<PAGE>
<PAGE>


                UNITED STATES SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

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

                                    FORM 10-Q

[X] Quarterly Report Pursuant  to Section 13 or 15(d) of the Securities Exchange
    Act of 1934 for the quarterly period ended July 31, 1996

                                       or

[ ] 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 1-12119

                  AMERICAN CRAFT BREWING INTERNATIONAL LIMITED
             (Exact name of registrant as specified in its charter)

            Bermuda                                   72-123940
--------------------------------          --------------------------------------
State or other jurisdiction of             (I.R.S. Employer Identification No.)
incorporation or organization

    One Galleria Boulevard, Metairie, Louisiana                        70001
-----------------------------------------------------              -------------
      (Address of principal executive offices)                       (Zip Code)

       Registrant's telephone number, including area code: (504) 849-2739

Indicate  by a 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_____     No X

                  Number of shares of common stock outstanding
                        at September 16, 1996: 3,696,876



<PAGE>
<PAGE>


                  AMERICAN CRAFT BREWING INTERNATIONAL LIMITED

                                    FORM 10-Q

PART I FINANCIAL INFORMATION

ITEM 1.      Financial Statements (unaudited):

             Consolidated Balance Sheets -
                    July 31, 1996 and October 31, 1995

             Consolidated  Statements of Operations - 
                    Three and nine months ended July 31, 1996 and 1995

             Consolidated  Statements  of Cash Flows -
                     Nine months ended July 31, 1996 and 1995

             Notes to Consolidated Financial Statements (unaudited)

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

PART II      OTHER INFORMATION

ITEM 4.      Submission of Matters to a Vote of Security Holders

ITEM 6.      Exhibits and Reports on Form 8-K

SIGNATURE




                                      -2-

<PAGE>
<PAGE>



PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

          AMERICAN CRAFT BREWING INTERNATIONAL LIMITED AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                  (Amounts expressed in United States Dollars)

<TABLE>
<CAPTION>
                                                           JULY 31,       OCTOBER 31,
                                                             1996             1995
                                                         -----------      -----------
                                                         (UNAUDITED)       (AUDITED)
<S>                                                       <C>              <C>       
ASSETS
Current assets:
   Cash                                                   $   57,433       $  102,248
   Accounts receivable, less allowance
     for doubtful accounts of $1,766 and $556                 82,720           21,680
   Inventories                                                31,268           22,922
   Other current assets                                       24,362              391
     Total current assets                                    195,783          147,241
                                                          ----------       ----------
Rental, utility & other deposits                              35,749           35,174
Deferred tax assets                                           61,925           49,096
Equipment & capital leases, net                              656,385          634,767
Deferred stock issuance costs                                593,174             --
                                                          ----------       ----------
   Total assets                                           $1,543,016       $  866,278
                                                          ==========       ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
   Long-term bank loan, current portion                   $  452,000       $  113,000
   Capital lease obligations, current portion                 12,858           13,284
   Accrued liabilities                                       419,720           39,294
   Bridge notes                                              370,000             --
   Shareholders' loans                                        65,000           85,638
                                                          ----------       ----------
     Total current liabilities                             1,319,578          251,216
Long-term bank loan                                             --            395,500
Capital lease obligations                                     21,223           30,221
                                                          ----------       ----------
     Total liabilities                                     1,340,801          676,937
                                                          ----------       ----------
Commitments
Shareholders' equity:
   Preferred stock, $0.01 par, 500,000 shares
     authorized, none issued                                    --                --
   Common stock, $0.01 par and $0.13 par, 10,000,000
     shares and 11,000 shares authorized, 2,000,000
     and 5,000 shares issued and outstanding,                 20,000              645
     respectively
   Additional paid-in capital                                535,032             --
   Subscription monies received in advance                      --            437,156
   Accumulated deficit                                      (352,817)        (248,460)
                                                          ----------       ----------
     Total shareholders' equity                              202,215          189,341
                                                          ----------       ----------
     Total liabilities and shareholders' equity           $1,543,016       $  866,278
                                                          ==========       ==========
</TABLE>


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




                                      -3-

<PAGE>
<PAGE>


          AMERICAN CRAFT BREWING INTERNATIONAL LIMITED AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                  (Amounts expressed in United States Dollars)
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                  THREE MONTHS ENDED         NINE MONTHS ENDED
                                                 ---------------------     ---------------------
                                                 JULY 31,     JULY 31,     JULY 31,     JULY 31,
                                                   1996         1995         1996         1995
                                                 --------     --------     --------     --------
<S>                                               <C>          <C>          <C>          <C>     
Net Sales                                         $110,954     $  6,755     $355,707     $  6,755
Cost of Sales                                       31,692        8,845       74,747        8,845
                                                 ---------    ---------    ---------    ---------
Gross profit                                        79,262       (2,090)     280,960       (2,090)
Selling, general and administrative expenses       153,932      184,415      361,026      281,457
Interest expense, net                               11,178       13,865       36,086       15,644
Other expenses, net                                    146        1,128        1,034        1,128
                                                 ---------    ---------    ---------    ---------
Loss before income taxes                           (85,994)    (201,498)    (117,186)    (300,319)
Income tax benefit                                   7,682       33,248       12,829       49,553
                                                 ---------    ---------    ---------    ---------
Net loss                                         ($ 78,312)   ($168,250)   ($104,357)   ($250,766)
                                                 =========    =========    =========    ========= 
Net loss per common share                           ($0.04)      $(0.08)      ($0.05)      ($0.12)
                                                 =========    =========    =========    ========= 
Weighted average number of shares outstanding    2,071,422    2,071,422    2,071,422    2,071,422
                                                 =========    =========    =========    ========= 

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




                                      -4-

<PAGE>
<PAGE>


          AMERICAN CRAFT BREWING INTERNATIONAL LIMITED AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                  (Amounts expressed in United States Dollars)
                                   (Unaudited)


</TABLE>
<TABLE>
<CAPTION>
                                                                          Nine Months Ended
                                                                  ---------------------------------
                                                                  July 31,                 July 31,
                                                                    1996                    1995
                                                                    ----                    ----
<S>                                                               <C>                     <C>       
CASH FLOWS FROM OPERATING ACTIVITIES:
    Net loss                                                      ($104,357)              ($250,766)
    Adjustments to reconcile net loss to net cash used in
    operating activities:
       Depreciation                                                  48,335                   3,739
       Deferred income taxes                                        (12,829)                (49,553)
       Increase in operating assets:
             Accounts receivable, net                               (61,040)                 (3,155)
             Inventories                                             (8,346)                (36,451)
             Other current assets                                   (23,971)                   (457)
             Rental, utility and other deposits                        (575)                (25,741)
       Increase in operating liabilities:
             Accrued liabilities                                     41,287                  25,450
                                                                  ---------               --------- 
       Net cash used in operating activities                       (121,496)               (336,934)
                                                                  ---------               --------- 
CASH FLOWS FROM INVESTING ACTIVITIES:
    Purchase of equipment                                           (69,953)               (467,866)
                                                                  ---------               --------- 
CASH FLOWS FROM FINANCING ACTIVITIES:
    Proceeds from bank loan                                            -                    565,000
    Repayment of bank loan                                          (56,500)                   -
    Repayment of capital lease obligations                           (9,424)                 (4,067)
    Proceeds from bridge notes                                      370,000                    -
    Proceeds from shareholders' loans                                  -                     37,893
    Repayment of shareholders' loans                                (20,638)                   -
    Proceeds from issuance of stock                                 117,231                   8,345
    Stock issuance costs                                           (254,035)                   -
                                                                  ---------               --------- 
        Net cash provided by financing activities                   146,634                 607,171
                                                                  ---------               --------- 
Decrease in cash                                                    (44,815)               (197,629)
Cash at beginning of period                                         102,248                 197,752
                                                                  ---------               --------- 
 Cash at end of period                                              $57,433                    $123
                                                                  =========               ========= 
SUPPLEMENTAL DISCLOSURES TO STATEMENTS OF CASH FLOWS:
    Interest                                                        $36,421              $    1,407
                                                                  =========              ==========
</TABLE>

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



                                      -5-

<PAGE>
<PAGE>


          AMERICAN CRAFT BREWING INTERNATIONAL LIMITED AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements
                  (Amounts expressed in United States Dollars)
                                   (Unaudited)

1.      Basis for Preparation of the Consolidated Financial Statements

        The  consolidated  financial  statements  have been prepared by American
Craft  Brewing   International   Limited   ("AmBrew   International")   and  its
subsidiaries (collectively, the "Company"), without audit, with the exception of
the  October 31, 1995  consolidated  balance  sheet.  The  financial  statements
include consolidated balance sheets,  consolidated  statements of operations and
consolidated  statements  of cash  flows.  In the  opinion  of  management,  all
adjustments, which consist of normal recurring adjustments, necessary to present
fairly the  financial  position,  results of  operations  and cash flows for all
periods have been made.

        These  financial  statements  should  be read in  conjunction  with  the
consolidated  financial  statements  as of and for the fiscal year ended October
31, 1995, and the footnotes  thereto included in the Company's Form S-1 as filed
with  the  Securities  and  Exchange   Commission  on  September  10,  1996,  as
supplemented  by the  prospectus,  dated as of September 11, 1996,  filed by the
Company  pursuant to Rule 424(b) of Regulation C of the  Securities and Exchange
Commission's rules and regulations (the "Form S-1").

2.      Basis of Presentation

        The consolidated  balance sheet as of October 31, 1995, the consolidated
statements of operations for the three-month  and nine-month  periods ended July
31, 1995, and the consolidated statement of cash flows for the nine months ended
July 31, 1995  incorporate  the financial  statements of the South China Brewery
(as defined in the Form S-1). The  consolidated  financial  statements as of and
for the periods  ended July 31, 1996  incorporate  the  financial  statements of
AmBrew  International  (previously  Craft,  as  defined in the Form S-1) and the
South China Brewery.

3.      Net Loss per Common Share

        Net loss per common share is computed by dividing net loss by 2,071,422,
the weighted average common shares outstanding during the periods,  on the basis
that the Share Exchange,  the Share Split and the Merger (each as defined in the
Form S-1) had been  consummated  prior to the  periods  presented,  plus  71,422
shares which  represent the effect,  using the treasury stock method,  of shares
issued to the holders of the Bridge Notes (as defined in the Form S-1)  assuming
such issuance had been made prior to the periods presented.



                                      -6-

<PAGE>
<PAGE>

4.      Inventories

<TABLE>
<CAPTION>
                                                   JULY 31,        OCTOBER 31,
                                                     1996              1995
                                               -----------------  --------------
                                                  (UNAUDITED)       (AUDITED)
<S>                                                <C>               <C>    
Raw materials                                      $24,462           $16,682
Work-in-process and finished goods                   6,806             6,240
                                                   -------           -------
                                                   $31,268           $22,922
                                                   =======           =======
</TABLE>

5.      Shareholders' Equity

        As of July 31,  1996,  the common  stock  recorded  in the  consolidated
balance sheet  represents the common stock of the Company as of that date giving
effect to the Share  Exchange,  Share Split and Merger.  As of October 31, 1995,
the common stock  recorded in the  consolidated  balance  sheet  represents  the
common stock of the subsidiaries of the Company as of that date.

        The  Board of  Directors  is  authorized,  without  further  stockholder
approval,  to issue up to 500,000 shares of "blank check" preferred stock in one
or more series and to fix the rights,  preferences,  privileges and restrictions
granted or imposed upon unissued shares of preferred stock and to fix the number
of shares constituting any series and designations of such series.

6.      Stock Option Plan

        On July 18,  1996,  the Stock  Option Plan was adopted by the  Company's
Board of Directors  and approved by its  shareholders.  The Company has reserved
300,000  authorized  but unissued  shares of common stock for issuance under the
plan.  Under the terms of the Stock  Option  Plan,  a committee  of the Board of
Directors may grant options to eligible  individuals that will allow the holders
of the options to purchase  shares of common  stock at the fair market  value on
the date the options are granted.

7.      Subsequent Events

        Subsequent to July 31, 1996, the following events took place:

        a. On  September  16,  1996,  the Company  completed  an initial  public
offering of 1,580,000 shares of its common stock and 1,580,000 redeemable common
stock purchase  warrants at initial public  offering  prices of $5.50 and $0.10,
respectively. The net proceeds from this offering, after underwriters' discounts
and commissions and other expenses, were $7,590,285.  At July 31, 1996, deferred
stock  issuance  costs of $593,174  were  recorded  as a long-term  asset in the
accompanying  consolidated  balance sheet. An additional  $110,234 of such costs
were  incurred  subsequent  to July 31, 1996.  The proceeds to be recorded as an
increase to shareholders'  equity will be net of these amounts. A portion of the
proceeds were used to retire $120,000 principal amount of Bridge Notes, $452,000
principal amount of the bank loan,  $65,000 principal of the shareholder's  loan
from BPW (as defined in the Form S-1) and various stock issuance  costs,  all as
reflected in the unaudited  pro forma  condensed  consolidated  balance sheet in
Note 8. In  addition,  116,876  shares of



                                      -7-

<PAGE>
<PAGE>

common stock and 116,876  redeemable  common stock purchase warrants were issued
to the Bridge Note holders.

        b. On September  16,  1996,  the 158,000  Representative's  Warrants (as
defined in the Form S-1) were sold to the Representative (as defined in the Form
S-1) for nominal consideration. These warrants allow the holder to purchase from
the Company up to 158,000  shares of common stock and/or 158,000  warrants.  The
Representative's Warrants are not exercisable until September 16, 1997.

        c. On September 17, 1996, the Company made a  non-refundable  deposit of
$200,000 for the purchase of twenty brew systems.

8.      Pro Forma Consolidated Financial Statements (Unaudited)

        The following unaudited pro forma consolidated financial statements have
been prepared on the basis  described  below.  The unaudited pro forma condensed
consolidated balance sheet as of July 31, 1996, has been prepared to give effect
to the following events as if such events had occurred on July 31, 1996: (i) the
aforementioned subsequent event a, (ii) the repayment of the Company's bank loan
of $452,000 and the shareholder's loan from BPW of $65,000,  (iii) the repayment
of $120,000  principal  amount of Bridge  Notes and the issuance of common stock
and Bridge  Warrants  (as  defined in the Form S-1) to the holder of such Bridge
Notes,  (iv) the  conversion of $250,000  principal  amount of Bridge Notes into
common stock and the  issuance of Bridge  Warrants to the holders of such Bridge
Notes and (v) the payment of  $339,139  of accrued  stock  issuance  costs.  The
unaudited pro forma  consolidated  statement of  operations  for the nine months
ended July 31, 1996, has been prepared to give effect to the following events as
if such  events  had  occurred  on  November  1,  1995:  (i) the  aforementioned
subsequent  event  a,  (ii) the  accrual  of  salary  payable  to the  Company's
Executive Vice  President,  Chief  Operating  Officer and Secretary at an annual
rate of $72,000 as if such  salary had become  payable on and after  November 1,
1995, and (iii) the  elimination of interest  expense  payable for the period in
respect of the bank loan and shareholder's loan as if such loans had been repaid
on November 1, 1995.

        The pro forma condensed financial statements are unaudited and have been
prepared  using the  historical  financial  statements  of the Company,  and are
qualified entirely by reference to, and should be read in conjunction with, such
historical financial statements. The pro forma financial statements are provided
for informational  and comparative  purposes only. The pro forma adjustments are
based on available financial  information and certain estimates and assumptions.
The pro forma  financial  statements  do not  purport  to be  indicative  of the
results  of  operations   and  financial   position  of  the  Company  had  such
transactions   in  fact   occurred  on  November  1,  1995  or  July  31,  1996,
respectively, or during the period presented or during any future period.

Unaudited pro forma condensed balance sheet as of July 31, 1996:

<TABLE>
<CAPTION>
                                                        PRO FORMA
                                         ACTUAL        ADJUSTMENTS             PRO FORMA
                                     --------------  ---------------        ---------------
<S>                                    <C>              <C>           <C>     <C>       
Total current assets                   $  195,783       $7,480,051    (1)     $6,699,695
                                                          (517,000)   (2)

</TABLE>

                                      -8-

<PAGE>
<PAGE>

<TABLE>
<CAPTION>
                                                       PRO FORMA
                                         ACTUAL       ADJUSTMENTS             PRO FORMA
                                      ------------   --------------        --------------
<S>                                    <C>              <C>           <C>     <C>       
                                                          (120,000)   (3)
                                                          (339,139)   (4)
Total assets                           $1,543,016       $7,480,051    (1)     $7,453,754
                                                          (517,000)   (2)
                                                          (120,000)   (3)
                                                          (339,139)   (4)
                                                          (593,174)   (5)
Total current liabilities              $1,319,578        $(517,000)   (2)        $93,439
                                                          (120,000)   (3)
                                                          (250,000)   (6)
                                                          (339,139)   (4)
Total liabilities                      $1,340,801        $(517,000)   (2)       $114,662
                                                          (120,000)   (3)
                                                          (250,000)   (6)
                                                          (339,139)   (4)
Total shareholders' equity               $202,215       $7,480,051    (1)     $7,339,092
                                                           250,000    (6)
                                                          (593,174)   (5)
                                                           265,000    (7)
                                                          (265,000)   (7)
</TABLE>

Unaudited pro forma  statement of operations  for the nine months ended July 31,
1996:

<TABLE>
<CAPTION>
                                                  PRO FORMA
                                     ACTUAL      ADJUSTMENTS           PRO FORMA
                                  ------------  --------------       --------------
<S>                                 <C>             <C>                <C>    
Net sales                           $  355,707                         $  355,707
Cost of sales                           74,747                             74,747
                                    ----------                         ----------
   Gross profit                        280,960                            280,960
Selling, general and
   administrative expenses             361,026         44,300   (8)       405,326
Interest expense, net                   36,086        265,000   (7)       266,036
                                                      (35,050)  (9)
Other expenses, net                      1,034                              1,034
                                    ----------                         ----------
   Loss before income taxes           (117,186)                          (391,436)
Income tax benefit                      12,829         (2,893)  (9)         9,936
                                    ----------                         ----------
   Net loss                         $ (104,357)                       $  (381,500)
                                    ==========                        =========== 
Net loss per common share               $(0.05)                            $(0.10)
                                    ==========                        =========== 
Weighted average number

</TABLE>



                                      -9-

<PAGE>
<PAGE>


<TABLE>
<CAPTION>

                                                  PRO FORMA
                                     ACTUAL      ADJUSTMENTS           PRO FORMA
                                  ------------  --------------       --------------
<S>                                 <C>             <C>                <C>    
   of shares outstanding             2,071,422                          3,696,876 (10)
                                     =========                          =========
</TABLE>


Notes to unaudited pro forma financial statements:

(1) Represents the proceeds from the initial public offering of 1,580,000 shares
of the Company's  common stock and 1,580,000  redeemable  common stock  purchase
warrants,  net of underwriting  discounts and commissions and offering expenses,
and net of stock issuance  costs incurred by the Company  subsequent to July 31,
1996.

(2) Represents the repayment of the bank loan of $452,000 and the  shareholder's
loan from BPW of $65,000 with the proceeds of the initial public offering.

(3)  Represents the repayment of $120,000  principal  amount of the Bridge Notes
with the proceeds of the initial public offering.

(4)  Represents the payment of accrued stock issuance costs with the proceeds of
the initial public offering.

(5)  Represents  the  charging  of deferred  stock  issuance  costs  against the
proceeds of the initial public offering.

(6) Represents the conversion of $250,000  principal  amount of the Bridge Notes
into shares of common stock.

(7) Represents the recognition of a non-recurring,  non-cash interest expense of
$265,000 representing the original issue discount relating to the Bridge Notes.

(8) Represents the additional salary expense payable to the Company's  Executive
Vice  President,  Chief  Operating  Officer and  Secretary  at an annual rate of
$72,000.

(9) Represents  elimination of interest  expense as a result of the repayment of
the bank loan and shareholder's loan from BPW.

(10) The pro forma  weighted  average shares  outstanding  includes the weighted
average shares  outstanding  during the period, as if the Share Exchange,  Share
Split and Merger had been  consummated  at November 1, 1995,  and the  1,580,000
shares issued in the initial  public  offering and the 116,876  shares issued in
connection  with the  satisfaction  of the Bridge Notes,  as if those  issuances
occurred on November 1, 1995.

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

GENERAL

               Unless otherwise  indicated,  the following  discussion addresses
the  financial  condition  and results of the  Company's  Hong Kong  brewing and
distribution  subsidiaries,  South China Brewing Company Limited ("South China")
and SCBC Distribution Company Limited ("SCBC"),  respectively.  On May 31, 1996,
the  stockholders  of South China and SCBC  exchanged  substantially  all of the
issued  and  outstanding  shares of South  China and SCBC for  23,750  shares of
capital  stock of Craft  Brewing  Holdings  Limited,  a British  Virgin  Islands
Company  ("Craft"),  in a  transaction  accounted  for  as a  reorganization  of
companies under common control in a manner similar to a


                                      -10-

<PAGE>
<PAGE>

pooling  of  interests.   On  July  30,  1996,  Craft  amalgamated  into  AmBrew
International  in a transaction  accounted  for as a pooling of  interests.  The
officers  and  directors  of AmBrew  International  remained in office after the
amalgamation.  South  China and SCBC are  collectively  referred to as the South
China Brewery.  This discussion should be read in conjunction with the Unaudited
Consolidated   Financial   Statements.   In   addition,   the   period-to-period
presentation  set forth under  "--Results of Operations" will not necessarily be
indicative of future  results and future net losses can be expected as increased
expenses  are  incurred  in  connection  with  the  establishment  of  expansion
breweries  that the Company  proposes to establish and operate,  either  through
wholly-owned    subsidiaries    or   through    majority-owned    or   otherwise
Company-controlled joint venture arrangements with strategic local partners.

               With  the  exception  of  historical  information,   the  matters
discussed  herein are  "forward  looking  statements"  within the meaning of the
Private  Litigation  Reform Act of 1995.  Such forward  looking  statements  are
subject to risks,  uncertainties and other factors which could differ materially
from future results implied by such forward looking statements.  Potential risks
and  uncertainties  include,  but are not limited to, the  Company's  ability to
establish  and  operate  additional  breweries  on  a  timely  basis,  increased
acceptance by consumers of the Company's  brands and  development by the Company
of new  brands of beer and the  Company's  ability  to  finance  any  additional
capital  expenditures once the proceeds of its recent initial public offering of
securities (the "Offering") have been committed.

RESULTS OF OPERATIONS

               The South China Brewery commenced operations in June 1995 and has
not  experienced a full fiscal year of operations.  The first sales of the South
China Brewery's  products  occurred in July 1995. For comparison  purposes,  the
following  presentation compares the nine months ended October 31, 1995 with the
nine months ended July 31, 1996. The following  table sets forth for the periods
indicated  certain  line items from the South China  Brewery's  combined and the
Company's consolidated statements of operations expressed as a percentage of net
sales for each of the nine months  ended  October  31,  1995 and July 31,  1996,
respectively:

<TABLE>
<CAPTION>
                                                                       NINE MONTHS ENDED
                                                               --------------------------------
                                                               October 31,             July 31,
                                                                   1995                   1996
                                                               -----------             --------
<S>                                                             <C>                    <C>   
Net Sales                                                       100.0%                 100.0%
Cost of Sales                                                    61.2%                  21.0%
Gross Profit                                                     38.8%                  79.0%
Selling, general & administrative expenses                      410.7%                 101.5%
Operating loss                                                  371.9%                  22.5%
</TABLE>

                                      -11-


<PAGE>
<PAGE>

<TABLE>
<S>                                                             <C>                    <C>   
Interest expense, net                                            31.5%                  10.1%
Net loss                                                        339.8%                  29.3%
</TABLE>



               Net Sales.  For the nine months  ended  October 31, 1995 and July
31,  1996,  the South  China  Brewery  had net sales of  $63,707  and  $355,707,
respectively.  The growth in sales  resulted from an increased  awareness of and
acceptance by consumers of the South China Brewery's  brands Dragon's Back India
Pale Ale and Crooked Island Ale, the first  micro-brewed beers produced and sold
in Hong Kong. In addition,  in September  1995, the South China Brewery  entered
into contracts for the brewing and supply of custom brewed ales for  consumption
in two Hong Kong pubs.  Both of these  contracts  expired in September 1996. The
Company has renewed one of the  contracts  and is in the process of  negotiating
renewal of the second  contract.  Custom brew  sales  have  accounted for 70% of
all of the South China  Brewery's sales for the nine months ending July 31, 1996
though the Company expects that sales of the South China  Brewery's  brands will
continue to increase relative to its custom brew sales.

               The  South China Brewery  had net sales of $110,954 for the three
months ended July 31, 1996. Third quarter sales declined from levels experienced
in the first two quarters due to the temporary  closure for renovation of one of
the  South China Brewery's Hong Kong  pub  customers  and  to  seasonally  lower
volumes during the Hong Kong summer months, as well as other factors.

               Cost of Sales.  The South China  Brewery's  cost of sales for the
nine months  ended  October 31, 1995 and July 31, 1996 was $38,960 and  $74,747,
respectively.  The  improvement in gross profit  percentage was due to the lower
cost of kegged products relative to bottled products, as the South China Brewery
has  increased  sales of kegged  products  during the nine months ended July 31,
1996, and to more efficient use of brewery equipment.

               Selling,  General and Administrative  Expenses.  Selling, general
and administrative  expenses for the nine months ended October 31, 1995 and July
31, 1996 were $261,653 and $361,026, respectively. This increase in expenses was
in part due to increased  salary expense which increased  during the nine months
ended July 31, 1996 over the nine months  ended  October 31, 1995 by $49,382 due
to the fact that the South China Brewery did not commence  operations until June
1995 and the hiring of an office manager and an additional sales representative.
The Company's selling,  general and administrative  expenses,  including salary,
marketing  and  other  operational  expenses,  will  increase  as  the  proposed
expansion breweries are established.

               Results  for  the  three  months  ended  July 31,  1996,  reflect
additional  advertising and  marketing costs  relating  mainly  to the promotion
of a new brand, Stonecutter's Lager.



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<PAGE>

               Net Interest  Expense.  Net interest  expense for the nine months
ended October 31, 1995 and July 31, 1996 was $20,093 and $36,086,  respectively.
The  Company's  net  interest   expense   should   decrease  in  the  future  as
approximately  $637,000 of the  proceeds of the  Offering was utilized to retire
certain notes issued by the Company.

LIQUIDITY AND CAPITAL RESOURCES

               At July 31,  1996,  the  Company  had  total  current  assets  of
$195,783, consisting of $57,433 in cash on hand, $82,720 in accounts receivable,
net, $31,268 in inventories,  and $24,362 in other current assets. Substantially
all  of the South China Brewery's sales are made to a small number of  customers
on an open account basis and generally no collateral is  required.  At  July 31,
1996, the South China Brewery's five largest accounts  receivable  accounted for
81% of its total accounts receivable as of such date.

               At  July  31,  1996,   the  Company  had  total   liabilities  of
$1,340,801, of which $1,319,578 were current liabilities,  and a working capital
deficit of $1,123,795.

               At July 31, 1996, the South China Brewery had fixed capital lease
obligations of $34,081 relating to its delivery vehicles: $12,858 due during the
year ended July 31,  1997,  $12,858  due during the year ended July 31, 1998 and
$8,365 due during the year ended  July 31,  1999.  At July 31,  1996,  the South
China  Brewery  had $13,865 in  operating  lease  commitments  over the two year
period ending July 31, 1998 relating to its warehouse and brewery facility.

               During May 1996, the  predecessor of the Company issued  $370,000
principal  of  convertible  notes  bearing an interest  rate of 12% per annum to
certain investors in Hong Kong and Singapore and maturing September 1, 1997 (the
"Bridge  Notes").  Pursuant  to the terms of the Bridge  Notes,  the  holders of
$250,000  principal  amount of these Notes  converted the  principal  amount and
accrued  interest  on such notes into an  aggregate  of 94,255  shares of Common
Stock,  par value $0.01 per share (the "Common Stock") upon the  consummation of
the Offering.  The holder of the remaining  $120,000  principal amount of Bridge
Notes was repaid the entire  principal  amount plus  interest of  $5,193.42  and
received  22,621  shares of Common  Stock.  The Bridge Note holders  received an
aggregate of 116,876 warrants entitling them to purchase,  in the aggregate,  up
to 116,876  shares of Common Stock,  commencing  March 11, 1997 and  terminating
March 11, 2002, at $8.25 per share.

PART II - OTHER INFORMATION

Item 4. Submission of Matters to a Vote of Security Holders

               (a) At the first annual general meeting of the Company on June 5,
1996,  the  following  resolutions  were  adopted  by the  affirmative  vote  of
1,200,000  shares,  par value  $0.01 per  share,  of the  Company,  such  shares
constituting  all of the issued and  outstanding  shares of capital stock of the
Company on such date:

               (i) that the  Bye-Laws,  in the form filed hereto as Exhibit 3.2,
               were approved;


                                      -13-

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<PAGE>

               (ii) that the number of directors of the Company be not less than
               two nor more than ten;

               (iii) that the  following  directors be elected  until the second
               annual general  meeting of the Company or until their  respective
               successors are elected or appointed:

                             Pierre William Harriston Bordeaux
                             Federico G. Cabo Alvarez
                             David K. Haines
                             Norman H. Brown, Jr.
                             John F. Beaudette
                             Wyndam H. Carver
                             Joseph Heid
                             John D. Campbell
                             Tonesan Amissah-Furbert;

               (iv)  that  the  Board of  Directors  be  authorized  to fill any
               vacancy on the Board as and when it deems fit;

               (v) that  Arthur  Andersen  & Co. be  appointed  auditors  of the
               Company  to hold  office  until  the close of the  second  annual
               general meeting;

               (vi)  that the  1,200,000  shares,  par value  $0.01  per  share,
               originally issued at the provisional  directors'  meeting held on
               June 5, 1996 be classified as shares of common stock; and

               (vii)  that  the  authorized  share  capital  of the  Company  be
               increased  from  $12,000,000  to $ 105,000,000 by the creation of
               8,800,000 shares of Common Stock, and 500,000 shares of preferred
               stock, par value $0.01 per share.

               (b) On July 18, 1996, the sole  stockholder  of the Company,  Mr.
Bordeaux,  executed a written consent  approving the Company's 1996 Stock Option
Plan in the form filed hereto as Exhibit 10.1.

Item 6.  Exhibits and Reports on Form 8-K

(a)     Exhibits:

        2.1 -    Plan  and  Agreement  of  Amalgamation  between  Craft  and the
                 Company.*

        3.1 -    Memorandum  of  Amalgamation  of the Company  (incorporated  by
                 reference  to  Exhibit  3.1  of  the   Company's   registration
                 statement on Form S-1 (file no.  333-6033)  (the  "Registration
                 Statement").


                                      -14-

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        3.2 -    Bye-Laws of the Company  (incorporated  by reference to Exhibit
                 3.2 of the Registration Statement).

        4.1 -    Specimen common stock certificate (incorporated by reference to
                 Exhibit 4.1 of the Registration Statement).

        4.2 -    Warrant  Agreement  between the  Company,  National  Securities
                 Corporation  ("National  Securities")  and the Bank of New York
                 (including form of Redeemable Common Stock Purchase Warrant).*

        4.3 -    Representative's  Warrant  Agreement  between  the  Company and
                 National   Securities   (including  form  of   Representative's
                 Warrant)  (incorporated  by  reference  to  Exhibit  4.3 of the
                 Registration Statement).*

        10.1 -   1996  Stock  Option  Plan  of  the  Company   (incorporated  by
                 reference to Exhibit 10.1 of the Registration Statement).

        10.2 -   Agreement of Lease between Ping Ping Investment Company Limited
                 ("Ping  Ping") and South China  dated as of  December  12, 1994
                 (incorporated  by reference to Exhibit 10.2 of the Registration
                 Statement).

        10.3 -   Agreement  of Lease  between Ping Ping and South China dated as
                 of May 1, 1995  (incorporated  by  reference to Exhibit 10.3 of
                 the Registration Statement).

        10.4 -   Management  Agreement and  Performance  Guaranty  between South
                 China  and  Lunar  Holdings  Limited  dated as of April 1, 1995
                 (incorporated  by reference to Exhibit 10.4 of the Registration
                 Statement).

        10.5 -   Distributors  Limited Brewing  Contract between South China and
                 DaBeers  Distributors Limited ("DaBeers") dated as of September
                 23, 1995  (incorporated  by  reference  to Exhibit  10.5 of the
                 Registration Statement).

        10.6 -   Brewing Agreement  between South China and Delaney's  (Wanchai)
                 Limited  dated  as  of  September  20,  1995  (incorporated  by
                 reference to Exhibit 10.6 of the Registration Statement).

        10.7 -   Employment  Agreement,  dated as of June 14, 1996,  between the
                 Company and James L. Ake.*

        10.8 -   Employment  Agreement,  dated as of  April  27,  1995,  between
                 Edward Cruise Miller and South China (incorporated by reference
                 to Exhibit 10.12 of the Registration Statement).

        10.9 -   Ratification and Exchange Agreement, dated May 31, 1996, by and
                 among South China,  SCBC,  Craft and each of the persons listed
                 on the signature page hereto.*



                                      -15-

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<PAGE>

        10.10 -  Bridge Financing Purchase Agreement,  dated as of May 31, 1996,
                 between the Company and Mark Youds.*

        10.11 -  Bridge Financing Purchase Agreement,  dated as of May 31, 1996,
                 between the Company and John Arvanitis.*

        10.12 -  Bridge Financing Purchase Agreement,  dated as of May 31, 1996,
                 between the Company and Mark Gallagher.*

        10.13 -  Bridge Financing Purchase Agreement,  dated as of May 31, 1996,
                 between the Company and Harry Allen Friedberg.*

        10.14 -  Bridge Financing Purchase Agreement,  dated as of May 31, 1996,
                 between the Company and Micro Brew Systems Co., Ltd.*

        10.15 -  Bridge Financing Purchase Agreement,  dated as of May 31, 1996,
                 between the Company and Noah Schaffer.*

        10.16 -  Bridge Financing Purchase Agreement,  dated as of May 31, 1996,
                 between the Company and Long-Term Partners Ltd.*

        10.17 -  Forms of Bridge Financing Convertible Notes (including forms of
                 Bridge Financing  Warrants attached  thereto)  (incorporated by
                 reference to Exhibit 10.11 of the Registration Statement).

        10.18 -  Novation  Agreement,  dated as of October 3, 1996,  among SCBC,
                 DaBeer and Iconic America Limited ("Iconic").*

        10.19 -  Brewing  Agreement,  dated as of October 3, 1996,  between SCBC
                 and Iconic.*

        27.0  -  Financial Data Schedule.*

        *filed herewith

   (b)  Reports on Form 8-K:

    None


                            STATEMENT OF DIFFERENCE
                      Section mark is expressed as.... 'ss'



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                                    SIGNATURE

Pursuant  to the  requirements  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.

                                                AMERICAN CRAFT BREWING
                                                INTERNATIONAL LIMITED

Date:   October 24, 1996                        /s/ James L. Ake
                                                ----------------
                                                James L. Ake
                                                Executive Vice President,
                                                Chief Operating Officer
                                                and Secretary (principal
                                                executive and financial officer)


                                      -17-

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