##### Table of Contents



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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549




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FORM 10-Q

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(Mark One)

|       |  |                                                                                                                             
|------ |  | ----------------------------------------------------------------------------------------------------------------------------
|(XBOX) |  | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTER ENDED MARCH 31, 2002
|      
|      
|      
|      
|(BOX)  |  | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 (No Fee Required)                  

For the transition period from                to                .

Commission file number 0-27116



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PYRAMID BREWERIES INC.

(Exact name of registrant as specified in its charter)


|                                                               |  |                                     
|-------------------------------------------------------------- |  | ------------------------------------
|Washington                                                     |  | 91-1258355                          
|                                                              
|                                                              
|                                                              
|                                                              
|(State or other jurisdiction of
incorporation or organization) |  | (I.R.S. Employer
Identification No.)

91 So. Royal Brougham Way,
Seattle, WA 98134
(Address of principal executive offices) (Zip Code)

Registrants telephone number, including area code: (206) 682-8322



---

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 preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes (XBOX) No (BOX).

Common stock, par value of $.01 per share: 8,306,750 shares of Common
Stock outstanding as of March 31, 2002





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TABLE OF CONTENTS



|                             |                                                                                                |                               |  |  |  |  |  | 
|---------------------------- | ---------------------------------------------------------------------------------------------- | ----------------------------- |  |  |  |  |  | 
|PART I FINANCIAL INFORMATION
|                             | Item 1  FINANCIAL STATEMENTS                                                                 
|                             |                                                                                                | BALANCE SHEETS               
|                             |                                                                                                | STATEMENTS OF OPERATIONS     
|                             |                                                                                                | STATEMENTS OF CASH FLOWS     
|                             |                                                                                                | NOTES TO FINANCIAL STATEMENTS
|                             | Item 2  Managements Discussion and Analysis of Financial Condition and Results of Operations
|                             | ITEM 3. Quantitative and Qualitative Disclosures about Market Risk                            
|PART II  OTHER INFORMATION 
|                             | ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K                                                      
|SIGNATURE                   



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##### Table of Contents



PYRAMID BREWERIES INC.
FORM 10-Q
FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2002

TABLE OF CONTENTS

|        |  |                                                                                       |  |     
|------- |  | ------------------------------------------------------------------------------------- |  | ----
|        |  |                                                                                       |  | Page
|        |  |                                                                                       |  |     
|PART I  |  | FINANCIAL INFORMATION                                                                 |  |     
|       
|       
|       
|       
|Item 1. |  | Financial Statements (Unaudited)                                                      |  |     
|       
|       
|       
|       
|        |  | Balance Sheets
    March 31, 2002 and December 31, 2001                               |  | 3   
|       
|       
|       
|       
|        |  | Statements of Operations
    Quarter Ended March 31, 2002 and 2001                    |  | 4   
|       
|       
|       
|       
|        |  | Statements of Cash Flows
    Quarter Ended March 31, 2002 and 2001                    |  | 5   
|       
|       
|       
|       
|        |  | Notes to Financial Statements                                                         |  | 6   
|       
|       
|       
|       
|Item 2. |  | Managements Discussion and Analysis of Financial Condition
and Results of Operations |  | 10  
|       
|       
|       
|       
|        |  |                                                                                       |  |     
|       
|       
|       
|       
|PART II |  | OTHER INFORMATION                                                                     |  |     
|       
|       
|       
|       
|Item 6. |  | Exhibits and Reports on Form 8-K                                                      |  | 12  
|       
|       
|       
|       
|        |  |                                                                                       |  |     
|       
|       
|       
|       
|        |  | SIGNATURE                                                                             |  | 13  
|       
|       
|       
|       
|        |  |                                                                                       |  |     

2



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##### Table of Contents












PART I

Item 1  FINANCIAL STATEMENTS

PYRAMID BREWERIES INC.

BALANCE SHEETS
(Unaudited)

|                                                                                                                  |                            |                                            |             |           |            |              |            |           |            | 
|----------------------------------------------------------------------------------------------------------------- | -------------------------- | ------------------------------------------ | ----------- | --------- | ---------- | ------------ | ---------- | --------- | ---------- | 
|                                                                                                                  |                            |                                            |             | March 31, |            | December 31,
|                                                                                                                  |                            |                                            |             | 2002      |            | 2001        
|                                                                                                                  |                            |                                            |             |           |            |             
|CURRENT ASSETS:                                                                                                   |                            |                                            |             |           |            |              |            |          
|                                                                                                                 
|                                                                                                                 
|                                                                                                                 
|                                                                                                                 
|                                                                                                                  | Cash and cash equivalents  |                                            | $           | 3,542,474 |            |              | $          | 5,075,454 |           
|                                                                                                                 
|                                                                                                                 
|                                                                                                                 
|                                                                                                                 
|                                                                                                                  | Accounts receivable, net   |                                            |             | 1,573,013 |            |              |            | 1,425,592 |           
|                                                                                                                 
|                                                                                                                 
|                                                                                                                 
|                                                                                                                 
|                                                                                                                  | Inventories                |                                            |             | 1,435,574 |            |              |            | 1,178,148 |           
|                                                                                                                 
|                                                                                                                 
|                                                                                                                 
|                                                                                                                 
|                                                                                                                  | Prepaid expenses and other |                                            |             | 259,034   |            |              |            | 382,826   |           
|                                                                                                                 
|                                                                                                                 
|                                                                                                                 
|                                                                                                                 
|                                                                                                                  | Deferred income taxes      |                                            |             |          |            |              |            |          |           
|                                                                                                                  |                            |                                            |             |           |            |              |            |          
|                                                                                                                  |                            | Total current assets                       |             |           | 6,810,095  |              |            |           | 8,062,020  | 
|                                                                                                                  |                            |                                            |             |           |            |              |            |          
|Long term investments                                                                                             |                            |                                            | 491,742     |           |            |              | 491,742    |          
|                                                                                                                 
|                                                                                                                 
|                                                                                                                 
|                                                                                                                 
|Note receivable related party                                                                                     |                            |                                            | 103,517     |           |            |              | 106,965    |          
|                                                                                                                 
|                                                                                                                 
|                                                                                                                 
|                                                                                                                 
|Fixed assets, net                                                                                                 |                            |                                            | 20,661,586  |           |            |              | 20,222,560 |          
|                                                                                                                 
|                                                                                                                 
|                                                                                                                 
|                                                                                                                 
|Deferred income taxes                                                                                             |                            |                                            |            |           |            |              |           |          
|                                                                                                                 
|                                                                                                                 
|                                                                                                                 
|                                                                                                                 
|Other assets                                                                                                      |                            |                                            | 537,302     |           |            |              | 547,466    |          
|                                                                                                                  |                            |                                            |             |           |            |              |            |          
|                                                                                                                  |                            | Total assets                               |             | $         | 28,604,242 |              |            | $         | 29,430,753 | 
|                                                                                                                  |                            |                                            |             |           |            |              |            |          
|CURRENT LIABILITIES:                                                                                              |                            |                                            |             |           |            |              |            |          
|                                                                                                                 
|                                                                                                                 
|                                                                                                                 
|                                                                                                                 
|                                                                                                                  | Accounts payable           |                                            | $           | 570,341   |            |              | $          | 662,527   |           
|                                                                                                                 
|                                                                                                                 
|                                                                                                                 
|                                                                                                                 
|                                                                                                                  | Accrued expenses           |                                            |             | 1,770,583 |            |              |            | 1,312,641 |           
|                                                                                                                 
|                                                                                                                 
|                                                                                                                 
|                                                                                                                 
|                                                                                                                  | Refundable deposits        |                                            |             | 472,629   |            |              |            | 550,259   |           
|                                                                                                                 
|                                                                                                                 
|                                                                                                                 
|                                                                                                                 
|                                                                                                                  | Note payable-current       |                                            |             | 20,000    |            |              |            | 20,000    |           
|                                                                                                                 
|                                                                                                                 
|                                                                                                                 
|                                                                                                                 
|                                                                                                                  | Dividends payable          |                                            |             | 365,497   |            |              |            | 365,178   |           
|                                                                                                                  |                            |                                            |             |           |            |              |            |          
|                                                                                                                  |                            | Total current liabilities                  |             |           | 3,199,050  |              |            |           | 2,910,605  | 
|                                                                                                                 
|                                                                                                                 
|                                                                                                                 
|                                                                                                                 
|                                                                                                                  | Note payable               |                                            |             | 44,806    |            |              |            | 43,397    |           
|                                                                                                                 
|                                                                                                                 
|                                                                                                                 
|                                                                                                                 
|                                                                                                                  | Deferred rent              |                                            |             | 1,221,732 |            |              |            | 1,252,650 |           
|                                                                                                                  |                            |                                            |             |           |            |              |            |          
|                                                                                                                  |                            | Total liabilities                          |             |           | 4,465,588  |              |            |           | 4,206,652  | 
|                                                                                                                  |                            |                                            |             |           |            |              |            |          
|COMMITMENTS AND CONTINGENCIES                                                                                     |                            |                                            |             |           |            |              |            |          
|                                                                                                                 
|STOCKHOLDERS EQUITY:                                                                                             |                            |                                            |             |           |            |              |            |          
|                                                                                                                 
|                                                                                                                 
|                                                                                                                 
|                                                                                                                 
|Preferred stock, 10,000,000 shares authorized, none issued                                                        |                            |                                            |            |           |            |              |           |          
|                                                                                                                 
|                                                                                                                 
|                                                                                                                 
|                                                                                                                 
|Common stock, $.01 par value; 40,000,000 shares authorized,
8,306,750 and 8,299,493 shares issued and outstanding |                            |                                            | 83,068      |           |            |              | 82,995     |          
|                                                                                                                 
|                                                                                                                 
|                                                                                                                 
|                                                                                                                 
|Additional paid-in capital                                                                                        |                            |                                            | 35,664,148  |           |            |              | 35,649,120 |          
|                                                                                                                 
|                                                                                                                 
|                                                                                                                 
|                                                                                                                 
|Note receivable                                                                                                   |                            |                                            | (786,818    | )         |            |              | (786,818   | )        
|                                                                                                                 
|                                                                                                                 
|                                                                                                                 
|                                                                                                                 
|Deferred compensation                                                                                             |                            |                                            | (153,139    | )         |            |              | (185,486   | )        
|                                                                                                                 
|                                                                                                                 
|                                                                                                                 
|                                                                                                                 
|Retained deficit                                                                                                  |                            |                                            | (10,668,605 | )         |            |              | (9,535,710 | )        
|                                                                                                                  |                            |                                            |             |           |            |              |            |          
|                                                                                                                  |                            | Total stockholders equity                 |             |           | 24,138,654 |              |            |           | 25,224,101 | 
|                                                                                                                  |                            |                                            |             |           |            |              |            |          
|                                                                                                                  |                            | Total liabilities and stockholders equity |             | $         | 28,604,242 |              |            | $         | 29,430,753 | 
|                                                                                                                  |                            |                                            |             |           |            |              |            |          

The accompanying notes are an integral part of these statements.

3



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##### Table of Contents






PYRAMID BREWERIES INC.

STATEMENTS OF OPERATIONS
(Unaudited)

|                                             |                       |   |                              |        |          |   |           |        | 
|-------------------------------------------- | --------------------- | - | ---------------------------- | ------ | -------- | - | --------- | ------ | 
|                                             |                       |   | Three Months Ended March 31,
|                                             |                       |   |                             
|                                             |                       |   |                              |        |          |   | 2001     
|                                             |                       |   | 2002                         |        | Restated
|                                             |                       |   |                              |        |         
|Gross sales                                  |                       | $ | 6,833,879                    |        |          | $ | 6,577,820 |       
|                                            
|                                            
|                                            
|                                            
|Less excise taxes                            |                       |   | 342,173                      |        |          |   | 277,806   |       
|                                             |                       |   |                              |        |          |   |           |       
|Net sales                                    |                       |   | 6,491,706                    |        |          |   | 6,300,014 |       
|                                            
|                                            
|                                            
|                                            
|Cost of sales                                |                       |   | 5,136,011                    |        |          |   | 4,892,466 |       
|                                             |                       |   |                              |        |          |   |           |       
|Gross margin                                 |                       |   | 1,355,695                    |        |          |   | 1,407,548 |       
|                                            
|                                            
|                                            
|                                            
|Selling, general and administrative expenses |                       |   | 2,175,255                    |        |          |   | 2,274,767 |       
|                                             |                       |   |                              |        |          |   |           |       
|Operating loss                               |                       |   | (819,560                     | )      |          |   | (867,219  | )     
|                                            
|                                            
|                                            
|                                            
|Other income, net                            |                       |   | 52,162                       |        |          |   | 101,226   |       
|                                             |                       |   |                              |        |          |   |           |       
|Loss before income taxes                     |                       |   | (767,398                     | )      |          |   | (765,993  | )     
|                                            
|                                            
|                                            
|                                            
|Provision for income taxes                   |                       |   |                             |        |          |   |          |       
|                                             |                       |   |                              |        |          |   |           |       
|Net loss                                     |                       | $ | (767,398                     | )      |          | $ | (765,993  | )     
|                                             |                       |   |                              |        |          |   |           |       
|Basic and diluted net loss per share         |                       | $ | (0.09                        | )      |          | $ | (0.10     | )     
|                                            
|                                            
|                                            
|                                            
|Weighted average shares outstanding          |                       |   | 8,112,136                    |        |          |   | 7,867,888 |       
|                                            
|                                            
|                                            
|                                            
|                                             | Beer barrels shipped  |   |                              | 23,200 |          |   |           | 22,300 | 
|                                            
|                                            
|                                            
|                                            
|                                             | Soda barrels shipped  |   |                              | 9,300  |          |   |           | 9,800  | 
|                                             |                       |   |                              |        |          |   |           |       
|                                             | Total barrels shipped |   |                              | 32,500 |          |   |           | 32,100 | 
|                                             |                       |   |                              |        |          |   |           |       

The accompanying notes are an integral part of these statements.

4



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##### Table of Contents






PYRAMID BREWERIES INC.

STATEMENTS OF CASH FLOWS
(Unaudited)

|                                                 |                                                                             |                                         |                                       |          |                              |          |           |          |          |          |  
|------------------------------------------------ | --------------------------------------------------------------------------- | --------------------------------------- | ------------------------------------- | -------- | ---------------------------- | -------- | --------- | -------- | -------- | -------- | -
|                                                 |                                                                             |                                         |                                       |          | Three Months Ended March 31,
|                                                 |                                                                             |                                         |                                       |          |                             
|                                                 |                                                                             |                                         |                                       |          |                              |          |           |          | 2001    
|                                                 |                                                                             | 2002                                    |                                       | Restated
|                                                 |                                                                             |                                         |                                       |         
|OPERATING
ACTIVITIES:                            |                                                                             |                                         |                                       |          |                              |          |           |         
|                                                 | Net loss                                                                    |                                         | $                                     | (767,398 | )                            |          | $         | (765,993 | )       
|                                                
|                                                
|                                                
|                                                
|                                                 | Adjustments to reconcile net loss to net cash used in
operating activities: |                                         |                                       |          |                              |          |           |          |         
|                                                
|                                                
|                                                
|                                                
|                                                 |                                                                             | Depreciation and amortization           |                                       |          | 580,183                      |          |           |          | 526,070  |         
|                                                
|                                                
|                                                
|                                                
|                                                 |                                                                             | Stock compensation                      |                                       |          | 33,733                       |          |           |          | 2,306    |         
|                                                
|                                                
|                                                
|                                                
|                                                 |                                                                             | Interest expense                        |                                       |          | 1,409                        |          |           |          |         |         
|                                                
|                                                
|                                                
|                                                
|                                                 |                                                                             | Gain on sales of fixed assets           |                                       |          | (856                         | )        |           |          |         |         
|                                                
|                                                
|                                                
|                                                
|                                                 |                                                                             | Deferred rent                           |                                       |          | (30,918                      | )        |           |          | 93,440   |         
|                                                
|                                                
|                                                
|                                                
|Changes in operating assets and liabilities:     |                                                                             |                                         |                                       |          |                              |          |           |         
|                                                
|                                                
|                                                
|                                                
|                                                 |                                                                             | Accounts receivable                     |                                       |          | (147,421                     | )        |           |          | 230,684  |         
|                                                
|                                                
|                                                
|                                                
|                                                 |                                                                             | Inventories                             |                                       |          | (257,426                     | )        |           |          | (135,779 | )       
|                                                
|                                                
|                                                
|                                                
|                                                 |                                                                             | Prepaid expenses and other              |                                       |          | (177,415                     | )        |           |          | 106,941  |         
|                                                
|                                                
|                                                
|                                                
|                                                 |                                                                             | Accounts payable and accrued expenses   |                                       |          | 365,756                      |          |           |          | (323,555 | )       
|                                                
|                                                
|                                                
|                                                
|                                                 |                                                                             | Refundable deposits                     |                                       |          | (77,630                      | )        |           |          | (44,266  | )       
|                                                 |                                                                             |                                         |                                       |          |                              |          |           |         
|                                                 |                                                                             |                                         | Net cash used in operating activities |          |                              | (477,983 | )         |          |          | (310,152 | )
|                                                
|                                                
|                                                
|                                                
|INVESTING ACTIVITIES:                            |                                                                             |                                         |                                       |          |                              |          |           |         
|                                                
|                                                
|                                                
|                                                
|                                                 |                                                                             | Acquisitions of fixed assets            |                                       |          | (714,233                     | )        |           |          | (247,352 | )       
|                                                
|                                                
|                                                
|                                                
|                                                 |                                                                             | Proceeds from sales of fixed assets     |                                       |          | 7,251                        |          |           |          |         |         
|                                                 |                                                                             |                                         |                                       |          |                              |          |           |         
|                                                 |                                                                             |                                         | Net cash used in investing activities |          |                              | (706,982 | )         |          |          | (247,352 | )
|                                                
|                                                
|                                                
|                                                
|FINANCING ACTIVITIES:                            |                                                                             |                                         |                                       |          |                              |          |           |         
|                                                
|                                                
|                                                
|                                                
|                                                 |                                                                             | Proceeds from the sale of common stock  |                                       |          | 13,715                       |          |           |          | 10,511   |         
|                                                
|                                                
|                                                
|                                                
|                                                 |                                                                             | Note receivable                         |                                       |          | 3,448                        |          |           |          |         |         
|                                                
|                                                
|                                                
|                                                
|                                                 |                                                                             | Cash dividends paid                     |                                       |          | (365,178                     | )        |           |          | (314,530 | )       
|                                                
|                                                
|                                                
|                                                
|                                                 |                                                                             | Purchase and retirement of common stock |                                       |          |                             |          |           |          |         |         
|                                                 |                                                                             |                                         |                                       |          |                              |          |           |         
|                                                 |                                                                             |                                         | Net cash used in financing activities |          |                              | (348,015 | )         |          |          | (304,019 | )
|                                                 |                                                                             |                                         |                                       |          |                              |          |           |         
|Decrease in cash and cash equivalents            |                                                                             |                                         | (1,532,980                            | )        |                              |          | (861,523  | )       
|                                                
|                                                
|                                                
|                                                
|Cash and cash equivalents at beginning of period |                                                                             |                                         | 5,075,454                             |          |                              |          | 6,444,145 |         
|                                                 |                                                                             |                                         |                                       |          |                              |          |           |         
|Cash and cash equivalents at end of period       |                                                                             | $                                       | 3,542,474                             |          |                              | $        | 5,582,622 |         
|                                                 |                                                                             |                                         |                                       |          |                              |          |           |         

The accompanying notes are an integral part of these statements.

5



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##### Table of Contents






PYRAMID BREWERIES INC.

NOTES TO FINANCIAL STATEMENTS
(Unaudited)

1. BASIS OF PRESENTATION:

Pyramid Breweries Inc. (the Company), a Washington corporation, is
engaged in the brewing, marketing and selling of craft beers and premium sodas
and in restaurant operations. The Company operates breweries in Seattle,
Washington and Berkeley, California. The Company sells its beer through a
network of selected independent distributors primarily in Washington, Oregon
and California under the Pyramid and Thomas Kemper brands. Pyramid also
manufactures a line of gourmet sodas under the Thomas Kemper Soda Company
label. As of March 31, 2002, the Companys products were distributed in 32
states and Canada. The Company also operates two restaurants adjacent to its
breweries under the Pyramid Alehouse brand name and is opening a third Alehouse
in Walnut Creek, California in May 2002.

Revenue Recognition

Revenue from the sale of wholesale beer and soda product is recognized at
the time of shipment, when the title of the Company product passes to the
customer, in accordance with distributor sales agreements.

Restatement

The Company changed the accounting method for package design costs to
reflect the expensing of these costs as incurred rather than capitalizing and
amortizing over twelve months. This change has been accounted for as a prior
period adjustment in accordance with Accounting Principals Board Opinion No. 20
Accounting Changes. The financial statements for the period presented have
been restated to reflect this change.

Impact of Restatement on Prior Period  Increase (Decrease) in Amounts
(Dollars in thousands, except per share data)

|                                             |  |                    |      |  
|-------------------------------------------- |  | ------------------ | ---- | -
|Income Statement Data:                       |  | Three Months Ended
|                                             |  | March 31, 2001    
|                                             |  |                   
|Cost of sales                                |  | $                  | (65  | )
|                                            
|                                            
|                                            
|                                            
|Selling, general and administrative expenses |  |                    | 105  |  
|                                            
|                                            
|                                            
|                                            
|Net loss                                     |  |                    | 40   |  
|                                            
|                                            
|                                            
|                                            
|Basic and diluted net loss per share         |  | $                  | 0.01 |  

Other Income, net

Other Income, net consists of interest income and parking fee income, and
other insignificant non-operating income and expenses.

|                       |  |                              |        |      |  |   |         |  
|---------------------- |  | ---------------------------- | ------ | ---- |  | - | ------- | -
|                       |  | Three Months Ended March 31,
|                       |  |                             
|                       |  | 2002                         |        | 2001
|                       |  |                              |        |     
|Interest income        |  | $                            | 31,206 |      |  | $ | 93,646  |  
|                      
|                      
|                      
|                      
|Parking income         |  |                              | 11,478 |      |  |   | 10,375  |  
|                      
|                      
|                      
|                      
|Interest expense       |  |                              | (1,409 | )    |  |   |        |  
|                      
|                      
|                      
|                      
|Loss on sale of assets |  |                              | 856    |      |  |   |        |  
|                      
|                      
|                      
|                      
|Other income (expense) |  |                              | 10,031 |      |  |   | (2,795  | )
|                       |  |                              |        |      |  |   |         |  
|Other income, net      |  | $                            | 52,162 |      |  | $ | 101,226 |  
|                       |  |                              |        |      |  |   |         |  

6



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##### Table of Contents



The accompanying condensed financial statements have been prepared by the
Company, without audit, in accordance with accounting principles generally
accepted in the United States for interim financial information and pursuant to
the rules and regulations of the Securities and Exchange Commission. With the
exception of the historical information contained herein, the matters described
may contain forward-looking statements that involve risks and uncertainties,
including those described under the caption entitled Risk Factors and
Forward-Looking Statements in the Companys Annual Report on Form 10-K for the
year ended December 31, 2001, filed with the Securities and Exchange
Commission, and elsewhere in the Companys periodic reports. In the opinion of
management, the accompanying unaudited financial statements contain all
material adjustments, consisting only of those of a normal recurring nature,
considered necessary for a fair presentation of the Companys financial
position, results of operations and cash flows at the dates and for the periods
presented. The operating results for the interim periods presented are not
necessarily indicative of the results expected for the full year.

2. INVENTORIES:

|                |  |           |           |              |  |   |           | 
|--------------- |  | --------- | --------- | ------------ |  | - | --------- | 
|                |  | March 31, |           | December 31,
|                |  | 2002      |           | 2001        
|                |  |           |           |             
|Raw materials   |  | $         | 561,649   |              |  | $ | 522,226   | 
|               
|               
|               
|               
|Work in process |  |           | 137,024   |              |  |   | 138,231   | 
|               
|               
|               
|               
|Finished goods  |  |           | 736,901   |              |  |   | 517,691   | 
|                |  |           |           |              |  |   |           | 
|                |  | $         | 1,435,574 |              |  | $ | 1,178,148 | 
|                |  |           |           |              |  |   |           | 

Raw materials primarily include ingredients, flavorings and packaging.
Work in process includes beer held in fermentation prior to the filtration and
packaging process. Finished goods primarily include product ready for
shipment, as well as promotional merchandise held for sale.

3. FIXED ASSETS:

|                               |  |           |             |              |  |   |            |  
|------------------------------ |  | --------- | ----------- | ------------ |  | - | ---------- | -
|                               |  | March 31, |             | December 31,
|                               |  | 2002      |             | 2001        
|                               |  |           |             |             
|Brewery and retail equipment   |  | $         | 14,509,331  |              |  | $ | 14,465,637 |  
|                              
|                              
|                              
|                              
|Furniture and fixtures         |  |           | 935,157     |              |  |   | 918,879    |  
|                              
|                              
|                              
|                              
|Leasehold improvements         |  |           | 14,110,614  |              |  |   | 13,808,247 |  
|                              
|                              
|                              
|                              
|Construction in progress       |  |           | 1,209,949   |              |  |   | 584,855    |  
|                               |  |           |             |              |  |   |            |  
|                               |  |           | 30,765,051  |              |  |   | 29,777,618 |  
|                              
|                              
|                              
|                              
|Less: accumulated depreciation |  |           | (10,103,465 | )            |  |   | (9,555,058 | )
|                               |  |           |             |              |  |   |            |  
|                               |  | $         | 20,661,586  |              |  | $ | 20,222,560 |  
|                               |  |           |             |              |  |   |            |  

Construction in progress includes the leasehold improvements made in the
Walnut Creek Alehouse which opened in May 2002.

4. NOTE RECEIVABLE RELATED PARTY

In June 2001, the Company issued a $787,000 full recourse note to the CEO
in exchange for the exercise of options for 387,400 shares of the Companys
common stock. In addition, the Company issued a $115,000 full recourse note to
the CEO to fund his payment of taxes on the exercise of the options. The notes
are due on the earlier of June 30, 2011 or upon the sale of the stock and bear
an annual interest rate of 5.6%. A total of 135,100 of those shares are
unrestricted, except for being pledged as collateral for the loans, and the
remaining 252,300 shares become unrestricted over the next three and one-half
years. During the quarter ended March 31, 2002, the Company recorded $32,000 in
compensation expense in connection with this equity arrangement.

5. EARNINGS PER SHARE

Basic and diluted net loss per share was computed by dividing net loss by
the weighted average number of shares of common stock outstanding during the
quarter. The effect of stock options has not been included in the calculation
of diluted net loss per shares as the effect is antidilutive. Options to
purchase approximately 756,900 and 1,096,900 shares of common stock were
outstanding as of March 31, 2002 and 2001, respectively, but were not included
in the computation of EPS because their effects are antidilutive.

7



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##### Table of Contents



6. STOCKHOLDERS EQUITY

|                             |                                                                 |  |              |       |            |   |         |    |            |   |              |        |               |   |          |   |  |   |          |        |  |   |             |          |   |   |            |          |  
|---------------------------- | --------------------------------------------------------------- |  | ------------ | ----- | ---------- | - | ------- | -- | ---------- | - | ------------ | ------ | ------------- | - | -------- | - |  | - | -------- | ------ |  | - | ----------- | -------- | - | - | ---------- | -------- | -
|                             |                                                                 |  | Common Stock |       | Additional |   |         |    |            |   |              |        |               |   |          |   |  |   | Total   
|                             |                                                                 |  |              |       | Paid-In    |   | Note    |    | Deferred   |   | Retained     |        | Stockholders'
|                             |                                                                 |  | Shares       |       | Amount     |   | Capital |    | Receivable |   | Compensation |        | Deficit       |   | Equity  
|                             |                                                                 |  |              |       |            |   |         |    |            |   |              |        |               |   |         
|Balance at December 31, 2001 |                                                                 |  | 8,299,493    |       |            | $ | 82,995  |    |            | $ | 35,649,120   |        |               | $ | (786,818 | ) |  | $ | (185,486 | )      |  | $ | (9,535,710  | )        |   | $ | 25,224,101 |         
|                            
|                            
|                            
|                            
|                             | Net loss                                                        |  |              |      |            |   |         |   |            |   |              |       |               |   |          |  |  |   |          |       |  |   |             | (767,398 | ) |   |            | (767,398 | )
|                            
|                            
|                            
|                            
|                             | Shares issued                                                   |  |              | 7,257 |            |   |         | 73 |            |   |              | 13,642 |               |   |          |  |  |   |          |       |  |   |             |         |   |   |            | 13,715   |  
|                            
|                            
|                            
|                            
|                             | Stock compensation including
amortization of stock compensation |  |              |      |            |   |         |   |            |   |              | 1,386  |               |   |          |  |  |   |          | 32,347 |  |   |             |         |   |   |            | 33,733   |  
|                            
|                            
|                            
|                            
|                             | Dividends declared                                              |  |              |      |            |   |         |   |            |   |              |       |               |   |          |  |  |   |          |        |  |   |             | (365,497 | ) |   |            | (365,497 | )
|                             |                                                                 |  |              |       |            |   |         |    |            |   |              |        |               |   |          |   |  |   |          |        |  |   |             |          |   |   |            |         
|Balance at March 31, 2002    |                                                                 |  | 8,306,750    |       |            | $ | 83,068  |    |            | $ | 35,664,148   |        |               | $ | (786,818 | ) |  | $ | (153,139 | )      |  | $ | (10,668,605 | )        |   | $ | 24,138,654 |         
|                             |                                                                 |  |              |       |            |   |         |    |            |   |              |        |               |   |          |   |  |   |          |        |  |   |             |          |   |   |            |         

7. COMMITMENTS AND CONTINGENCIES:

The Company is involved from time to time in claims, proceedings and
litigation arising in the ordinary course of business. The Company does not
believe that any such claim, proceeding or litigation, either alone or in the
aggregate, will have a material adverse effect on the Companys financial
position or results of operations.

8. CASH DIVIDEND:

The Board of Directors announced on February 14, 2002, the declaration of
a $0.044 per common share dividend payable on April 12, 2002 to shareholders of
record on March 29, 2002. The Board of Directors also announced, on May 1,
2002, the declaration of a $0.044 per common share dividend payable on July 12,
2002 to shareholders of record on June 28, 2002. The cash dividends declared
totaled approximately $365,000 for all common stock outstanding as of the dates
of record.

Cash dividends declared per common share:

|     |  |                    |       | 
|---- |  | ------------------ | ----- | 
|     |  | Three Months Ended
|     |  | March 31,         
|     |  |                   
|2002 |  | $                  | 0.044 | 
|    
|    
|    
|    
|2001 |  | $                  | 0.044 | 

Although the Company has declared and paid a dividend every quarter since
the fourth quarter of 1999, continued future declaration of dividends will
depend, among other things, on the Companys results of operations, capital
requirements and financial condition, and on such other factors as the
Companys Board of Directors may in its discretion consider relevant and in the
best long term interest of the shareholders.

9. SEGMENT INFORMATION:

The Company follows the provisions of Statement of Financial Accounting
Standards (SFAS) No. 131 Disclosures about Segments of an Enterprise and
Related Information, and reports segment information in the same format as
reviewed by the Companys management, which is organized around differences in
products and services.

Products and Services

The Companys reportable segments include beverage operations and
alehouses. Beverage operations include the production and sale of Pyramid ales
and lagers, Thomas Kemper beers and Thomas Kemper Soda Company products. The
alehouse segment consists of two full-service alehouses, which market and sell
the full line of the Companys beer and soda products as well as food and
certain merchandise. A third, new Walnut Creek Alehouse location is opened in
May 2002.

Factors used to identify reportable segments

8



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##### Table of Contents



The Companys reportable segments are strategic business units that offer
different products and services. These segments are managed separately because
each business requires different management and marketing strategies.

Measurement of segment profit and segment assets

The accounting policies of the segments are the same as those described in
the summary of significant accounting policies. The Company evaluates
performance based on profit or loss from operations before income taxes not
including nonrecurring gains and losses. The Company records intersegment
sales at cost.

Segment profit and segment assets are as follows:

|                             |                                                            |                        |            |        |          |  |       |       |       |  |   |        |   |  |   |        |  
|---------------------------- | ---------------------------------------------------------- | ---------------------- | ---------- | ------ | -------- |  | ----- | ----- | ----- |  | - | ------ | - |  | - | ------ | -
|                             |                                                            |                        | Beverage   |        |          |  |       |       |       |  |   |        |   |  |  
|                             |                                                            |                        | Operations |        | Alehouse |  | Other |       | Total
|                             |                                                            |                        |            |        |          |  |       |       |      
|Quarter ended March 31, 2002 |                                                            | (Dollars in thousands) |            |        |          | 
|                             | Revenues from external customers                           |                        | $          | 4,983  |          |  | $     | 1,851 |       |  | $ |       |   |  | $ | 6,834  |  
|                            
|                            
|                            
|                            
|                             | Intersegment revenues                                      |                        |            | 64     |          |  |       | (64   | )     |  |   |       |   |  |   |       |  
|                            
|                            
|                            
|                            
|                             | Interest income                                            |                        |            |       |          |  |       |      |       |  |   | 31     |   |  |   | 31     |  
|                            
|                            
|                            
|                            
|                             | Depreciation and amortization
including stock compensation |                        |            | 437    |          |  |       | 98    |       |  |   | 79     |   |  |   | 614    |  
|                            
|                            
|                            
|                            
|                             | Operating (loss) income                                    |                        |            | (146   | )        |  |       | 85    |       |  |   | (706   | ) |  |   | (767   | )
|                            
|                            
|                            
|                            
|                             | Capital expenditures                                       |                        |            | 75     |          |  |       | 621   |       |  |   | 18     |   |  |   | 714    |  
|                            
|                            
|                            
|                            
|                             | Total assets                                               |                        |            | 16,041 |          |  |       | 4,066 |       |  |   | 8,497  |   |  |   | 28,604 |  
|                            
|                            
|                            
|                            
|Quarter ended March 31, 2001 |                                                            |                        |            |        |          |  |       |       |       |  |   |        |   |  |   |       
|                            
|                            
|                            
|                            
|                             | Revenues from external customers                           |                        | $          | 4,768  |          |  | $     | 1,810 |       |  | $ |       |   |  | $ | 6,578  |  
|                            
|                            
|                            
|                            
|                             | Intersegment revenues                                      |                        |            | 54     |          |  |       | (54   | )     |  |   |       |   |  |   |       |  
|                            
|                            
|                            
|                            
|                             | Interest income                                            |                        |            |       |          |  |       |      |       |  |   | 94     |   |  |   | 94     |  
|                            
|                            
|                            
|                            
|                             | Depreciation and amortization
including stock compensation |                        |            | 389    |          |  |       | 103   |       |  |   | 36     |   |  |   | 528    |  
|                            
|                            
|                            
|                            
|                             | Operating (loss) income                                    |                        |            | (346   | )        |  |       | 132   |       |  |   | (552   | ) |  |   | (766   | )
|                            
|                            
|                            
|                            
|                             | Capital expenditures                                       |                        |            | 120    |          |  |       | 85    |       |  |   | 42     |   |  |   | 247    |  
|                            
|                            
|                            
|                            
|                             | Total assets                                               |                        |            | 16,996 |          |  |       | 3,331 |       |  |   | 10,402 |   |  |   | 30,729 |  

Other

Other consists of interest income, general and administrative expense,
corporate office assets and other reconciling items that are not allocated to
segments for internal management reporting purposes. Total assets include all
assets except for fixed assets, which are presented by segment.

10. NEW ACCOUNTING PRONOUNCEMENTS:

Effective January 1, 2002 the Company adopted SFAS No. 142, Goodwill and
Other Intangible Assets. SFAS No. 142 requires companies to cease amortizing
goodwill that existed at June 30, 2001. The annual amortization of existing
goodwill of approximately $80,000 ceased on December 31, 2001. SFAS No. 142
also establishes a new method of testing goodwill for impairment on an annual
basis or on an interim basis if an event occurs or circumstances change that
would more likely than not reduce the fair value of a
reporting unit below its carrying value. The Company is currently
evaluating whether there will be additional impacts from the adoption of SFAS
No. 142 on the Companys financial statements such as an impairment of existing
goodwill amounts, however, the Company does not expect to recognize any
material impairment change.

9



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##### Table of Contents






Item 2  Managements Discussion and Analysis of Financial Condition and Results of Operations

RESULTS OF OPERATIONS

The following table sets forth, for the periods indicated, certain
selected unaudited operating data, expressed as a percentage of net sales.

SELECTED UNAUDITED OPERATING DATA

|                                             |                            |   |           |         |           |  |                              |   |           |   |           |         |  |  |       |   | 
|-------------------------------------------- | -------------------------- | - | --------- | ------- | --------- |  | ---------------------------- | - | --------- | - | --------- | ------- |  |  | ----- | - | 
|                                             |                            |   |           |         |           |  | Three Months Ended March 31, |   |           |   |          
|                                             |                            |   |           |         |           |  |                              |   |           |   |          
|                                             |                            |   |           |         |           |  | % of                         |   | 2001      |   | % of     
|                                             |                            |   | 2002      |         | Net Sales |  | Restated                     |   | Net Sales
|                                             |                            |   |           |         |           |  |                              |   |          
|Gross sales                                  |                            | $ | 6,833,879 |         |           |  |                              |   |           | $ | 6,577,820 |         |  |  |       |  
|                                            
|                                            
|                                            
|                                            
|Less excise taxes                            |                            |   | 342,173   |         |           |  |                              |   |           |   | 277,806   |         |  |  |       |  
|                                             |                            |   |           |         |           |  |                              |   |           |   |           |         |  |  |       |  
|Net sales                                    |                            |   | 6,491,706 |         |           |  | 100.0                        |   |           |   | 6,300,014 |         |  |  | 100.0 |  
|                                            
|                                            
|                                            
|                                            
|Cost of sales                                |                            |   | 5,136,011 |         |           |  | 79.1                         |   |           |   | 4,892,466 |         |  |  | 77.7  |  
|                                             |                            |   |           |         |           |  |                              |   |           |   |           |         |  |  |       |  
|Gross margin                                 |                            |   | 1,355,695 |         |           |  | 20.9                         |   |           |   | 1,407,548 |         |  |  | 22.3  |  
|                                            
|                                            
|                                            
|                                            
|Selling, general and administrative expenses |                            |   | 2,175,255 |         |           |  | 33.5                         |   |           |   | 2,274,767 |         |  |  | 36.1  |  
|                                             |                            |   |           |         |           |  |                              |   |           |   |           |         |  |  |       |  
|Operating loss                               |                            |   | (819,560  | )       |           |  | (12.6                        | ) |           |   | (867,219  | )       |  |  | (13.8 | )
|                                            
|                                            
|                                            
|                                            
|Other income, net                            |                            |   | 52,162    |         |           |  | 0.8                          |   |           |   | 101,226   |         |  |  | 1.6   |  
|                                             |                            |   |           |         |           |  |                              |   |           |   |           |         |  |  |       |  
|Loss before income taxes                     |                            |   | (767,398  | )       |           |  | (11.8                        | ) |           |   | (765,993  | )       |  |  | (12.2 | )
|                                            
|                                            
|                                            
|                                            
|Benefit for income taxes                     |                            |   |          |         |           |  |                             |   |           |   |          |         |  |  |      |  
|                                             |                            |   |           |         |           |  |                              |   |           |   |           |         |  |  |       |  
|Net loss                                     |                            | $ | (767,398  | )       |           |  | (11.8                        | ) |           | $ | (765,993  | )       |  |  | (12.2 | )
|                                             |                            |   |           |         |           |  |                              |   |           |   |           |         |  |  |       |  
|Basic and diluted net loss per share         |                            | $ | (0.09     | )       |           |  |                              |   |           | $ | (0.10     | )       |  |  |       |  
|                                             |                            |   |           |         |           |  |                              |   |           |   |           |         |  |  |       |  
|Weighted average shares outstanding          |                            |   | 8,112,136 |         |           |  |                              |   |           |   | 7,867,888 |         |  |  |       |  
|                                             |                            |   |           |         |           |  |                              |   |           |   |           |         |  |  |       |  
|Operating data (in barrels):                 |                            |   |           |         |           |  |                              |   |           |   |           |         |  |  |       |  
|                                            
|                                            
|                                            
|                                            
|                                             | Beer barrels shipped       |   |           | 23,200  |           |  |                              |   |           |   |           | 22,300  |  |  |       |   | 
|                                            
|                                            
|                                            
|                                            
|                                             | Soda barrels shipped       |   |           | 9,300   |           |  |                              |   |           |   |           | 9,800   |  |  |       |   | 
|                                             |                            |   |           |         |           |  |                              |   |           |   |           |         |  |  |       |  
|                                             | Total barrels shipped      |   |           | 32,500  |           |  |                              |   |           |   |           | 32,100  |  |  |       |   | 
|                                             |                            |   |           |         |           |  |                              |   |           |   |           |         |  |  |       |  
|                                             | Annual production capacity |   |           | 200,000 |           |  |                              |   |           |   |           | 200,000 |  |  |       |   | 
|                                             |                            |   |           |         |           |  |                              |   |           |   |           |         |  |  |       |  

QUARTER ENDED MARCH 31, 2002 COMPARED TO QUARTER ENDED MARCH 31, 2001

Gross Sales.Gross sales increased 3.9% to $6,834,000 in the first
quarter ended March 31, 2002 from $6,578,000 in the same quarter of 2001.
Wholesale beverage sales increased 4.5% to $4,983,000 in the first quarter
ended March 31, 2002 from $4,768,000 in the same quarter of 2001. Although
total beverage barrel shipments remained flat compared to prior year, beer
shipments increased 4.0% to 23,200 barrels in the current quarter from 22,300
barrels in the same quarter of the prior year. The beer shipment increases were
offset by a 5.1% decrease in soda barrels shipped to 9,300 barrels from 9,800
barrels in the same quarter of the prior year. The reduction in soda volume is
the result of a shift in the timing of promotional activity from the first
quarter of 2001, to the second quarter of 2002. Alehouse sales increased 2.3%,
to $1,851,000 in the first quarter ended March 31, 2002, from $1,810,000 in the
same quarter of 2001 due to increased patronage at the Berkeley alehouse.

Excise Taxes.Excise taxes totaled 5.0% and 4.2% of gross sales for the
quarters ended March 31, 2002 and 2001, respectively. The increase in excise
taxes as a percentage of gross sales was due mainly to a greater portion of
beer sales during the quarter ended March 31, 2002, which bear excise tax.

Gross Margin. Gross margin as a percentage of net sales decreased to
20.9% in the first quarter ended March 31, 2002 from 22.3% in the same quarter
of 2001. This decrease as a percentage of net sales was due mainly to increased
labor costs at the Seattle and Berkeley Alehouses and cost increases associated
with opening the new Walnut Creek Alehouse location in May 2002.

10



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##### Table of Contents



Selling, General and Administrative Expenses. Selling, general and
administrative expenses decreased 4.4% to $2,175,000 or 33.5% of net sales for
the first quarter ended March 31, 2002 from $2,275,000 or 36.1% of net sales
for the same quarter of 2001. This decrease as a percentage of net sales was
due mainly to a decrease in marketing expense of $295,000 related to a brand
awareness campaign which began in the fourth quarter of 2000 and was completed
in the first quarter of 2001.

Other Income, net. Other income, net was approximately $52,000 and 0.8% of
net sales for the first quarter ended March 31, 2002 compared to $101,000 and
1.6% of net sales in the same quarter of 2001. The decrease was due to lower
interest income during the current year.

Income Taxes. The Company recorded no income tax benefit for the quarters
ended March 31, 2002 and 2001. As of December 31, 2001, the Company had
deferred tax assets arising from deductible temporary differences, tax losses,
and tax credits offset against certain deferred tax liabilities. A valuation
allowance was recorded against the deferred tax asset for the benefits of tax
losses which may not be realized. Realization of the deferred tax asset
representing tax loss and credit carryforwards is dependent on the Companys
ability to generate future U.S. taxable income. The Company will continue to
evaluate the realizability of the deferred tax assets quarterly by assessing
the need for and amount of a valuation allowance.

Net Loss. The Company reported a net loss of $767,000 for the first
quarter ended March 31, 2002 compared to a net loss of $766,000 in the same
quarter of 2001.

Other.In April 2002, the Company announced plans for a new alehouse
located in Sacramento, California. The 295 seat restaurant and brewery will
occupy approximately 9,100 square feet on the first floor of a historical
building.

LIQUIDITY AND CAPITAL RESOURCES

Net cash used in operating activities during the first quarter ended March
31, 2002 was approximately $479,000 compared to $310,000 for the same period of
the prior year. This increase was due primarily to the increase in finished
goods inventory resulting from the preparation of promotional activities
scheduled for the second quarter of 2002. Net cash used in investing
activities for the quarter ended March 31, 2002 was $707,000 compared to net
cash used in investing activities of $247,000 for the same period of the prior
year. The cash used in investing activities in 2002 included funds used to
improve the new Walnut Creek Alehouse which opened in May 2002. At March 31,
2002, the Company had working capital of $3,611,000 compared to $5,151,000 at
December 31, 2001.

On December 15, 1999, the Company announced a stock buyback plan to
repurchase up to $2,000,000 of the Companys common stock from time to time on
the open market. Stock repurchases are at the discretion of management and
depend, among other things, on the Companys results of operations, capital
requirements and financial condition, and on such other factors as the
Companys management may consider relevant. As of March 31, 2002, the Company
has repurchased 457,724 shares at an average price of $1.94 per share.

Future capital requirements may vary depending on such factors as the cost
of acquisition of businesses, brands and real estate costs in the markets
selected for future expansion, whether such real estate is leased or purchased
and the extent of improvements necessary. Capital expenditures in 2002 are
expected to be greater than 2001 expenditures. Planned projects include the
Walnut Creek Alehouse development which opened in May 2002, Sacramento Alehouse
development scheduled to open in the first quarter 2003 and the upgrading of
brewery equipment and alehouse facilities in the Seattle and Berkeley
locations. The Company estimates that total alehouse development
costs to be incurred in 2002 will be approximately $1,400,000. While there can be no assurance
that current expectations will be realized and plans are subject to change upon
further review, the Company believes that its cash reserves, together with cash
from operations, will be sufficient for the Companys working capital needs.

The Companys future cash requirements and cash flow expectations are
closely related to its expansion plans. The Company generally expects to meet
future financing needs through cash on-hand and cash flow from operations.
Additionally, the Company has opened discussions with several lenders related
to establishing a line of credit to help support the costs of future expansion.
Although the Company has declared and paid a dividend every quarter since the
fourth quarter of 1999, continued future declaration of dividends
will depend, among other things, on the Companys results of operations,
capital requirements and financial condition, and on such other factors as the
Companys Board of Directors may in its discretion consider relevant and in the
best long term interest of the shareholders.

11



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##### Table of Contents



RISK FACTORS AND FORWARD LOOKING STATEMENTS

The Company does not provide forecasts of future financial performance.
However this report does contain forward-looking statements within the meaning
of Section 21E of the Securities Exchange Act of 1934, which are subject to the
safe harbor created by that section. There are numerous important factors
that could cause results to differ materially from those anticipated by some of
the statements made by the Company. Investors are cautioned that all
forward-looking statements involve a high degree of risk and uncertainty.
Additional information concerning those and other factors is contained in the
Companys Securities and Exchange Commission filings including its Form 10-K
for the year ended December 31, 2001.




ITEM 3. Quantitative and Qualitative Disclosures about Market Risk

The Company has not and does not currently have any intention to hold any
derivative instruments or engage in hedging activities. Also, the Company does
not have any outstanding variable rate debt and does not enter into significant
transactions denominated in foreign currency. Therefore, the Companys direct
exposure to risks arising from changes in interest rates, foreign currency
exchange rates, commodity prices, equity prices, and other market changes that
affect market risk sensitive instruments is not material.




PART II  OTHER INFORMATION




ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K



|(A) |  | EXHIBITS                                                
|--- |  | --------------------------------------------------------
|   
|    |  | The following exhibits are filed as part of this report.



| | 3.1* |  | Amended and Restated Articles of Incorporation
| | ---- |  | ----------------------------------------------
|
| | 3.2* |  | Amended and Restated Bylaws                   
|

| | * |  | Incorporated by reference to the exhibits filed as part of the
Companys Registration Statement on Form S-1 (File No. 33-97834).
| | - |  | --------------------------------------------------------------------------------------------------------------------------------



|(B) |  | REPORTS ON FORM 8-K                                
|--- |  | ---------------------------------------------------
|   
|    |  | None filed during the quarter ended March 31, 2002.

Items 1, 2, 3, 4 and 5 of PART II are not applicable and have been omitted

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##### Table of Contents






SIGNATURE

Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned; thereunto duly authorized, in the City of
Seattle, State of Washington, on May 14, 2002.

|                   |  |                        |  |                                                        |  | 
|------------------ |  | ---------------------- |  | ------------------------------------------------------ |  | 
|                   |  | PYRAMID BREWERIES INC. |  |                                                       
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|                   |  | By:                    |  | /s/ JASON W. REES                                      |  | 
|                   |  |                        |  |                                                        |  | 
|                   |  |                        |  | Jason W. Rees, Corporate Controller                    |  | 
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|                   |  | By:                    |  | /s/ R. MARTIN KELLY                                    |  | 
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|                   |  |                        |  | R. Martin Kelly, President and Chief Executive Officer |  | 
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|DATE: May 14, 2002 |  |                        |  |                                                        |  | 
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