<PAGE>   1
                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                             ----------------------

                                    FORM 10-Q


                QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934


                FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 1996


                         COMMISSION FILE NUMBER 0-26542
                           ---------------------------



                        REDHOOK ALE BREWERY, INCORPORATED
             (Exact name of registrant as specified in its charter)



             WASHINGTON                                         91-1141254
  (State or other jurisdiction of                            (I.R.S. Employer
   incorporation or organization)                           Identification No.)



              3400 PHINNEY AVENUE NORTH, SEATTLE, WASHINGTON    98103
               (Address of principal executive offices)       (Zip Code)


       Registrant's telephone number, including area code: (206) 548-8000


     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 X  No____




      Common stock, par value $.005 per share: 7,685,486 shares outstanding
                            as of September 30, 1996.


                    Page 1 of 13 sequentially numbered pages




<PAGE>   2
                                                          

                        REDHOOK ALE BREWERY, INCORPORATED

                                    FORM 10-Q

                FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 1996

                                TABLE OF CONTENTS


<TABLE>
<CAPTION>
                                                                                                         PAGE

<S>                                                                                                        <C>
PART I:  FINANCIAL INFORMATION

Item 1.           Financial Statements

                  Balance Sheets
                           September 30, 1996 and December 31, 1995.......................................  3

                  Statements of Income
                           Three Months Ended September 30, 1996 and 1995
                           and Nine Months Ended September 30, 1996 and 1995..............................  4

                  Statement of Cash Flows
                           Nine Months Ended September 30, 1996 and 1995..................................  5

                  Notes to Financial Statements...........................................................  6

Item 2.           Management's Discussion and Analysis of Financial Condition
                  and Results of Operations...............................................................  7


PART II: OTHER INFORMATION

Item 6.           Exhibits and Reports on Form 8-K........................................................  13
</TABLE>



                                       2
<PAGE>   3


PART I.

ITEM 1. FINANCIAL STATEMENTS

                        REDHOOK ALE BREWERY, INCORPORATED

                                 BALANCE SHEETS


<TABLE>
<CAPTION>
                                                                        SEPTEMBER 30,     DECEMBER 31,
                                                                            1996             1995
                                                                        -------------     ------------
                                                                         (Unaudited)
                                     ASSETS
<S>                                                                      <C>               <C>        
Current Assets:
  Cash and Cash Equivalents ......................................       $ 1,686,551       $24,676,600
  Accounts Receivable ............................................         2,263,000         2,027,454
  Inventories ....................................................         1,728,709         1,152,265
  Prepaid Expenses and Other .....................................         1,072,443           635,202
                                                                         -----------       -----------

    Total Current Assets .........................................         6,750,703        28,491,521
  Fixed Assets, Net ..............................................        82,212,800        57,799,694
  Other Assets ...................................................           694,756           347,221
                                                                         -----------       -----------

      Total Assets ...............................................       $89,658,259       $86,638,436
                                                                         ===========       ===========


                       LIABILITIES, REDEEMABLE PREFERRED STOCK
                           AND COMMON STOCKHOLDERS' EQUITY

Current Liabilities:
  Accounts Payable ...............................................       $ 3,989,877       $ 4,828,902
  Accrued Salaries, Wages, and Payroll Taxes .....................         1,136,286           695,645
  Refundable Deposits ............................................           847,046           972,957
  Other Accrued Expenses .........................................           224,637           312,948
  Current Portion of Long-Term Debt ..............................           130,366           121,659
                                                                         -----------       -----------

    Total Current Liabilities ....................................         6,328,212         6,932,111
                                                                         -----------       -----------

Long-Term Debt, Net of Current Portion ...........................         1,724,821         1,825,339
                                                                         -----------       -----------

Deferred Income Taxes ............................................         3,156,626         2,389,588
                                                                         -----------       -----------

Other Liabilities ................................................            43,995            35,348
                                                                         -----------       -----------


Convertible Redeemable Preferred Stock ...........................        15,910,755        15,877,455
                                                                         -----------       -----------

Common Stockholders' Equity:
  Common Stock, Par Value $0.005 per Share, Authorized, 20,000,000
    Shares; Issued and Outstanding, 7,685,486 Shares in 1996 and
    7,683,596 Shares in 1995 .....................................            38,428            38,417
  Additional Paid-In Capital .....................................        56,652,764        56,642,663
  Retained Earnings ..............................................         5,802,658         2,897,515
                                                                         -----------       -----------

      Total Common Stockholders' Equity ..........................        62,493,850        59,578,595
                                                                         -----------       -----------
        Total Liabilities, Redeemable Preferred Stock and
          Common Stockholders' Equity ............................       $89,658,259       $86,638,436
                                                                         ===========       ===========
</TABLE>
 

                             See Accompanying Notes.

                                       3
<PAGE>   4
                        REDHOOK ALE BREWERY, INCORPORATED

                              STATEMENTS OF INCOME

                                   (Unaudited)

<TABLE>
<CAPTION>
                                                        THREE MONTHS ENDED                    NINE MONTHS ENDED
                                                           SEPTEMBER 30,                        SEPTEMBER 30,
                                                   -----------------------------       -----------------------------
                                                      1996              1995              1996              1995
                                                   -----------       -----------       -----------       -----------

<S>                                                <C>               <C>               <C>               <C>        
Sales ......................................       $10,393,830       $ 7,388,929       $29,251,056       $19,672,798
Less Excise Taxes ..........................           963,032           632,668         2,788,848         1,743,711
                                                   -----------       -----------       -----------       -----------

Net Sales ..................................         9,430,798         6,756,261        26,462,208        17,929,087
Cost of Sales ..............................         6,045,247         4,416,580        16,898,029        11,770,426
                                                   -----------       -----------       -----------       -----------

Gross Profit ...............................         3,385,551         2,339,681         9,564,179         6,158,661
Selling, General and Administrative Expenses         2,117,104         1,179,985         5,511,378         3,154,366
                                                   -----------       -----------       -----------       -----------

Operating Income ...........................         1,268,447         1,159,696         4,052,801         3,004,295
Other Income, Net ..........................           128,672           198,548           574,668           222,641
                                                   -----------       -----------       -----------       -----------

Income before Income Taxes .................         1,397,119         1,358,244         4,627,469         3,226,936
Provision for Income Taxes .................           509,948           488,968         1,689,026         1,161,697
                                                   -----------       -----------       -----------       -----------

Net Income .................................       $   887,171       $   869,276       $ 2,938,443       $ 2,065,239
                                                   ===========       ===========       ===========       ===========

Net Income per Share .......................       $      0.10       $      0.12       $      0.32       $      0.31
                                                   ===========       ===========       ===========       ===========

Average Number of Common and
  Equivalent Shares Outstanding ............         9,141,758         7,520,448         9,146,227         6,650,226
                                                   ===========       ===========       ===========       ===========
</TABLE>

                            See Accompanying Notes.

                                       4
<PAGE>   5
                        REDHOOK ALE BREWERY, INCORPORATED

                            STATEMENTS OF CASH FLOWS

                                   (Unaudited)

<TABLE>
<CAPTION>
                                                               NINE MONTHS ENDED
                                                                 SEPTEMBER 30,
                                                       --------------------------------
                                                           1996                1995
                                                       ------------        ------------
<S>                                                    <C>                 <C>         
OPERATING ACTIVITIES
Net Income .....................................       $  2,938,443        $  2,065,239
Adjustments to Reconcile Net Income to Net Cash
  Provided by Operating Activities:
  Depreciation and Amortization ................          1,347,780             922,880
  Deferred Income Tax Provision ................            767,038             552,691
  Other ........................................           (287,002)            206,352
  Net Change in Operating Assets and Liabilities           (176,133)            254,295
                                                       ------------        ------------

Net Cash Provided by Operating Activities ......          4,590,126           4,001,457
                                                       ------------        ------------

INVESTING ACTIVITIES
Expenditures for Fixed Assets ..................        (27,437,847)        (16,084,481)
Other ..........................................            (66,914)               --
                                                       ------------        ------------

Net Cash Used in Investing Activities ..........        (27,504,761)        (16,084,481)
                                                       ------------        ------------

FINANCING ACTIVITIES
Proceeds from Debt .............................         17,000,000          10,227,617
Repayments on  Debt ............................        (17,091,811)        (12,164,226)
Proceeds from Sale of Common Stock .............               --            46,247,721
Other ..........................................             16,397                --
                                                       ------------        ------------

Net Cash Provided (Used) by Financing Activities            (75,414)         44,311,112
                                                       ------------        ------------

Increase (Decrease) in Cash and Cash Equivalents        (22,990,049)         32,228,088
Cash and Cash Equivalents:
  Beginning of Period ..........................         24,676,600             472,487
                                                       ------------        ------------

  End of Period ................................       $  1,686,551        $ 32,700,575
                                                       ============        ============
</TABLE>

                            See Accompanying Notes.

                                       5
<PAGE>   6


                        REDHOOK ALE BREWERY, INCORPORATED

                          NOTES TO FINANCIAL STATEMENTS

                                   (Unaudited)


1.  BASIS OF PRESENTATION

    The accompanying financial statements and related notes should be read in
    conjunction with the financial statements and notes thereto included in the
    Company's Annual Report on Form 10-K. The accompanying financial statements
    include the accounts of Redhook Ale Brewery, Incorporated (the "Company")
    and have been prepared pursuant to the rules and regulations of the
    Securities and Exchange Commission. These financial statements are
    unaudited, condensed and do not contain all of the information required by
    generally accepted accounting principles to be included in a full set of
    financial statements. In the opinion of management, all material adjustments
    necessary to present fairly the financial position, results of operations
    and cash flows of the Company, for the periods presented, have been made.
    All such adjustments are of a normal, recurring nature. The results of
    operations for such interim periods are not necessarily indicative of the
    results of operations for the full year.


2.  EARNINGS PER SHARE

    Earnings per share is based on the weighted average number of common and
    common equivalent shares outstanding during the respective periods. The
    calculation of average common equivalent shares outstanding includes the
    effect of all outstanding convertible redeemable preferred stock and
    outstanding stock options. Because all of the Company's outstanding
    preferred shares are common equivalent shares, for purposes of calculating
    earnings per share, the accretion related to the preferred stock carrying
    value is not deducted from net income in the calculation of earnings per
    share. The calculation uses the treasury stock method in determining the
    resulting incremental average equivalent shares outstanding.


3.  INVENTORIES

    Inventories consist of the following:


<TABLE>
<CAPTION>
                                           SEPTEMBER 30,    DECEMBER 31,
                                              1996             1995
                                           ----------       ----------
<S>                                        <C>              <C>       
    Finished goods .................       $1,067,147       $  786,580
    Raw materials  .................          162,772          121,651
    Promotional merchandise ........          418,877          222,160
    Bottling materials .............           79,913           21,874
                                           ----------       ----------
                                           $1,728,709       $1,152,265
                                           ==========       ==========
</TABLE>


    Finished goods include beer held in fermentation prior to the filtration and
    packaging process.

                                       6
<PAGE>   7

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

    The following discussion and analysis should be read in conjunction with the
Company's financial statements and notes thereto included herein.

OVERVIEW

    Since its formation, the Company has focused its business activities on the
brewing, marketing and selling of craft beers. For the nine months ended
September 30, 1996, the Company had gross sales of $29,251,000, an increase of
49% over the first nine months of 1995. The Company believes that
period-to-period comparisons of its financial results should not be relied upon
as an accurate indicator of future performance. The Company's sales consist
predominantly of sales of beer to third-party distributors. In addition, the
Company derives other revenues from the sale of beer, food, apparel and other
retail items in its brewery pubs. The Company is required to pay federal excise
taxes on sales of its beer. The excise tax burden on beer sales increases from
$7 to $18 per barrel on annual production over 60,000 barrels and thus, as the
Company increases its sales volume, federal excise taxes will increase as a
percentage of sales.

    The following discussion contains forward-looking statements that involve
risks and uncertainties. Actual future results and trends may differ materially
depending on a variety of factors, including, but not limited to, pricing and
availability of raw materials and packaging, successful execution of internal
performance and expansion plans, impact of competition, distributor changes,
availability of financing, legal proceedings, and other risks detailed in the
Company's Securities and Exchange Commission filings, including the Company's
Annual Report on Form 10-K for the year ended December 31, 1995.

    In addition to the level of consumer demand in existing markets, the
Company's sales are also affected by other factors such as the opening of new
distribution territories, new product introductions and competitive
considerations, including the increasing number of craft brewers and promotional
pricing. Sales in the craft beer industry generally reflect a degree of
seasonality, with the second half of the year typically demonstrating stronger
sales in connection with summer activities and fall and early winter holidays.
The Company has historically operated with little or no backlog, and its ability
to predict sales for an upcoming quarter is limited.

    Under normal circumstances, the Company generally operates its brewing
facilities five days per week, two shifts per day. To meet the increasing demand
for its products, the Company has periodically increased its annual production
capacity, from approximately 3,000 barrels at its first brewery in the Ballard
neighborhood of Seattle in 1982 to approximately 325,000 barrels as of September
30, 1996, the maximum designed capacity of its two Seattle-area breweries.
Production capacity of each facility is added in phases until the facility
reaches its maximum designed production capacity. The timing of each phase is
affected by the availability of capital, construction constraints and the
Company's plans for an orderly entry into selected new markets and growth in
existing markets. The Portsmouth, New Hampshire brewery began commercial
production during October 1996. The Portsmouth brewery's initial production
capacity is approximately 100,000 barrels per year and its maximum designed
production capacity is approximately 250,000 barrels per year.

    The Company's capacity utilization has a significant impact on gross
profits. When facilities are operating at their maximum designed production
capacity, profitability is favorably affected by spreading fixed and
semivariable operating costs, such as depreciation and production salaries, over
a larger sales base. Most capital costs associated with building a new brewery
and fixed and semivariable costs related to operating a new brewery are incurred
prior to, or upon commencement of, production at a facility. Because the initial
production level is substantially below the facility's maximum designed
production capacity, gross margins are negatively impacted. This impact is
reduced as the facility's actual production increases.




                                       7
<PAGE>   8
    In addition to capacity utilization, the Company expects other factors to
influence profit margins, including higher costs associated with the opening of
new distribution territories, such as increased shipping, marketing and sales
personnel costs; fees related to the distribution agreement with Anheuser-Busch,
Inc. ("A-B"); changes in packaging and other material costs; and changes in
product sales mix. The incremental cost of shipping beer from the Company's
breweries will continue to increase as the volume of beer supplied to more
distant markets increases. The Company believes that commencing full-scale
production at the Portsmouth Brewery will reduce shipping expenses to eastern
U.S. markets. Also, the Company's ability to connect directly to the City of
Portsmouth water line is subject to approval and there is no assurance as to the
timing, or even the approval, of such direct connection. The cost of tankering
water from the City of Portsmouth's system, or other sources, for production
purposes at the Portsmouth brewery will impact gross profit.


RESULTS OF OPERATIONS

    The following table sets forth, for the periods indicated, certain items
from the Company's Statements of Income expressed as a percentage of net sales.

<TABLE>
<CAPTION>
                                                                THREE MONTHS                NINE MONTHS
                                                             ENDED SEPTEMBER 30,         ENDED SEPTEMBER 30,
                                                             --------------------        --------------------

                                                              1996          1995          1996          1995
                                                             ------        ------        ------        ------
<S>                                                           <C>           <C>           <C>           <C>   
      Sales ..........................................        110.2%        109.4%        110.5%        109.7%
      Less Excise Taxes ..............................         10.2           9.4          10.5           9.7
                                                             ------        ------        ------        ------
      Net Sales ......................................        100.0         100.0         100.0         100.0
      Cost of Sales ..................................         64.1          65.4          63.9          65.6
                                                             ------        ------        ------        ------
      Gross Profit ...................................         35.9          34.6          36.1          34.4
      Selling, General, and Administrative Expenses ..         22.4          17.4          20.8          17.6
                                                             ------        ------        ------        ------
      Operating Income ...............................         13.5          17.2          15.3          16.8
      Other Income ...................................          1.3           2.9           2.2           1.2
                                                             ------        ------        ------        ------
      Income before Income Taxes .....................         14.8          20.1          17.5          18.0
      Provision for Income Taxes .....................          5.4           7.2           6.4           6.5
                                                             ------        ------        ------        ------
      Net Income .....................................          9.4%         12.9%         11.1%         11.5%
                                                             ======        ======        ======        ======
</TABLE>



THREE MONTHS ENDED SEPTEMBER 30, 1996 COMPARED TO THREE MONTHS ENDED SEPTEMBER
30, 1995

    Sales. Sales increased by 40.7% to $10,394,000 in the third quarter of 1996
from $7,389,000 in the comparable 1995 period, primarily due to expansion into
new markets and growth in existing markets. As of September 30, 1996, the
Company was selling beer in 47 states compared to 21 states at September 30,
1995. The sales increase reflects a 42.9% increase in sales volume to 57,600
barrels in the third quarter of 1996 from 40,300 barrels in the comparable 1995
period, and relatively stable sales prices in the Company's various markets.
Third quarter 1996 sales in the San Francisco Bay Area of Northern California
were negatively impacted by the change of certain distributors to distributors
affiliated with A-B's distribution network. The Company does not expect to make
any further significant changes in its distribution system as part of its
conversion to the A-B distribution network. The Company's other sales totaled
$1,166,000 in the third quarter of 1996, compared to $1,104,000 in the third
quarter of 1995.

    Excise Taxes. Excise taxes increased to $963,000, or 10.2% of net sales in
the third quarter of 1996, from $633,000, or 9.4% of net sales in the comparable
quarter of 1995, reflecting increased sales volumes and the increased federal
excise tax rate applicable to annual production in excess of 60,000 barrels.

    Cost of Sales. Cost of sales increased to $6,045,000 in the third quarter of
1996 from $4,417,000 in 1995, primarily due to the increase in sales volume.
Cost of sales, as a percentage of net sales, decreased to 64.1% in 1996 compared
to 65.4% in 1995, primarily due to increased capacity utilization and the
resulting effect of


                                       8
<PAGE>   9


spreading fixed and semivariable operating costs over a larger production base,
substantially offset by higher freight costs. The utilization rate of the
operating breweries' maximum designed capacity was 71% and 50% in the quarters
ended September 30, 1996 and 1995, respectively. Shipping expense significantly
increased in the third quarter of 1996 compared to the third quarter of 1995,
reflecting increased shipments of beer to new, more distant markets. The Company
expects that cost of goods sold, as a percentage of sales, will be negatively
impacted beginning in the quarter ended December 31, 1996 due to commencing
production at the Portsmouth Brewery and the related decrease in the Company's
capacity utilization rate. That impact will be partially offset by lower freight
costs on shipments to eastern markets.

    Selling, General and Administrative Expenses. Selling, general and
administrative expenses increased to $2,117,000 in the third quarter of 1996
from $1,180,000 in 1995. The increase is primarily related to the Company's
expansion into new markets. These expenses increased as a percentage of net
sales to 22.4% in the third quarter of 1996 from 17.4% in 1995, primarily
attributable to additional sales personnel in the new markets and related
expenses, including promotional and marketing support.

    Other Income, Net. Other income, net, decreased to $129,000 in the third
quarter of 1996 compared to $199,000 in the 1995 period. The decrease is due
primarily to a decline in income as the short-term investment of cash from the
August 1995 sale of common stock is invested in fixed assets.

    Income Taxes. The Company's effective income tax rate increased to 36.5% in
1996 from 36.0% in 1995. That increase is the result of the Company's expansion
into new states and the corresponding increase in state income taxes.


NINE MONTHS ENDED SEPTEMBER 30, 1996 COMPARED TO NINE MONTHS ENDED SEPTEMBER 30,
1995

    Sales. Sales increased by 48.7% to $29,251,000 in the first nine months of
1996 from $19,673,000 in the comparable 1995 period, primarily due to expansion
into new markets and growth in existing markets. The sales increase reflects a
52.6% increase in sales volume to 166,600 barrels in the first nine months of
1996 from 109,200 barrels in the comparable 1995 period, and relatively stable
sales prices in the Company's various markets. The Company's other sales totaled
$2,559,000 in the first nine months of 1996, compared to $2,542,000 in the first
nine months of 1995.

    Excise Taxes. Excise taxes increased to $2,789,000, or 10.5% of net sales in
the first nine months of 1996, from $1,744,000, or 9.7% of net sales in the
comparable period of 1995, reflecting increased sales volumes and the increased
federal excise tax rate applicable to annual production in excess of 60,000
barrels.

    Cost of Sales. Cost of sales increased to $16,898,000 in the first nine
months of 1996 from $11,770,000 in 1995, primarily due to the increase in sales
volume. Cost of sales, as a percentage of net sales, decreased to 63.9% in 1996
compared to 65.6% in 1995, primarily due to increased capacity utilization and
the resulting effect of spreading fixed and semivariable operating costs over a
larger production base, substantially offset by higher freight costs. The
utilization rate of the breweries' maximum designed capacity was 68% and 45% in
the nine-month periods ended September 30, 1996 and 1995, respectively. Shipping
expense significantly increased in the first nine months of 1996 compared to
first nine months of 1995, reflecting increased shipments of beer to new, more
distant markets. The Company expects that cost of goods sold, as a percentage of
sales, will be negatively impacted beginning in the quarter ended December 31,
1996 due to commencing production at the Portsmouth Brewery and the related
decrease in the Company's capacity utilization rate. That impact will be
partially offset by lower freight costs on shipments to eastern markets.

    Selling, General and Administrative Expenses. Selling, general and
administrative expenses increased to $5,511,000 in the first nine months of 1996
from $3,154,000 in 1995. The increase is primarily related to the Company's
expansion into new markets. These expenses increased as a percentage of net
sales to 20.8% in the first nine months of 1996 from 17.6% in 1995, primarily
attributable to additional sales personnel in the new markets and related
expenses, including promotional and marketing support.



                                       9
<PAGE>   10



    Other Income, Net. Other income, net, increased to $575,000 in the first
nine months of 1996 from $223,000 in the comparable 1995 period. The increase is
due primarily to the income earned on the short-term investment of cash from the
August 1995 sale of common stock.

    Income Taxes. The Company's effective income tax rate increased to 36.5% in
1996 from 36.0% in 1995. That increase is the result of the Company's expansion
into new states and the corresponding increase in state income taxes.


LIQUIDITY AND CAPITAL RESOURCES

    The Company had $1,687,000 and $24,677,000 of cash and cash equivalents at
September 30, 1996 and December 31, 1995, respectively. At September 30, 1996,
the Company had working capital of $422,000. The Company's long-term debt as a
percentage of total capitalization (long-term debt, preferred stock and common
stockholders' equity) was 2.3% and 2.5% as of September 30, 1996 and December
31, 1995, respectively.

    Capital expenditures for the first nine months of 1996 totaled $27,438,000.
The capital expenditures relate primarily to additional fermentation equipment
and the kegging and cold storage facility at the Woodinville Brewery, and costs
associated with the construction of the new brewery in Portsmouth, New
Hampshire. The construction of the Portsmouth Brewery began in late May 1995 and
that facility commenced commercial operations in October 1996. The Portsmouth
brewery's initial production capacity is 100,000 barrels on an annual basis, and
its maximum designed production capacity is approximately 250,000 barrels per
year. The total cost of the Portsmouth Brewery was approximately $30 million. In
April 1996, the Company began construction of the keg racking and cold storage
facility at the Woodinville Brewery. This facility is expected to cost
approximately $6 million and will be used to supplement the supply of Redhook
draft beer in western states. Capital expenditures for 1996 are expected to
total approximately $30 million.

    The Company has $10 million available under a secured bank facility (the
"Secured Facility") through June 5, 1997. In addition, the Company has $10
million available under an unsecured revolving credit facility with the same
bank through June 5, 1998. Interest accrues at a variable rate based on the
Inter Bank Offered Rate ("IBOR") plus 1.00% to 2.50%, depending on the Company's
debt-to-tangible net worth ratio. The Company can fix the rate by selecting IBOR
for one- to twelve-month periods as a base. As of September 30, 1996, there were
no borrowings outstanding under these bank facilities and the Company's
one-month IBOR-based borrowing rate was approximately 6.44%.

    The Company expects to meet its future financing needs, including working
capital and capital expenditure requirements, through cash on hand, operating
cash flow and, to the extent required and available, bank borrowings and
offerings of debt, convertible securities or equity securities.

    The Company has certain commitments, contingencies and uncertainties
relating to its normal operations. Management believes that any such
commitments, uncertainties or contingent liabilities, including any
environmental uncertainties, will not have a material adverse effect on the
Company's financial position or results of operations.



                                       10
<PAGE>   11



NEW ACCOUNTING STANDARD

    In October 1995, the Financial Accounting Standards Board issued Statement
No. 123, Accounting for Stock-Based Compensation ("Statement No. 123"). This
pronouncement establishes the accounting and reporting standards for stock-based
employee compensation plans, including: stock purchase plans, stock options and
stock appreciation rights. This new standard defines a fair value-based method
of accounting for these equity instruments. This method measures compensation
cost based on the value of the award and recognizes that cost over the service
period. Companies may elect to adopt this standard or to continue accounting for
these types of equity instruments under current guidance, APB Opinion No. 25,
Accounting for Stock Issued to Employees ("Opinion No. 25"). Companies that
elect to continue using the rules of Opinion No. 25 must make pro forma
disclosures of net income and earnings per share as if Statement No. 123 had
been applied. The new disclosures are required for fiscal years beginning after
December 15, 1995. The Company has elected to continue accounting in accordance
with Opinion No. 25 and will include the pro forma disclosures required by
Statement No. 123 in the footnotes to its financial statements for the year
ending December 31, 1996. The pro forma footnote disclosures will have no effect
on the Company's Balance Sheet or Statement of Income.



                                       11
<PAGE>   12
                                    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 November 7, 1996.


                                         REDHOOK ALE BREWERY, INCORPORATED      
                                    
                                    
                                    
                                    
                                         BY:      /s/ Bradley A. Berg   
                                                  -------------------
                                                  Bradley A. Berg
                                                  Executive Vice President and
                                                  Chief Financial Officer
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                         BY:      /s/ David H. Kirske
                                                  -------------------
                                                  David H. Kirske
                                                  Controller and Treasurer
                                                  (Principal Accounting Officer)
 


DATE:  November 7, 1996


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<PAGE>   13
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.



         10.34    First Amendment dated as of July 25, 1996, to Amended and
                  Restated Credit Agreement between U.S. Bank of Washington,
                  National Association and Registrant, dated June 5, 1995

         11.1     Computation of Earnings Per Share
           

         27       Financial Data Schedule






(b)  REPORTS ON FORM 8-K


                  None filed during the quarter ended September 30, 1996.





ITEMS 1, 2, 3, 4 AND 5 OF PART II ARE NOT APPLICABLE AND HAVE BEEN OMITTED.

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