Replies to post #194486 on 1812 Brewing Company Inc (KEGS)

[holter]

travel, Are you saying that the glorified IOU's have no impact on the number of shares outstanding in the float? And that the new partner has the IOU for new preferred shares as a form of insurance that the partnership will not screw them. If the preferreds are backed up dollar for dollar by the seller of his company, when does SWVC get the benefit of the performance of the company, if it does perform. Or does that happen from day one. Does SWVC take on all the acquired companies debt and assets? Screwy questions, I know, but I am trying to see how this works. Thanks if you try and straighten me out with any answers here.

[JimsZ]

The "Seller" receives preferred shares based upon a pre-arranged dollar amount, no matter how many commons it would take... Yes, shares that could be "converted to commons" at any time they wish & usually convert at between 85-95% of the average 5 days (although those "C" shares convert at 21.25% - talk about a deal for family!)

Not only that... but look at Swartz's deal.... Preferred D Shares, along with $50k worth of commons per year (figuring current pps that would be at least 125 million common shares! EVERY YEAR) on top of a $125k gauranteed salary, even if he was fired!


Yes, the preferred shares may hold things off for a little while on the big chunk of it, but it's worse for the common shareholder even more with every deal TS does!