1812 Brewing Company to End 3(a)10 Debt Reduction Plan After First Tranche

Rhea-AI Summary

1812 Brewing Company, Inc. (OTC PINK:KEGS) terminates debt restructuring program with Trillium Partners LP, citing market conditions and the need to focus on business growth. The company will end the 3(a)10 debt transaction after repaying Trillium's first payment of $500,000, with the debt transferring back to original CD holders. Chairman and CEO Tom Scozzafava highlights the impact of rising interest rates and market weakness on KEGS' stock, expressing the company's commitment to refocus on business growth.

Debt investor and Company agree to end program to relieve long-term selling pressure on KEGS' stock

WATERTOWN, NY / ACCESSWIRE / August 2, 2023 / 1812 BREWING COMPANY, INC. (OTC PINK:KEGS) (the "Company" or "KEGS") is pleased to announce that the Company and its debt investor, Trillium Partners LP, have mutually-agreed to terminate the court-approved 3(a)10 debt restructuring transaction at the conclusion of the current partial debt paydown.

On October 17, 2022, the Company entered into a Settlement Agreement with Trillium (the "Settlement Agreement"), which was later approved by the Federal District Court of Maryland, whereby the Company agreed to issue shares of common stock to Trillium pursuant to the Section 3(a)10 exemption to satisfy the Company's outstanding debts.

Over the recent months several factors have made untenable the prospects of fully exercising the 3(a)(10) transaction in its totality, and to this end, both the Company and Trillium felt that it was the best interest of the Company and its shareholders to end the transaction after the repayment of Trillium's first payment of $500,000 to the original debt holders ("Tranche 1") has been made in full pursuant to the terms of the Transaction. Upon repayment of Tranche 1 in full to Trillium, the debt - having been reduced by $500,000 and with no further interest accrued during the entire period - will transfer back to the two original CD holders. The Company intends to further negotiate with these two CD holders at that time.

Chairman and CEO Tom Scozzafava stated, "When these discussions began approximately 18 months prior, the world and the markets were in a different place. Factors like rapidly rising interest rates and the threat of recession appear to have made markets weaker than they had been. Certainly, this has been the case for KEGS' stock." Mr. Scozzafava continued, "So in an effort to relieve the Company and its shareholders of this pressure, and to allow management to refocus its efforts on continuing to grow the business of 1812 Brewing Company, we have agreed to cease the debt reduction program after this ongoing tranche has been satisfied. We look forward to shareholder updates soon on these continuing business developments."

About 1812 Brewing Company ("KEGS or the "Company"):

KEGS is an operator of and investor in companies in the craft beer industry. The Company seeks to build a nation-wide network of craft breweries to develop and foster respective brand growth at the local, regional, and national level. KEGS looks to build a network wherein certain economies of scale can be shared across it such as production, distribution footprint expansion, inter-member contract brewing, new product development, sharing of best brewery practices and scale logistics and transportation. The network is to be built through investment by 1812 Brewing Company while maintaining the members' respective local and regional uniqueness, brand autonomy and direct involvement with its consumers. The Company seeks to be an "incubator" of growth for its holdings in the industry.

The Company's current holding, 1812 Brewing Co., produces award-winning beers such as War of 1812 Amber Ale ("1812 Amber Ale"), 1812 Light, Hazy Oasis Pale Ale, Thousand Islands IPA, Malicious Intent XX IPA, Route 11 Lager, Railroad Red Ale, Helles Bells Lager, St. Stephens Stout, Third Rail Porter, Featherhammer Maibock.

For more updates follow us on our Website, Facebook, Twitter, Instagram and Linkedin.

https://www.kegsnetwork.com/
https://www.facebook.com/kegsnetwork/
https://www.instagram.com/kegsnetwork/
https://twitter.com/kegsnetwork

https://www.1812ale.com/
https://www.facebook.com/1812brewingcompany/
https://www.instagram.com/1812brewingcompany/
https://twitter.com/1812Brewing
https://www.linkedin.com/company/1812brewingcompany/

Contact Name: Tom Scozzafava
Contact Phone Number: 315-788-1812
Contact Email Address: contact@1812ale.com

Safe Harbor: This release includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 27E of the Securities Act of 1934. Statements contained in this release that are not historical facts may be deemed to be forward-looking statements. Investors are cautioned that forward-looking statements are inherently uncertain. Actual performance and results may differ materially from that projected or suggested herein due to certain risks and uncertainties including, without limitation, ability to obtain financing and regulatory and shareholder approval for anticipated actions.

SOURCE: 1812 Brewing Company Inc.

View source version on accesswire.com:
https://www.accesswire.com/771777/1812-Brewing-Company-to-End-3a10-Debt-Reduction-Plan-After-First-Tranche

FAQ

What is the reason for terminating the debt restructuring program?

The termination is due to market conditions, including rapidly rising interest rates and the threat of recession, which have weakened KEGS' stock.

What will happen after repaying Trillium's first payment of $500,000?

The debt, reduced by $500,000, will transfer back to the original CD holders, and the company intends to negotiate further with them at that time.

Who announced the termination of the debt reduction program?

Chairman and CEO Tom Scozzafava made the announcement, expressing the company's commitment to refocus on business growth.