This is your OFFICIAL NOTICE of the issuance by the Securities Commisioner of the State of Texas ("Securities Commissioner") of an EMERGENCY CEACE AND DESIST ORDER pursuant to Section 23-2 of The Securities Act [....................]
The Staff of the Enforcement Division ("the Staff") of the Texas State Securities Board ("the Securities Board") has presented evidence sufficient for the Securities Commisioner to find that:
FINDINGS OF FACT:
- Respondent Kevin D. Sepe ("Respondent Sepe") maintains a last known address at 4770 Biscayne Blvd., Suite 1400, Miami, FL 33137.
- Respondent Kenneth A. Oxsalida ("Respondent Oxsalida") maintains a last known address at 4770 Biscayne Blvd., Suite 1400, Miami, FL 33137.
- Respondent Youth Enhancement Systems, Inc. ("Respondent YES") maintains a last know address at 4770 Biscayne Blvd., Suite 1400, Miami, FL 33137.
- Respondents are offering to Texas residents shares of stock in Respondent YES and claiming that YES is "close to becoming public". Respondents also claim that YES has, among other products, a "breakthrough hair cream that's awaiting FDA approval" and "one application of this cream on your head and you see immediate hair re-growth."
- Respondents are also offering to Texas residents shares of stock in FB Foods Inc. (formerly known as Funny Bagel Food Company, Inc.)(herinafter "Funny Bagels") for $2 per share and claiming that the company will have an IPO within the next 12-16 months causing the stock price to increase to $20-$30 per share, but the company may be purchaset by Kraft to enable Kraft to protect its market share which would cause the stock to increase to $8-$10 per share. Funny Bagels is a Florida corporation with a last know address of 1200 Biscayne Boulevard, Suite 104, North Miami, Florida 33181. Respondents are purportedly selling their personal shares of stock in Funny Bagels.
- The above-described shares of stock have not been registered by qualification, notification or coordination and no permit has been granted for their sale in Texas.
- Respondents have not been registered with the Securities Commissioner as dealers of agents at any time material hereto.
- In connection with the offer for sale of the above-described shares of stock, Respondents are misrepresenting the following relevant facts:
- the Stock Purchase Agreement "has been prepared by, and is the product of extensive negotiations between, the parties hereto"; and
- Funny Bagels is presently in takeover negotiations with Oscar Mayer (a division of Kraft).
- In connection with the offer for sale of the above-mentioned shares of stock, Respondents are intentionally failing to disclose the following material facts:
- Respondent Sepe filed for Chapter 13 bankruptcy in the United States Bankruptcy Court, Souther District of Florida, Miami Division, on 8/19/1996 in case number 96-15128;
- Respondent Sepe filed for Chapter 7 bankruptcy in the United States Bankruptcy Court, Souther District of Florida, Miami Division, on 1/25/1999 in case number 99-10649; and
- information regarding the assets, liabilities, profits, losses, cash flow and other financial data of Respondent YES.
- In connection with the offer for sale of the above-described shares of stock, Respondents hold themselves out as representatives of Funny Bagels, which is materially misleading in light of the fact that the Stock Puchase Agreement requires that investors represent and warrant that "Funny Bagels Food Company Inc. (The "Company") is not the seller of the shares being purchased under this agreement..."
- In connection with the offer for sale of the above-described shares of stock, Respondents represent that Kraft will likely buyout Funny Bagels to prevent it from going public, which is materially misleading in light of the fact that prospective investors were told in 2002 that the company was likely to be sold to Kraft within the next 3-4 months.
CONCLUSIONS OF LAW
- The above-described shares of stock are "securities" as that term is defined by Section 4.A of the Texas Securities Act.
- Respondents are violating Section 7 of the Texas Securities Act [.........]
- Respondents are violating Section 12 of the Texas Securities Act [.........]
- Respondents are engaging in fraud in connection with the offer for sale of securities.
- Respondents have made an offer containing statements that are materially misleading or otherwise likely to deceive the public.
- Respondents conduct, acts, and practices threaten immediate and irreparable public harm.
- The foregoing violations constitute bases for the issuance of an Emergency Cease and Desist Order pursuant to Section 23-2 of the Texas Securities Act.
SIGNED AND ENTERED by the Securities Commissioner this 2nd day of
DENISE VOIGT CRAWFORD