##### Table of Contents



UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 
 Form 10-K/A
 (Amendment No. 1)
 þ
    
    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the fiscal year ended December 31, 2006
 or
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the transition period from  to
 Commission File Number 0-26542
 REDHOOK ALE BREWERY, INCORPORATED
 (Exact name of registrant as specified in its charter)
 Washington
    
    91-1141254(State of incorporation)
    
    (I.R.S. Employer Identification Number)14300 NE 145thStreet, Suite 210
    
    98072-6950Woodinville, Washington(Address of principal executive offices)
    
    (Zip Code)
 (425) 483-3232  (Registrants telephone number, including area code)
 Securities registered pursuant to Section 12(b) of the Act
 Title of Each Class
    
    Name of Each Exchange on Which RegisteredCommon Stock, Par Value $0.005 Per Share
    
    The NASDAQ Stock Market LLC
 Securities registered pursuant to Section 12(g) of the Act:
None.
 (Title of Class)
 o þ
 o þ
 þ o
 þ
  o o þ
 o þ
   DOCUMENTS INCORPORATED BY REFERENCE
  
 (1)
    
    Excludes shares held of record on that date by directors and executive officers and
greater than 10% shareholders of the registrant. Exclusion of such shares should not be
construed to indicate that any such person directly or indirectly possesses the power to
direct or cause the direction of the management of the policies of the registrant.




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##### Table of Contents



EXPLANATORY NOTE
   2




---



TABLE OF CONTENTS  Item 8. Financial Statements and Supplementary DataPART IVItem 15. Exhibits and Financial Statement SchedulesSIGNATURESEXHIBIT 23.1EXHIBIT 31.1EXHIBIT 31.2EXHIBIT 31.3EXHIBIT 32.1EXHIBIT 32.2EXHIBIT 32.3    Table of Contents  
 Item 8. Financial Statements and Supplementary Data
 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 To the Board of Directors and Stockholders of  Redhook Ale Brewery, Incorporated
     
 
 3




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##### Table of Contents



REDHOOK
    ALE BREWERY, INCORPORATED
  BALANCE
    SHEETS
  December 31,2006


2005ASSETSCurrent assets:Cash and cash equivalents

$
9,435,073


$
6,435,609Accounts receivable, net of
    allowance for doubtful accounts of $68,808 and $7,599 in 2006
    and 2005, respectively


1,842,388



1,297,404Trade receivable from Craft Brands


854,507



698,272Inventories


2,571,732



3,027,720Deferred income tax asset, net


506,886



Other


203,594



502,667Total current assets


15,414,180



11,961,672Fixed assets, net


58,076,434



60,379,901Investment in Craft Brands


127,555



92,806Other assets


222,573



143,326Total assets

$
73,840,742


$
72,577,705LIABILITIES AND COMMON
    STOCKHOLDERS EQUITYCurrent liabilities:Accounts payable

$
2,233,689


$
1,990,627Trade payable to Craft Brands


324,900



367,590Accrued salaries, wages and
    payroll taxes


1,547,482



1,259,823Refundable deposits


2,153,127



2,440,796Other accrued expenses


380,394



211,200Current portion of long-term debt
    and capital lease obligations


464,648



459,245Total current liabilities


7,104,240



6,729,281Long-term debt and capital lease
    obligations, net of current portion


4,321,616



4,751,920Deferred income tax liability, net


1,548,699



946,395Other liabilities


173,768



123,542Common stockholders equity:Common stock, par value
    $0.005 per share, authorized, 50,000,000 Shares;
    issued and outstanding, 8,281,489 shares in 2006 and
    8,222,609 shares in 2005


41,407



41,113Additional paid-in capital


68,977,402



68,828,009Retained deficit


(8,326,390
)


(8,842,555
)Total common stockholders
    equity


60,692,419



60,026,567Total liabilities and common
    stockholders equity

$
73,840,742


$
72,577,705    4




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##### Table of Contents



REDHOOK
    ALE BREWERY, INCORPORATED
  STATEMENTS
    OF OPERATIONS
  Year Ended December 31,2006


2005


2004Sales

$
40,006,708


$
34,520,401


$
36,639,552Less excise taxes


4,292,324



3,421,494



3,267,513Net sales


35,714,384



31,098,907



33,372,039Cost of sales


30,918,137



27,543,639



27,171,255Gross profit


4,796,247



3,555,268



6,200,784Selling, general and
    administrative expenses


6,848,050



6,783,821



7,639,290Income from equity investment in
    Craft Brands


2,655,248



2,391,936



1,123,283Craft Brands shared formation
    expenses










534,628Operating income (loss)


603,445



(836,617
)


(849,851
)Interest expense


346,455



271,460



189,662Other income, net


384,025



125,308



115,619Income (loss) before income taxes


641,015



(982,769
)


(923,894
)Income tax provision


124,850



217,674



331,000Net income (loss)

$
516,165


$
(1,200,443
)

$
(1,254,894
)Basic earnings (loss) per share

$
0.06


$
(0.15
)

$
(0.18
)Diluted earnings (loss) per share

$
0.06


$
(0.15
)

$
(0.18
)    5




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##### Table of Contents



REDHOOK
    ALE BREWERY, INCORPORATED
  STATEMENTS
    OF COMMON STOCKHOLDERS EQUITY
  Common Stock


Additional





Total CommonPar


Paid-In


Retained


StockholdersShares


Value


Capital


Deficit


EquityBalance as of January 1, 2004


6,226,306


$
31,132


$
54,250,059


$
(6,365,018
)

$
47,916,173Issuance of common stock to A-B in
    exchange for Series B preferred stock


1,808,243



9,041



14,245,814







14,254,855Issuance of common stock


153,650



768



265,893







266,661Other














(22,200
)


(22,200
)Net loss














(1,254,894
)


(1,254,894
)Balance as of December 31,
    2004


8,188,199



40,941



68,761,766



(7,642,112
)


61,160,595Issuance of common stock


34,410



172



66,243







66,415Net loss














(1,200,443
)


(1,200,443
)Balance as of December 31,
    2005


8,222,609



41,113



68,828,009



(8,842,555
)


60,026,567Issuance of common stock


58,880



294



149,393







149,687Net income














516,165



516,165Balance as of December 31,
    2006


8,281,489


$
41,407


$
68,977,402


$
(8,326,390
)

$
60,692,419    6




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##### Table of Contents



REDHOOK
    ALE BREWERY, INCORPORATED
  STATEMENTS
    OF CASH FLOWS
  Year Ended December 31,2006


2005


2004Operating ActivitiesNet income (loss)

$
516,165


$
(1,200,443
)

$
(1,254,894
)Adjustments to reconcile net
    income (loss) to net cash provided by (used in) operating
    activities:Depreciation and amortization


2,999,916



2,938,088



2,944,412Deferred income taxes


95,418



176,597



301,000Loss on disposition of fixed assets






25,631



Income from equity investment in
    Craft Brands less than (in excess of) cash distributions


(34,749
)


377,195



(219,901
)Stock-based compensation


53,760







Changes in operating assets and
    liabilities:Accounts receivable


(544,984
)


(173,929
)


563,260Trade receivables from Craft Brands


(156,235
)


(299,565
)


(398,707
)Inventories


455,988



(27,411
)


341,697Other current assets


299,073



3,661



(259,290
)Other assets


(86,146
)


(131,140
)


4,400Accounts payable and other accrued
    expenses


243,062



(128,676
)


(274,059
)Trade payable to Craft Brands


(42,690
)


(63,499
)


431,089Accrued salaries, wages and
    payroll taxes


287,659



39,575



(341,278
)Refundable deposits


354,850



(85,292
)


253,760Other liabilities


219,420



58,639



64,903Net cash provided by operating
    activities


4,660,507



1,509,431



2,156,392Investing ActivitiesExpenditures for fixed assets


(1,295,668
)


(585,392
)


(252,098
)Investment in Craft Brands










(250,100
)Proceeds from disposition of fixed
    assets






305,260



Other, net






4,961



(4,583
)Net cash used in investing
    activities


(1,295,668
)


(275,171
)


(506,781
)Financing ActivitiesPayment to A-B pursuant to
    exchange and recapitalization agreement










(2,000,000
)Principal payments on debt and
    capital lease obligations


(461,302
)


(454,687
)


(450,000
)Issuance of common stock


95,927



66,415



266,661Net cash used in financing
    activities


(365,375
)


(388,272
)


(2,183,339
)Increase (decrease) in cash and
    cash equivalents


2,999,464



845,988



(533,728
)Cash and cash equivalents:Beginning of period


6,435,609



5,589,621



6,123,349End of period

$
9,435,073


$
6,435,609


$
5,589,621Supplemental
    DisclosuresCash paid for interest

$
343,629


$
182,202


$
186,888Cash paid for taxes Acquisition of
    fixed assets under capital leases

$
36,401


$
40,852


$
Issuance of 1,808,243 shares
    of common stock to A-B and payment of $2,000,000 to A-B in
    exchange for 1,289,872 shares of preferred stock held by A-B

$



$



$
14,232,655    7




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##### Table of Contents



REDHOOK
    ALE BREWERY, INCORPORATED
  NOTES TO
    FINANCIAL STATEMENTS
  1.
    Nature of
    Operations            2.
    Subsequent
    Events   8




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##### Table of Contents



REDHOOK
    ALE BREWERY, INCORPORATED
  NOTES TO
    FINANCIAL STATEMENTS  (Continued)
    3.
    Significant
    Accounting Policies  Cash
    and Cash Equivalents
    Accounts
    Receivable
    Inventories
  first-in,
  Fixed
    Assets
    Buildings


31 - 40 yearsBrewery equipment


10 - 25 yearsFurniture, fixtures and other
    equipment


2 - 10 yearsVehicles


5 years  9




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##### Table of Contents



REDHOOK
    ALE BREWERY, INCORPORATED
  NOTES TO
    FINANCIAL STATEMENTS  (Continued)
  Investment
    in Craft Brands Alliance LLC
  Consolidation of Variable Interest Entities  an
    Interpretation of ARB No. 51 The Equity Method of Accounting for
    Investments in Common Stock.
  Long-Lived
    Assets
  Accounting for the
    Impairment or Disposal of Long-Lived Assets.
  Revenue
    Recognition
    Excise
    Taxes
   10




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##### Table of Contents



REDHOOK
    ALE BREWERY, INCORPORATED
  NOTES TO
    FINANCIAL STATEMENTS  (Continued)
    Shipping
    and Handling Costs
    Income
    Taxes
  Accounting for Income Taxes
  Advertising
    Expenses
    Segment
    Information
  Disclosures about Segments of an Enterprise and Related
    Information.
  Stock-Based
    Compensation
    Share-Based Payment Accounting for Stock Issued to Employees. Accounting for
    Stock-Based Compensation Accounting for Stock-Based
    Compensation  Transition and Disclosure.
   11




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##### Table of Contents



REDHOOK
    ALE BREWERY, INCORPORATED
  NOTES TO
    FINANCIAL STATEMENTS  (Continued)
        Year Ended December 31,2005


2004Net loss as reported

$
(1,200,443
)

$
(1,254,894
)Add:Stock compensation as reported under APB 25






Less:Stock-based employee compensation expense determined under the
    fair value based method for all options, net of related tax
    effects


(244,585
)


(256,161
)Pro forma net loss

$
(1,445,028
)

$
(1,511,055
)Net loss per
    shareBasicAs reported

$
(0.15
)

$
(0.18
)Proforma

$
(0.18
)

$
(0.21
)DilutedAs reported

$
(0.15
)

$
(0.18
)Proforma

$
(0.18
)

$
(0.21
)    12




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##### Table of Contents



REDHOOK
    ALE BREWERY, INCORPORATED
  NOTES TO
    FINANCIAL STATEMENTS  (Continued)
          2006


2005


2004Expected life (years)


0 days



5 yrs.



5 yrs.Risk-free interest rate


4.70
%


3.88
%


3.88
%Expected volatility rate


0.00
%


46.0
%


52.0
%Expected dividend yield


0.00
%


0.0
%


0.0
%     2006


2005


2004Total number of options granted


14,000



16,000



16,000Estimated fair value of each
    option granted

$
3.84


$
1.24


$
1.08Total estimated fair value of all
    options granted

$
54,000


$
20,000


$
17,000     Earnings
    (Loss) per Share
  Earnings per
    Share.
 13




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##### Table of Contents



REDHOOK
    ALE BREWERY, INCORPORATED
  NOTES TO
    FINANCIAL STATEMENTS  (Continued)
   Use of
    Estimates
    Fair
    Value of Financial Instruments
    Recent
    Accounting Pronouncements
  Inventory Costs  an Amendment of ARB No. 43,
    Chapter 4.
  Share-Based Payment
  Accounting Changes and Error Corrections Accounting Changes Reporting Accounting Changes in Interim
    Financial Statements.
  No. 04-10, Determining Whether to Aggregate Operating Segments That Do
    Not Meet the Quantitative Thresholds
 14




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##### Table of Contents



REDHOOK
    ALE BREWERY, INCORPORATED
  NOTES TO
    FINANCIAL STATEMENTS  (Continued)
  EITF No. 04-10 Disclosures about
    Segments of an Enterprise and Related Information No. 04-10
  No. 04-13, Accounting for Purchases and Sales of Inventory with the Same
    Counterparty. No. 04-13 No. 04-13 No. 04-13
  No. 06-3, How Taxes Collected from Customers and Remitted to
    Governmental Authorities Should Be Presented in the Income
    Statement (That Is, Gross versus Net
    Presentation). No. 06-3 No. 06-3 No. 06-3,
  Accounting for Uncertainty in Income
    Taxes. Accounting for Income Taxes.
  Considering the Effects of Prior Year Misstatements when
    Quantifying Misstatements in Current Year Financial
    Statements.
  Fair Value Measurements.
  The
    Fair Value Option for Financial Assets and Financial Liabilities
    Including an Amendment of FASB Statement
    No. 115.
 15




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##### Table of Contents



REDHOOK
    ALE BREWERY, INCORPORATED
  NOTES TO
    FINANCIAL STATEMENTS  (Continued)
   4.
    Inventories    December 31,2006


2005Raw materials

$
666,938


$
1,180,831Work in process


622,352



950,827Finished goods


247,333



262,618Promotional merchandise


538,339



372,073Packaging materials


496,770



261,371$
2,571,732


$
3,027,720     5.
    Fixed
    Assets    December 31,2006


2005Brewery equipment

$
46,387,322


$
46,119,789Buildings


35,838,145



35,831,040Land and improvements


4,601,427



4,601,427Furniture, fixtures and other
    equipment


2,284,062



2,277,994Vehicles


81,730



81,730Construction in progress


460,389



51,54489,653,075



88,963,524Less accumulated depreciation and
    amortization


31,576,641



28,583,623$
58,076,434


$
60,379,901     6.
    Craft
    Brands Alliance LLC     16




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##### Table of Contents



REDHOOK
    ALE BREWERY, INCORPORATED
  NOTES TO
    FINANCIAL STATEMENTS  (Continued)
              17




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##### Table of Contents



REDHOOK
    ALE BREWERY, INCORPORATED
  NOTES TO
    FINANCIAL STATEMENTS  (Continued)
     Form 10-K Exhibits and Financial Statement Schedules Rule 3-09 Regulation S-X.
  start-up
  7.
    Debt and
    Capital Lease Obligations    December 31,2006


2005Term loan, payable to bank monthly
    at $37,500 plus accrued interest; interest at 7.1% at
    December 31, 2006; due June 5, 2012

$
4,725,000


$
5,175,000Various capital lease obligations


61,264



36,1654,786,264



5,211,165Current portion, term loan


(450,000
)


(450,000
)Current portion, capital leases


(14,648
)


(9,245
)Total current portion of term loan
    and capital leases


(464,648
)


(459,245
)Long-term portion of term loan and
    capital leases

$
4,321,616


$
4,751,920   Term
    Loan
     18




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##### Table of Contents



REDHOOK
    ALE BREWERY, INCORPORATED
  NOTES TO
    FINANCIAL STATEMENTS  (Continued)
        2007

$
450,0002008


450,0002009


450,0002010


450,0002011


450,000Thereafter


2,475,000$
4,725,000   Capital
    Leases Obligations
    2007

$
17,8542008


17,8542009


17,8542010


11,7102011


3,669Total minimum lease payments


68,941Less amount representing interest


(7,677
)Present value of minimum lease
    payments

$
61,264     8.
    Common
    Stockholders Equity  Issuance
    of Common Stock
     19




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##### Table of Contents



REDHOOK
    ALE BREWERY, INCORPORATED
  NOTES TO
    FINANCIAL STATEMENTS  (Continued)
      Stock
    Option Plans
         20




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##### Table of Contents



REDHOOK
    ALE BREWERY, INCORPORATED
  NOTES TO
    FINANCIAL STATEMENTS  (Continued)
     WeightedWeighted

Weighted





AverageShares

Average

Average

Aggregate

Options

ExerciseSubject to

Price per

Remaining

Intrinsic

Exercisable

Price perOptions

Share

Contractual Life

Value

at End of Year

ShareBalance at January 1, 2004


1,372,322


$
3.61



6.71


$
285,124



766,562


$
4.85Granted


16,000


$
2.45Exercised


(153,650
)

$
1.74Canceled


(180,142
)

$
6.19Balance at December 31, 2004


1,054,530


$
3.43



5.89


$
624,841



703,760


$
4.18Granted


16,000


$
3.15Exercised


(34,410
)

$
1.93Canceled


(189,800
)

$
4.92Balance at December 31, 2005


846,320


$
3.15



5.08


$
700,258



846,320


$
3.15Granted


14,000


$
0.01Exercised


(58,880
)

$
1.63Canceled


(18,000
)

$
17.04Balance at December 31, 2006


783,440


$
2.89



4.10


$
1,950,534



783,440


$
2.89       Options OutstandingWeighted Average



Options ExercisableRemaining

Weighted Average



Weighted AverageNumber of

Contractual Life

Exercise Price per

Number of

Exercise Price perRange of Exercise Price

Outstanding

(Years)

Share

Exercisable

Share$1.49 to $ 1.86


345,190



4.57


$
1.86



345,190


$
1.861.87 to  2.02


153,334



5.65


$
2.02



153,334


$
2.022.03 to  2.18


8,000



6.38


$
2.18



8,000


$
2.182.19 to  2.45


18,666



6.67


$
2.44



18,666


$
2.442.46 to  3.15


16,000



8.39


$
3.15



16,000


$
3.153.15 to  3.97


163,600



2.38


$
3.97



163,600


$
3.973.98 to  5.73


43,050



1.38


$
5.73



43,050


$
5.735.74 to  7.63


24,000



0.39


$
7.63



24,000


$
7.637.64 to 10.13


11,600



0.10


$
10.13



11,600


$
10.13$1.49 to $10.13


783,440



4.10


$
2.89



783,440


$
2.89    21




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##### Table of Contents



REDHOOK
    ALE BREWERY, INCORPORATED
  NOTES TO
    FINANCIAL STATEMENTS  (Continued)
    Shareholder
    Rights Agreement
    9.
    Earnings
    (Loss) Per Share    Year Ended December 31,2006


2005


2004Net income (loss)

$
516,165


$
(1,200,443
)

$
(1,254,894
)Preferred stock accretion










(22,200
)Income (loss) available to common
    stockholders


516,165



(1,200,443
)


(1,277,094
)Weighted average common shares
    outstanding


8,250,613



8,206,219



7,228,674Dilutive effect of stock options
    on weighted average common shares outstanding


274,542







Diluted weighted average common
    shares outstanding


8,525,155



8,206,219



7,228,674Basic net income (loss) per share

$
0.06


$
(0.15
)

$
(0.18
)Diluted net income (loss) per share

$
0.06


$
(0.15
)

$
(0.18
)     10.
    Income
    Taxes    Year Ended December 31,2006


2005


2004Current

$
29,432


$
41,077


$
30,000Deferred


95,418



176,597



301,000Income tax provision


124,850



217,674



331,000    22




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##### Table of Contents



REDHOOK
    ALE BREWERY, INCORPORATED
  NOTES TO
    FINANCIAL STATEMENTS  (Continued)
     Year Ended December 31,2006


2005


2004Federal statutory rate


34.0
%


(34.0
)%


(34.0
)%State taxes, net of federal benefit


2.9
%


(2.9
)%


(2.7
)%Permanent differences, primarily
    meals and entertainment


11.6
%


6.8
%


6.9
%Other items, net


11.7
%


1.1
%


20.6
%Adjustment to deferred tax asset
    tax rate


52.4
%


0.0
%


0.0
%Valuation allowance


(93.1
)%


51.1
%


45.0
%Effective income tax rate


19.5
%


22.1
%


35.8
%       Year Ended December 31,2006


2005Deferred tax liabilities:Tax-over-book
    depreciation

$
9,760,169


$
10,549,576Other






154,3499,760,169



10,703,925Deferred tax assets:NOL and AMT credit carryforwards


9,405,515



10,938,218Other


372,163



475,445Valuation allowance


(1,059,322
)


(1,656,133
)8,718,356



9,757,530Net deferred tax liability, net

$
1,041,813


$
946,395      23




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##### Table of Contents



REDHOOK
    ALE BREWERY, INCORPORATED
  NOTES TO
    FINANCIAL STATEMENTS  (Continued)
    11.
    Commitments      2007

$
69,9572008


69,9572009


102,1472010


271,8662011


276,251Thereafter


11,727,947$
12,518,125         2007

$
2,671,0152008


680,4452009


30,5152010


20,7892011


18,528Thereafter


772$
3,422,064  24




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##### Table of Contents



REDHOOK
    ALE BREWERY, INCORPORATED
  NOTES TO
    FINANCIAL STATEMENTS  (Continued)
    12.
    Employee
    Benefit Plan    13.
    Financial
    Instruments, Major Customers, and Related-Party
    Transactions        non-A-B
 25




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REDHOOK
    ALE BREWERY, INCORPORATED
  NOTES TO
    FINANCIAL STATEMENTS  (Continued)
    A-B
    Pacific Ridge
              Widmer Hefeweizen Widmer Hefeweizen
 26




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REDHOOK
    ALE BREWERY, INCORPORATED
  NOTES TO
    FINANCIAL STATEMENTS  (Continued)
  Widmer Hefeweizen
   27




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REDHOOK
    ALE BREWERY, INCORPORATED
  NOTES TO
    FINANCIAL STATEMENTS  (Continued)
  14.
    Quarterly
    Financial Data (Unaudited)  Quarter Ended12/31/06


9/30/06


6/30/06


3/31/06


12/31/05


9/30/05


6/30/05


3/31/05Sales

$
9,381


$
10,813


$
11,144


$
8,669


$
7,956


$
9,498


$
9,741


$
7,325Less excise taxes


1,046



1,169



1,187



890



740



947



982



752Net sales


8,335



9,644



9,957



7,779



7,216



8,551



8,759



6,573Cost of sales


7,554



8,012



8,110



7,242



6,789



7,429



7,277



6,048Gross profit


781



1,632



1,847



537



427



1,122



1,482



525Selling, general and administrative
    expenses


1,557



1,777



1,800



1,714



1,484



1,905



1,852



1,543Income from equity investment in
    Craft Brands


579



743



819



514



767



674



691



259Operating income (loss)


(197
)


598



866



(663
)


(290
)


(109
)


321



(759
)Interest expense


88



92



84



83



72



72



66



61Other income, net


185



57



88



54



40



20



36



29Income (loss) before income taxes


(100
)


563



870



(692
)


(322
)


(161
)


291



(791
)Income tax provision (benefit)


(93
)


199



11



8



259



10



8



(59
)Net income (loss)

$
(7
)

$
364


$
859


$
(700
)

$
(581
)

$
(171
)

$
283


$
(732
)Basic earnings (loss) per share *

$



$
0.04


$
0.10


$
(0.09
)

$
(0.07
)

$
(0.02
)

$
0.03


$
(0.09
)Diluted earnings (loss) per share *

$



$
0.04


$
0.10


$
(0.09
)

$
(0.07
)

$
(0.02
)

$
0.03


$
(0.09
)Barrels shipped


64.7



72.9



76.0



58.0



50.5



61.6



64.0



49.2     *
    
    Summing the earnings per share amounts for each of the quarters
    will not equal the full year earnings per share due to rounding.  Seasonality
   28




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PART IV.
 
 Item 15. Exhibits and Financial Statement Schedules
 (a) The following documents are filed as part of this report:
 1. Audited Financial Statements
 Page
    
    
    Report of Moss Adams LLP, Independent Registered Public Accountants
    
    
    3
    
    
    Balance Sheets as of December 31, 2006 and 2005
    
    
    4
    
    
    Statements of Operations for the Years Ended December 31, 2006, 2005 and 2004
    
    
    5
    
    
    Statements of Common Stockholders Equity for the Years Ended December 31, 2006, 2005 and
2004
    
    
    6
    
    
    Statements of Cash Flows for the Years Ended December 31, 2006, 2005 and 2004
    
    
    7
    
    
    Notes to Financial Statements
    
    
    8
 2.
Financial Statement Schedules
 
    
    
    Report of
Moss Adams LLP, Independent Registered Public Accountants
    
    
    Craft Brands
Alliance LLC Balance Sheets as of December 31, 2006 and 2005
    
    
    Craft Brands
Alliance LLC Statement of Income for the Years Ended December 31, 2006 and 2005
    
    
    Craft Brands
Alliance LLC Statement of Members Equity for the Years Ended December 31, 2006 and 2005
    
    
    Craft Brands
Alliance LLC Statement of Cash Flows for the Years Ended December 31, 2006 and 2005
    
    
    Notes to
Financial Statements
 29




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3. Exhibits
                  30




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31




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32




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33




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10.52
    
    Amendment No. 1, dated as of May 18, 2004, to Amended and Restated
Rights Agreement dated May 12, 1999 between Redhook Ale Brewery,
Incorporated and Mellon Investor Services LLC (formerly known as
ChaseMellon Shareholder Services, L.L.C.), as Rights Agent (Incorporated by
reference from Exhibit 1 to the Companys Form 8-A/A filed on June 28,
2004)10.53
    
    Licensing Agreement dated as of February 1, 2003 between the
Registrant and Widmer Brothers Brewing Company (Incorporated by reference
from Exhibit 10.1 to the Companys Form 10-Q filed on May 15, 2006)*
                 
 (*)
    
    Confidential treatment has been granted for portions of this document.  34




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##### Table of Contents



SIGNATURES
  REDHOOK ALE BREWERY, INCORPORATEDBy
    
    /s/ JAY T. CALDWELL

Jay T. CaldwellChief Financial Officer and Treasurer
  Signature
    
    Title
    
    Date/s/
Paul S. Shipman

Paul S. Shipman
    
    Chief Executive Officer and
Chairman of the Board
(Principal Executive Officer)
    
    May 9, 2007/s/
David J. Mickelson

David J. Mickelson
    
    President
    
    May 9, 2007/s/
Jay T. Caldwell

Jay T. Caldwell
    
    Chief Financial Officer and Treasurer
(Principal Financial Officer)
    
    May 9, 2007/s/
Frank H. Clement

Frank H. Clement
    
    Director
    
    May 9, 2007/s/
Michael Loughran

Michael Loughran
    
    Director
    
    May 9, 2007/s/
David R. Lord

David R. Lord
    
    Director
    
    May 9, 2007/s/
John W. Glick

John W. Glick
    
    Director
    
    May 9, 2007/s/
John D. Rogers, Jr.

John D. Rogers, Jr.
    
    Director
    
    May 9, 2007/s/
Anthony J. Short

Anthony J. Short
    
    Director
    
    May 9, 2007
 35