1812 Brewing Company Inc (KEGS)

[IHUBfan]

From the 8K filed on Feb 27th,2007

27-Feb-2007

Unregistered Sale of Equity Securities, Financial Statements and Exhibits


ITEM 3.02 UNREGISTERED SALE OF EQUITY SECURITIES

Effective February 26, 2007, the Company entered into a Securities Purchase Agreement with Cornell Capital Partners, LP, under which Cornell purchased a Convertible Debenture in the amount of $1,125,000. The Debenture was issued as of February 26, 2007. Cornell paid the $1,125,000 purchase price on February 27, 2007.

The conversion price of the Debenture shall be equal to the lesser of $0.05 per share or ninety percent of the lowest closing market prices of the Company's Common Stock for the thirty days preceding conversion. Cornell will be entitled to convert the Debenture on the basis of the conversion price into the Company's common stock, provided that Cornell cannot convert into shares that would cause Cornell to own more than 4.9% of the Company's outstanding common stock.

The Debenture will bear interest at 10% per annum. Accrued interest and the principal amount will be payable on February 26, 2009. The Company's obligations under the Debenture are secured by a pledge of all of its assets, subject to Cornell's agreement to subordinate its security interest to any line of credit that the Company obtains from a bank or other financial institution.