1812 Brewing Company Inc (KEGS)

[fwhomeboy]

3) Impact of Issuance of Convertible Debentures, the Exchange Debentures and
Warrants.

As a result of our issuance of the Convertible Debentures, the Exchange
Debentures, and the Warrants described in this Form 8-K and in the event that YA
Global exercises its rights under these instruments, we will be obligated to
substantially increase the number of shares of our Common Stock outstanding at
prices which may be significantly lower than the price of our Common Stock in
the trading market. In that event, these issuances would significantly reduce
the ownership interests of our existing stockholders. While we believe that the
agreements that we have entered into with YA Global are prudent and will allow
us a better opportunity to implement our business plan, there can be no
assurance that the market price of our Common Stock will not decline as a result
of the issuance and sale of the significant number of additional shares
resulting from the conversion of the debentures or exercise of the Warrants
described in this Form 8-K.