<PAGE>

                    U.S. SECURITIES AND EXCHANGE COMMISSION
                            Washington, D.C. 20549

                                 Form 10-QSB/A

[X]  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
     ACT OF 1934, For the quarterly period ended September 30, 1999.
                                       or
[ ]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES ACT OF
     1934.

                       Commission File Number:  0-27800

                             Frederick Brewing Co.
       (Exact Name of Small Business Issuer as Specified in Its Charter)

              Maryland                           52-1769647
       (State or Other Jurisdiction of        (I.R.S. Employer
        Incorporation or Organization)         Identification No.)

4607 Wedgewood Boulevard, Frederick, Maryland       21703
(Address of Principal Executive Offices)         (Zip Code)

                                (301) 694-7899
               (Issuer's Telephone Number, Including Area Code)

                                Not Applicable
             (Former Name, Former Address and Former Fiscal Year,
                         if Changed Since Last Report)

      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 Exchange Act of
1934 during the past 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
    ------     ------

State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date:

  Common Stock, $0.0004 par value    8,596,211
  (Title of Each Class)              (Number of shares outstanding as of
                                     September 30, 1999)

<PAGE>

                             FREDERICK BREWING CO.
                                  FORM 10-QSB
                              September 30, 1999

This Amendment No. 1 on Form 10-QSB/A (this "Amendment") amends and restates in
full the disclosures made by the registrant, Frederick Brewing Co., in response
to "ITEM 1.CONSOLIDATED FINANCIAL STATEMENTS" and "ITEM 2. MANAGEMENT'S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS" in its
Form 10-QSB as originally filed with the Securities and Exchange Commission (the
"Commission") via EDGAR transmission on October 12, 1999 (the "Original
Filing"). The disclosures responsive to all of the other Items in the Original
Filing are not affected by this Amendment but continue as set forth in the
Original Filing without change. Notwithstanding the foregoing, the disclosures
in the Original Filing, as amended by this Amendment, are subject to updating
and supplementation by the disclosures contained in the filings made by
Frederick Brewing with the Commission for any period or as of any date
subsequent to the quarter ended September 30, 1999, covered by the Original
Filing.

The purpose of this Amendment No. 1 is to make the following restatements and
reclassifications and clarifications:

In "Item 1. CONSOLIDATED FINANCIAL STATEMENTS":

(i)   To restate the statement of operations to reflect a compensation charge of
$200,000 resulting from the issuance of 126,478 shares of common stock to former
officers as severance compensation. As a result, selling, general and
administrative expenses increased by $200,000 and additional paid-in capital
increased by $200,000.

(ii)  To reclassify on the balance sheet withheld payroll used to purchase
common shares in the third quarter ended September 30, 1999. As a result,
accrued liabilities decreased by $23,044 and additional paid-in capital
increased by $23,044.

(iii) To restate the balance sheet to reflect an additional $77,569 payable. As
a result, gain on forgiveness of debt was decreased and accounts payable was
increased by $77,569.

(iv)  To revise the discussion in the notes to the consolidated financial
statements with respect to the above mentioned transactions as well as Frederick
Brewing's issuance of variance warrants to purchase common stock as disclosed in
note 15 -- Stockholders' Equity.

In "Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS":

To revise the discussion under "Results of Operations - Selling, General and
Administrative Expenses, Extraordinary Gain on Forgiveness of Debt (net) and Net
Operating Loss" for the previously mentioned restated items.

In "Item 6. EXHIBITS AND REPORTS ON FORM 8-K": To include Exhibit 27.1 as of
September 30, 1999, which serves to restate Exhibit 27.1, as of September 30,
1999, filed with the Original Filing, for the restatements and reclassifications
previously mentioned.

<PAGE>

                             FREDERICK BREWING CO.
                             INDEX TO FORM 10-QSB
                              September 30, 1999

<TABLE>
<S>                                                                                          <C>
PART I.  FINANCIAL INFORMATION                                                                3

Item 1.  Financial Statements                                                                 3

Consolidated Balance Sheet (unaudited) - September 30, 1999                                   3

Consolidated Statements of Operations (unaudited) -for the three and nine months
ended September 30, 1999 and 1998                                                             4

Consolidated Statements of Cash Flows (unaudited) -for the three and nine months
ended September 30, 1999 and 1998                                                             5

Notes to Consolidated Financial Statements (unaudited)                                        6

Item 2.  Management's Discussion and Analysis of Financial Condition and Results
         of Operations                                                                       12

PART II.  OTHER INFORMATION                                                                  26

Item 1.  Legal Proceedings                                                                   26

Item 2.  Changes in Securities and Use of Proceeds                                           26

Item 3.  Defaults Upon Senior Securities                                                     27

Item 6.  Exhibits and Reports on Form 8-K                                                    28

SIGNATURES                                                                                   32

</TABLE>
<PAGE>

PART I.  FINANCIAL INFORMATION

Item 1.  FINANCIAL STATEMENTS

                             FREDERICK BREWING CO.
                          Consolidated Balance Sheet
                              September 30, 1999
                                                                  September 30,
                                                                     1999
                                                                  -------------
                                                                   (Unaudited)
                                    ASSETS
Current assets:
     Cash and cash equivalents                                    $     69,932
     Cash - restricted                                                 312,475
     Trade receivables, net of allowance for doubtful
      accounts of $31,716                                              409,901
     Inventories, net of reserve for obsolescence of $74,313           545,201
     Prepaid expenses and other current assets                         258,707
                                                                  ------------
        Total current assets                                         1,596,216

Property and equipment, net of accumulated depreciation of
 $1,725,036                                                          7,743,936
Intangibles, net of accumulated amortization of $128,688               524,270
Goodwill, net of accumulated amortization of $9,321                    932,140
Other assets                                                             1,460
                                                                  ------------
        Total assets                                              $ 10,798,022
                                                                  ============

                     LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities
     Current maturities of long-term debt                         $  2,171,691
     Capital lease obligations, current portion                         44,717
     Accounts payable                                                1,201,728
     Accrued liabilities                                               442,903
                                                                  ------------
        Total current liabilities                                    3,861,039

Long-term debt                                                          84,151
Capital lease obligations                                            2,618,655
                                                                  ------------
        Total liabilities                                            6,563,845
                                                                  ------------

Stockholders' equity:
     Preferred stock - $0.01 par value, 1,000,000 shares
      authorized:
        Cumulative, convertible Series A, 1,455 shares issued
         and outstanding                                               548,512
        Common stock - $0.0004 par value, 19,000,000 shares
         authorized, 8,596,211 shares issued and outstanding             3,439
        Additional paid-in capital                                  23,861,881
        Accumulated deficit                                        (20,179,655)
                                                                  ------------
         Total stockholders' equity                                  4,234,177
                                                                  ------------

         Total liabilities and stockholders' equity               $ 10,798,022
                                                                  ============

The accompanying notes are an integral part of these consolidated financial
statements.


<PAGE>

                             FREDERICK BREWING CO.
                     Consolidated Statements of Operations
        For the Three and Nine Months Ended September 30, 1999 and 1998

<TABLE>
<CAPTION>
                                                                        Three Months Ended                 Nine Months Ended
                                                                           September 30,                     September 30
                                                                        ------------------                 -----------------
                                                                    1999                 1998            1999             1998
                                                                 -----------          -----------    -----------      -------------
                                                                          (Unaudited)                          (Unaudited)
<S>                                                              <C>                 <C>             <C>               <C>
Gross sales                                                      $   810,014          $1,603,212      $ 2,804,522      $  4,213,059
Less:  Returns and allowances, and excise taxes                      441,159             189,595          618,053           490,340
                                                                 -----------          ----------      -----------      ------------
   Net sales                                                         368,855           1,413,617        2,186,469         3,722,719

   Cost of sales                                                     869,958           1,071,373        2,627,185         2,851,091
                                                                 -----------          ----------      -----------      ------------
   Gross profit (loss)                                              (501,103)            342,244         (440,716)          871,628

Selling, general and administrative expenses                       1,135,188             863,277        2,437,779         2,665,688
Impairment of goodwill                                             1,359,751                  --        1,359,751                --
Minority interest in joint venture                                        --               4,985               --             4,985
Amortization of deferred public relations costs                           --                  --               --         1,089,000
                                                                 -----------          ----------      -----------      ------------
   Operating loss                                                 (2,996,042)           (526,018)      (4,238,246)       (2,888,045)

Loss on sale of equipment                                              2,123                  --            2,123            99,545
Interest expense, net                                                151,996             209,475          502,537           419,910
                                                                 -----------          ----------      -----------      ------------
Loss before extraordinary gain on forgiveness
  of debt                                                         (3,150,163)           (735,493)      (4,742,906)       (3,407,500)
Extraordinary gain on forgiveness of debt, net                       731,360                  --          731,360                --
                                                                 -----------          ----------      -----------      ------------
   Net loss                                                       (2,418,801)           (735,493)      (4,011,546)       (3,407,500)

Preferred stock deemed dividend requirement                               --            (247,000)              --          (275,627)
                                                                 -----------          ----------      -----------      ------------
Net loss attributable to common stockholders                     $(2,418,801)         $ (982,493)     $(4,011,546)     $ (3,683,127)
                                                                 ===========          ==========      ===========      ============

Basic and diluted loss per common share:
   Net loss before extraordinary item and
    preferred stock dividend requirement                         $     (0.71)         $    (0.54)     $     (1.77)     $      (3.65)
   Extraordinary item                                                    .17                  --              .27                --
   Preferred stock dividend requirement                                   --               (0.18)              --             (0.29)
                                                                 -----------          ----------      -----------      ------------
   Net loss per common share                                           (0.54)         $    (0.72)     $     (1.50)     $      (3.94)
                                                                 ===========          ==========      ===========      ============

Weighted average common shares (basic
 and diluted)                                                      4,490,972           1,356,275        2,670,414           934,672
</TABLE>

The accompanying notes are an integral part of these consolidated financial
statements.


<PAGE>
                             FREDERICK BREWING CO.
                     Consolidated Statements of Cash Flows
        For the Three and Nine Months ended September 30, 1999 and 1998

<TABLE>
<CAPTION>
                                                                        Three Months Ended                 Nine Months Ended
                                                                           September 30,                     September 30
                                                                        ------------------                 -----------------
                                                                    1999                 1998            1999             1998
                                                                 -----------          -----------    -----------      -------------
                                                                          (Unaudited)                          (Unaudited)
<S>                                                              <C>                 <C>             <C>               <C>
Cash flows from operating activities:
  Net loss                                                       $(2,418,801)          $(735,493)     $(4,011,546)      $(3,407,500)
  Adjustments to reconcile net loss to
  net cash used in operating activities:
       Depreciation and amortization                                 323,109             270,178          894,139           774,401
       Gain on forgiveness of debt                                  (731,360)                 --         (731,360)               --
       Goodwill impairment                                         1,359,751                  --        1,359,751                --
       Compensation charges for fair value of stock
        issued in lieu of salary                                      23,044                  --           23,044                --
       Compensation charges for issuance of stock
        to former officers                                           200,000                  --          200,000                --
       Equity investment in joint venture                                 --                (384)              --              (384)
       Amortization of deferred public
       relations costs                                                    --                  --               --         1,089,000
  Loss on sale of equipment                                            2,123                  --            2,123            99,545
  Change in operating assets and liabilities:
       Trade receivables                                             (34,814)           (158,113)           1,082          (495,244)
       Inventories                                                    44,355             (75,474)         126,655          (438,301)
       Prepaid expenses, and other current assets                   (100,375)            (85,174)        (100,801)         (221,190)
       Other assets                                                   70,936              13,266          197,866            (9,830)
       Accounts payable                                             (393,506)            359,647           46,591           931,979
       Accrued liabilities                                           309,354            (190,990)         288,296           (91,076)
                                                                 -----------           ---------      -----------       -----------
  Net cash used in operating activities                           (1,346,184)           (602,537)      (1,704,160)       (1,768,600)
                                                                 -----------           ---------      -----------       -----------

Cash flows from investing activities:
  Change in restricted cash                                         (300,000)                 --         (300,000)               --
  Purchase of property and equipment                                (202,500)            (87,123)        (354,780)         (320,356)
  Purchase of intangibles                                                 --             (14,463)          (2,355)         (105,174)
  Purchases of business, net of cash acquired                             --                  --               --          (834,611)
  Proceeds from sale of equipment                                      5,250                  --            5,250            94,060
                                                                 -----------           ---------      -----------       -----------
  Net cash used in investing activities                             (497,250)           (101,586)        (651,885)       (1,166,081)
                                                                 -----------           ---------      -----------       -----------

Cash flows from financing activities:
  Proceeds from borrowings                                         2,204,691                  --        2,815,751                --
  Payments on debt obligations and capital
  leases                                                          (2,139,692)            (96,717)      (2,326,567)         (283,222)
  Proceeds from issuance of preferred
  stock, net                                                              --             359,100               --           359,100
  Proceeds from issuance of common
  stock, net                                                       1,841,856             436,000        1,843,794           436,000
                                                                 -----------           ---------      -----------       -----------
  Net cash provided by/(used in)
  financing activities                                             1,906,855             698,383        2,332,978           511,878
                                                                 -----------           ---------      -----------       -----------

Net increase/(decrease) in cash and cash
equivalents                                                           63,421              (5,740)         (23,067)       (2,422,803)

Cash and cash equivalents, beginning of period                         6,511             195,817           92,999         2,612,880
                                                                 -----------           ---------      -----------       -----------
Cash and cash equivalents, end of period                         $    69,932           $ 190,077      $    69,932       $   190,077
                                                                 ===========           =========      ===========       ===========
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
<PAGE>

                             FREDERICK BREWING CO.
                  Notes to Consolidated Financial Statements
                              September 30, 1999
                                  (Unaudited)


1.   Basis of Presentation

The accompanying unaudited consolidated financial statements of Frederick
Brewing Co. ("Frederick Brewing") have been prepared in accordance with
generally accepted accounting principles for interim financial reporting and
with the instructions of Form 10-QSB and Regulation S-B. As such, they do not
include all information and footnotes required by generally accepted accounting
principles for complete year-end financial reporting. In the opinion of
Frederick Brewing's management, all normal recurring accruals and other
adjustments considered necessary for a fair presentation of an interim
consolidated financial position and the interim consolidated results of
operations have been included.

Operating results for the three and nine months ended September 30, 1999 are not
necessarily indicative of the results that may be expected for other interim
periods within 1999 or for the year ending December 31, 1999. Information
relating to the financial position, results of operations and cash flows of
Frederick Brewing as of and for the year ended December 31, 1998 may be found in
the financial statements included in Frederick Brewing's Annual Report filed on
Form 10-KSB for the year ended December 31, 1998.

Effective August 24, 1999, Frederick Brewing and Snyder International Brewing
Group, LLC ("SIBG"), an Ohio limited liability company that was founded and is
controlled by C. David Snyder, Frederick Brewing's Chairman and Chief Executive
Officer, completed a series of transactions that resulted in SIBG acquiring
approximately 51% of the outstanding common stock of Frederick Brewing. An
overview of these transactions is set forth below:

     .  SIBG purchased 4,447,104 newly issued shares of Frederick Brewing's
        common stock for $2.0 million in cash.

     .  Holders of Frederick Brewing's Series F and G convertible preferred
        stock converted their shares of preferred stock into an aggregate of
        2,155,140 shares of Company common stock.

     .  A number of Frederick Brewing's creditors agreed to forgive
        approximately $0.9 million of aggregate indebtedness in order to
        facilitate SIBG's investment in Frederick Brewing (See note 3).

     .  Frederick Brewing entered into transition agreements with Kevin Brannon,
        the former Chairman and Chief Executive Officer of Frederick Brewing,
        and Marjorie McGinnis, the former President of Frederick Brewing,
        pursuant to which

<PAGE>

Mr. Brannon and Ms. McGinnis are bound by non-compete provisions through 2001
and will receive in the aggregate $300,000 in severance payments. As of October
1, 1999, Mr. Brannon and Ms. McGinnis were no longer employees of Frederick
Brewing.

In addition, in connection with its investment in Frederick Brewing, SIBG
purchased all of the outstanding equity interests in Blue II, LLC ("Blue II"),
the entity that owns Frederick Brewing's 5.5 acre site and brewing facility.
SIBG will cause Blue II to continue to lease the brewing facility to Frederick
Brewing.

In connection with SIBG's investment and the related transactions, Frederick
Brewing paid Westfinance Corporation an aggregate amount of $135,600 for (i)
assisting Frederick Brewing in obtaining SIBG's equity investment, (ii)
assisting Frederick Brewing in implementing the creditor and vendor debt
forgiveness plan and (iii) issuing a fairness opinion to the Board of Directors
of Frederick Brewing. The fees paid to Westfinance Corporation were recorded as
a deduction from additional paid-in capital.

3.   Extraordinary Gain on Forgiveness of Debt

On August 24, 1999, in order to facilitate SIBG's investment in Frederick
Brewing, a number of Frederick Brewing's creditors forgave amounts owed to
Frederick Brewing totaling $824,662. One of the creditors was a financial
institution for which Frederick Brewing had unamortized debt costs of $93,302
that were expensed. The net amount of $731,360 of debt forgiveness has been
recorded in the statement of operations for the period ended September 30, 1999
as an extraordinary gain on forgiveness of debt.

4.   Related Parties

Frederick Brewing currently leases its operating facilities from Blue II, which
is wholly-owned by SIBG. The lease is recorded and accounted for as a capital
lease in accordance with SFAS 13 (See note 14). Total payments made to Blue II
pursuant to this lease were $32,184 for the period ended September 30, 1999.

Effective August 24, 1999, Frederick Brewing executed a demand promissory note
in favor of SIBG that enables Frederick Brewing to borrow from SIBG on a
revolving basis up to $5.0 million in aggregate principal amount (See note 13).
Total interest accrued to SIBG as of September 30, 1999 was $16,992.

Effective August 24, 1999, Frederick Brewing entered into a one year management
agreement with SIBG whereby SIBG provides to Frederick Brewing administrative,
financial, operational, sales and marketing and strategic planning services.
Under this agreement, Frederick Brewing pays SIBG $30,000 per month for these
services. For the period ended September 30, 1999, Frederick Brewing paid SIBG
$30,000 in the aggregate for these services.

In addition, effective August 24, 1999, Frederick Brewing entered into a
production agreement with Crooked River Brewing Company, LLC pursuant to which
Frederick

<PAGE>

Brewing has agreed to produce and package draft beer for Crooked River for up to
four years, which includes automatic renewals. Crooked River is controlled and
predominantly owned by C. David Snyder, Frederick Brewing's Chief Executive
Officer and Chairman. For the period ended September 30, 1999, sales to
Frederick Brewing totaled $14,561 under this agreement.

5.   Principles of Consolidation

The consolidated financial statements of Frederick Brewing for the three and
nine months ended September 30, 1999 include the accounts of Frederick Brewing
and its wholly-owned subsidiaries Wild Goose Brewery, Inc. ("Wild Goose") and
Brimstone Brewing Company ("Brimstone") since their acquisitions on January 28,
1998 and January 15, 1998, respectively. Frederick Brewing plans to merge these
subsidiaries into Frederick Brewing before December 31, 1999.

6.   Cash and Cash Equivalents

Cash and cash equivalents are stated at cost, which approximates fair value, and
consists of amounts on hand. The restricted cash balance of $312,475 consists of
(i) a $300,000 escrow fund established at a financial institution for the
purpose of making payments to Kevin Brannon, former Chairman and Chief Executive
Officer of Frederick Brewing, and Marjorie McGinnis, former President of
Frederick Brewing, under the terms of their transition agreements, which contain
non-compete provisions through 2001 (See note 2), and (ii) a short-term
investment of $12,475, which is in a highly liquid short term investment account
as required by the Frederick County government.

7.   Trade Receivables

Trade receivables result primarily from product sales to wholesale distributors.
Frederick Brewing periodically reviews the financial strength of its
distributors and provides allowances for anticipated losses as necessary. At
September 30, 1999, there was $31,716 in allowance for doubtful accounts.

8.   Inventories

Inventories consist of raw ingredients, work in process, packaging materials and
finished goods, and are valued at the lower of cost or market. Cost is
determined by the first-in, first-out (FIFO) method. Frederick Brewing
periodically reviews the age and marketability of its inventory and provides
obsolescence reserves as necessary. Net inventories at September 30, 1999 are as
follows:

<PAGE>


     Raw ingredients...........   $ 77,590
     Work in process...........     87,136
     Packaging materials.......    174,306
     Finished goods............    280,482
                                  --------
     Inventory, gross..........    619,514
     Reserve for obsolescence..    (74,313)
                                  --------
     Inventory, net............   $545,201

9.   Prepaid Expenses and Other Current Assets

Prepaid expenses and other current assets include brewery merchandise, points of
sale promotional items, prepaid keg deposits and miscellaneous prepaid expenses
consisting of pallet deposits, prepaid taxes and insurance. The composition of
the prepaid expenses and other current assets at September 30, 1999 is as
follows:

     Merchandise inventory...........  $ 25,983
     Promotional and marketing
         inventory...................   103,773
     Prepaid keg deposits............    28,530
     Miscellaneous prepaid expenses..   100,421
                                       --------
          Total                        $258,707

10.  Property and Equipment

Property and equipment are recorded at cost and depreciated over the estimated
useful lives of the individual asset groups. Straight-line depreciation is used
for financial reporting, and accelerated depreciation methods are used for tax
reporting. The estimated useful lives used for financial reporting are as
follows: brewing equipment, seven to 20 years; automobiles and trucks, five
years; furniture and fixtures, three to seven years. Leasehold improvements are
recorded at cost and amortized over the shorter of the terms of the related
lease or over the estimated useful life of the improvement. On retirement or
disposition of property and equipment, the cost and accumulated depreciation of
the property or equipment are removed from the accounts and any resulting gain
or loss is reflected in operations. Repair and maintenance costs to property and
equipment are expended in the year incurred. Property and equipment at September
30, 1999 are as follows:

     Brewing equipment..............  $ 4,511,273
     Brewery building...............    3,000,000
     Leasehold improvements.........    1,663,683
     Automobiles and trucks.........      155,621
     Furniture and fixtures.........      138,395
                                      -----------
     Property and equipment, gross..    9,468,972
     Accumulated depreciation.......   (1,725,036)
                                      -----------
     Property and equipment, net....  $ 7,743,936

<PAGE>


Depreciation expense for the three and nine months ended September 30, 1999 was
$193,323 and $622,802, respectively. As of September 30, 1999, Frederick Brewing
has a commitment to construct improvements to its wastewater treatment facility
at a cost of approximately $125,000. The construction is scheduled to be
completed by November 30, 1999.

11.  Intangible Assets

Intangible assets consist of trademarks, copyrights and loan origination costs
related to existing debt obligations. Trademarks and copyrights are amortized
over five years on the straight-line basis. Loan origination costs are amortized
over the term of their related loan. Intangible asset amortization expense for
the three and nine months ended September 30, 1999 was $33,411 and $79,741,
respectively. For the quarter ended September 30, 1999, the amount of $93,302
was expensed as an offset to the extraordinary gain on the forgiveness of debt
(See note 3). This amount represented loan origination costs on loans repaid in
August 1999, in connection with SIBG's equity investment in Frederick Brewing.

12.  Goodwill

Frederick Brewing acquired Wild Goose in January 1998 and recognized goodwill of
$2,734,113 associated with the acquisition. During the three months ended
September 30, 1999, Frederick Brewing's management determined that the goodwill
associated with this acquisition will not be fully recovered. Frederick Brewing
has experienced lower than expected sales volume of certain Wild Goose products.
Frederick Brewing has estimated that it can recover $941,461 of the remaining
value of its goodwill based on a future cash flows analysis. Accordingly,
Frederick Brewing has taken a charge of $1,359,751 in its statements of
operations for the three months ended September 30, 1999 reflecting this
impairment of the goodwill associated with the Wild Goose acquisition.

13.  Debt

On August 30, 1999, Frederick Brewing executed a promissory note in favor of
SIBG that is due on demand with an interest rate per annum equal to the prime
rate of a regional financial institution (7.8% at September 30, 1999) plus one
percent. Interest on the principal balance of the note is payable monthly. Under
the note, Frederick Brewing may obtain loan advances from SIBG as needed up to
an aggregate principal amount of $5.0 million. At September 30, 1999, Frederick
Brewing had outstanding borrowings from SIBG of $2,171,691 under the note.

In August, 1999, Frederick Brewing repaid the remaining outstanding balance of
its bank debt and its loan from the United States Small Business Administration
that was not forgiven (See note 3) with borrowings from SIBG under the SIBG
note.

<PAGE>

The aggregate amount of $111,060 remains outstanding on the note payable to
Frederick County for sewer connections, and the terms of this note have not
changed. The payment of this note is secured by a second mortgage on the brewery
building and property.

14.  Capital Leases

Frederick Brewing leases the land and building containing its brewery operations
from Blue II, which is wholly-owned by SIBG. The lease qualifies for capital
lease treatment. The current and long-term portion of the capital lease is
$2,663,372 at September 30, 1999. Frederick Brewing has the option to purchase
the land and building after March 1, 2008.

15.  Stockholders' Equity

During the three months ended September 30, 1999, Frederick Brewing issued
6,750,452 shares of common stock. The additional shares consisted of (i)
4,447,104 shares issued to SIBG, (ii) 1,552,000 shares issued to former Series F
preferred stockholders upon conversion of their preferred stock, (iii) 603,140
shares issued to former Series G preferred stockholders upon conversion of their
preferred stock and (iv) 148,208 shares issued to former officers and employees
of Frederick Brewing. Total weighted common shares for the three and nine months
ended September 30, 1999 were 4,490,072 and 2,670,414, respectively.

The Company incurred a $200,000 compensation charge related to the issuance of
126,478 shares to former officers of the Company.

The Company issued 500,000 warrants to purchase common stock in June 1999 to a
group of investors who had loaned the Company $500,000. The loan was repaid in
August 1999. These warrants were immediately exercisable at $0.375 per share.
The Company determined the aggregate fair value of the warrants at the time of
the grant was not material. These warrants were cancelled in August 1999
concurrent with the SIBG transaction (see Note 1). Additionally, 500,000 new
warrants to purchase common stock were issued to this same group of investors in
conjunction with the SIBG transaction whereas each warrant is exercisable at
$0.50. These warrants are exercisable immediately and expire in August 2002. The
Company determined the aggregate fair value of these warrants at the time of
grant to be approximately $502,300 which is recorded on the balance sheet as
deferred compensation and additional paid-in capital in the equity section until
such time the warrants are exercised.

In August 1999, the Company issued 132,000 warrants to purchase common stock to
the former owners of Blue II as settlement of back rent and late charges. These
warrants are exercisable upon grant at $1.00 each and expire in August 2002.
These warrants remain outstanding at September 30, 1999.

The Company also issued warrants to purchase shares of common stock to SIBG at
an exercise price of $0.01 per share. These warrants become exercisable solely
in the event that warrants, options, or convertible securities of the Company
outstanding at September 30, 1999, are exercisable, but remain outstanding.

16.  Income Taxes

Frederick Brewing accounts for income taxes under the asset and liability
method. Deferred income taxes are recognized for their tax consequences in
future years by the differences between the tax basis of assets and liabilities
and their financial reporting values at each year-end. This is based on enacted
tax laws and statutory rates applicable to the periods in which the differences
are expected to affect taxable income. Valuation allowances are established as
necessary to reduce deferred tax assets to the amount they may realize if
disposed. Income tax expense represents the current tax provision for the period
plus the change during the period in deferred tax assets and liabilities. Net
operating losses have been incurred in the three and nine months ended September
30, 1999 and 1998, and Frederick Brewing has not recorded a provision for income
taxes payable. The utilization of the net operating loss carry forward to future
periods may be limited under Section 382 of the Internal Revenue Code.

17.  Basic and Diluted Loss per Common Share

Statement of Financial Accounting Standards No. 128, "Earnings Per Share,"
requires the presentation of basic (loss) per share and diluted (loss) per
share. Basic (loss) per share is based on the weighted-average number of
outstanding common shares for the period. Diluted (loss) per share adjusts the
weighted average common shares for any potential dilution that could occur if
stock options, warrants or other convertible securities were

<PAGE>

exercised or converted into common shares. There is no difference between basic
and diluted loss per share for the three and nine months ended September 30,
1999 because the effects of Frederick Brewing's outstanding options, warrants
and convertible preferred stock were anti-dilutive.

18.  Returns and Allowances

For the three months ended September 30, 1999, returns and allowances includes a
charge of $350,000 for a potential loss related to allegedly out-of-code product
that was exported to, and is currently warehoused in, a non-U.S. market.
Frederick Brewing's management is currently reviewing the situation and is in
discussions with the relevant authorities in the non-U.S. market.

Item 2.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
          RESULTS OF OPERATIONS

The following is a discussion of the financial condition and results of
operations of Frederick Brewing for the three and nine months ended September
30, 1999 and 1998. This discussion should be read in conjunction with the
Management's Discussion and Analysis of Financial Condition and Results of
Operations and the Consolidated Financial Statements and Notes thereto included
in Frederick Brewing's Form 10-KSB for the fiscal year ended December 31, 1998.

Overview

Effective August 24, 1999, SIBG purchased 4,447,104 newly issued shares of the
Company's common stock for $2.0 million in cash, representing approximately 51%
of the outstanding common stock of Frederick Brewing after giving effect to the
transaction. At the time of SIBG's investment, Frederick Brewing was suffering
from serious financial and operational problems, which were outlined in
Frederick Brewing's Form 10-QSB for the fiscal quarter ended June 30, 1999.
After SIBG's investment in Frederick Brewing, a number of changes were made in
Frederick Brewing's board of directors and senior management. Each member of
Frederick Brewing's board of directors resigned, except for Jerome Pool, and C.
David Snyder, Christopher J. Livingston, Dale W. Bainbridge and David L. Stith
were appointed to the board to fill their vacancies. On October 1, 1999, Glenn
E. Corlett was also appointed to Frederick Brewing's board. In addition, the
following changes in Frederick Brewing's senior management were made:

     .  C. David Snyder, founder and Chairman of SIBG, replaced Frederick
        Brewing's co-founder, Kevin Brannon, as Chairman and Chief Executive
        Officer.

     .  Christopher J. Livingston, President of SIBG and its craftbrewing
        affiliate, Crooked River, replaced Frederick Brewing's co-founder,
        Marjorie McGinnis, as President.

<PAGE>

     .  James Gehrig, the Chief Financial Officer of SIBG, replaced Leslie
        Harper as Chief Financial Officer.

Mr. Brannon and Ms. McGinnis served as Vice Presidents of Frederick Brewing
until September 30, 1999 and, as of October 1, 1999, were no longer employees of
Frederick Brewing.  Under their transition agreements, Mr. Brannon and Ms.
McGinnis are bound by non-compete provisions through 2001.  Mr. Harper's
position with Frederick Brewing terminated on October 31, 1999.

The changes in Frederick Brewing's board of directors and senior management
are expected to result in changes in, among other things, Frederick Brewing's
strategic direction, its distribution efforts and its sales and marketing
strategies.  Since the completion of SIBG's investment in Frederick Brewing,
Frederick Brewing's management has engaged in a thorough evaluation of Frederick
Brewing's operations and financial condition.  This evaluation is continuing.
Nevertheless, Frederick Brewing has taken a number of immediate steps intended
to stabilize Frederick Brewing's financial condition, which had been
deteriorating rapidly, and to establish a foundation upon which to improve
Frederick Brewing's operating and financial performance in the future.  These
include the following:

     .  Enter into the SIBG Management Agreement

Effective August 24, 1999, Frederick Brewing entered into a management agreement
with SIBG under which SIBG provides Frederick Brewing with administrative,
financial, operational, sales and marketing and strategic planning services. The
SIBG management team has collectively over 70 years of experience in the
alcoholic beverage industry. Frederick Brewing entered into the SIBG management
agreement, which has a term of one year, in order to obtain the benefits of the
extensive experience of the SIBG management team. The monthly management fee of
$30,000 paid by Frederick Brewing to SIBG under the agreement is less than the
aggregate monthly salaries and related fringe benefits paid to Frederick
Brewing's former senior managers. The members of SIBG's management team who also
serve as officers of Frederick Brewing do not receive any compensation from
Frederick Brewing. This agreement was unanimously approved by those members of
the Frederick Brewing board who are not members, officers or directors of, or
otherwise affiliated with, SIBG or Crooked River.

     .  Enter into the Crooked River Production Agreement

Effective August 24, 1999, Frederick Brewing entered into a production agreement
with Crooked River under which Frederick Brewing produces and packages draft
beer for Crooked River for up to four years, which includes automatic renewal
periods. This agreement was unanimously approved by those members of the
Frederick Brewing board who are not members, officers or directors of, or
otherwise affiliated with, SIBG or Crooked River.

<PAGE>

     .  Enter into the SIBG Promissory Note

In order to repay certain outstanding indebtedness of Frederick Brewing and to
fund working capital and other corporate needs, Frederick Brewing executed a
promissory note in favor of SIBG. The SIBG note is payable on demand and
provides that Frederick Brewing may borrow on a revolving basis up to $5.0
million in aggregate principal amount. The note has an interest rate per annum
equal to the prime rate of a regional financial institution plus one percent. As
of September 30, 1999, Frederick Brewing had outstanding borrowings of
approximately $2.2 million under the note. This note was unanimously approved by
those members of the Frederick Brewing board who are not members, officers or
directors of, or otherwise affiliated with, SIBG or Crooked River.

     .  Acquire Distribution Rights for the Frederick, Maryland Regional Area

Through September 30, 1999, Frederick Brewing's gross revenues had been
negatively impacted by the decision of Frederick Brewing's major distributor in
the Frederick, Maryland regional area to diversify its brand portfolio and
concentrate its sales and marketing efforts in alcoholic beverage products other
than beer. Consequently, on September 24, 1999, Frederick Brewing acquired its
distribution rights for Frederick Brewing's brands for the Frederick, Maryland
regional area from this distributor. Frederick Brewing immediately assigned
these rights to nine distributors that will service the Frederick, Maryland
regional area. C. David Snyder, Frederick Brewing's Chairman and Chief Executive
Officer, personally guaranteed up to $160,000 of the acquisition price for these
distribution rights. Frederick Brewing's management believes that these new
distributors will help to stabilize Frederick Brewing's brands in this area.

     .  Initiate New Sales and Marketing Plans

During the fourth quarter of 1999, Frederick Brewing expects to initiate and
begin implementation of new sales strategies and marketing plans to increase
interest in Frederick Brewing's brands. Initially, Frederick Brewing expects to
concentrate its sales efforts in the Maryland and Virginia areas.

Frederick Brewing's management believes that the key to improving Frederick
Brewing's financial performance is to increase the utilization levels of its
brewing facility.  To that end, Frederick Brewing has entered into the
production agreement with Crooked River.  In addition, Frederick Brewing may
enter into a similar production agreement relating to certain brands C. David
Snyder had previously acquired from The Hudepohl-Schoenling Brewing Company,
although no assurance can be given as to when or if Frederick Brewing will enter
into such agreement.  To accommodate and produce the potential incremental
volume related to these additional brands, Frederick Brewing is considering
expanding the brewing capacity and storage capability of its brewery.  Current
estimates for this capital expansion project are in the range of $150,000 to
$200,000.  Management plans to fund this capital expansion project, in part,
with funds from SIBG.  Frederick Brewing is also pursuing additional funds
sources at both the state and local government levels for this project.

Also, Frederick Brewing's management is directly monitoring and, as appropriate,
reducing overhead spending. Overall employment at the brewery is also being
reviewed in an effort to maximize the talents of Frederick Brewing's labor
workforce.

<PAGE>

Results of Operations

     The following table sets forth data derived from Frederick Brewing's
Consolidated Statements of Operations.  The table set forth below is expressed
as a percentage of net sales, for the three and nine months ended September 30,
1999 and 1998.


                                 Percentage of Net Sales

<TABLE>
<CAPTION>

                                                   Three Months Ended            Nine Months Ended
                                                       September 30                 September 30
                                                   -------------------           -----------------
                                                   1999           1998           1999         1998
                                                   ----           ----           ----         ----
                                                       (Unaudited)                  (Unaudited)

<S>                                                <C>            <C>           <C>          <C>
Gross Sales                                        219.6%         113.4%        128.3%       113.2%
Less:  Returns and allowances, and
  excise taxes                                     119.6           13.4          28.3         13.2
                                                  ------          -----        ------        -----
Net sales                                          100.0          100.0         100.0        100.0
Cost of sales                                      235.9           75.8         120.2         76.6
                                                  ------          -----        ------        -----
Gross profit/(loss)                               (135.9)          24.2         (20.2)        23.4
Selling, general and administrative
  expenses                                         307.8           61.4         111.5         71.7
Impairment of goodwill                             368.6            0.0          62.2          0.0
Amortization of deferred public
  relations costs                                    0.0            0.0           0.0         29.3
                                                  ------          -----        ------        -----
Operating loss                                    (812.3)         (37.2)       (193.9)       (77.6)
Loss on sale of equipment                            0.6            0.0           0.0          2.7
Interest expense, net                               41.2           14.8          23.0         11.3
                                                  ------          -----        ------        -----
Loss before extraordinary gain on                 (854.1)         (52.0)       (216.9)       (91.6)
  forgiveness of debt
Extraordinary gain on forgiveness
  of debt, net                                     198.3            0.0          33.4          0.0
Net Loss                                          ------          -----        ------        -----
                                                  (655.8)         (52.0)       (183.5)       (91.6)
</TABLE>
<PAGE>

Per Barrel Operating Data

<TABLE>
<CAPTION>
                                                  Three Months Ended          Nine Months Ended
                                                     September 30                September 30
                                                     ------------                ------------
                                                  1999           1998         1999          1998
                                                  ----           ----         ----          ----
                                                       (Unaudited)                (Unaudited)
<S>                                             <C>             <C>          <C>          <C>
Barrels sold                                       5,091          9,233       16,404        23,800
Gross sales per barrel sold                      $159.11        $173.64      $170.97       $177.02
Less:  Returns and allowances, and
  excise taxes                                     86.66          20.53        37.68         20.60
                                                 -------        -------      -------       -------
Net sales per barrel sold                        $ 72.45        $153.11      $133.29       $156.42
Cost of sales per barrel sold                     170.88         116.04       160.16        119.79
                                                 -------        -------      -------       -------
Gross profit per barrel sold                     $(98.43)       $ 37.07      $(26.87)      $ 36.63
</TABLE>

Three Months Ended September 30, 1999 to Three Months Ended September 30, 1998

Gross Sales

Gross sales decreased $793,198, or approximately 49.5%, to $810,014 for the
third quarter of 1999 from $1,603,212 for the comparable period in 1998. The
decrease in gross sales resulted primarily from a reduction in demand in all
product lines as sales, marketing and promotional efforts for all markets were
curtailed by Frederick Brewing's former management.

Selling Price per Barrel

The selling price per barrel decreased by $14.53, or approximately 8.4%, to
$159.11 per barrel for the third quarter of 1999 from $173.64 for the comparable
period in 1998. The decrease in selling price per barrel was primarily due to
Frederick Brewing's continued use of price reductions in certain markets to
maintain Frederick Brewing's brand presence in the consumer market in lieu of
significant marketing and selling support.

Significant changes in the packaging mix could have a material effect on sales
price per barrel. Frederick Brewing packages its brands in bottles and kegs.
Assuming the same level of production, a shift in the mix from bottles to kegs
would effectively decrease revenue per barrel because the selling price per
equivalent barrel is lower for kegs than for bottles. Keg sales as a percentage
of total equivalent barrels of brands were 28% for the third quarter of 1999,
and 24% for the third quarter of 1998.

Returns and Allowances, and Excise Taxes

Returns and allowances increased $251,564, or approximately 132.7%, to $441,159
in the third quarter of 1999 from $189,595 for the comparable period in 1998.
The increase is

<PAGE>

attributable to an allowance reserve established by Frederick Brewing's
management relating to allegedly out-of-code product that was exported to, and
is currently warehoused in, a non-U.S. market. Frederick Brewing's management is
currently reviewing the situation and is in discussions with the relevant
authorities in the non-U.S. market.

State excise taxes vary, depending on where the beer is to be sold. In some
jurisdictions, including Maryland and Pennsylvania, the brewery is required to
pay the excise tax, while in others, such as the District of Columbia and
Virginia, the tax is paid by the wholesale distributor to whom the beer is
shipped. State excise tax rates vary from state to state as well. Frederick
Brewing also currently pays a $7 per barrel federal excise tax on all beer sold
in the United States.

Net Sales

Net sales decreased $1,044,762, or approximately 73.9%, to $368,855 for the
third quarter of 1999 from $1,413,617 for the comparable period in 1998. The
decrease was caused, in part, by (i) a decrease in gross sales of $793,198 for
the third quarter of 1999 compared to the comparable period in 1998 and (ii) an
increase in Frederick Brewing's returns and allowances and excise taxes of
$251,564 for the third quarter of 1999 compared to the comparable period in
1998.

Volume

Barrelage volume decreased by 4,142 barrels, or approximately 44.9%, to 5,091
barrels for the third quarter of 1999 from 9,233 barrels for the comparable
period in 1998. The decrease was primarily caused by a significant decline in
volume for all of Frederick Brewing's product lines. The predominant factor in
this broad based product volume decline was Frederick Brewing's continued
reliance on one major wholesaler for the Frederick, Maryland regional area. In
1999, this wholesaler elected to change its product portfolio from a major beer
emphasis to other alcoholic beverage products. On September 24, 1999, Frederick
Brewing acquired its distribution rights for the Frederick, Maryland regional
area from this distributor and promptly assigned those acquired rights to nine
wholesalers.

Cost of Goods Sold

For the third quarters of 1999 and 1998, the cost of sales was $869,958, or
$170.88 per barrel, and $1,071,373, or $116.04 per barrel, respectively. For the
third quarters of 1999 and 1998, variable costs (materials, direct labor and
variable overhead) were $592,758, or $116.43 per barrel, and $753,319, or $81.59
per barrel, respectively. Fixed overhead costs for the third quarter of 1999
decreased by $40,854, or approximately 12.8%, to $277,200 from $318,054 for the
comparable period in 1998.

Variable costs include raw materials, packaging materials, liquid costs and
variable labor costs directly related to the production and packaging of beer.
Variable and fixed overhead costs

<PAGE>

include costs related to the following operational departments: brewing,
cellaring, packaging, quality assurance, warehousing, maintenance and production
management.

The increase in cost of sales was caused by Frederick Brewing's fixed overhead
costs being absorbed over a reduced barrel shipment, 5,091 barrels in 1999
compared to 9,233 barrels in 1998. For the third quarter of 1999, Frederick
Brewing's facility operated at a level of 20.4% of plant capacity as compared to
36.9% for the comparable period in 1998. Frederick Brewing's capacity
utilization has a significant impact on gross profit. When facilities are
operating at their maximum designed production capacities, profitability is
favorably affected by spreading fixed and variable operating costs over a larger
sales base. Because the actual production level is substantially below the
facility's maximum designed production capacity, gross margins are negatively
impacted. This impact is reduced when actual utilization levels increase.

Selling, General and Administrative Expenses

Selling, general, and administrative expenses increased $271,911, or
approximately 31.5%, to $1,135,188 for the third quarter of 1999 from $863,277
for the comparable period in 1998. This increase was due, in part, to (i) a
$200,000 compensation charge related to 126,478 shares issued to former officers
of Frederick Brewing, (ii) a $30,000 monthly management fee paid by Frederick
Brewing to SIBG, and (iii) consulting fees paid to former senior executive
officers of Frederick Brewing.

Impairment of Goodwill

Impairment of goodwill associated with the Wild Goose acquisition resulted in a
charge of $1,359,751 for the third quarter of 1999 as compared to $0.00 for the
comparable period in 1998. Frederick Brewing's management determined that the
goodwill of $2,734,113 that was recognized when Frederick Brewing acquired Wild
Goose in 1998 will not be fully recovered due to lower than expected sales
volumes of certain Wild Goose brands. Based on future cash flows analysis,
Frederick Brewing's management has estimated that it can recover $941,461 of the
remaining value of its goodwill.

Interest Expense (net)

Net interest expense decreased $57,479, or approximately 27.4%, to $151,996 for
the third quarter of 1999 from $209,475 for the comparable period in 1998. A
substantial portion of the interest expense incurred during the third quarter of
1999 and 1998 relates to indebtedness incurred by Frederick Brewing in
connection with equipment financing. Interest expense for the third quarter
decreased as a result of Frederick Brewing repaying this indebtedness.

Extraordinary Gain on Forgiveness of Debt (net)

The net amount of extraordinary gain on forgiveness of debt for the third
quarter of 1999 was $731,360 as compared to $0.00 for the comparable period in
1998. In order to facilitate SIBG's investment in Frederick Brewing, a number of
Frederick Brewing's creditors forgave
<PAGE>

amounts owed to Frederick Brewing totalling $824,662. One of the creditors was a
financial institution for which Frederick Brewing had unamortized debt costs of
$93,302 that were expensed.

Net Operating Loss

A net loss of $2,418,801 or $0.54 per weighted-average common share was incurred
during the third quarter of 1999, compared to a net loss of $982,493 or $0.72
per weighted-average common share for the comparable period in 1998, an increase
of $1,436,308 or approximately 146.2%.

Nine Months Ended September 30, 1999 To Nine Months Ended September 30, 1998

Gross Sales

Gross Sales decreased $1,408,537, or approximately 33.4%, to $2,804,522 for the
nine months ended September 30, 1999 from $4,213,059 for the comparable period
in 1998. The decrease resulted primarily from the reduction in demand in all
product lines as sales, marketing and promotional efforts for all markets were
curtailed by Frederick Brewing's former management.

Selling Price Per Barrel

The selling price per barrel decreased by $6.05, or approximately 3.4%, to
$170.97 per barrel for the nine months ended September 30, 1999 from $177.02 for
the comparable period in 1998. The decrease in the selling price per barrel was
primarily due to Frederick Brewing's continued use of price reductions to
maintain Frederick Brewing's brand presence in the consumer market in lieu of
significant marketing and selling support.

Significant changes in the packaging mix could have a material effect on sales
price per barrel. Frederick Brewing packages its brands in bottles and kegs.
Assuming the same level of production, a shift in the mix from bottles to kegs
would effectively decrease revenue per barrel because the selling price per
equivalent barrel is lower for kegs than for bottles. Keg sales as a percentage
of total equivalent barrels of brands were 28% for the nine months ended
September 30, 1999, and 25% for the nine months ended September 30, 1998.

Returns and Allowances, and Excise Taxes

Returns and allowances increased $127,713, or approximately 26.0%, to $618,053
for the nine months ended September 30, 1999 from $490,340 for the comparable
period in 1998. The increase is attributable to an allowance reserve established
by Frederick Brewing's management relating to allegedly out-of-code product that
was exported to, and is currently warehoused in, a non-U.S. market. Frederick
Brewing's management is currently reviewing the situation and is in discussions
with the relevant authorities in the non-U.S. market.

<PAGE>

State excise taxes vary, depending on where the beer is to be sold. In some
jurisdictions, including Maryland and Pennsylvania, the brewery is required to
pay the excise tax, while in others, such as the District of Columbia and
Virginia, the tax is paid by the wholesale distributor to whom the beer is
shipped. State excise tax rates vary from state to state as well. Frederick
Brewing also currently pays a $7 per barrel federal excise tax on all beer sold
in the United States.

Net Sales

Net sales decreased $1,536,250, or approximately 41.3%, to $2,186,469 for the
nine months ended September 30, 1999 from $3,722,719 for the comparable period
in 1998. The decrease was caused, in part, by (i) a decrease in gross sales of
$1,408,537 for the nine month period ended September 30, 1999 compared to the
comparable period in 1998 and (ii) an increase in Frederick Brewing's returns
and allowances and excise taxes of $127,713 for the nine months ended September
30, 1999 compared to the comparable period in 1998.

Volume

Barrelage volume decreased by 7,396 barrels, or approximately 31.1%, to 16,404
barrels for the nine months ended September 30, 1999 from 23,800 barrels for the
comparable period in 1998. The decrease was primarily caused by a significant
decline in volume for all of Frederick Brewing's product lines. The predominant
factor in this broad based product volume decline was Frederick Brewing's
continued reliance on one major wholesaler for the Frederick, Maryland regional
area. In 1999, this wholesaler elected to change its product portfolio from a
major beer emphasis to other alcoholic beverage products. On September 24, 1999,
Frederick Brewing acquired its distribution rights for the Frederick, Maryland
regional area from this distributor and promptly assigned those acquired rights
to nine wholesalers.

Cost of Goods Sold

For the nine months ended September 30, 1999 and 1998, the cost of sales was
$2,627,185, or $160.16 per barrel, and $2,851,091, or $119.79 per barrel,
respectively. For the nine months ended September 30, 1999 and 1998, variable
costs (materials, direct labor and variable overhead) were $1,734,785, or
$105.75 per barrel, and $2,003,008, or $84.16 per barrel, respectively. Fixed
overhead costs for the nine months ended September 30, 1999 increased by
$44,317, or approximately 5.2%, to $892,400 from $848,083 for the comparable
period in 1998.

Variable costs include raw materials, packaging materials, liquid costs and
variable labor costs directly related to the production and packaging of beer.
Variable and fixed overhead costs include costs related to the following
operational departments: brewing, cellaring, packaging, quality assurance,
warehousing, maintenance and production management.

<PAGE>

The increase in cost of sales was caused by Frederick Brewing's fixed overhead
costs being absorbed over a reduced barrel shipment, 16,404 barrels in 1999
compared to 23,800 barrels in 1998. For the nine months ended September 30,
1999, the Frederick Brewing facility operated at a level of 21.9% of plant
capacity as compared to 31.7% for the comparable period in 1998. Frederick
Brewing's capacity utilization has a significant impact on gross profit. When
facilities are operating at their maximum designed production capacities,
profitability is favorably affected by spreading fixed and variable operating
costs over a larger sales base. Because the actual production level is
substantially below the facility's maximum designed production capacity, gross
margins are negatively impacted. This impact is reduced when actual utilization
levels increase.

Selling, General and Administrative Expenses

SG&A expenses for the nine months ended September 30, 1999 decreased
$227,909, or approximately 8.5%, to $2,437,779 from $2,665,688 for the
comparable period in 1998. The decrease was due, in part, to (i) a $200,000
compensation charge related to 126,478 shares issued to former officers of
Frederick Brewing, (ii) a reduction of $629,662 in sales and marketing costs,
(iii) an increase in the $30,000 monthly management fee paid by Frederick
Brewing to SIBG, and (iv) an increase in consulting fees paid to former senior
executive officers of Frederick Brewing.

Impairment of Goodwill

Impairment of goodwill associated with the Wild Goose acquisition resulted in a
charge of $1,359,751 for the nine months ended September 30, 1999 as compared to
$0.00 for the comparable period in 1998. Frederick Brewing's management
determined that the goodwill of $2,734,113 that was recognized when Frederick
Brewing acquired Wild Goose in 1998 will not be fully recovered due to lower
than expected sales volumes of certain Wild Goose brands. Based on future cash
flows analysis, Frederick Brewing's management has estimated that it can recover
$941,461 of the remaining value of its goodwill.

Interest Expense (net)

Net interest expense increased $82,627, or approximately 19.7%, to $502,537 for
the nine months ended September 30, 1999 from $419,910 for the comparable period
in 1998. A substantial portion of the interest expense incurred during the nine
months ended September 30, 1999 and 1998 relates to indebtedness incurred by
Frederick Brewing in connection with equipment financing. Frederick Brewing
repaid this indebtedness in the third quarter of 1999.

Extraordinary Gain on Forgiveness of Debt (net)

The net amount of extraordinary gain on forgiveness of debt for the nine months
ended September 30, 1999 was $731,360 as compared to $0.00 for the comparable
period in 1998. In order to facilitate SIBG's investment in Frederick Brewing, a
number of Frederick Brewing's creditors forgave amounts owed to Frederick
Brewing totalling $824,662. One of the creditors was a financial institution for
which Frederick Brewing had unamortized debt costs of $93,302 that were
expensed.

<PAGE>

Net Operating Loss

A net loss of $4,011,546 or $1.50 per weighted-average common share was incurred
for the nine months ended September 30, 1999, compared to a net loss of
$3,683,127 or $3.94 per weighted-average common share for the comparable period
of 1998, an increase of $328,419 or approximately 8.9%.

Liquidity and Capital Resources

Frederick Brewing has recorded losses from operations since 1993 and has funded
its operations primarily from private and public placements of common and
preferred stock. As of September 30, 1999, Frederick Brewing had a working
capital deficit of $2,210,298.

Net cash used in operating activities was $1,346,184 in the third quarter of
1999, compared to $602,537 in the third quarter of 1998. Year-to-date net cash
used in operations activities was $1,704,160 in 1999, compared to $1,768,600 in
1998.

Net cash used for investing activities was $497,250 in the third quarter of
1999, compared to $101,586 in the third quarter of 1998. Year-to-date net cash
used for investing activities was $651,885 in 1999, compared to $1,166,081 in
1998.

Net cash provided by financing activities in the third quarter of 1999 was
$1,906,855, compared to $698,383 in the third quarter of 1998. Year to-date net
cash provided by financing activities was $2,332,978 in 1999, compared to
$511,878 in 1998.

Frederick Brewing's ability to meet its obligations on a long term basis is
dependent on achieving operating profitability and on generating positive cash
flows. To achieve these results, Frederick Brewing will need to eliminate or
substantially reduce excess brewing capacity. In order to meet its short term
obligations, Frederick Brewing will need to borrow additional amounts from SIBG
under the SIBG note. Frederick Brewing currently has approximately $2.8 million
in availability under the SIBG note. The SIBG note, however, is subject to
repayment in full upon demand by SIBG. SIBG receives funding for Frederick
Brewing's borrowings under the SIBG note from a line of credit obtained by SIBG
from a financial institution on substantially similar terms and which is also
payable on demand. As a result, although SIBG is owned and controlled by C.
David Snyder, Frederick Brewing's Chairman and Chief Executive Officer, SIBG may
nonetheless have to demand repayment from Frederick Brewing of amounts
outstanding under the SIBG note if the financial institution providing funding
to SIBG demands repayment. Consequently, Frederick Brewing is exploring
obtaining more permanent financing arrangements, including possibly a line of
credit secured by Frederick Brewing's equipment, although no assurances can be
given that any such financing arrangements can be obtained and, if obtained,
upon what terms such financing would be provided to Frederick Brewing.

Impact of Inflation

Frederick Brewing has not attempted to calculate the impact of inflation on
operations, but does not believe that inflation has had a material impact in
recent years. Management does believe any future cost increases in raw
ingredients, packaging materials, direct labor costs,

<PAGE>

overhead payroll costs, and general operating expenses due to inflation could
have a significant impact on Frederick Brewing's results of operations to the
extent that these additional costs cannot be transferred to distributors.

Provision for Income Taxes

Frederick Brewing has incurred net operating losses during both 1998 and 1999
and no provisions for income taxes have been provided for on the Consolidated
Statements of Operations. Frederick Brewing has recorded a full valuation
allowance against the net deferred tax assets.

Impact of Year 2000 Issue

The term "Year 2000" is used to describe general problems that may result from
improper processing of dates and date-sensitive calculations by computers or
other machinery as the Year 2000 is approached and reached. This problem stems
from the fact that many of the world's computer hardware and software
applications have historically used only the last two digits to refer to a year.
As a result, may of these computer programs do not or will not properly
recognize a year that begins with "20" instead of the familiar "19". If not
corrected, many computer applications could fail or create erroneous results.
Frederick Brewing is working with key external parties, including banks,
utilities, other vendors and third party payers, to assess the efforts made by
these parties with respect to their own systems and to determine the extent to
which their systems are vulnerable to the Year 2000 issue. Frederick Brewing has
received sufficient information from these parties about their plans to be able
to predict the outcome of their efforts.

Readiness.  Frederick Brewing has completed a review of its computerized
information systems to identify systems and applications that could be affected
by Year 2000 issues. Desktop operating systems and software applications are
being upgraded to the latest versions and will be Year 2000 compliant by October
31, 1999. Frederick Brewing plans to finalize its information systems
remediation by enhancing the financial application by October 31, 1999.
Frederick Brewing does not maintain any proprietary information technology
systems and has not made any modifications to any of the information technology
systems provided by its vendors. Frederick Brewing utilizes software and
hardware offered by major vendors and is in the process of receiving Year 2000
readiness disclosures and warranties individually from those vendors. Frederick
Brewing expects that minor Year 2000 compliance issues will continue to be
identified throughout its discussions with hardware and software vendors.

Cost.  As of September 30, 1999, Frederick Brewing has spent approximately
$15,000 to upgrade or replace essential computer hardware and software.  The
estimated cost of enhancing the financial application will be approximately
$2,500.  This estimated cost does not account for any additional costs incurred
due to the failure of any third party vendor or service provider to achieve Year
2000 compliance.

Risk.  Year 2000 risk involves a "worst case scenario" which would comprise of
system errors or failures, business interruptions and the inability to engage in
normal business practices.

<PAGE>

The main areas of concern would be the accounting and operations systems. The
amount of any potential losses related to these occurrences cannot be reasonably
estimated at this time.

Contingency Plan.  Frederick Brewing will continue to explore contingency plans,
so as to be in a position to mitigate the consequences of any disruption
resulting from the Year 2000 issue.

Frederick Brewing recognizes the importance of ensuring that Year 2000 issues
will not adversely affect its operations. Frederick Brewing believes that the
process described above will be effective to manage the risks associated with
the problem that the Year 2000 poses.

Certain Factors That May Affect Future Results

From time to time, information provided by Frederick Brewing, statements by its
employees or information included in its filings with the Securities and
Exchange Commission (including those portions of this Management's Discussion
and Analysis that refer to the future) may contain forward-looking statements
that are not historical facts. Those statements are "forward-looking" within the
meaning of the Private Securities Litigation Reform Act of 1995. Such forward-
looking statements, and Frederick Brewing's future performance, operating
results, financial position and liquidity, are subject to a variety of factors
that could materially affect results, including:

     .  Going Concern.  The financial statements included in this report have
        been prepared assuming Frederick Brewing will continue as a going
        concern. Frederick Brewing has sustained significant recurring operating
        losses and has significant cash commitments to creditors. These facts
        raise substantial doubt about Frederick Brewing's ability to continue as
        a going concern.

     .  Reliance on SIBG.   Frederick Brewing's success depends to a significant
        degree upon the continued support and contributions of its controlling
        shareholder, SIBG.

     .  Under the one-year management agreement with SIBG, SIBG provides
        extensive management services for Frederick Brewing. If SIBG terminates
        this Agreement, there can be no assurance that Frederick Brewing will be
        able to attract and hire qualified management personnel to develop its
        business.

     .  Under the promissory note in favor of SIBG, Frederick Brewing has
        incurred debt obligations of approximately $2.2 million in principal
        amount and may borrow additional amounts up to $5.0 million in principal
        amount. There can be no assurance that SIBG will not have to demand
        repayment of these amounts if the financial institution that provides
        the funding for these loans to SIBG demands repayment from SIBG. If SIBG
        demands

<PAGE>

     .  repayment of the note, there can be no assurance that Frederick will be
        able to obtain alternative financing or if such alternative financing is
        obtained, there can be no assurance as to the terms of the financing.

     .  SIBG's ownership of other brands has already resulted in the four year
        agreement to produce and package draft beer for Crooked River and may
        lead to other production agreements to produce and package other SIBG
        owned brands. If SIBG terminates the Crooked River agreement and/or
        determines not to enter into additional production agreements, there can
        be no assurance that Frederick Brewing will be able to obtain other
        production contracts, which are needed to increase plant utilization.

     .  Potential Out-of-Code Product Loss.  The Company has made a $350,000
        allowance reserve for a potential loss related to allegedly out-of-code
        product that was exported to, and is currently warehoused in, a non-U.S.
        market. Frederick Brewing's management is currently reviewing the
        situation and is in discussions with the relevant authorities in the
        non-U.S. markets. However, since all arrangements regarding this product
        were made by former management and, at this point, much information
        regarding this situation is still unknown, the potential amount of this
        loss is difficult to predict.

     .  Heavy Dependence on Wholesale Distributors.  Frederick Brewing
        distributes its products only through independent wholesale distributors
        for resale to retailers. Accordingly, Frederick Brewing is dependent
        upon these wholesale distributors to sell Frederick Brewing's beers and
        to assist Frederick Brewing in creating demand for its products and in
        providing adequate service to its retail customers. Even though
        Frederick Brewing recently assigned its distribution rights for the
        Frederick, Maryland regional area to nine new distributors, there can
        be no assurance that any of Frederick Brewing's wholesale distributors
        will devote the resources necessary to provide effective sales and
        promotional support to Frederick Brewing.

     .  Competition.  Frederick Brewing competes in the speciality beer
        segment of the domestic beer market against a variety of domestic and
        international brewers, many of whom have substantially greater
        financial, production, distribution and marketing resources and have
        achieved a higher level of brand recognition than Frederick Brewing.
        Increased competition could result in price reductions, reduced profit
        margins and loss of market share, all of which would have a material
        adverse effect on Frederick Brewing's financial condition and results of
        operations.

     .  Decrease in Industry Growth.  Beginning in 1996, the overall sales
        growth of domestic speciality brewers has slowed substantially. This
        decrease is primarily caused by factors such as (i) the maturation and
        saturation of certain large consumer markets, (ii) the increased
        marketing efforts of import brewers and (iii) a shift in the promotional
        efforts of

<PAGE>

        many wholesale distributors from domestic speciality brands to higher
        volume products. There can be no assurance that this trend will not
        continue and such a trend could have a material adverse effect on
        Frederick Brewing's financial condition and results of operations.

PART II.   OTHER INFORMATION

Item 1.        Legal Proceedings.
               -----------------

On July 12, 1999, Frederick Brewing's landlord, Blue II, was granted an Order of
Restitution by the District Court for Frederick County, Maryland permitting Blue
II to re-enter and evict Frederick Brewing from the brewery premises due to
Frederick Brewing's failure to pay $158,803 in rental payments. On August 24,
1999, SIBG purchased all of the outstanding membership interests in Blue II and
settled the amounts due to Blue II. Consequently, on August 25, 1999, the Order
was dismissed by Blue II without prejudice.

Frederick Brewing also has been the subject of legal actions that were initiated
by certain of its unsecured creditors. While no single action was, by itself,
material, the total amount sought exceeded $35,000. In connection with SIBG's
investment in Frederick Brewing, Frederick Brewing successfully negotiated with
many of its unsecured and secured creditors to obtain substantial reductions in
its secured debt and accounts payable. In the aggregate, Frederick Brewing
estimates that these debt forgiveness arrangements reduced its outstanding
indebtedness by approximately $800,000.

On June 6, 1999, the Department of Public Works Frederick County Maryland Bureau
of Water and Sewer Operations issued an Addendum to Consent Order, which
modifies the Consent Order issued on June 30, 1998. The Consent Order directs
Frederick Brewing to take appropriate actions to cause its wastewater discharge
to meet its permit limitations by November 30, 1999. The Consent Order provides
that failure to obtain compliance by such deadline will result in the imposition
of a penalty of up to $1,000 per day. Frederick Brewing is currently taking
steps to cause compliance and Frederick Brewing expects to obtain compliance on
or before the November 30th deadline.

Item 2.        Changes in Securities and Use of Proceeds.
               -----------------------------------------

On August 24, 1999, Frederick Brewing entered into an Investment Agreement with
SIBG whereby Frederick Brewing sold to SIBG 4,447,104 newly issued shares of
common stock, par value $0.0004 per share, of Frederick Brewing and warrants to
purchase shares of Company common stock for an aggregate cash purchase price of
$2,000,000. The warrants, which have an exercise price of $0.01 per share,
become exercisable solely in the event that any warrants, options or convertible
securities of Frederick Brewing outstanding on August 24, 1999 are exercised or
converted after that date. Frederick Brewing utilized the exemption from
registration provided by Section 4(2) of the Securities Act of 1933, as amended,
in connection with the issuance of Frederick Brewing common stock and the
warrants.

<PAGE>

In order to facilitate SIBG's investment in Frederick Brewing, Frederick
Brewing entered into a Restructuring Agreement on August 24, 1999 with SIBG,
Austost Anstalt Schaan, Balmore Funds S.A., Ron S. Williams, Sr., Ron Williams,
Jr., Dean Dowda, Fred Lenz, World Capital Funding, LLC, The Augustine Fund,
L.P., Jimmy Dean, Congregation Beth Moredechai and Bertek, Inc.  Pursuant to the
Restructuring Agreement, the holders of all of Frederick Brewing's Series F
Convertible Preferred Stock, par value $.01 per share, and Series G Convertible
Preferred Stock, par value $0.01 per share, converted their preferred stock into
an aggregate of 2,155,140 newly issued shares of Company common stock.  Pursuant
to the Restructuring Agreement, the holders of Common Stock Purchase Warrants,
dated June 7, 1999, entered into Amended and Restated Common Stock Purchase
Warrants to purchase 500,000 shares of Company common stock at an exercise price
of $0.50 per share.  This exercise price and the number of shares of Company
common stock issuable upon exercise of the amended warrants are subject to
certain adjustments for dividends, stock splits and the like. Frederick Brewing
determined the Aggregate Fair Value of these warrants at the time of grant to be
approximately $502,300 which is recorded on the balance sheet as deferred
compensation and additional paid-in capital in the equity section until such
time the warrants are exercised. Frederick Brewing utilized the exemption from
registration provided by Section 3(a)(9) of the Securities Act in connection
with the issuance of Frederick Brewing common stock and the amended warrants.

On August 24, 1999, SIBG also entered into a Purchase Agreement with Frederick
Brewing, Edward D. Scott, Catherine D. Scott, Robert Schuerholz, Nicholas P.
Foris and Vishnampet S. Jayanthimath, pursuant to which SIBG purchased all of
the outstanding membership interests in Blue II. SIBG, in consideration of the
sale of these membership interests, paid an amount in cash to the Sellers, and
Frederick Brewing, in consideration of the repayment by SIBG of certain
outstanding obligations owed by Frederick Brewing to Blue II, issued warrants to
the members of Blue II to purchase an aggregate of 132,000 shares of Company
common stock at an exercise price of $1.00 per share. This exercise price and
the number of shares of Company common stock issuable upon exercise of the
warrants are subject to certain adjustments for dividends, stock splits and the
like. Frederick Brewing utilized the exemption provided by Section 4(2) of the
Securities Act in connection with the issuance of the warrants.

During the three months ended September 30, 1999, Frederick Brewing issued
148,208 shares of Company common stock to former employees of Frederick Brewing
in lieu of salary amounts owed to such employees. Frederick Brewing incurred a
$200,000 compensation charge related to the issuance of 126,478 shares to former
officers of Frederick Brewing.

Item 3.        Defaults  Upon Senior Securities.
               --------------------------------

For the six months ended June 30, 1999, Frederick Brewing was in default of its
secured loans from First Union National Bank and the U.S. Small Business
Administration. In connection with SIBG's investment in Frederick Brewing,
Frederick Brewing negotiated settlement agreements with these lenders, and,
pursuant to such agreements, Frederick Brewing's obligations were repaid and
Frederick Brewing has been released from all further obligations under such
loans.

<PAGE>

Item 6.        Exhibits and Reports on Form 8-K
               --------------------------------

a.    Exhibits

Except as otherwise indicated, the following Exhibits are filed herewith and
made a part hereof:

Exhibit No.                      Description
-----------                      -----------

4.1(1)           Amended and Restated Common Stock Purchase Warrant by Frederick
                 Brewing Co. in favor of Austost Anstalt Schaan, dated August
                 24, 1999

4.2(1)           Amended and Restated Common Stock Purchase Warrant by Frederick
                 Brewing Co. in favor of Balmore Funds S.A., dated August 24,
                 1999

4.3(1)           Amended and Restated Common Stock Purchase Warrant by Frederick
                 Brewing Co. in favor of Ron Williams, Sr., dated August 24,
                 1999

4.4(1)           Amended and Restated Common Stock Purchase Warrant by Frederick
                 Brewing Co. in favor of Ron Williams, Jr., dated August 24,
                 1999

4.5(1)           Amended and Restated Common Stock Purchase Warrant by Frederick
                 Brewing Co. in favor of Dean Dowda, dated August 24, 1999


4.6(1)           Amended and Restated Common Stock Purchase Warrant by Frederick
                 Brewing Co. in favor of Fred Lenz, dated August 24, 1999

4.7(1)           Amended and Restated Common Stock Purchase Warrant by Frederick
                 Brewing Co. in favor of World Capital Funding, LLC, dated
                 August 24, 1999

4.8(1)           Common Stock Purchase Warrant by Frederick Brewing Co. in favor
                 of Edward D. Scott, dated August 24, 1999

4.9(1)           Common Stock Purchase Warrant by Frederick Brewing Co. in favor
                 of Catherine D. Scott, dated August 24, 1999

4.10(1)          Common Stock Purchase Warrant by Frederick
                 Brewing Co. in favor of Nicholas P. Foris, dated
                 August 24, 1999

4.11(1)          Common Stock Purchase Warrant by Frederick Brewing Co. in favor
                 of Robert Schuerholz, dated August 24, 1999

4.12(1)          Common Stock Purchase Warrant by Frederick Brewing Co. in favor
                 of Vishnampet S. Jayanthimath, dated August 24, 1999

<PAGE>

10.1(2)          Investment Agreement, dated August 24, 1999, by and between
                 Snyder International Brewing Group, LLC and Frederick Brewing
                 Co.

10.2(2)          Restructuring Agreement, dated August 24, 1999, by and among
                 Frederick Brewing Co., Snyder International Brewing Group, LLC,
                 Austost Anstalt Schaan, Balmore Funds S.A., Ron S. Williams,
                 Sr., Ron Williams, Jr., Dean Dowda, Fred Lenz, World Capital
                 Funding, LLC, The Augustine Fund, L.P., Jimmy Dean,
                 Congregation Beth Moredechai and Bertek, Inc.

10.3(2)          Transition Agreement, dated August 24, 1999, by and between
                 Kevin E. Brannon and Frederick Brewing Co.

10.4(2)          Transition Agreement, dated August 24, 1999, by and between
                 Marjorie A. McGinnis and Frederick Brewing Co.

10.5(2)          Escrow Agreement, dated August 24, 1999, by and among Frederick
                 Brewing Co., Key Trust Company, N.A., Kevin E. Brannon and
                 Marjorie A. McGinnis

10.6(2)          Common Stock Purchase Warrant, dated August 24, 1999, by
                 Frederick Brewing Co. in favor of Snyder International Brewing
                 Group, LLC

10.7(2)          Settlement Agreement, dated August 24, 1999, by and between
                 First Union National Bank and Signet Bank

10.8(2)          Settlement Agreement, dated August 19, 1999, by and among U.S.
                 Small Business Administration, Snyder International Brewing
                 Group, LLC and Frederick Brewing Co.

10.9(4)          Production Agreement, dated as of August 24, 1999, by and
                 between Crooked River Brewing Company, LLC and Frederick
                 Brewing Co.

10.10(4)         Management Agreement, dated as of August 24, 1999, by and
                 between Snyder International Brewing Group, LLC and Frederick
                 Brewing Co.

10.11(4)         Demand Promissory Note, dated August 30, 1999, by Frederick
                 Brewing Co. in favor of Snyder International Brewing Group, LLC

16.1(3)          Letter of BDO Siedman, LLP, dated October 21, 1999, to the U.S.
                 Securities and Exchange Commission

<PAGE>

27.1             Financial Data Schedule

99.1(2)          Press release, dated August 26, 1999

<PAGE>


        b.  Reports on Form 8-K

Frederick Brewing filed a Current Report on Form 8-K, dated August 24, 1999,
reporting under Items 1 and 5.

Frederick Brewing filed a Current Report on Form 8-K, dated October 22, 1999,
reporting under Item 4.

______________________

(1)    Filed as an Exhibit to the Schedule 13D, dated August 24, 1999, and
       incorporated herein by this reference.

(2)    Filed as an Exhibit to Frederick Brewing's Current Report on Form 8-K,
       dated August 24, 1999, and incorporated herein by this reference.

(3)    Filed as an Exhibit to Frederick Brewing's Current Report on Form 8-K,
       dated October 22, 1999, and incorporated herein by this reference.

(4)    Previously Filed as an Exhibit to Frederick Brewing's Quarterly Report
       on Form 10-QSB for the period ending September 30, 1999.

<PAGE>

                             FREDERICK BREWING CO.

                                  SIGNATURES

     In accordance with the requirements of the Securities and Exchange Act of
1934, the Registrant has caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.


                                 FREDERICK BREWING CO.



Date: November 15, 1999          /s/ C. David Snyder
                                 -------------------
                                 C. David Snyder
                                 Chairman of the Board,
                                 Chief Executive Officer and Treasurer



Date: November 15, 1999          /s/ James M. Gehrig
                                 -------------------
                                 James M. Gehrig
                                 Chief Financial Officer

<PAGE>

                             FREDERICK BREWING CO.

                                 EXHIBIT INDEX

EXHIBIT     DESCRIPTION
-------     -----------

4.1(1)      Amended and Restated Common Stock Purchase Warrant by Frederick
            Brewing Co. in favor of Austost Anstalt Schaan, dated August 24,
            1999

4.2(1)      Amended and Restated Common Stock Purchase Warrant by Frederick
            Brewing Co. in favor of Balmore Funds S.A., dated August 24, 1999

4.3(1)      Amended and Restated Common Stock Purchase Warrant by Frederick
            Brewing Co. in favor of Ron Williams, Sr., dated August 24, 1999

4.4(1)      Amended and Restated Common Stock Purchase Warrant by Frederick
            Brewing Co. in favor of Ron Williams, Jr., dated August 24, 1999

4.5(1)      Amended and Restated Common Stock Purchase Warrant by Frederick
            Brewing Co. in favor of Dean Dowda, dated August 24, 1999

4.6(1)      Amended and Restated Common Stock Purchase Warrant by Frederick
            Brewing Co. in favor of Fred Lenz, dated August 24, 1999

4.7(1)      Amended and Restated Common Stock Purchase Warrant by Frederick
            Brewing Co. in favor of World Capital Funding, LLC, dated August
            24, 1999

4.8(1)      Common Stock Purchase Warrant by Frederick Brewing Co. in favor of
            Edward D. Scott, dated August 24, 1999

4.9(1)      Common Stock Purchase Warrant by Frederick Brewing Co. in favor of
            Catherine D. Scott, dated August 24, 1999

4.10(1)     Common Stock Purchase Warrant by Frederick Brewing Co. in favor of
            Nicholas P. Foris, dated August 24, 1999

4.11(1)     Common Stock Purchase Warrant by Frederick Brewing Co. in favor of
            Robert Schuerholz, dated August 24, 1999

4.12(1)     Common Stock Purchase Warrant by Frederick Brewing Co. in favor of
            Vishnampet S. Jayanthimath, dated August 24, 1999

10.1(2)     Investment Agreement, dated August 24, 1999, by and between Snyder
            International Brewing Group, LLC and Frederick Brewing Co.
<PAGE>

10.2(2)     Restructuring Agreement, dated August 24, 1999, by and among
            Frederick Brewing Co., Snyder International Brewing Group, LLC,
            Austost Anstalt Schaan, Balmore Funds S.A., Ron S. Williams, Sr.,
            Ron Williams, Jr., Dean Dowda, Fred Lenz, World Capital Funding,
            LLC, The Augustine Fund, L.P., Jimmy Dean, Congregation Beth
            Moredechai and Bertek, Inc.

10.3(2)     Transition Agreement, dated August 24, 1999, by and between Kevin E.
            Brannon and Frederick Brewing Co.

10.4(2)     Transition Agreement, dated August 24, 1999, by and between Marjorie
            A. McGinnis and Frederick Brewing Co.

10.5(2)     Escrow Agreement, dated August 24, 1999, by and among Frederick
            Brewing Co., Key Trust Company, N.A., Kevin E. Brannon and Marjorie
            A. McGinnis

10.6(2)     Common Stock Purchase Warrant, dated August 24, 1999, by Frederick
            Brewing Co. in favor of Snyder International Brewing Group, LLC

10.7(2)     Settlement Agreement, dated August 24, 1999, by and between First
            Union National Bank and Signet Bank

10.8(2)     Settlement Agreement, dated August 19, 1999, by and among U.S. Small
            Business Administration, Snyder International Brewing Group, LLC and
            Frederick Brewing Co.

10.9(4)     Production Agreement, dated as of August 24, 1999, by and between
            Crooked River Brewing Company, LLC and Frederick Brewing Co.

10.10(4)    Management Agreement, dated as of August 24, 1999, by and between
            Snyder International Brewing Group, LLC and Frederick Brewing Co.

10.11(4)    Demand Promissory Note, dated August 30, 1999, by Frederick Brewing
            Co. in favor of Snyder International Brewing Group, LLC

16.1(3)     Letter of BDO Siedman, LLP, dated October 21, 1999, to the U.S.
            Securities and Exchange Commission

<PAGE>

27.1        Financial Data Schedule

99.1(2)     Press release, dated August 26, 1999

------------------------

(1)   Filed as an Exhibit to the Schedule 13D, dated August 24, 1999, and
      incorporated herein by  this reference.

(2)   Filed as an Exhibit to Frederick Brewing's Current Report on Form 8-K,
      dated August 24, 1999, and incorporated herein by this reference.

(3)   Filed as an Exhibit to Frederick Brewing's Current Report on Form 8-K,
      dated October 22, 1999, and incorporated herein by this reference.

(4)   Filed as an Exhibit to Frederick Brewing's Quarterly Report on Form 10-QSB
      for the period ending September 30, 1999.