accounts of $19,113          315,503
  Inventory, net of reserve for obsolescence of $88,813                           287,955
  Prepaid expenses                                                                176,549
  Employee advances                                                                14,174

                                                                             -------------
    Total current assets                                                        2,886,353

PROPERTY AND EQUIPMENT, NET                                                       960,303

OTHER ASSETS
  Deposits                                                                         32,742
  Intangibles, net of accumulated amortization of $361,781                        676,769

                                                                             -------------
    Total other assets                                                            709,511
                                                                             -------------

    Total assets                                                             $  4,556,167
                                                                             =============

LIABILITIES AND STOCKHOLDERS' DEFICIT
CURRENT LIABILITIES:
  Accounts payable and accrued expenses                                      $    717,966
  Accrued payroll and related benefits                                             26,534
  Current portion of long-term debt                                                 4,433
                                                                             -------------
    Total current liabilities                                                     748,933

  Long-term debt, net of current portion                                       13,264,363
  Unamortized discount on long-term debt                                       (4,281,929)

                                                                             -------------
    Net long-term debt                                                          8,982,434

  Accrued long-term interest payable                                            2,139,105
  Commitments and contingencies                                                        --

                                                                             -------------
    Total liabilities                                                          11,870,472
                                                                             -------------
STOCKHOLDERS' DEFICIT:
  Common stock, $0.001 par value, 150,000,000 shares authorized,
  149,367,465 shares issued and outstanding                                       149,367
  Additional paid in capital                                                   21,615,333
  Accumulated deficit                                                         (29,079,005)

                                                                             -------------
    Total stockholders' deficit                                                (7,314,305)
                                                                             -------------
    Total liabilities and stockholders' deficit                              $  4,556,167
                                                                             =============

       The accompanying notes are an integral part of these financial statements.


                                          F-2


</TABLE>

<PAGE>
<TABLE>
                                      JAVO BEVERAGE COMPANY, INC.
                                       STATEMENTS OF OPERATIONS
                            FOR THE YEARS ENDED DECEMBER 31, 2004 AND 2003


                                                                           2004               2003
                                                                     --------------     --------------
<S>                                                                  <C>                <C>
Net sales                                                            $   2,083,810      $     661,594

Cost of sales                                                            1,395,961            447,420
                                                                     --------------     --------------

Gross profit                                                               687,849            214,174

Operating expenses:
  Research and development                                                 433,523            443,042
  Selling and marketing                                                    963,010          1,006,214
  General and administrative                                             2,213,152          1,822,641
                                                                     --------------     --------------

    Total operating expenses                                             3,609,685          3,271,897
                                                                     --------------     --------------

    Loss from operations                                                (2,921,836)        (3,057,723)
                                                                     --------------     --------------

Other income (expenses):
  Interest Income                                                           15,071              4,646
  Interest Expense                                                      (2,394,439)        (1,397,241)
  Loan Cost                                                               (664,500)        (1,800,000)
  Other income                                                                 134                 --

  Gain /(loss) on disposal of assets                                         1,701             (1,134)
                                                                     --------------     --------------

    Total other expense                                                 (3,042,033)        (3,193,729)
                                                                     --------------     --------------

    Net loss                                                         $  (5,963,869)     $  (6,251,452)
                                                                     ==============     ==============

Basic and diluted loss per share                                             (0.04)             (0.05)
                                                                     ==============     ==============

Weighted average number of shares outstanding, basic and diluted       143,028,396        121,471,919
                                                                     ==============     ==============

              The accompanying notes are an integral part of these financial statements.


                                                  F-3
</TABLE>

<PAGE>
<TABLE>
                                                    JAVO BEVERAGE COMPANY, INC.
                                                STATEMENTS OF STOCKHOLDERS' DEFICIT
                                           FOR THE YEARS ENDED DECEMBER 31, 2004 AND 2003


                                                                    Additional
                                            Common Stock               Paid-in        Accumulated     Subscription
                                      Shares           Amount          Capital          Deficit        Receivable          Total
                                  -------------    -------------    -------------    -------------    -------------    -------------
<S>                                <C>             <C>              <C>              <C>              <C>              <C>
Balances at January 1, 2003        139,321,434     $    139,321     $ 15,239,622     $(16,863,684)    $   (510,000)    $ (1,994,741)

Shares issued at $0.13 per
share in connection with loan
payable                             36,000,000           36,000        4,644,000          --              (315,000)       4,365,000

Shares issued to employees at
$0.16                                   55,000               55            8,745          --                 --               8,800

Shares issued for exercised
warrants at $0.20                      250,000              250           49,750          --                 --              50,000

Shares issued for services at
$0.13                                  700,000              700           90,300          --                 --              91,000

Shares issued to employees at
$0.13                                   35,000               35            4,515          --                 --               4,550

Shares contributed by officers     (36,000,000)         (36,000)        (474,000)         --               510,000             --

Shares Issued for services at
$0.14                                  500,000              500           69,500          --                  --             70,000

Shares issued to employees at
$0.12                                  215,000              215           25,585          --                  --             25,800

Shares issued to employees
canceled at $0.04                      (30,000)             (30)          (1,170)         --                  --             (1,200)

62,535 warrants issued at a
strike price of $0.085 per
agreement with consultant                --                 --            10,959          --                  --             10,959

Net loss                                 --                 --              --         (6,251,452)            --         (6,251,452)

                                  -------------    -------------    -------------    -------------    -------------    -------------
Balance at December 31, 2003       141,046,434     $    141,046     $ 19,667,806     $(23,115,136)    $   (315,000)    $ (3,621,284)
                                  =============    =============    =============    =============    =============    =============

                             The accompanying notes are an integral part of these financial statements.
(CONTINUED)


                                                                F-4
</TABLE>

<PAGE>
<TABLE>
                                                    JAVO BEVERAGE COMPANY, INC.
                                                STATEMENTS OF STOCKHOLDERS' DEFICIT
                                           FOR THE YEARS ENDED DECEMBER 31, 2004 AND 2003


                                                                    Additional
                                            Common Stock               Paid-in        Accumulated     Subscription
                                      Shares           Amount          Capital          Deficit        Receivable          Total
                                  -------------    -------------    -------------    -------------    -------------    -------------
<S>                                <C>             <C>              <C>              <C>              <C>              <C>
Balances at January 1, 2004        141,046,434     $    141,046     $ 19,667,806     $(23,115,136)    $   (315,000)    $ (3,621,284)

Shares issued for exercised
warrants                               371,033              371           16,987            --                --             17,358

Subscription receivables
  collected                               --               --               --              --             315,000          315,000

Warrants issued at a strike price
  of $0.085 per agreement with
  consultant                              --               --             25,990            --                --             25,990

Shares issued Board of Directors
  at $0.14                           1,200,000            1,200          166,800            --                --            168,000

Shares issued at $0.24 per share
  in connection with loan payable      450,000              450          107,550            --                --            108,000

Shares issued at $0.26 per share
  in connection with loan payable    6,150,000            6,150        1,592,850            --                --          1,599,000

Shares issued at $0.25 per share
  in connection with loan payable      150,000              150           37,350            --                --             37,500

Net loss                                 --                --               --         (5,963,869)            --         (5,963,869)
                                  -------------    -------------    -------------    -------------    -------------    -------------
Balance at December 31, 2004       149,367,467     $    149,367     $ 21,615,333     $(29,079,005)    $       --       $ (7,314,305)
                                  =============    =============    =============    =============    =============    =============

                             The accompanying notes are an integral part of these financial statements.


                                                                F-5
</TABLE>

<PAGE>
<TABLE>
                                         JAVO BEVERAGE COMPANY, INC.
                                           STATEMENTS OF CASH FLOWS
                                FOR THE YEARS ENDED DECEMBER 31, 2004 AND 2003


                                                                                    2004             2003
                                                                                ------------     ------------
<S>                                                                             <C>               <C>
Cash flows from operating activities:
Net loss                                                                        $(5,963,869)      (6,251,452)

Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization                                                     1,498,659          906,780
Issuance of warrants for services                                                   (25,990)         171,959
Issuance of common stock for compensation and debt                                  883,900           37,950
Loss (Gain) on disposal of assets                                                    (1,701)           1,134
Changes in operating assets and liabilities:
Accounts receivable                                                                (236,833)         (16,492)
Inventory                                                                          (162,157)          24,202
Prepaid expenses                                                                   (176,549)              --
Deposits                                                                            244,806         (224,711)
Employee advances                                                                     1,900            2,611
Accounts payable and accrued expenses                                               340,157           16,599
Accrued payroll and related benefits                                                 18,945          (24,342)
Accrued interest payable                                                          1,131,076          639,973
Other current liabilities                                                                --          (24,809)
                                                                                ------------     ------------

Net cash used in operating activities                                            (2,447,656)      (4,740,598)
                                                                                ------------     ------------

Cash flows from investing activities:
Proceeds from disposal of equipment                                                   9,419              836
Purchases of property and equipment                                                (510,542)        (241,026)
                                                                                ------------     ------------

Net cash used in investing activities                                              (501,123)        (240,190)
                                                                                ------------     ------------

Cash flows from financing activities:
Proceeds from long-term debt                                                      2,250,000        5,408,493
Loan cost                                                                          (225,000)        (313,550)
Payments on long-term debt                                                           (4,698)              --
Payment received on stock subscription                                              315,000               --
Proceeds from exercised warrants                                                     17,941               --
Issuance of stock for cash                                                               --        1,849,550
                                                                                ------------     ------------

Net cash provided by financing activities                                         2,353,243        6,944,493
                                                                                ------------     ------------

Net change in cash and cash equivalents                                            (595,536)       1,963,705

Cash and cash equivalents at beginning of period                                  2,687,708          724,003

                                                                                ------------     ------------
Cash and cash equivalents at end of period                                      $ 2,092,172      $ 2,687,708
                                                                                ============     ============

Non cash financing activities:
Stock subscription note cancelled                                                        --          510,000
Stock issued for subscription                                                            --         (315,000)

Supplemental cash flow information:
Cash paid for interest                                                                   --               --
Cash paid for income taxes                                                            1,600            1,600

                  The accompanying notes are an integral part of these financial statements.


                                                     F-6
</TABLE>

<PAGE>

                           JAVO BEVERAGE COMPANY, INC.
                          NOTES TO FINANCIAL STATEMENTS
                                DECEMBER 31, 2004


NOTE 1.  NATURE OF OPERATIONS

Organization
------------

Javo Beverage Company, Inc., formerly La Jolla Fresh Squeezed Coffee Company,
Inc., (the "Company") was incorporated in the state of Delaware on June 21,
2002. In 2002, the Company merged with La Jolla Fresh Squeezed Coffee Company,
Inc. ("LJCC"). LJCC was incorporated in the state of Washington on February 9,
1987. In 1998, LJCC acquired the net assets of Stephen's Coffee Company, Inc.
("SCC"). SCC was incorporated in the state of California on August 13, 1993. SCC
was the operating company responsible for the development of manufacturing
methods and products for distribution. Effective November 1, 1998, SCC was
acquired for 1,142,500 shares of common stock representing approximately 9% of
the outstanding voting stock of LJCC in exchange for the common stock of SCC.
The LJCC's sales during 2001 were primarily of a promotional nature as it tried
to find its niche in the marketplace. From August 13, 1993 to December 31, 2001,
the Company was a development stage enterprise. After the merger of LJCC into
the Company, the Company exited the development stage as it began to generate
commercial revenues.

Nature of Operations
--------------------

The Company is a manufacturer of coffee and tea concentrates, extracts and
beverages serving the foodservice, food and beverage manufacturing, and retail
industries. For foodservice operators, Javo combines great tasting coffees, teas
and specialty beverages with the added convenience and efficiency of
dispenser-based systems. For food and beverage processors and retailers looking
for authentic coffee and tea flavor for their packaged foods and ready-to-drink
beverages, Javo supplies customized beverage formulations, extracts and flavors.

NOTE 2.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Use of Estimates
----------------

The preparation of financial statements in conformity with accounting principles
generally accepted in the United States requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements, and the reported amounts of revenues and expenses during the
reporting periods. Actual results could materially differ from those estimates.

Concentration of Credit Risk
----------------------------

The Company purchases certain products from five suppliers, which accounted for
approximately 65% and 85% of total purchases in 2004 and 2003, respectively.
Management does not believe that the loss of these suppliers could have a severe
impact on the result of operations.

Revenue Recognition
-------------------

Revenue from coffee products is recognized upon shipment of product. Estimated
returns and allowances are accrued at the time of sale.

Advertising Costs
-----------------

Advertising and promotional costs are expensed as incurred. Advertising and
promotional expenses were $72,240 and $38,193 for the years ended December 31,
2004 and 2003, respectively.

Research and Development Expenses
---------------------------------

Research and development costs are expensed as incurred.


                                       F-7


<PAGE>


                           JAVO BEVERAGE COMPANY, INC.
                          NOTES TO FINANCIAL STATEMENTS
                                DECEMBER 31, 2004


NOTE 2.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Income Taxes
------------

The Company accounts for income taxes under the provisions of SFAS No. 109.
"Accounting for Income Taxes," whereby deferred tax assets and liabilities are
recognized for the future tax consequences attributable to temporary differences
between bases used for financial reporting and income tax purposes. Deferred tax
assets and liabilities are measured using enacted tax rates expected to apply to
taxable income in the years in which those temporary differences are expected to
be recovered or settled. A valuation allowance is provided for certain deferred
tax assets if it is more likely than not that the Company will not realize tax
assets through future operations.

Stock-Based Compensation
------------------------

The Company has elected to follow Accounting Principles Board Opinion No. 25,
"Accounting for Stock Issued to Employees" and related interpretations as
permitted by SFAS "Accounting for Stock-Based Compensation" as amended in
accounting for its employee stock options. Under APB 25, compensation expense is
measured as the excess, if any, of the quoted price of the Company's stock at
the date of grant over the exercise price.

Loss per Share
--------------

Basic EPS is computed as net loss is based on weighted average shares
outstanding and diluted net loss per share is based on weighted average common
shares and dilutive equivalents outstanding, if any. As a result of net losses,
all common share equivalents would have been anti-dilutive and have therefore
been excluded from the diluted net loss per share calculation.

Cash and Cash Equivalents
-------------------------

Cash and cash equivalents include cash on hand and on deposit and highly liquid
debt instruments with original maturities of three months or less. Substantially
all funds are on deposit with one financial institution.

Inventory
---------

Inventories consist principally of raw materials and finished goods and are
stated at the lower of cost (first-in, first-out method) or market.

Property and Equipment
----------------------

Property and equipment are depreciated over their estimated useful lives using
the straight-line method over three to seven years. Additions are capitalized
when acquired. The cost of maintenance and repairs is charged to expense as
incurred.

Fourth quarter adjustments
--------------------------

The Company made adjustments during the fourth quarter of 2004 to better reflect
the matching of costs and benefits primarily relating to the issuance of stock
and debt. The net effect of these adjustments was to reduce the Company's net
loss by approximately $76,000.

Reclassifications
-----------------

Certain prior year amounts in the accompanying financial statements have been
reclassified to conform to the current year's presentation.


                                       F-8


<PAGE>


                           JAVO BEVERAGE COMPANY, INC.
                          NOTES TO FINANCIAL STATEMENTS
                                DECEMBER 31, 2004


NOTE 3.  BASIS OF PRESENTATION

During the two years ended December 31, 2004 and 2003, the Company had recurring
losses while developing its niche in the coffee, foodservice, flavored beverage,
and tea markets. The Company still has not developed sufficient revenues to
cover its operating expenses. The Company has a working capital of approximately
$2,886,000, but a stockholder deficit of over $7,314,000, and losses from
operations during the last two years have been significant. As a result, the
Company Management is confident that the Company's working capital and financing
arrangements are sufficient to cover its capital requirements through 2005.

Management's plans to become profitable involve expanding its sales force to
further introduce its products across the country.

It is not possible to predict the success of management's subsequent efforts to
achieve profitability. If management is unable to achieve its goals, the Company
may find it necessary to undertake other actions as may be appropriate if it is
to continue operations and meet its commitments. The accompanying financial
statements do not include any adjustments relating to the recoverability and
classification of the recorded asset amounts or the amounts and classification
of liabilities that might be necessary should the Company be unable to meet its'
sales targets.

NOTE 4.  MAJOR CUSTOMERS

During the year ended December 31, 2004, the Company had sales to three major
customers, which accounted for 21%, 17% and 15% of sales, respectively. During
2003, it had sales to three major customers, which accounted for 31%, 19% and
14% of sales, respectively.

NOTE 5.  INVENTORY

Inventory at December 31, 2004 consists of the following:

                   Raw Materials                                  $    230,932
                   Finished Goods                                      145,837
                                                                  -------------
                                                                       367,769
                   Reserve for Obsolescence                            (88,813)
                                                                  -------------
                                                                  $    287,956
                                                                  =============


NOTE 6.  PROPERTY AND EQUIPMENT

Property and equipment consists of the following at December 31, 2004:

                   Production Equipment                           $  1,337,369
                   Office Equipment                                     55,258
                   Leasehold Improvements                               81,431
                                                                  -------------

                   Total Cost                                     $  1,474,058
                   Less Accumulated Depreciation                      (513,755)
                                                                  -------------

                                                                  $    960,303
                                                                  =============

During the years ended December 31, 2004 and 2003, depreciation expense totaled
$233,488 and $155,377, respectively.


                                       F-9


<PAGE>

                           JAVO BEVERAGE COMPANY, INC.
                          NOTES TO FINANCIAL STATEMENTS
                                DECEMBER 31, 2004


NOTE 7.  INTANGIBLE ASSETS

The Company recorded loan costs of $225,000 and $313,550 during the years ended
December 31, 2004 and 2003, respectively, which represented a 10% loan cost paid
in connection with its private placement debt offerings (see Note 8 below).
These loan costs are being amortized over the five-year life of the loans.
Amortization expense as of December 31, 2004 and 2003 was $170,371 and $119,466,
respectively.

NOTE 8.  LONG-TERM DEBT

On February 8, 2002, the Company issued $1,000,000 in notes payable to private
investors as a bridge loan until funding for its $5,000,000 private placement
debt offering was completed on April 11, 2002. In connection with the bridge
loan, the Company paid 6% interest (totaling $10,192) and issued 15,000,000
shares of restricted common stock, valued at $1,125,000, to the note holders.
These note holders were also given a 5% discount on their notes payable,
totaling $50,000, which the Company recorded as interest expense.

On April 11, 2002, the Company issued $5,000,000 in promissory notes bearing 10%
interest per year, which mature on April 11, 2007. The proceeds of this funding
paid off the Bridge Loan discussed above and provided the Company with working
capital to begin operations.

In connection with these promissory notes, the Company issued 30,000,000 shares
of its restricted common stock and paid a 10% loan cost totaling $500,000 (see
Note 7 above). As per APBO No. 14, the Company determined that the note holders
had bought the 30,000,000 shares of restricted common stock for $2,400,000 and
had paid $2,600,000 for the debt, based on the relative fair values of the
respective equity and debt instruments issued. Accordingly, a $2,400,000 debt
discount was recognized on the $5,000,000 principal value of the promissory
notes, which is being amortized over the five-year life of the debt. This makes
the effective interest rate on the notes approximately 25.8% over the life of
the debt. At December 31, 2002, $353,333 in interest expense was amortized and
$368,056 in interest expense (at the 10% coupon rate) was accrued on the notes.

On February 28, 2003, the Company opened a $6,000,000 Private Placement Debt
offering. During the year, the Company issued $6,000,000 in promissory notes
bearing 10% interest per year, which mature 2008. The proceeds of this funding
provided the Company with working capital to continue operations.

In connection with these promissory notes, the Company issued 36,000,000 shares
of its restricted common stock and paid loan costs totaling $313,550 (see Note 7
above). As per APBO No. 14, the Company determined that the note holders had
bought the 36,000,000 shares of restricted common stock for $2,880,000 and had
paid $3,120,000 for the debt, based on the relative fair values of the
respective equity and debt instruments issued. Accordingly, a $2,880,000 debt
discount was recognized on the $6,000,000 principal value of the promissory
notes, which is being amortized over the five-year life of the debt. This makes
the effective interest rate on the notes approximately 20% over the life of the
debt.

In October, 2004, the Company opened a $2,700,000 Private Placement Debt
offering. During the year, the Company issued $2,250,000 in promissory notes
bearing 10% interest per year, which mature 2009. The proceeds of this funding
provided the Company with working capital to continue operations.


                                      F-10


<PAGE>

                           JAVO BEVERAGE COMPANY, INC.
                          NOTES TO FINANCIAL STATEMENTS
                                DECEMBER 31, 2004


NOTE 8.  LONG-TERM DEBT (CONTINUED)

In connection with these promissory notes, the Company issued 6,750,000 shares
of its restricted common stock and incurred loan costs totaling $225,000
(see Note 7 above). As per APBO No. 14, the Company determined that the
note holders had bought the 6,750,000 shares of restricted common stock for
$1,080,000 and had paid $1,170,000 for the debt, based on the relative fair
values of the respective equity and debt instruments issued.

Accordingly, a $1,080,000 debt discount was recognized on the $2,250,000
principal value of the promissory notes, which is being amortized over the
five-year life of the debt. This makes the effective interest rate on the notes
approximately 20% over the life of the debt.

<TABLE>
Long-term debt at December 31, 2004 consisted of the following:

<S>                                                                                         <C>
         Notes payable, unsecured, payable at maturity including interest at 10% per        $  5,000,000
         annum. Matures 2007
         Notes payable, unsecured, payable at maturity including interest at 10% per           6,000,000
         annum. Matures 2008
         Notes payable, unsecured, payable at maturity including interest at 10% per           2,250,000
         annum. Matures 2009
         Note payable, secured by automobile, payable in monthly installments of $411,            18,794
         including interest at 1.9% per annum.  Matures 2008
                                                                                            -------------
                                                                                              13,268,794
                Less current portion                                                               4,432
                                                                                            -------------
                                                                                            $ 13,264,362
                                                                                            =============
</TABLE>

Long-term debt matures as follows:

                                 Year ended December 31,
                                                    2005      $       4,432
                                                    2006              4,697
                                                    2007          5,004,787
                                                    2008          6,004,878
                                                    2009          2,250,000
                                              Thereafter                 --
                                                              --------------
                                                              $  13,268,794
                                                              ==============

NOTE 9.  COMMITMENTS AND CONTINGENCIES

Leases
------

The Company entered into a non-cancelable operating lease for its office space
in 2002. The lease expires in 2009. Total rent expense for all operating leases
for the years ended December 31, 2004 and 2003 amounted to $308,655 and
$278,679, respectively.

The Company's future annual minimum lease payments as of December 31, 2004 are
as follows:

                                         Year Ending
                                                2005  $   259,632
                                                2006      267,420
                                                2007      275,445
                                                2008      283,704
                                                2009      267,320
                                                      ------------
                                                      $ 1,353,521
                                                      ============


                                      F-11


<PAGE>


                           JAVO BEVERAGE COMPANY, INC.
                          NOTES TO FINANCIAL STATEMENTS
                                DECEMBER 31, 2004


NOTE 9.  COMMITMENTS AND CONTINGENCIES (CONTINUED)

Consulting Agreements
---------------------

In 2003, the Company entered into agreement with consultant to implement a
national sales effort for the Company's products. The agreement calls for the
issuance of 10 warrants of the Company's restricted common stock for each gallon
sold by the consultant. As of December 31, 2004, 213,679 warrants were earned by
the consultant, in which 115,969 warrants were exercised in 2004. The Company
recognized an expense of $79,605 and $10,959 in 2004 and 2003, respectively.

Litigation
----------

As of December 31, 2004, there were no claims filed against the Company.

In February 2004, the Company settled a suit for $8,500 (the amount of the final
payment plus fees) in connection with the Company's 2002 engaged consultant to
design and implement certain production room improvements to the Company
facility in Vista.

The Company, during its normal course of business, may be subject from time to
time to disputes and to legal proceedings against it. Both counsel and
management do not expect that the ultimate outcome of any current claims will
have a material adverse effect on the Company's financial statements.

NOTE 10. STOCK TRANSACTIONS

In February, 2003, the Company opened a private placement debt offering and
issued 36,000,000 shares of common stock throughout the year at an average rate
of $0.13 per share in connection with the promissory notes held by the private
investors (Note 8 above).

In March and April, 2003, certain officers of the Company contributed 36,000,000
shares of Company common stock to the Company in order to complete the private
placement offering. A promissory note of $510,000 was cancelled in connection
with the return of shares from a certain officer.

In January, 2003, warrants for 250,000 shares of common stock were exercised at
$0.20 per share for proceeds of $50,000.

In 2003, the Company issued 305,000 shares of restricted common stock at prices
ranging from $0.12 to $0.16 per share and cancelled 30,000 shares of restricted
common stock at $0.04 per share for employees relating to employment with the
Company. $37,950 was recorded as net expense relating to these issuances and
cancellations.

During 2003, the Company issued 1,200,000 shares of restricted common stock
valued at $161,000 at prices ranging from $0.13 to $0.14 per share for services
rendered during 2003.

In 2003, a consultant earned 62,535 warrants exercisable at $0.85 per warrant
(see note 9 above). Using the Black Scholes method of calculating fair value and
using the terms of 1- issue date of end of each quarter, 2-strike price of
$0.085, 3- expiration date of three years from issuance and 4-30 day average
price on calculation date (end of quarter), the warrants were recorded at a
value of $10,959.

In 2004, warrants for 371,033 shares of common stock were exercised at prices
ranging from $0.085 to $0.1875 per share for proceeds of $17,358.

In January 2004, the Company issued 1,200,000 shares of restricted common stock
valued at $168,000 at $0.14 per share to eight members of the Board of
Directors, who are not employees, for services over their two year terms.

In 2004, the Company issued 6,750,000 shares of restricted common stock at
prices ranging from $0.24 to $0.26 per share in connection with promissory notes
held by private investors (See Note 7 above).


                                      F-12


<PAGE>

                           JAVO BEVERAGE COMPANY, INC.
                          NOTES TO FINANCIAL STATEMENTS
                                DECEMBER 31, 2004


NOTE 10. STOCK TRANSACTIONS (CONTINUED)

In 2004, there were no options granted to any employees or officers.

Incentive Stock Plans

On February 18, 2000, the board of directors and stockholders adopted the 2000
Incentive Stock Plan (the "2000 Plan"), which authorizes the granting of options
to key employees, directors, and/or consultants to purchase 10,000,000 shares of
unissued common stock. On February 18, 2000, the board of directors approved an
aggregate of 4,550,000 shares of the Company's common stock to three officers
for $0.1875 per share. None of the approved shares were purchased.

No options, or shares related to previously issued options, were issued or
exercised during 2004.

NOTE 11. PROVISION FOR INCOME TAXES

No provision for income taxes was recorded in 2004 or 2003 sine the Company
generated both book and tax losses. The Company's deferred tax assets consist of
the following:

<TABLE>
        PROVISION FOR INCOMES TAXES                                    2004            2003
<S>                                                               <C>              <C>
        Net operating loss carry forward                          $ 29,100,000    $ 23,100,000
                                                                  =============   =============
        Calculated deferred tax benefit                           $ 11,000,000    $  8,700,000
        Valuation allowance                                       $(11,000,000)   $ (8,700,000)
                                                                  -------------   -------------
        Deferred tax asset                                        $         --    $         --
                                                                  =============   =============
        Provision for income tax benefits were as follows:
        Tax benefit, calculated at statutory rate                 $ (4,100,000)   $ (3,300,000)
        Increase in valuation allowance                           $  4,100,000    $  3,300,000
                                                                  -------------   -------------
                                                                  $         --    $        --
                                                                  =============   =============
</TABLE>

At December 31, 2004, the Company had net operating carryforwards for federal
and state purposes that expire through 2023. The extent to which these loss
carryforwards can be used to offset future taxable income may be limited.


                                      F-13


<PAGE>


ITEM 8.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
         FINANCIAL STATEMENTS

Not applicable.

ITEM 8A. CONTROLS AND PROCEDURES

Within the 90 days prior to the date of this report, the Company carried out an
evaluation, under the supervision and with the participation of the Company's
management, including the Company's Chief Executive Officer and Chief Financial
Officer, of the effectiveness of the design and operation of the Company's
disclosure controls and procedures (as defined in Rule 13a-14(c) of the
Securities Exchange Act of 1934). Based upon that evaluation, the Chief
Executive Officer and Chief Financial Officer concluded that the Company's
disclosure controls and procedures are effective in timely alerting them to
material information required to be included in the Company's periodic filings
with the Commission. There have been no significant changes in the Company's
internal controls or in other factors that could significantly affect these
internal controls subsequent to the date of their most recent evaluation. Since
there were no significant deficiencies or material weaknesses identified in the
Company's internal controls, the Company did not take any corrective actions.

                                    PART III

ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE
        WITH SECTION 16(a) OF THE EXCHANGE ACT

CODY C. ASHWELL, 34
-------------------

Cody C. Ashwell is the Chairman and Chief Executive Officer of Javo Beverage
Company. Mr. Ashwell has served as the Company's CEO and Chairman since
September 4, 2001, acted as a consultant to the Company prior to that, and has
held a major stake in the Company since 1999. Prior to joining Javo, Mr. Ashwell
was managing partner of Ashwell, Marshall & Associates, a financial services and
consulting firm specializing in financial and management solutions. Prior to
this, he was the founder and principal of a successful financial and insurance
services firm, which was later, sold to the Allstate Insurance Corporation.

GARY LILLIAN, 48
----------------

Gary A. Lillian is Javo Beverage Company's President, responsible for the
company's commercial strategy and the development of key industry alliances.
Prior to becoming Javo's President in January of 2002, Mr. Lillian held
executive level sales and marketing positions at consumer products companies
including PepsiCo, Ford Motor Company, Pennzoil-Quaker State and The Clorox
Company. In those positions, Lillian directed multimillion-dollar marketing and
turn-around efforts with highly profitable results. He also founded start-up
companies, including a beverage company and a packaged food company, which was
later sold to Nestle. Lillian earned a bachelor's and a master's degree in
business administration from Northwestern University.

STEPHEN F. COREY, 49
--------------------

Stephen F. Corey is the founder of Javo Beverage Company. Mr. Corey currently
holds the position of senior vice president responsible for research and
development and supervision of Javo's product development programs. Mr. Corey
served as the Company's corporate secretary until March 26, 2002. Mr. Corey
performed years of scientific research on coffee varieties and coffee processing
systems, extraction processes, blend creation, equipment design, and product
stabilization to create Javo's proprietary brewing technology. His experience
has allowed him to tailor the company's products to have broad commercial
appeal. Corey studied chemistry, physics and engineering at the College of
Idaho.

RICHARD A. GARTRELL, 56
-----------------------

Richard A. Gartrell has served as Javo's chief financial officer since the fall
of 2001 and acted as a consultant to the Company for 2 years prior to that. A
certified public accountant with more than 28 years of accounting experience,
Mr. Gartrell has acted successfully in the position of chief financial officer
at several mid-cap companies; most recently, AMX Resorts, Inc. Mr. Gartrell is
qualified as an expert witness in forensic accounting and holds a Bachelor of
Science degree in accounting from Colorado State University.


                                       12

<PAGE>

WILLIAM E. MARSHALL, 34
-----------------------

William E. Marshall is Javo Beverage Company's' Executive Vice President of
Operations and General Counsel and, since March, 2002, the Company's corporate
secretary. Prior to becoming general counsel in January of 2002, Mr. Marshall
served as the Company's Chief Administrative Officer. Mr. Marshall became an
Executive Vice President on September 3, 2002. Prior to joining Javo Beverage
Company in the summer of 2001, he was a partner in Ashwell, Marshall &
Associates, a financial services and consulting firm. A member of the California
State Bar, Marshall earned his juris doctor from the University of California at
Los Angeles. He completed his undergraduate studies at the University of
California at Santa Barbara.

WILLIAM C. BAKER, 71
--------------------

William C. Baker has served as a Director of the Callaway Golf Company
(NYSE:ELY) since January 1994 and is Chair of its Finance Committee. Mr. Baker
also serves as a Director of La Quinta Corporation (NYSE:LQI), Public Storage,
Inc. (NYSE:PSA) and California Pizza Kitchen, Inc. (NASDAQ:CPKI). Previously,
Mr. Baker was the President of Meditrust Operating Company, President and Chief
Executive Officer of the Los Angeles Turf Club, Inc., a subsidiary of Magna
International, Inc., Chairman and Chief Executive Officer of The Santa Anita
Companies, Inc., Chairman of Santa Anita Realty Enterprises, Inc. and Chairman,
President and Chief Executive Officer of Santa Anita Operating Company. Mr.
Baker also served as President and Chief Operating Officer of Red Robin
International, Inc. (a restaurant chain) from May 1993 to May 1995, and Chairman
and Chief Executive Officer of Carolina Restaurant Enterprises, Inc. from August
1992 to December 1995. He was the principal shareholder and Chief Executive
Officer of Del Taco, Inc. from 1977 until it was sold in 1988. Mr. Baker
received his law degree in 1957 from the University of Texas.

JAMES R. KNAPP, 69
------------------

James R. Knapp has served as the Chairman of The Brookhollow Group, a real
estate investment and industrial and commercial development firm, since 1980.
Mr. Knapp currently serves as a director of Ameritas Life Insurance Corporation
(formerly Bankers Life Nebraska) and Ameritas Acacia Mutual Holding Company.
From 1975 to 1980, Mr. Knapp served as Executive Vice President and Director of
Pacific Enterprises (Formerly Pacific Lighting Corporation), the largest gas
distribution company in the United States, where he was in charge of the
financial and legal affairs of the company (corporate finance, gas supply
finance, law, accounting and administration) as well as non-utility operations
(real estate development, agriculture and equipment leasing). From 1971 to 1975,
Mr. Knapp was Group Vice President of Pacific Enterprises in charge of
non-utility operations. From 1969 to 1971, he was President and Co-Founder of
Dunn Properties Corporation, a developer of industrial properties in California,
Texas, Georgia and Colorado. From 1961 to 1969, he was a partner in the law firm
of Kalmbach, DeMarco, Knapp & Chillingworth. Prior to that, he was a partner and
associate in the law firm of Kindel and Anderson. Mr. Knapp received a degree in
Economics from Stanford University and law degree from Hastings College of the
Law.

RICHARD B. SPECTER, 52
----------------------

Richard B. Specter is a partner in the Southern California law firm of Corbett &
Steelman. Mr. Specter has served as a litigator for over twenty-five years with
extensive experience in both Federal and State courts. He has acted as lead
counsel in major litigation involving franchise disputes, distribution rights,
unfair competition and trademark issues. He has also been involved in antitrust
matters affecting the petroleum, sports and newspaper industries, Federal and
State securities claims, and commercial transactions. Mr. Specter's trial
experience includes the areas of product liability, business disputes, real
estate matters, employment disputes, professional malpractice and banking
litigation, and antitrust litigation. Mr. Specter received his B.A. from
Washington University and his law degree from George Washington University. Mr.
Specter is a member of the Orange County Bar Association, American Bar
Association, Pennsylvania Bar Association, Illinois State Bar Association, and
Missouri Bar Association.

JERRY W. CARLTON, 63
--------------------

Jerry W. Carlton is an attorney specializing in tax and general business law and
has been a partner in O'Melveny & Myers L.L.P. for 30 years. As Managing Partner
of the firm's Orange County office for 15 years, Mr. Carlton handled hospital
acquisitions and divestitures and was responsible for all legal aspects of a
large managed care entity. Mr. Carlton has served as a director of numerous
public and privately-held companies and on the boards of several charitable
organizations, including: Phoenix House, Prentice Day School, Willametta K. Day
Foundation, Arlington Investment Company, Vicente Management Company and the
Foley Timber Company, Oakmont Corporation and Fibres International. Mr. Carlton
earned his law degree from the University of Texas in 1967.


                                       13

<PAGE>

THOMAS J. RIELLY, 53
--------------------

Thomas J. Rielly is the founder of Rielly Homes, a California-based development
company that has built over 3,000 residences and commercial buildings throughout
Southern California. As president of Rielly Homes, Mr. Rielly is directly
involved in all aspects of real estate development including land acquisition,
financing, lender-joint venture relationships, project design, construction,
leasing and sales of properties. Prior to founding Rielly Homes, Mr. Rielly
served for eight years as Executive Vice President and Chief Operating Officer
of BCE Development, Inc.'s United States operations where he managed a staff of
370 and assets exceeding $2.5 billion.

STANLEY A. SOLOMON, 64
----------------------

Stanley A. Solomon is a Certified Public Accountant currently operating a
professional practice specializing in providing tax consulting services.
Previously, Mr. Solomon was a partner in the national accounting firm of Kenneth
Leventhal & Company. Mr. Solomon has served as an outside director of two
publicly traded corporations. He earned a B.S. degree in accounting from Hunter
College and a law degree from Brooklyn Law School.

RONALD S. BEARD, 66
-------------------

Ronald S. Beard is currently a partner in the Zeughauser Group, consultants to
the legal industry. Mr. Beard has served as a Director of Callaway Golf Company
(NYSE:ELY) since June 2001. Mr. Beard chairs Callaway's Audit Committee and
serves as its lead independent director. Mr. Beard is a retired former partner
of the law firm of Gibson, Dunn & Crutcher LLP. He joined the firm in 1964,
served as Chairman of the firm from April 1991 until December 2001, and was also
its Managing Partner from April 1991 until mid-1997. Mr. Beard served as
Callaway Golf Company's General Outside Counsel from 1998 until he joined the
Board of Directors. He received his law degree in 1964 from Yale Law School.

TERRY C. HACKETT, 56
--------------------

Terry C. Hackett is the President and a partner in Hackett Management
Corporation, a real estate management company specializing in retail properties.
For fifteen years, Mr. Hackett sat on the Board of Directors of Knott's Berry
Farm Foods, which manufactured preserves, salad dressings, and other products
for distribution throughout the United States. The company was sold to ConAgra
in 1995. Mr. Hackett sat on the Board of the parent company, Knott's Berry Farm,
which was involved in the theme park, retail and food service businesses. He was
the representative for the Knott family on the Board of Cedar Fair LP
(NYSE:FUN), which acquired Knott's and has theme parks and retail sales and food
service operations at 12 locations throughout the U.S. Mr. Hackett has a degree
in business finance from the University of Southern California School of
Business and earned his law degree from the University of Southern California
School of Law.

There are no family relationships among our directors or executive officers. The
eight outside directors were appointed in January 2004. Each outside director
has received 150,000 shares of the Company's common stock as compensation for
their service on its board of directors.

Javo's Board of Directors has determined that it will not have a separate audit
committee from its executive committee at this time. Javo has not designated an
audit committee financial expert to its board.

Javo has not adopted a formal, written code of ethics that applies to its
principal executive officer, principal financial officer, principal accounting
officer or controller, or persons performing similar functions. Javo has not
done so due to time constraints of its management team.


                                       14

<PAGE>

ITEM 10. EXECUTIVE COMPENSATION

The following table shows the compensation paid over the past three fiscal years
with respect to the Company's officers as of the end of the 2004 fiscal year. No
other officers or directors received an annual salary or bonus exceeding
$100,000.
<TABLE>
<S>     <C>
                                            Summary Compensation Table
-------------------------------------------------------------------------------------------------------------------
                                                                                   Long Term Compensation
                                                                           ----------------------------------------
                                  Annual Compensation                        Awards                    Payouts
               ----------------------------------------------------------- ------------ ---------- ----------------
                 (b)       (c)        (d)          (e)            (f)          (g)         (h)           (i)
               -------- ----------- -------- ---------------- ------------ ------------ ---------- ----------------
                                                                            Securities
   Name &                                                      Restricted   Underlying    LTIP         All Other
  Principal                Salary    Bonus    Other Annual       Stock      Options/     Payouts     Compensation
  Position       Year       ($)       ($)     Compensation     Award (s)    SARs (#)       ($)           ($)
-------------- -------- ----------- -------- ---------------- ------------ ------------ ---------- ----------------
    CEO &        2004    $180,000     none         none             none       none        none            None
  Chairman,      2003    $180,000     none         none             none       none        none            None
Cody Ashwell     2002    $182,500     none         none             none       none        none            None
                 2001    none         none         none         note (2)       none        none        note (2)

 President,      2004    $180,000     none         none             none       none        none            None
Gary Lillian     2003    $180,000     none         none             none       none        none            None
                 2002    $144,000     none         none         note (3)       none        none        note (3)

    CFO,         2004    $180,000     none         none             none       none        none            None
   Richard       2003    $180,000     none         none             none       none        none            None
  Gartrell       2002    $144,000     none         none         note (4)       none        none        note (4)

    EVP,         2004    $144,000     none         none             none       none        none            None
   William       2003    $144,000     none         none             none       none        none            None
  Marshall       2002    $126,000     none         none         note (5)       none        none        note (5)

    SVP,         2004    $144,000     none         none             none       none        none            None
Stephen Corey    2003    $144,000     none         none             none       none        none            None
                 2002    $156,200     none         none             none       none        none            None
                 2001     $41,850     none         none         note (1)       none        none        note (1)

</TABLE>

Note (1)          Stephen Corey received 2,121,654 shares of restricted Common
                  Stock in September 2001 as payment for past salaries and
                  benefits accrued but unpaid in the amount of $84,866. In
                  addition, in January 2002 Mr. Corey was issued 3,040,646
                  shares of restricted Common Stock subject to forfeiture in
                  accordance with the terms of his five-year employment
                  agreement. In March and April 2003, Mr. Corey returned a total
                  of 5,500,000 shares of restricted Common Stock to the Company
                  treasury. The shares returned to treasury included all the
                  above-mentioned shares.

Note (2)          In January 2002, Mr. Ashwell was issued 5,000,000 of
                  restricted Common Stock subject to forfeiture in accordance
                  with the terms of his five-year employment agreement. Also in
                  January 2002, Mr. Ashwell was issued 11,689,448 shares of
                  restricted Common Stock in payment of amount owed him by the
                  Company for loans, expenses and past services. In March 2003,
                  Mr. Ashwell returned a total of 13,500,000 shares of the
                  above-mentioned restricted Common Stock to the Company
                  treasury.

Note (3)          In January 2002, Mr. Lillian was issued 4,900,000 of
                  restricted Common Stock subject to forfeiture in accordance
                  with the terms of his five-year employment agreement. Also in
                  January 2002, Mr. Lillian was issued 2,600,000 shares of
                  restricted Common Stock in payment of amount owed him by the
                  Company for expenses and past services. In March 2003, Mr.
                  Lillian returned a total of 6,500,000 shares of the
                  above-mentioned restricted Common Stock to the Company
                  treasury.

Note (4)          In January 2002, Mr. Gartrell was issued 3,500,000 of
                  restricted Common Stock subject to forfeiture in accordance
                  with the terms of his five-year employment agreement. Also in
                  January 2002, Mr. Gartrell was issued 3,000,000 shares of
                  restricted Common Stock in payment of amount owed him by the
                  Company for expense and services. In March 2003, Mr. Gartrell
                  returned a total of 5,500,000 shares of the above-mentioned
                  restricted Common Stock to the Company treasury.

Note (5)          In January 2002, Mr. Marshall was issued 1,000,000 of
                  restricted Common Stock subject to forfeiture in accordance
                  with the terms of his five-year employment agreement. Also in
                  January 2002, Mr. Marshall was issued 4,893,025 shares of
                  restricted Common Stock in payment of amount owed him by the
                  Company for loans, expenses and services. In March 2003, Mr.
                  Marshall returned a total of 5,000,000 shares of the
                  above-mentioned restricted Common Stock to the Company
                  treasury.


                                       15

<PAGE>

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth as of December 31, 2004, information concerning
ownership of the Company's Common Stock by each person known by the Company to
own beneficially more than 5% of its outstanding Common Stock, each director or
executive officer and all officers and directors as a group.

The following table sets forth as of December 31, 2004, information with respect
to the shares of Common Stock beneficially ownership of Directors and Executive
Officers of the Company:
<TABLE>
                (1)                                       (2)                             (3)              (4)
                                                                                      Amount and
                                                                                       Nature of
                                                                                      Beneficial        Percent of
          Title of Class               Name and Address of Beneficial Owner              Owner            Class
------------------------------------------------------------------------------------------------------------------
<S>                                                                                   <C>                <C>
Common Stock                         Cody Ashwell, San Diego, CA                      11,504,027         7.7%
Common Stock                         Curci Investment Co., Newport Beach, CA           8,800,000         5.9%
Common Stock                         Gary Lillian, San Diego, CA                       1,000,000         0.7%
Common Stock                         Stephen Corey, La Jolla, CA                       1,733,334         1.2%
Common Stock                         Richard A. Gartrell, Irvine, CA                   2,000,002         1.3%
Common Stock                         William Marshall, San Diego, CA                   2,500,300         1.7%
Common Stock                         William C. Baker, Newport Beach, CA               6,950,000         4.7%
Common Stock                         Thomas Rielly, Newport Beach, CA                  5,690,000         3.8%
Common Stock                         James Knapp, Newport Beach, CA                    2,250,000         1.5%
Common Stock                         Terry Hackett, Newport Beach, CA                  1,350,000         0.9%
Common Stock                         Jerry W. Carlton, Newport Beach, CA               1,200,000         0.8%
Common Stock                         Richard Specter, Newport Beach, CA                  675,000         0.5%
Common Stock                         Stanley A. Solomon, Newport Beach, CA               450,000         0.3%
Common Stock                         Ronald Beard, Laguna Nigel, CA                      300,000         0.2%
All Officers and Directors as a
Group                                                                                 46,402,663        31.1%

It should be noted that as a group, the five top officers of the Company at the
end of March and in April of 2003 contributed a total of 36,000,000 shares of
Common Stock to the Company treasury in order to facilitate a $6,000,000 private
placement offering completed in 2003. The employment agreements of the
contributing members of management were amended in light of these contributions.

EQUITY COMPENSATION PLAN INFORMATION

                                                                                             NUMBER OF SHARES
                                         NUMBER OF SHARES TO BE      WEIGHTED AVERAGE    REMAINING AVAILABLE FOR
                                         ISSUED UPON EXERCISE OF    EXERCISE PRICE OF     FUTURE ISSUANCE UNDER
                                          OUTSTANDING OPTIONS,     OUTSTANDING OPTIONS     EQUITY COMPENSATION
                                          WARRANTS, AND RIGHTS     WARRANTS AND RIGHTS          PLANS (1)
                                         -----------------------   -------------------   -----------------------
Equity compensation plans approved by
shareholders                                       --                       --                      --

Equity compensation plans not
approved by shareholders                    3,269,131 (2)(3)                --                      --
                                         -----------------------   -------------------   -----------------------

Total                                       3,269,131                       --                      --
                                         -----------------------   -------------------   -----------------------
</TABLE>

(1)      Excludes number of shares to be issued upon exercise of outstanding
         options.

(2)      Some 384,031 of these warrants relate to compensation to outside
         marketing consultant. These are reserves for warrants that could
         potentially be but have not yet been earned and issued pursuant to
         agreements with the consultants based on consultants' attaining certain
         performance objectives. The remaining 2,885,100 warrants were issued
         pursuant to a restructuring and settlement of prior compensation issues
         with former officer of the Company, Kurt Toneys. See Item 12 herein for
         further details.


                                       16

<PAGE>

(3)      No formal equity compensation plan exists at Javo Beverage Company,
         Inc. for current or future employees at this time. Javo has in the
         past, as a part of employee compensation, issued negotiated amounts of
         Common Stock to certain employees pursuant to employment agreements
         providing that all or most all of the shares are subject to a right of
         the Company to cancel the shares. This right of cancellation lapses or
         expires as to portions of these shares according to a vesting schedule
         thereby resulting in the issued shares vesting in the employee per the
         schedule. Other issuances to consultants for services have been made.
         See Item 5 herein generally for further details regarding these and
         other compensation-related issuances.

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

On February 18, 2000, Mr. Kurt Toneys, then director and executive officer,
purchased 2,850,000 shares of our Common Stock for $0.1875 per share by
executing two promissory notes totaling $534,375, bearing interest at six
percent per annum and due in February 2009. Mr. Toneys left the Company in
August 2001. In June of 2002, the Company entered into an agreement with Mr.
Toneys settling all matters relating to Mr. Toneys compensation and
reimbursements and the promissory notes including interest owed. Mr. Toneys
surrendered 1,750,100 of the 2,212,500 shares of Common Stock he held subject to
the note and retained 462,400 shares. The Company issued Mr. Toneys 2,925,100
three-year warrants at a strike price equal to his original purchase price of
$0.1875 cents per share, extinguished the promissory notes, and paid him $35,000
in cash.  Mr. Toneys exercised warrants for 40,000 shares in 2004.

ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K

         (a)      The list of exhibits is incorporated herein by reference to
                  the Exhibit Index attached after the signature page hereto.
         (b)      On December 11, 2002, the Company reported on Form 8-K under
                  Item 5 that the Company planned a private placement of
                  securities

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

AUDIT FEES

The aggregate fees billed for each of the last two fiscal years for professional
services rendered by the principal accountant for the audit of the registrant's
annual financial statements and review of financial statements included in the
registrant's Form 10-QSB (17 CFR 249.308b) or services that are normally
provided by the accountant in connection with statutory and regulatory filings
or engagements for those fiscal years are $32,000 for fiscal year 2003 and
$34,500 to date for fiscal year 2004. Additional billing amounts are anticipated
for 2004 audit.

AUDIT-RELATED FEES

Other than amounts included as set forth above, there were no other fees billed
in each of the last two fiscal years for assurance and related services by the
principal accountant that are reasonably related to the performance of the audit
or review of the registrant's financial statements.

TAX FEES

There were no fees billed in each of the last two fiscal years for products and
services provided by the Company's principal accountant.

ALL OTHER FEES

There were no fees billed in each of the last two fiscal years for products and
services provided by the principal accountant, other than the services reported
above.

Our entire Board acts as the Audit Committee, and intends to adopt pre-approval
policies and procedures described in paragraph (c)(7)(i) of Rule 2-01 of
Regulation S-X.

All of the services described above were approved by the audit committee
pursuant to paragraph (C)(7)(i)(C) of Rule 2-01 of Regulation S-X.



                                       17

<PAGE>

CERTIFICATIONS

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

I, Cody C. Ashwell, certify that:

1. I have reviewed this annual report on Form 10-KSB of Javo Beverage Company,
Inc.;

2. Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this annual
report;

3. Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all material
respects the financial condition, results of operations, and cash flows of the
registrant as of, and for, the periods presented in this annual report;

4. The registrant's other certifying officer and I am responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

         a)  Designed such disclosure controls and procedures to ensure that
             material information relating to the registrant, including its
             subsidiaries, is made known to us by others within those entities,
             particularly during the period in which this annual report is being
             prepared;

         b)  Evaluated the effectiveness of the registrant's disclosure controls
             and procedures as of a date within 90 days prior to the filing date
             of this annual report (the "Evaluation Date"); and

         c)  Presented in this annual report our conclusions about the
             effectiveness of the disclosure controls and procedures based on
             our evaluation as of the Evaluation Date;

5. The registrant's other certifying officer and I have disclosed, based on our
most recent evaluation, to the registrant's auditors and the audit committee of
registrant's board of directors (or persons performing the equivalent function):

         a)  All significant deficiencies in the design or operation of internal
             controls which could adversely affect the registrant's ability to
             record, process, summarize, and report financial data and have
             identified for the registrant's auditors any material weaknesses in
             internal controls; and

         b)  Any fraud, whether or not material, that involves management or
             other employees who have a significant role in the registrant's
             internal controls; and

6. The registrant's other certifying officer and I have indicated in this annual
report whether or not there were significant changes in internal controls or in
other factors that could significantly affect internal controls subsequent to
the date of our most recent evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.

                                                     /s/ Cody C. Ashwell
                                                     -------------------------
                                                     Cody C. Ashwell
                                                     Chief Executive Officer
                                                     and Chairman of the Board

Dated: March 31, 2005


<PAGE>

CERTIFICATION OF CHIEF FINANCIAL OFFICER

I, Richard A. Gartrell, certify that:

1. I have reviewed this annual report on Form 10-KSB of Javo Beverage Company,
Inc.;

2. Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this annual
report;

3. Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all material
respects the financial condition, results of operations, and cash flows of the
registrant as of, and for, the periods presented in this annual report;

4. The registrant's other certifying officer and I am responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

         a)  Designed such disclosure controls and procedures to ensure that
             material information relating to the registrant, including its
             subsidiaries, is made known to us by others within those entities,
             particularly during the period in which this annual report is being
             prepared;

         b)  Evaluated the effectiveness of the registrant's disclosure controls
             and procedures as of a date within 90 days prior to the filing date
             of this annual report (the "Evaluation Date"); and

         c)  Presented in this annual report our conclusions about the
             effectiveness of the disclosure controls and procedures based on
             our evaluation as of the Evaluation Date;

5. The registrant's other certifying officer and I have disclosed, based on our
most recent evaluation, to the registrant's auditors and the audit committee of
registrant's board of directors (or persons performing the equivalent function):

         a)  All significant deficiencies in the design or operation of internal
             controls which could adversely affect the registrant's ability to
             record, process, summarize, and report financial data and have
             identified for the registrant's auditors any material weaknesses in
             internal controls; and

         b)  Any fraud, whether or not material, that involves management or
             other employees who have a significant role in the registrant's
             internal controls; and

6. The registrant's other certifying officer and I have indicated in this annual
report whether or not there were significant changes in internal controls or in
other factors that could significantly affect internal controls subsequent to
the date of our most recent evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.

                                                        /s/ Richard A. Gartrell
                                                        -----------------------
                                                        Richard A. Gartrell
                                                        Chief Financial Officer

Dated: March 31, 2005



<PAGE>


SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned in the City of San Diego, California, on March 31, 2005.

                                                    Javo Beverage Company, Inc.,
                                                    a Delaware corporation

                                                    By: /s/ Cody C. Ashwell
                                                    ----------------------------
                                                        Cody C. Ashwell
Its:    Chairman and Chief Executive Officer



<PAGE>


EXHIBIT INDEX

2.1      Agreement and Plan of Merger between La Jolla Fresh Squeezed Coffee
         Co., Inc. and Javo Beverage Company, Inc.(1).
3.1      Certificate of Incorporation (1).
3.2      Bylaws (1).
4.1      Shareholder Rights Agreement by and between the Company and Corporate
         Stock Transfer, Inc. as Rights Agent (1).
10.1*    Executive Employment Contract between the Company and Cody Ashwell (2)
10.2*    Executive Employment Contract between the Company and Gary Lillian (2)
10.3*    Executive Employment Contract between the Company and Richard Gartrell
         (2)
10.4*    Executive Employment Contract between the Company and William Marshall
         (2)
10.5*    Executive Employment Contract between the Company and Stephen Corey (2)
10.6     Net Industrial Lease (Facility Lease) dated August 12, 2002 between the
         Company and Square One Partners (3)
11       Statement re earnings per share - included in this 10-KSB's financial
         statements
16       Letter on Change in Certifying Accountant (4)
99.1     Certifications

------------
* Indicates a management compensatory plan or arrangement.

(1)      Incorporated by reference to the Registrant's current report on Form 4A
         filed with the Commission on August 19, 2002.

(2)      Incorporated by reference to the Registrant's annual report on Form
         10-KSB filed with the Commission on April 16, 2002.

(3)      Incorporated by reference to the Registrant's annual report on Form
         10-QSB filed with the Commission on August 15, 2002.

(4)      Incorporated by reference to the Registrant's current report on Form
         8-K filed with the Commission on February 1, 2001.