UNITED STATES

                       SECURITIES AND EXCHANGE COMMISSION

                              Washington D.C. 20549
                                    ---------

                                   FORM 10-QSB

               Quarterly Report Pursuant to Section 13 or 15(d)
                     of the Securities Exchange Act of 1934

For the quarter ended     December 31, 1996    Commission File Number  33-53748C

                           PERRY'S MAJESTIC BEER, INC.
             (Exact name of registrant as specified in its charter)

               Delaware                                      36-3769323
            (State or other jurisdiction of              (I.R.S. Employer
            incorporation or organization)              Identification No.)

            134 Morgan Avenue
            Brooklyn, New York                                 11237
            (Address of principal executive offices)        (Zip code)

Registrant's telephone number, including area code:             (718) 894-4300
                                                        ----------------------


Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the  Securities  and  Exchange Act of 1934
during the preceding 12 months (or for such shorter  period that the  registrant
was  required  to file such  reports),  and (2) has been  subject to such filing
requirements for the past 90 days.

                              Yes   X      No


Indicate the number of shares  outstanding  of each of the  issuer's  classes of
common stock, as of February 13, 1997 was 3,083,335.


<PAGE>



PERRY'S MAJESTIC BEER, INC.
------------------------------------------------------------------------------


INDEX
------------------------------------------------------------------------------



                                                             Page to Page
PART I

Item 1.  Financial Statements

   Balance Sheet as of December 31, 1996 [Unaudited]........... 1.....

   Statements of Operations for the three and nine months ended
   December 31, 1996 [Unaudited]............................... 2.....

   Statement of Stockholders' Equity for the nine months ended
   December 31, 1996 [Unaudited]............................... 3.....

   Statements of Cash Flows for the nine months ended
   December 31, 1996 [Unaudited]............................... 4.....

   Notes to Financial Statements [Unaudited]................... 5.....7

Item 2.  Managements' Discussion and Analysis of the Financial
         Condition and Results of Operations................... 8......9

Signature......................................................10......





                         . . . . . . . . . . . . . . .


<PAGE>



Item 1:  Financial Statements

PERRY'S MAJESTIC BEER, INC.
------------------------------------------------------------------------------


BALANCE SHEET AS OF DECEMBER 31, 1996.
[UNAUDITED]
------------------------------------------------------------------------------


Assets:
Current Assets:
  Cash                                                               $ 1,889,418
  Inventory                                                              279,064
  Accounts Receivable                                                     19,538
                                                                     -----------

  Total Current Assets                                                 2,188,020

Non-Current Assets:
  Investment in Bev-Tyme, Inc. - Preferred Stock - Related Party [3]     800,000
                                                                      ----------

Property and Equipment - Net                                              14,170
                                                                      ----------

Other Assets:
  Deposits                                                                 9,700
  Other Assets                                                            86,700
  Goodwill - Net                                                         251,767
                                                                     -----------

  Total Other Assets                                                     348,167

  Total Assets                                                       $ 3,350,357
                                                                     ===========

Liabilities and Stockholders' Equity:
Current Liabilities:
  Accounts Payable                                                        41,536

Commitments and Contingencies [9]                                            --

Stockholders' Equity:
  Preferred  Stock,  $.001 Par Value Per Share,  15,000,000
   Blank Check  Shares Authorized,  Convertible  Class A -
   Issued and  Outstanding,  500,000 Shares; Non-Convertible
   Class B - Issued  and  Outstanding,  7,000,000  Shares [3]        $     7,500

  Additional Paid-in Capital - Preferred Stock [3]                     2,142,500

  Common Stock - $.0001 Par Value, Authorized 25,000,000 Shares,
   Issued and Outstanding, 3,083,335 Shares                                  308

  Additional Paid-in Capital - Common Stock                            2,524,778

  Unrealized Loss on Available for Sale Investment [3]               (1,200,000)

  Retained Earnings [Deficit]                                          (166,265)

  Total Stockholders' Equity                                           3,308,821

  Total Liabilities and Stockholders' Equity                         $ 3,350,357
                                                                     ===========

See Notes to Financial Statements.

                                         1

<PAGE>



PERRY'S MAJESTIC BEER, INC.
------------------------------------------------------------------------------


STATEMENT OF OPERATIONS
[UNAUDITED]
------------------------------------------------------------------------------


                                                      Three months  Nine months
                                                          ended        ended
                                                      December 31,  December 31,
                                                         1 9 9 6      1 9 9 6

Sales - Net                                            $  155,172   $   564,590

Cost of Goods Sold                                        123,443       450,581
                                                       ----------   -----------

  Gross Profit                                             31,729       114,009

Selling, General and Administrative Expenses              140,701       257,834

Amortization of Goodwill                                   13,683        21,883
                                                       ----------   -----------

  [Loss] from Operations                                 (122,655)     (165,708)
                                                       ----------   -----------

Other [Income] Expense:
  Interest Expense                                             --         6,998
  Interest Income                                          (4,103)       (6,441)
                                                       ----------   -----------

  Other Expense - Net                                      (4,103)          557
                                                       ----------   -----------

  [Loss] Before Income Taxes                             (118,552)     (166,265)

Provision for Income Taxes                                     --            --
                                                       ----------   -----------

  Net [Loss]                                           $ (118,552)  $  (166,265)
                                                       ==========   ===========

  Net [Loss] Per Share                                       (.03)         (.05)
                                                       ==========   ===========

  Number of Shares                                     $3,583,335   $ 3,311,819
                                                       ==========   ===========



See Notes to Financial Statements.

                                         2

<PAGE>



PERRY'S MAJESTIC BEER, INC.
------------------------------------------------------------------------------


STATEMENT OF STOCKHOLDERS' EQUITY
[UNAUDITED]
------------------------------------------------------------------------------
<TABLE>


                                                                                             Unrealized                             
                                                                                               Loss on
                                                                       Additional  Retained   Available     Total
                              Preferred Stock       Common Stock         Paid-in   Earnings   For Sale   Stockholders'
                            Shares     Amount     Shares     Amount      Capital   [Deficit] Investment     Equity
<S>                         <C>       <C>         <C>        <C>       <C>         <C>       <C>         <C>

Common Stock Issued
  for Cash - January 1996     --      $   --      2,500,000  $   250   $  49,750   $   --    $   --      $     50,000

500,000 Shares of Series
  A and 7,000,000 Shares
  of Ser B Preferred Stock
  Issued for Cash and
  Investment in Bev-Tyme,
   Inc.[Series C Preferred] 7,500,000    7,500         --        --    2,142,500       --         --        2,150,000
                            --------- --------    ---------  -------   ---------   --------   ----------    ---------

Balance - March 31, 1996    7,500,000    7,500    2,500,000      250   2,192,250       --         --        2,200,000

 Net Proceeds from Public
  Offering of Common Stock      --         --       583,335       58   2,475,028       --         --        2,475,086

 Unrealized Loss on Avail
  for Sale Investment [3]       --         --           --       --          --        --      (1,200,000) (1,200,000)

 Net[Loss]for the nine mo
  ended December 31, 1996       --         --           --       --          --    (166,265)      --         (166,265)
                            --------- ---------   ---------  -------   ---------   --------   -----------  -----------

Balance-December 31, 1996
  [Unaudited]              7,500,000 $   7,500  3,083,335  $      308 $4,667,278 $ (166,265)  $(1,200,000) $3,308,821
                           ========= =========  =========  ========== ========== ===========  ===========  ==========



See Notes to Financial Statements.

</TABLE>


                                           3

<PAGE>



PERRY'S MAJESTIC BEER, INC.
------------------------------------------------------------------------------


STATEMENT OF CASH FLOWS FOR THE NINE MONTHS ENDED DECEMBER 31, 1996.
[UNAUDITED]
------------------------------------------------------------------------------




  Net Cash - Operating Activities                                   $  (363,455)
                                                                    -----------

Investing Activities:
  Acquisition of Old Marlborough Brewery                               (172,213)
  Riverosa Acquisition                                                 (100,000)
  Loan to Bev-Tyme                                                      (75,000)
  Repayment of Loan from Bev-Tyme                                        75,000
                                                                    -----------

  Net Cash - Investing Activities                                      (272,213)
                                                                     -----------

Financing Activities:
  Proceeds from Bridge Loan                                              60,000
  Proceeds from Sale of Preferred Stock to Bev-Tyme                      75,000
  Payment of Bridge Loan Obligation                                    (150,000)
  Final Payment on Stock Subscription for Common Stock                    4,800
  Proceeds of Public Offering - Net of Offering Costs                 2,475,086
                                                                    -----------

  Net Cash - Financing Activities                                     2,464,886
                                                                    -----------

  Net Increase in Cash                                                1,829,218

Cash - Beginning of Period                                               60,200
                                                                    -----------

  Cash - End of Period                                              $ 1,889,418
                                                                    ===========

Supplemental Disclosures of Cash Flow Information:
  Cash paid for the period for:
   Interest                                                         $     6,998
   Income Taxes                                                     $        --



See Notes to Financial Statements.

                                           4

<PAGE>



PERRY'S MAJESTIC BEER, INC.
NOTES TO FINANCIAL STATEMENTS
[UNAUDITED]
------------------------------------------------------------------------------


[1] Summary of Significant Accounting Policies

[A] Nature of Operations - Perry's Majestic Beer,  Inc., a Delaware  corporation
[the "Company" or "Perry's"], was formed in December 1995. There were no revenue
or expense activities through March 31, 1996. The Company became a subsidiary of
Bev-Tyme, Inc. as of March 29, 1996 [See Note 3].

[B] Earnings Per Share - The number of shares to be used for earnings per share
calculation purposes is based on the number of shares issued and outstanding for
the period presented.  Convertible Preferred Stock shares are included if 
dilutive.

[C] Cash  Equivalents  - The  Company's  policy is to classify all highly liquid
debt  instruments  purchased with an initial maturity of three months or less to
be cash equivalents.

[D] Use of Estimates - The  preparation  of financial  statements  in conformity
with  generally  accepted  accounting  principles  requires  management  to make
estimates  and  assumptions  that  affect  the  reported  amounts  of assets and
liabilities  and disclosure of contingent  assets and liabilities at the date of
the  financial  statements  and the  reported  amounts of revenues  and expenses
during the reporting period.  Actual results could differ from those estimates.

[E]  Goodwill  - Amounts  paid in excess of the  estimated  value of net  assets
acquired of Riverosa  and Old  Marlborough  are  charged to  goodwill.  Goodwill
relates to revenues  the Company  anticipates  realizing  in future  years.  The
Company has decided to amortize its  goodwill  over a period of up to five years
under the straight-line  method. The Company's policy is to evaluate the periods
of goodwill  amortization  to determine  whether later events and  circumstances
warrant  revised  estimates  of useful  lives.  The Company  will also  evaluate
whether the  carrying  value of goodwill has become  impaired by  comparing  the
carrying  value of goodwill to the value of  projected  undiscounted  cash flows
from  acquired  assets or  businesses.  Impairment is recognized if the carrying
value of goodwill  is less than the  projected  undiscounted  cash flow from the
acquired assets or business.

[F] Stock  Options  and Similar  Equity  Instruments  Issued to  Employees - The
Company uses the  intrinsic  value method to recognize  cost for stock issued to
employees.

[G] Basis of Reporting - The accompanying  unaudited  financial  statements have
been prepared in accordance with generally  accepted  accounting  principles for
interim financial  information and with the instructions to Form 10-QSB and Item
310(b)of Regulation S-B. Accordingly, they do not include all of the information
and footnotes required by generally accepted accounting  principles for complete
financial statements. In the opinion of management,  such statements include all
adjustments  which  are  considered  necessary  in  order  to make  the  interim
financial statements not misleading.

[2] Business Combination

[A] On March 29, 1996,  the Company  entered into an agreement to acquire all of
the stock of Riverosa  Company,  Inc. for $250,000 of which $150,000 in cash was
put into escrow as of March 31, 1996 and a note payable was issued for $100,000.
The note was  payable  with  interest  of 8% and was paid in August of 1996 with
proceeds  from  the  Company's  initial  public  offering.  The  combination  is
accounted for by the purchase method.

Goodwill of  approximately  $246,000 will be amortized over five years under the
straight-line method.

Amortization  of  goodwill  of $20,500 was  recorded  for the nine months  ended
December 31, 1996.

Interest expense for the nine months ended December 31, 1996 was $2,790.

                                        5

<PAGE>



PERRY'S MAJESTIC BEER, INC.
NOTES TO FINANCIAL STATEMENTS, Sheet #2
[UNAUDITED]
------------------------------------------------------------------------------



[2] Business Combination [Continued]

[B] In August of 1996, the Company  entered into a letter of intent to acquire a
brewery for $50,000. In September 1996, the Company finalized its acquisition of
the Old  Marlborough  Brewery.  The total  purchase  price was $160,513 of which
$35,513 was for inventory and equipment and $75,000 was for distribution rights.
Goodwill of $27,650 was recorded and will be amortized over five years under the
straight-line method. For the nine months ended December 31, 1996,  amortization
of goodwill was $1,383. This acquisition was deemed insignificant.

During  the  third  quarter,   the  Company  paid  an  additional   $11,700  for
distribution rights.

[3] Investment - Related Party

On March 29, 1996, the Company issued to Bev-Tyme,  Inc. [a public  corporation]
500,000 shares of convertible  Class A Preferred  Stock and 7,000,000  shares of
non-convertible Class B Preferred Stock for 400,000 shares of Series C Preferred
Stock of Bev-Tyme,  Inc.  [valued at $2,000,000 at March 31, 1996] and $150,000.
As of March 31, 1996,  $75,000 of cash was  collected and the balance of $75,000
was  received  on April 4, 1996.  Each share of Class A  Preferred  Stock may be
convertible  by the  holder  into one [1] share of Common  Stock.  Each share of
Class A Preferred Stock and Class B Preferred Stock has attached to it the right
to vote on all matters submitted to the Company.

On April 19, 1996, the Company lent $75,000 to Bev-Tyme,  Inc., which was repaid
September 9, 1996.

Interest  income for this loan for the nine months  ended  December 31, 1996 was
$2,338.

The  investment in Bev-Tyme,  Inc. is classified as "available  for sale" and is
presented at estimated fair value. As of December 31, 1996, the Company recorded
an  unrealized  loss of  $1,200,000 to reflect the change in the market value of
Bev-Tyme, Inc.'s Series C Preferred Stock.

[4] 1996 Stock Option Plan

In  March  1996,  the  Board  of  Directors  of the  Company  adopted,  and  the
stockholders of the Company approved the adoption of the 1996 Stock Option Plan.
The maximum number of shares of common stock with respect to which awards may be
granted pursuant to the 1996 Plan is initially 2,000,000 shares.

[5] Common Stock

[A] In January  1996,  the Company  issued  2,500,000  shares of common stock to
seven [7]  parties for a total  consideration  of  $50,000.  At March 31,  1996,
$45,200 was collected and the balance of $4,800 was received April 4, 1996.

[B] The Company's  registration  statement for 583,335 shares of common stock at
$6.00 per share  was  declared  effective  in July of 1996 and net  proceeds  of
approximately $2,475,000 were received in August of 1996.

[6] Bridge Loan

On March 31, 1996, the Company  borrowed an aggregate of $150,000 from seven [7]
unaffiliated lenders [the "Bridge Lenders"]. In exchange for making loans to the
Company, each Bridge Lender received a promissory note [the "Bridge Note"]. Each
of the Bridge Notes bears  interest at the rate of eight percent [8%] per annum.
The Bridge Notes were paid at the closing of the initial public  offering of the
Company's  securities  in August  of 1996.  As of March 31,  1996,  $90,000  was
received in cash from the bridge loan and  $60,000 was  received  April 4, 1996.
The  principal  balance of $150,000  and  interest for $4,208 was paid August 5,
1996.

                                        6

<PAGE>



PERRY'S MAJESTIC BEER, INC.
NOTES TO FINANCIAL STATEMENTS, Sheet #3
[UNAUDITED]
------------------------------------------------------------------------------


[7] New Authoritative Pronouncements

The FASB has also issued SFAS No. 115,  "Accounting  for Certain  Investments in
Debt and Equity  Securities," which the Company adopted on January 1, 1995. SFAS
No. 115  requires  management  to classify  its  investments  in debt and equity
securities as trading,  held-to-maturity,  and/or available-for-sale at the time
of purchase and to reevaluate such determination at each balance sheet date. The
Company does not anticipate that it will have many investments that will qualify
as  trading  or  held-to-maturity  investments.  Debt  securities  for which the
Company  does  not  have the  intent  or  ability  to hold to  maturity  will be
classified  as  available-for-sale,   along  with  most  investments  in  equity
securities.  Securities available-for-sale are to be carried at fair value, with
any  unrealized  holding  gains and losses,  net of tax,  reported in a separate
component of shareholders' equity until realized.

The Financial  Accounting Standards Board ["FASB"] issued Statement of Financial
Accounting  Standards  ["SFAS"]  No.  121,  Accounting  for  the  Impairment  of
Long-Lived Assets and for Long-Lived Assets to Be Disposed Of, in March of 1995.
SFAS No. 121 establishes  accounting  standards for the impairment of long-lived
assets, certain identifiable  intangibles,  and goodwill related to those assets
to be held  and  used,  and  for  long-lived  assets  and  certain  identifiable
intangibles  to be  disposed  of. The Company  adopted  SFAS No. 121 on April 1,
1996.  Adoption of SFAS No. 121 did not have a material  impact on the Company's
financial  statements.  In the future,  if the sum of the expected  undiscounted
cash flows is less than the carrying  amount of the asset,  an  impairment  loss
would be recognized.

The FASB has also issued SFAS No. 123 "Accounting for Stock-Based Compensation,"
in October 1995.  SFAS No. 123 uses a fair value based method of recognition for
stock options and similar equity  instruments  issued to employees as contrasted
to the  intrinsic  valued based method of  accounting  prescribed  by Accounting
Principles  board  ["APB"]Opinion  No.  25,  "Accounting  for  Stock  Issued  to
Employees."  The  recognition  requirements  of SFAS No. 123 are  effective  for
transactions  entered into in fiscal  years that begin after  December 15, 1995.
The Company will continue to apply Opinion No. 25 in recognizing its stock based
employee arrangements. The disclosure requirements of SFAS No. 123 are effective
for financial statements for fiscal years beginning after December 15, 1995. The
Company  adopted the  disclosure  requirements  on April 1, 1996.  SFAS 123 also
applies to  transactions  in which an entity  issues its equity  instruments  to
acquire  goods  or  services  from  non-employees.  Those  transactions  must be
accounting for based on the fair value of the consideration received or the fair
value of the equity instrument  issued,  whichever is more reliably  measurable.
This requirement is effective for  transactions  entered into after December 15,
1995. The adoption of SFAS No. 123 could have a material impact on the Company's
financial statements.

[8] Financial Instruments

The carrying amount of cash, accounts  receivable and payable  approximates fair
value because of their short maturities.

[9] Commitments and Contingencies

In April of 1996, the Company entered into a three [3] year employment agreement
with Mark  Butler  pursuant to which Mr.  Butler  serves as the  Company's  Vice
President of Sales. The agreement provides for Mr. Butler to receive a salary of
$25,000 per annum until the closing of this offering and thereafter  $75,000 per
annum.  In addition,  on each of March 31, 1997,  March 31, 1988,  and March 31,
1999,  the Company has agreed to grant Mr. Butler an option to purchase  100,000
shares of common stock exercisable at fair market value on the date of issuance.

Also in April of 1996,  the  Company  entered  into a three [3] year  employment
agreement  with  Robert  Sipper  pursuant  to which  Mr.  Sipper  serves  as the
Company's President. The agreement provides for Mr.
Sipper to receive a salary of $52,000 per annum.

In October of 1996, Mr. Sipper exercised his option to transfer his Bev-Tyme 
salary of $106,650 to the Company.

                      . . . . . . . . . . . . . . . . . . .

                                        7

<PAGE>



Item 2:

PERRY'S MAJESTIC BEER, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
------------------------------------------------------------------------------





OVERVIEW

Perry's  Majestic Beer, Inc. [the "Company" or "Perry's"] was formed in December
of 1995.  There were no  operations  prior to the  formation  of Perry's for the
period  December  1995 to March 1996 nor any revenue or expense  activities  for
Perry's through March 31, 1996. The primary  activities for Perry's prior to the
proposed acquisition of Riverosa Company,  Inc.  ["Riverosa"] were investing and
financing  activities  through  March  31,  1996  [See  "Liquidity  and  Capital
Resources"].  In March of 1996, the Company entered into an agreement to acquire
Riverosa,  which was  formed in  November  of 1993.  Riverosa  is engaged in the
manufacture  and  distribution  of  microbrewed  beers and ales.  Management  of
Riverosa  consisted  of Mark  Butler  and Ron  Zagha.  Mark  Butler  is the Vice
President  of the Company and Robert J. Sipper is the  President  of the Company
and will be responsible for the management functions of the Company.

Bev-Tyme, Inc. ["Bev-Tyme"], the Company's controlling shareholder and parent, 
through its wholly owned subsidiary, shall be the distributor for Perry's in New
York City.  Besides Robert J. Sipper, who is the President and Chief Executive
Officer of Bev-Tyme, Inc. and the Company and Robert Forst, the Chief Financial 
Officer of Bev-Tyme, it is not anticipated that any other employees of Bev-Tyme
or its subsidiaries will be involved with the Company's operations. It is 
anticipated that the two companies will be run independently of each other.

The Board of Directors of Perry's  consist of three people,  two of whom have no
interest [not an employee,  officer or director] in Bev-Tyme.  Accordingly,  all
potential conflicts of interest shall be decided by an impartial Board.

Results of Operations

The Company had a loss from  operations of $165,708 and net loss of $166,265 for
the nine months ended December 31, 1996.

The sales for the  Company  for the nine  months  ended  December  31, 1996 were
$564,590.  The Company  believes its customers  base will increase in 1997.  The
Company  intends to introduce at least one new style beer within the next twelve
months and explore changing the label of the bottle.  Emphasis will be placed on
building  businesses in bars and  restaurants as well as retail and  supermarket
outlets.  The Company will attempt to increase its  distribution  base by adding
new distributors and designing incentive and price promotion programs.

The Company's selling,  general and administrative  expenses for the nine months
ended  December  31, 1996 were  $257,834.  The  Company's  selling,  general and
administrative  expenses increased for the December 31, 1996 quarter as a result
of two additional sales personnel.

The Company's  interest  expense for the nine months ended December 31, 1996 was
$6,998.  The interest  expense was attributable to the $150,000 bridge loans and
the $100,000 acquisition note for Riverosa, both repaid in August of 1996.

                                        8

<PAGE>



PERRY'S MAJESTIC BEER, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
------------------------------------------------------------------------------



Liquidity and Capital Resources

Perry's had excess working  capital at December 31, 1996 of $2,146,484.  For the
nine months ended December 31, 1996, the Company  utilized  $363,455 in cash for
operations.  The Company  utilized  $272,213  in  investing  activities  for the
acquisition of Riverosa and the Old Marlborough  brewery as of December 31, 1996
and expended  another  $75,000 as a loan to Bev-Tyme,  Inc.  which was repaid in
September  of 1996.  The Company  generated  $2,464,886  in cash from  financing
activities  for the nine months ended  December 31, 1996 resulting from the sale
of preferred  stock to Bev-Tyme,  Inc. with  additional cash proceeds of $75,000
being received in April of 1996, the sale of common stock with  additional  cash
proceeds of $4,800 being received in April of 1996, the additional proceeds from
bridge  loans of $60,000  being  received in April of 1996 and the net  proceeds
from the initial public  offering of $2,475,086.  The $150,000 bridge loans from
the seven unaffiliated lenders had an interest rate of 8% per annum. These loans
were repaid at the close of the initial  public  offering on August 4, 1996. The
cash balance at December 31, 1996 was $1,889,418.

In April of 1996, the Company entered into a three [3] year employment agreement
with Mark  Butler  pursuant to which Mr.  Butler  serves as the  Company's  Vice
President of Sales. The agreement provides for Mr. Butler to receive a salary of
$25,000 per annum until the closing of this offering and thereafter  $75,000 per
annum.  In addition,  on each of March 31, 1997,  March 31, 1988,  and March 31,
1999,  the Company has agreed to grant Mr. Butler an option to purchase  100,000
shares of common stock exercisable at fair market value on the date of issuance.

Also in April of 1996,  the  Company  entered  into a three [3] year  employment
agreement  with  Robert  Sipper  pursuant  to which  Mr.  Sipper  serves  as the
Company's  President.  The agreement provides for Mr. Sipper to receive a salary
of $52,000 per annum.  In October of 1996,  Mr.  Sipper  exercised his option to
transfer his Bev-Tyme salary of $106,650 to Perry's.

In August of 1996,  the  Company  entered  into a letter of intent to  acquire a
brewery for $50,000. In September 1996, the Company finalized its acquisition of
the Old  Marlborough  Brewery.  The total  purchase  price was $160,513 of which
$35,513 was for inventory and equipment and $75,000 was for distribution rights.
During  the  third  quarter,   the  Company  paid  an  additional   $11,700  for
distribution rights.

The Company  anticipates  that the net proceeds of  $2,475,086  from the initial
public  offering in August of 1996 along with  anticipated  cash to be generated
from operating  activities  will be sufficient to satisfy its cash  requirements
for at least the next twelve  [12] months and enable it to market and  advertise
its products,  expand the market as well as to develop a brewpub/restaurant  and
microbrewery in the New York metropolitan area.



                                        9

<PAGE>


SIGNATURE
------------------------------------------------------------------------------




Pursuant to the  requirements  of the  Securities  and Exchange Act of 1934, the
Registrant has duly caused this report on Form 10-QSB to be signed on its behalf
by the undersigned thereon duly authorized.



                                          PERRY'S MAJESTIC BEER, INC.



                                          By:/s/ Robert J. Forst
                                              Robert J. Forst
                                              Chief Financial Officer

February 13, 1997

                                       10

<PAGE>