SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                               FORM 10-KSB/A No. 1
(Mark One)
    [x]     ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE  SECURITIES  EXCHANGE
            ACT OF 1934
    

For the fiscal year ended December 31, 1996

    [ ]     TRANSITION  REPORT  UNDER  SECTION  13 OR  15(d)  OF THE  SECURITIES
            EXCHANGE ACT OF 1934

For the transition period from __________________ to________________________
Commission file number: 1-13636

                         Mendocino Brewing Company, Inc.
                 (Name of small business issuer in its charter)


          California                                    68-0318293
(State or other jurisdiction of            (I.R.S. Employee Identification No.)
  incorporation or organization)


13351 South Highway 101, Hopland, CA                      95449
 (Address of principal executive offices)              (Zip code)

Issuer's telephone number:  (707) 744-1015

Securities registered under Section 12(b) of the Act:

     Title of each class               Name of each exchange on which registered
 Common Stock, without par value             The Pacific Stock Exchange

Securities registered under Section 12(g) of the Act:

                                 Not applicable
                                (Title of class)

     Check  whether  the issuer (1) filed all  reports  required  to be filed by
Section 13 or 15(d) of the  Exchange  Act during the past 12 months (or for such
shorter period that the  registrant was required to file such reports),  and (2)
has been subject to such filing requirements for the past 90 days. Yes X No
                                                                       -    -

     Check if there is no disclosure  of  delinquent  filers in response to Item
405 of  Regulation  S-B not contained in this form,  and no  disclosure  will be
contained,  to the  best of  registrant's  knowledge,  in  definitive  proxy  or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB. [X]

     State issuer's revenues for its most recent fiscal year: $4,004,700

     The  aggregate  market  value of the voting  stock  held by  non-affiliates
computed by reference to the last  reported sale price of such stock as of April
2, 1997 was $10,416,000.

     The number of shares the issuer's common stock  outstanding as of March 31,
1997  is  2,322,222.   (Does  not  include  300,000  shares  issued  subject  to
substantial  restrictions  as security for a forbearance.  Also does not include
approximately  16,000 shares,  subscriptions  for which the Company had received
but not accepted as of March 31, 1997.)

     Transitional Small Business Disclosure Format Yes   No X
                                                       -    -



<PAGE>

Exhibit
Number               Description of Document
-------              -------------------------------

 10.43         (J) Employment Agreement with Norman H. Franks.

 10.44         (J) Employment Agreement with Michael F. Lovett.

 10.45         (J) Employment Agreement with John Scahill.

 10.46         (A) 1994 Stock Option Plan (previously filed as Exhibit 99.6)

   
 19.1           +  Keg Management Agreement with MicroStar Keg Management LLC.
    

 19.2              Form of Change in Terms  Agreement  with the Savings  Bank of
                   Mendocino County

 27                Financial Data Schedule

--------------------------------
               (A) Incorporated  by reference  from the  Company's  Registration
                   Statement dated June 15, 1994, as amended,  previously  filed
                   with the Commission, Registration No. 33-78390-LA.

               (B) Incorporated by referenced from the Company's  Report on Form
                   10-KSB  for  the  annual  period  ended   December  31,  1994
                   previously filed with the Commission.

               (C) Incorporated by referenced from the Company's  Report on Form
                   10-QSB for the quarter period ended March 31, 1995 previously
                   filed with the Commission.

               (D) Incorporated by referenced from the Company's  Report on Form
                   10-QSB for the quarter period ended June 30, 1995  previously
                   filed with the Commission.

               (E) Incorporated by referenced from the Company's  Report on Form
                   10-QSB  for the  quarter  period  ended  September  30,  1995
                   previously filed with the Commission.

               (F) Incorporated by referenced from the Company's  Report on Form
                   10-KSB  for  the  annual  period  ended   December  31,  1995
                   previously filed with the Commission.

               (G) Incorporated by referenced from the Company's  Report on Form
                   10-QSB for the quarter period ended June 30, 1996  previously
                   filed with the Commission.

               (H) Incorporated by referenced from the Company's  Report on Form
                   10-QSB/A  No. 1 for the  quarter  period  ended June 30, 1996
                   previously filed with the Commission.

               (J) Incorporated  by reference  from the  Company's  Registration
                   Statement  dated  February 6, 1997,  as  amended,  previously
                   filed with the Commission, Registration No. 333-15673.

   
               +   Portions of this  Exhibit  have been  omitted  pursuant to an
                   application  for an order  declaring  confidential  treatment
                   filed with the Securities and Exchange Commission.
    



The  registrant  did not file any Reports on Form 8-K during the last quarter of
the period covered by this report.

                                      -22-

<PAGE>
   
[NOTE: "XXXXXXX" denotes expurgated information]
    


                            KEG MANAGEMENT AGREEMENT


         This Keg  Management  Agreement  ("Agreement")  dated  effective  as of
February 21, 1997,  is between  MicroStar  Keg  Management,  L.L.C.,  a Delaware
Limited  Liability  Company whose address is P. O. Box 3129 Redmond,  Washington
98073   ("MicroStar")  and  Mendocino   Brewing  Company,   Inc.,  a  California
corporation, whose address is 13351 South Highway 101, Hopland, California 95449
(referred to herein and in the Exhibits  hereto  either as "Brewing  Company" or
"Mendocino").

                           RECITATIONS AND DEFINITIONS

1.  MicroStar is engaged in the logistical  management of stainless  steel kegs,
primarily   for  the  craft   beer/micro-brewing   industry  and  has  developed
proprietary concepts,  arrangements and systems for the ownership,  licensing of
the use of, tracking and retrieval of kegs.

2. Brewing  Company is engaged in the business of brewing premium and/or special
quality or custom beers and desires to more efficiently service existing markets
while  simultaneously  expanding its business in both existing and potential new
market areas.

3.  Brewing  Company  desires to utilize the  services of  MicroStar in order to
avoid the capital outlay and manpower/administrative  costs and risks associated
with keg  ownership,  thereby  enabling  Brewing  Company  to direct  additional
resources to its brewing business. XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX

4.
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX

5. For purposes of this  Agreement  the term "kegs" shall mean and refer to beer
kegs that are straight-sided  with a single opening and an American  Sankey-type
neck, having a full U.S. half-barrel (15.5 gallon) capacity,  with minimum chime
(skirt) thickness of 2.00 mm and minimum sidewall (body/shell) thickness of 1.32
mm which have not been used to store or transport wine, and which are capable of
being  cleaned  to  Brewing  Company's  reasonable  satisfaction  by  using  the
procedures specified in this Agreement. 

<PAGE>

                                   SIGNATURES

     Pursuant  to the  requirements  of  Section  13 of the  Exchange  Act,  the
registrant  caused  this  report to be signed on its behalf by the  undersigned,
thereto duly authorized.

                               (Registrant)   Mendocino Brewing Company, Inc.




                                              By: /s/ H. Michael Laybourn
                                                 -------------------------------
                                                 H.  Michael Laybourn,  Chairman
                                                     of  the  Board   and  Chief
                                                     Executive Officer

   
                                              Date:  April  24, 1997
    

     Pursuant to the requirements of Section 13 of the Exchange Act, this report
has been signed by the following  persons on behalf of the registrant and in the
capacities and on the dates indicated.




                                              By: /s/ Norman H. Franks
                                                 -------------------------------
                                                 Norman H. Franks, Director  and
                                                     Chief Financial Officer

   
                                              Date: April 24, 1997
    




                                              By: /s/ Michael F. Lovett
                                                 -------------------------------
                                                 Michael F. Lovett, Director

   
                                              Date: April 24, 1997
    




                                              By:
                                                 -------------------------------
                                                 Eric G. Bradley, Director

                                              Date: April  _________ , 1997




                                              By:
                                                 -------------------------------
                                                 Daniel R. Moldenhauer, Director

                                              Date: April  _________ , 1997


                                      -23-


<PAGE>
                    EXHIBIT "A-1" TO KEG MANAGEMENT AGREEMENT

                          List of Regional Wholesalers

                                   CALIFORNIA

   
A&D Distributing Co.                   L&M Distributing                         
231 South Maple                        2300 Hoover Ave.                         
So. San Francisco, CA 94080            Modesto, CA 95354                        
415-583-4953                           209-521-2350                             
San Mateo, Santa Clara counties        Stanislaus County                        
                                                                                
Del Reka Dist. Co.                     Lassen Beverage, Inc.                    
P.O. Box 1327                          P.O. Box 430                             
Eureka, CA 95501                       474-340 Commercial Way                   
707-442-1701                           Susanville, CA 96130                     
Humboldt county                        916-257-9103                             
                                       Lasen, Modoc, Plumas, Sierra             
Angell Distributing Co.                                                         
P.O. Box 1530                          McCormick Beverage Co.                   
Ukiah, CA 95482                        P.O. Box 1346                            
707-462-1697                           Woodland, CA 95776                       
Lake, Mendocino counties               916-666-3263                             
                                       El Dorado, Nevada, Placer,               
Bay Area Distributing Co.              Plumas, Butte, Sacramento, Yolo counties 
1061 Factory St.                                                                
Richmond, CA 94804                     Morris Distributing                      
510-232-8554                           150 Landing Way                          
Alameda, Contra Costa,                 Petaluma, CA 94952                       
Counties                               707-769-7294                             
                                       Solano County                            
El Ray Distributing Co.                                                         
P.O. Box 750                           Olivetto Distributing                    
Napa, CA 94558                         30 Forest Products Rd.                   
707-252-8800                           Sutter Creek, CA 95685                   
Napa county                            209-223-4344                             
                                       Amador, Calaveres, Alpine Counties       
Elyxir Distributing                                                             
270 West Riverside Drive               San Joaquin Beverage Co.                 
Watsonville, CA 95076                  1401 S. Fresno Ave.                      
408-761-6400                           Stockton, CA 95203                       
Santa Cruz, Monterey and               209-948-9400                             
San Benito Counties                    San Joaquin County                       
                                                                                
Foothill Distributing Co., Inc.        Valley Wide Beverage Co.                 
P.O. Box 492800                        2907 East Butler Ave.                    
1530 Beltline Rd.                      Fresno, CA 93721                         
Redding, CA 96049-2800                 209-237-2183                             
916-243-3932                           Fresno, Madera, Merced, Mariposa Counties
Shasta, Tehema, Trinity Counties                                                
                                       Wine Warehouse                           
Golden Brands Distributing             P.O. Box 91-1234                         
255 Channel St.                        Commerce, CA 90091-1234                  
San Francisco, CA 94107                213-724-1700                             
415-863-4669                           Southern California from San Luis        
San Francisco                          Obispo to San Diego                      
                                                                                
Golden Gate Distributing Co.           
12 Harbor Dr. Blackpoint
Novato, CA 94948
415-892-6949
Marin, Sonoma counties

                                      WEST

Crown Beverage                        Admiralty Beverage Co.     
1658 Linda Way                        6800 North Cutter Circle   
Sparks, NV 89431                      Portland, OR 97217         
707-358-2426                          503-240-8333               
Northern Nevada                       Oregon                     
    
                                                                 

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