Replies to post #86381 on 1812 Brewing Company Inc (KEGS)

[power_forward]

doesn't matter--pps will be diluted down to .01 easy

[Sprycel]

At this point and time NO ONE HERE KNOWS WHERE THE LAST 2 CONVERSIONS WENT! They are even share certificates which IMHO does not fall within the conversion platform due to the fact that Cornell converts MONEY not shares so there is no possible way to get even share certificates. These certificates are for something else. Until Tom gets off his butt and tells us we are all going to be hear screaming and yelling at each other! All I know is Tom is a licensed SEC representative. He knows the consequences for not following the laws. He has great attorney's, great CPA's, an impeccable reputation and great business plan! There is some reason he is not telling us and I have to feel it is on advise of legal counsel until the deal is consummated, then they will let the Shareholders know. Until then, I am holding off on any more buying and I will support the company by NOT selling a share of my holdings! After he lets us know, then I will reevaluate my position!

[xyz1002]

Faucet- see answer below >>>>


what do you think the dilution is for?
what would be your guess?

>>>> 100% debt convertibels coming from Cornell/Highgate etc. But from what I've seen, the convertibles are getting converted at a much lower price than stated in the 10K (unless some hidden covenant is attached that is hard for the naked eye to see)
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Mine is that it is not to line his pockets of course - he is building a business here.

>>>>agree he is not getting any of this money. But if I'v to guess, he is getting benefited some other way through his connection with KK and the other GS companies that he is involved in. Otherwise this doesn't make sense.
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I also don't think it would be better had he done it when we are already into a run.

>>>He has no control when the convertbles are converted. It's upto the debt holder. And we are seeing the conversion happening at every run. Although we heard about the O/S increase today, doesn't mean it happened today. It has happened in the last few days The TA was made aware today/yesterday.
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I am assuming he chose the equity dilution as preferable over toxic financing to purchase new assets or to pay off exisiting debt.

>>> This is what is called "toxic financing" and is being used to payoff carried over debt from GSCR. The only thing that is saving it from becoming a "death spiral" is that there is a real business out here and there are share holders like you and me willing to buy the stock and the pps has gone up significantly. So there is limit to the number of shares that can be converted to payy off the entire debt. No, he is not doing this to buy new assets. If he wants to sell shares to raise capital for other acqusition, he must file with the SEC first.
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I don't think we can second guess the CEO - like all, hoping (and expecting) we will see clarification on the value the other side of this transaction.

>> that is your personal preference. But I would second guess everyone, after all its my money and must keep an eye on it. I can almost gurantee there is no other side of this dilution except the old debt is being converted.

AIMHO