1812 Brewing Company Inc (KEGS)

[rpt]

As for the Wells Fargo loan
Tom was forced to repay it or lose all his personal assets.. The idiot let the loan go into default almost before the ink was dry on the loan papers.

And what about these other 15 CD's ??????
This company is a toxic money pit for common shareholders and a personal ATM for Cornell and company management.

http://xml.10kwizard.com/filing_raw.php?repo=tenk&ipage=5684440

Following is a summary of convertible debentures as of March 31, 2008:

Convertible Debentures due on March 23, 2009, provides for interest in the amount of 10% per annum and are convertible at the lesser of (a) $0.015 or (b) 85% of the lowest closing bid price of Seaway common stock during the 10 trading days immediately preceding the conversion date. $ 150,000

Convertible debentures due on December 12, 2010 provide for interest at 7% per annum and are convertible at the lesser of (a) $0.10 per share or (b) 85% of the average 3 lowest Volume Weighted Average Prices ("VWAP") during the 20 trading days prior to the holder's election to convert. If the holder elects to convert a portion of the debenture and the VWAP is below $0.005, the Company shall have the right to prepay that portion of the debenture that the holder elected to convert, plus any accrued interest at 150% of such amount. 1,500,000

Convertible debenture due on September 18, 2012 provide for interest at 8% per annum and is convertible at the lesser of (a) $0.024 per share or (b) 90% of the closing market price for the day prior to the date of the holder's election to convert. 470,000

Convertible debentures due on demand provide for interest at 12% per annum and are convertible at the lesser of (a) $0.02 per share or (b) 90% of the closing market price for the day prior to the date of the holders' election to convert. 944,775

Convertible debenture due on December 10, 2011 provide for interest at 12% per annum and is convertible at the lesser of (a) $0.011 per share or (b) 75% of the closing market price for the day prior to the date of the holder's election to convert. 1.525,000

Convertible debentures due on November 30, 2010 provide for interest at 10% per annum and are convertible at the lesser of (a) $0.12 per share or (b) 90% of the average 3 lowest Volume Weighted Average Prices ("VWAP") during the 20 trading days prior to the holder's election to convert. 550,000

Convertible debenture due on March 2, 2010 provide for interest at 12% per annum and is convertible at the lesser of (a) $0.01 per share or (b) 75% of the average lowest Volume Weighted Average Price ("VWAP") during the 5 trading days prior to the holder's election to convert. 50,589

Convertible debenture due on February 28, 2010 provide for interest at 12% per annum and are convertible at the lesser of (a) $0.01 per share or (b) 75% of the average lowest Volume Weighted Average Price ("VWAP") during the 5 trading days prior to the holder's election to convert. 2,249,073

On July 11, 2008 the Company issued a $100,000 convertible 8% debenture to an individual for financing provided. The debenture, due July 10, 2013, is convertible into common stock equal to the lesser of: (a) $0.004 per share; (b) the amount of this note to be converted divided by 75% of the closing market price of the Maker’s common stock for the day prior to the date of the exercise of such conversion right; or (c) the lowest per share price of any common stock issued by the Company any time subsequent to the date of the note. Interest is payable in shares of the Company’s common stock.

On August 1, 2008 the Company issued two convertible debentures totaling $457,174 to two individuals for financing provided. The debentures, due July 31, 2013, are convertible into common stock equal to the lesser of: (a) $0.0025 per share; (b) the amount of these notes to be converted divided by 75% of the closing market price of the Maker’s common stock for the day prior to the date of the exercise of such conversion right; or (c) the lowest per share price of any common stock issued by the Company any time subsequent to the date of the note.

On September 1, 2008 the Company issued two convertible 10% debentures totaling $200,000 to an individual and an entity for financing provided. The debentures, due August 31, 2011, are convertible into common stock equal to the lesser of: (a) $0.005 per share; (b) the amount of these notes to be converted divided by 65% of the lowest Volume Weighted Average Prices ("VWAP") during the 5 trading days immediately preceding the holder's election to convert.

On September 23, 2008 the Company issued a $100,000 convertible 10% debenture to an individual for financing provided. The debenture, due September 15, 2011, is convertible into common stock equal to the lesser of: (a) $0.005 per share; (b) the amount of this note to be converted divided by 65% of the closing market price of the Maker’s common stock for the day prior to the date of the exercise of such conversion right. Interest is payable in shares of the Company’s common stock.


ALSO

Subsequent to the nine months ended September 30, 2008, holders of certain convertible debentures converted principal amounts totaling $57,700 into 216,356,223 shares of common stock.

Subsequent to the nine months ended September 30, 2008, the Company issued 127,500,000 shares of its common stock to employees and consultants for services. The shares were valued at the closing price on the date of grant and the Company recognized compensation expense totaling $33,500.

Subsequent to the nine months ended September 30, 2008, holders of Preferred Series C converted shares totaling 8,750 into 220,995,475 shares of common stock.


Seaway Valley Capital Corporation had an operating loss of $4,804,478 for the first nine months of fiscal 2008 versus a loss of $2,036,704 for the same period ended September 30, 2007

Our operations have been funded to date primarily by loans (both bank loans and more recently convertible debentures), contributions by our founders and their associates, and profitable securities sales at Seaway Valley Fund, LLC. The net amount of the bank loans is reflected on our September 30, 2008 balance sheet in the aggregate amount of $12,926,642. The net amount of the convertible debentures is reflected on our September 30, 2008 balance sheet in the aggregate amount of $5,464,017.

As a result, to increase the Company’s liquidity and to help fund operations, the Company secured a $5 million inventory-based line of credit from Wells Fargo in March 2008. Concurrently, YA Global Investments, LP acquired over $2.249 million of the Company’s legacy senior bank debt, most of which was due at that time. Of course, this allowed shareholders to pay ALL this debt instead of the company (and we are still losing money) The purchase and exchange of this debt into convertible debentures by YA Global materially lowered that Company’s immediate cash needs by $2.249 million and also allowed the Company to maintain significantly more available capital under the Wells Fargo line of credit. In addition, the Company expects to receive capital from Golden Gate Investors, Inc. and JMJ Financial to satisfy its Promissory Note asset of $2.125 million during 2008 and 2009.


As of September 30, 2008, the Company was in breach of certain loan covenants of the Wells Fargo line of credit. As a result conditional terms were outlined by Wells Fargo, and to date certain of those conditional terms had not yet been met. Specifically, the Company has raised additional capital of approximately $620,000, which is $315,000 below the $935,000 required by Wells Fargo. Although the Company continues to seek out additional capital, no guarantee can be made of our ultimate success in doing so. As a result of the foregoing, the Company was not in compliance of the debt agreement at September 30, 2008. Due to the default, certain other long term obligations that may be callable by the holders have been classified as current in the accompanying financial statements.

We have the capital resources necessary to carry on operations for the next period, despite continuing losses and the line of credit covenant breach. In order to implement our revised business plan, however, we will need substantial additional capital, including the funds associated with any of the Company’s notes receivable outstanding.

The Company expects to fund its operations and capital expenditures from internally generated funds as well as additional outside capital, which may come in the form of equity or debt. Management believes that its existing cash balances will be sufficient to meet its short term working capital, capital expenditures, and investment requirements for at least the next 6 to 12 months. Hackett’s or the Company may require additional funds for other purposes, such as acquisitions of complementary businesses, and may seek to raise such additional funds through public and private equity financings or from other sources. However, management cannot assure you that additional financing will be available at all or that, if available, such financing will be obtainable on terms favorable to us or that any additional financing will not be dilutive.

Be careful here..Be VERY,VERY CAREFUL.