HISTORIC BELLEFONTE BREWERY INC, SB-2/A, 1996-11-22

HISTORIC BELLEFONTE BREWERY INC
SB-2/A, 1996-11-22
MALT BEVERAGES

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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON NOVEMBER 22, 1996

REGISTRATION NO. 333-5013
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- --------------------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549

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

AMENDMENT NO. 4 TO
FORM SB-2

REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------

THE HISTORIC BELLEFONTE BREWERY, INC.
(Exact name of registrant as specified in its charter)

<TABLE>
<S> <C> <C>
PENNSYLVANIA 2082 25-6536769
(State or other jurisdiction (Primary Standard Industrial (I.R.S. Employer
of
incorporation or organization) Classification Code Number) Identification
Number)
</TABLE>

P.O. BOX 389
BELLEFONTE, PA 16823
(814) 355-8994
(Address and telephone number of registrant's principal executive offices)

367 PHOENIX AVENUE
BELLEFONTE, PA 16823
(Address of intended principal place of business)

EDWARD J. LAUTH, III
ONE AQUAPENN DRIVE
MILESBURG, PA 16853
(814) 355-5556 (EXT. 111)
(Name, address, including zip code, and telephone number, including area code,
of agent for service)

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COPY TO:
JUSTIN P. KLEIN, ESQ.
BALLARD SPAHR ANDREWS & INGERSOLL
1735 Market Street, 51st Floor
Philadelphia, PA 19103-7599
(215) 665-8500

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If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933 check the following box. /X/

If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. / /

If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / /

If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. / /

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

THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.

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INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
<PAGE>
SUBJECT TO COMPLETION NOVEMBER 14, 1996

[LOGO]
THE HISTORIC BELLEFONTE BREWERY, INC.

A MINIMUM OF 500,000 AND A MAXIMUM OF 1,250,000 SHARES OF
COMMON STOCK AT $10.00 PER SHARE

The Historic Bellefonte Brewery, Inc. (the "Company") hereby offers a
minimum of 500,000 and a maximum of 1,250,000 shares of Common Stock, no par
value per share (the "Shares"), at an offering price of $10.00 per share (the
"Offering"). Within five days of its receipt of a Subscription Agreement
accompanied by a check for the purchase price, the Company will send by first
class mail a written confirmation to notify the subscriber of the extent, if
any, to which such subscription has been accepted by the Company. The offering
price has been arbitrarily determined solely by the Company. The Offering will
begin on the date of this Prospectus and will terminate on or before October 1,
1997 (the "Offering Termination Date").
--------------------------

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON
THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.

THE OFFERING HAS BEEN REGISTERED UNDER THE SECURITIES LAWS OF A LIMITED
NUMBER OF STATES, AND THE SHARES OFFERED HEREBY MAY BE SOLD ONLY IN THOSE
STATES. SUCH REGISTRATIONS, HOWEVER, DO NOT CONSTITUTE AN ENDORSEMENT OR
APPROVAL BY ANY PARTICULAR STATE SECURITIES COMMISSION OF ANY SECURITIES OFFERED
OR THE TERMS OF THE OFFERING. NO STATE SECURITIES COMMISSION HAS PASSED UPON THE
ACCURACY OR COMPLETENESS OF THIS PROSPECTUS OR ANY OTHER SELLING LITERATURE.

THE OFFERING INVOLVES SUBSTANTIAL RISKS CONCERNING THE COMPANY AND AN
INVESTMENT THEREIN AND SHOULD BE CONSIDERED ONLY BY PERSONS ABLE TO BEAR THE
ECONOMIC RISK OF THE INVESTMENT FOR AN INDEFINITE PERIOD OF TIME OR ABLE TO
AFFORD THE LOSS OF THEIR ENTIRE INVESTMENT. SEE "RISK FACTORS" BEGINNING AT PAGE
5. OFFERS ARE PERMITTED ONLY TO RESIDENTS OF CERTAIN STATES. SEE "INVESTOR
SUITABILITY" BEGINNING AT PAGE 5.

<TABLE>
<CAPTION>
UNDERWRITING
DISCOUNT
AND PROCEEDS TO
PRICE TO PUBLIC COMMISSIONS (1) THE COMPANY (2)
<S> <C> <C> <C>
Per Share................................. $10.00 -- $10.00
Total Minimum (3)......................... $5,000,000 -- $4,800,000
Total Maximum............................. $12,500,000 -- $12,300,000
</TABLE>

(1) The Shares will be offered and sold by officers and employees of the
Company. No commissions or other compensation will be paid to the officers
and employees of the Company in connection with the Offering. No broker or
dealer has been retained or is under any obligation to purchase any Shares,
although the Company may attempt to engage brokers or dealers and pay a
commission on such sales. See "Plan of Distribution."

(2) After deducting offering expenses payable by the Company estimated to be
$200,000, including, among other expenses, printing, mailing and marketing
expenses and legal and accounting fees. See "Plan of Distribution."

(3) Until the sale of at least a minimum of 500,000 Shares (the "Minimum") plus
the receipt of financing which together with the sale of the Shares
aggregates to at least $10,000,000 (before offering expenses payable by the
Company) (the "Initial Closing"), all proceeds of the Offering will be held
in escrow by American Securities Transfer & Trust, Inc. (the "Escrow
Agent"). If the Initial Closing has not occurred by the Offering Termination
Date, the proceeds held in escrow will be returned by the Escrow Agent to
the investors with interest. After closing on the sale of the Minimum, the
proceeds held in escrow will be disbursed by the Escrow Agent to the Company
and the escrow will be closed. Thereafter, the Company may continue to sell
Shares for the remaining term of the Offering. Proceeds from such sales will
be immediately available to the Company. See "Plan of Distribution."

THE DATE OF THIS PROSPECTUS IS , 1996
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AVAILABLE INFORMATION

The Company has filed with the Securities and Exchange Commission (the
"Commission"), a Registration Statement on Form SB-2 under the Securities Act
with respect to the Common Stock offered hereby. This Prospectus, which
constitutes a part of the Registration Statement, omits certain information
contained in the Registration Statement and the exhibits and schedules thereto
on file with the Commission pursuant to the Securities Act and the rules and
regulations of the Commission thereunder. The Registration Statement, including
the exhibits and schedules thereto, may be inspected, without charge, at the
Public Reference Section of the Commission at 450 Fifth Street, N.W., Room 1024,
Washington, D.C. 20549, and copies may be obtained at the prescribed rates.
Statements contained in this Prospectus as to the contents of any contract or
other document referred to are not necessarily complete and in each instance
reference is made to the copy of such contract or other document filed as an
Exhibit to the Registration Statement, each such statement being qualified in
all respects by such reference.

If the Company's Common Stock becomes qualified, and is accepted, for
listing on the Nasdaq SmallCap Market, copies of such reports and other
information filed with the Commission would also be filed with, and would be
available for inspection at the offices of, the National Association of
Securities Dealers, Inc., 1735 K Street, Washington, D.C. 20006.

In the event that the Company's Common Stock is not qualified, or accepted,
for listing on the Nasdaq SmallCap Market, it is possible that brokers or
dealers may desire to trade shares of the Company's Common Stock in the
over-the-counter inter-dealer market. Under the rules of the Commission,
however, such trading would only be permitted if such brokers or dealers have
current public information about the Company as required by Rule 15c2-11,
promulgated under the Exchange Act. In order to assist brokers or dealers in
complying with this requirement, the Company may provide to such brokers or
dealers copies of this Prospectus and/or other information about the Company.

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SUMMARY

THE FOLLOWING SUMMARY IS QUALIFIED IN ITS ENTIRETY BY, AND SHOULD BE READ IN
CONJUNCTION WITH, THE MORE DETAILED INFORMATION AND FINANCIAL STATEMENTS
INCLUDED ELSEWHERE IN THIS PROSPECTUS. CERTAIN TERMS USED HEREIN ARE DEFINED
ELSEWHERE IN THIS PROSPECTUS. SEE "RISK FACTORS" FOR A DISCUSSION OF CERTAIN
FACTORS THAT SHOULD BE CONSIDERED IN CONNECTION WITH AN INVESTMENT IN THE SHARES
OFFERED HEREBY.

THE COMPANY

The Company was recently formed to build and operate a premier regional
craft brewery in the historic, one hundred year old Match Factory building in
Bellefonte, Pennsylvania. The Company intends to purchase and install a premium
brewhouse, capable of annually producing initially 30,000 barrels and eventually
as much as 100,000 barrels of high-quality lagers. The Company intends to
develop a premium line of lager beers to be sold under the Bellefonte brand name
and other Company-owned labels and names. All of the Company's beers will be
brewed utilizing the natural spring water from the Bellefonte Big Spring in
Bellefonte, Pennsylvania. In addition, the Company's equipment will enable it to
produce certain soft drinks, hard ciders and draft ciders.

The Company has no operating history. The Company has been organized by its
Chairman, Edward J. Lauth III, to develop and operate a regional craft brewery
in the historic one hundred year old Match Factory Building located on a nine
acre site in Bellefonte, Pennsylvania. The Company has undertaken the following
activities:

- hiring Michael D. Graham, an experienced brewery executive, as President,
to oversee the engineering, construction and operation of the Company's
proposed premium brewhouse. See "Management."

- obtaining an option for the purchase of the historic Match Factory
Building located on a nine acre site in Bellefonte, Pennsylvania as the
location for the Company's proposed brewery. See "Business -- Initial
Operations."

- entering into discussions with and receiving a price quote from a premier
engineering firm with significant brewery experience, to engineer, build
and install the Company's proposed brewhouse. See "Business -- Initial
Operations."

- entering into discussions with and receiving a price quote from a
preeminent manufacturer of bottle filling and labelling equipment. See
"Business -- Initial Operations."

- selecting Alan Meyers, A.I.A., as the architect for the renovations of the
Match Factory site. See "Business -- Initial Operations."

- selecting graphic designers for the design of the Company's bottles,
labels and promotional materials. See "Business -- Initial Operations."

- retaining John C. Haas Associates, Inc. as the structural engineer for the
renovations of the Match Factory site. See "Business -- Initial
Operations."

- selecting Miller & Masters as the landscape architect for the renovations
of the Match Factory site. See "Business -- Initial Operations."

- retaining L. Robert Kimball & Associates as the environmental consultant
for the renovations of the Match Factory site. See "Business -- Initial
Operations."

- searching for an experienced Brewmaster, to assist in developing the
Company's beer recipes. See "Management."

Upon completion of the Company's proposed brewery and the commencement of
operations, the Company's strategy will be to market its products through third
party distributors for resale in bars, restaurants, retail stores and other
retail license holders, initially in the Northeast and Mid-Atlantic regions and
eventually throughout the United States.

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The mailing address of the Company's executive offices is P.O. Box 389,
Bellefonte, Pennsylvania 16823 and the Company's telephone number is (814)
355-8994.

THE OFFERING

<TABLE>
<S> <C>
Common Stock Offered................... Between 500,000 Shares (the "Minimum") and
1,250,000 Shares (the "Maximum")

Offering Price......................... $10.00 Per Share

Initial Closing........................ The initial closing of the Offering (the "Initial
Closing") will occur upon the sale of at least the
Minimum plus the receipt of financing in an amount
which together with the sale of Shares aggregates
to at least $10,000,000 (before offering expenses
payable by the Company).

Common Stock Outstanding After the
Offering.............................. 912,500 assuming that only the Minimum is sold and
1,662,500 assuming that the Maximum is sold. See
"Capitalization."

Dividend Policy........................ The Company does not anticipate paying dividends on
its Common Stock in the foreseeable future. See
"Dividend Policy."

Use of Proceeds........................ To renovate, equip and operate the proposed brewery
and the public areas on the brewery property. See
"Use of Proceeds."

Risk Factors........................... An investment in the Shares offered hereby is
subject to a high degree of risk. See "Risk
Factors."

Escrow of Shares....................... Prior to the initial closing of the Offering,
Edward J. Lauth, III and Poole Financial Group,
Inc. ("PFG"), the Company's principal shareholders,
will place in escrow 412,500 shares of the
Company's outstanding shares of Common Stock
currently owned by Mr. Lauth and PFG. The escrow
will provide for the release of these shares to Mr.
Lauth and PFG based upon the Company's satisfaction
of certain revenue and earnings levels or the
shares of Common Stock being traded at certain
price levels. The escrow also includes certain
restrictions on Mr. Lauth and PFG's ability to sell
or transfer shares of Common Stock owned by Mr.
Lauth and PFG. See "Security Ownership of
Management and Certain Shareholders."
</TABLE>

4
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INVESTOR SUITABILITY

Only residents of the states of Pennsylvania, Illinois, Florida, New York,
New Jersey, Connecticut, Massachusetts, Ohio and Michigan may purchase the
Shares offered hereby. Each subscriber will be required to execute a
Subscription Agreement which, among other things, requires the subscriber to
certify his or her state of residence. A subscriber who is a resident of a state
other than a state in which the Shares have been qualified for sale may request
that the Company register the Shares in the state in which such subscriber
resides. However, the Company is under no obligation to do so, and may refuse
any such request.

Since the Company's intention is to establish and operate a brewery in the
Commonwealth of Pennsylvania, the Company will be subject to licensure by the
Pennsylvania Liquor Control Board ("PLCB"). As a result of such licensure,
ownership of the Company's Common Stock is not permitted by persons or entities
which hold a wholesale or retail PLCB license or which have an "interest" (i.e.,
officer, director or owner; or creditor, lessor, lender or guarantor; etc.) in
an entity holding a wholesale or retail PLCB license. This restriction does not
preclude a person or entity from owning shares in more than one brewery licensed
by the PLCB. Each subscriber in the Offering will be required to execute a
Subscription Agreement which, among other things, requires the subscriber to
certify his eligibility as a subscriber in accordance with the PLCB restriction
described above. The Company will use reasonable efforts to assure that
subsequent purchasers of shares of the Company's Common Stock comply with this
PLCB restriction. However, there can be no assurance that the Company will be
able to prevent shares of the Company's Common Stock from being acquired by
persons or entities in violation of this PLCB restriction. In the event the PLCB
determines that a holder of the Company's Common Stock also holds a wholesale or
retail PLCB license or has an "interest" in a wholesale or retail license
holder, the PLCB may compel such stockholder to divest or otherwise terminate
its interest with one of the conflicting license holders. Failure by such holder
to comply with the PLCB licensure requirements may subject the Company to
enforcement action, which may include fines, penalties or other sanctions,
including suspension and revocation of the Company's license.

AN INVESTMENT IN THE COMPANY IS HIGHLY SPECULATIVE AND SHOULD BE CONSIDERED
ONLY BY THOSE PERSONS WHO ARE ABLE TO AFFORD A LOSS OF THEIR ENTIRE INVESTMENT.
SEE "RISK FACTORS".

RISK FACTORS

IN ADDITION TO INFORMATION SET FORTH ELSEWHERE IN THIS PROSPECTUS, THE
FOLLOWING SPECIFIC RISK FACTORS RELATING TO THE COMPANY AND ITS PROPOSED
OPERATIONS SHOULD BE CONSIDERED CAREFULLY BEFORE PURCHASING SHARES OF COMMON
STOCK OFFERED BY THIS PROSPECTUS.

NO OPERATING HISTORY. The Company was incorporated on March 1, 1996, has no
operating history or revenues, and has not engaged in any business other than
organizational activities, including preparing this Prospectus. The Company has
limited assets, has not yet produced any beer, and there can be no assurance
that it will be successful in developing marketable beers, or that marketable
beers, if developed, will result in product sales that meet the Company's
expectations or that the Company will ever operate profitably. The Company's
viability will depend upon successful completion of the Offering, obtaining
additional financing, successful implementation of the Company's plans for the
establishment of its proposed brewery and successful marketing of the Company's
proposed beer products. See "Business."

ADDITIONAL FINANCING. The Company may be able to consummate the Initial
Closing based upon the sale of at least the Minimum, plus additional financing
of up to $5,000,000, resulting in aggregate proceeds (before payment of offering
expenses) of at least $10,000,000. To date, the Company does not have any
commitment for such financing. There can be no assurance that such financing can
be obtained on terms favorable to the Company and/or not dilutive to the
Company's shareholders to purchase at the Minimum. See "Use of Proceeds" and
"Business -- Initial Operations."

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NEED FOR ADDITIONAL OPERATING CAPITAL. In addition to the proceeds from
this Offering (including any financing needed to conclude the Initial Closing),
the Company will need additional financing in the amount of approximately $1.0
million at the Minimum and $2.0 million at the Maximum (due to the increased
size and scope of brewery operations, in the event the Company is able to close
on the Maximum), to provide operating capital for the first twelve months of
operations following completion of the Offering. Thereafter, the Company would
be dependent upon revenues from the sale of its products, if any, or additional
debt or equity financing. To date, the Company does not have any commitments for
such financing. Any incurred in order to conclude the Initial Closing may
adversely effect the Company's ability to obtain additional operating capital.
There can be no assurance that financing can be obtained on terms favorable to
the Company and/or not dilutive to the Company's shareholders. If the Company is
unable to obtain the financing needed, the Company may not have sufficient funds
to complete the establishment of the proposed brewery and/or to commence brewing
operations. See "Use of Proceeds" and "Business -- Initial Operations."

LEVERAGE. If the Company obtains additional financing, particularly if only
the Minimum has been sold, the Company may be highly leveraged and may have
substantial debt service obligations. Such leverage could present significant
risks to an investor in the Shares. There can be no assurance that the Company
would be able to generate sufficient cash flow to make timely payments of
principal and interest on indebtedness. In that event, the Company could default
on such indebtedness, which could result, among other things, in a foreclosure
or other actions of creditors against collateral securing such indebtedness.
Such collateral could include the proposed brewery, equipment and/or inventory,
as well as any other assets of the Company. See "Use of Proceeds" and "Business
- -- Initial Operations."

FLUCTUATIONS IN QUARTERLY OPERATING RESULTS; POTENTIAL REDUCTION IN EARNINGS
DUE TO RELEASE OF ESCROW SHARES. The Company's operating results may vary
significantly from quarter to quarter, and the results of operations of the
Company for any particular quarter are not necessarily indicative of results
that may be expected for any subsequent quarter or for the year in question. In
addition, if the performance goals applicable to the Escrow Shares (defined
below) are met, the Company will record compensation expense in the period such
goals are achieved based on the then fair market value of the Common Stock
released from escrow, which may adversely affect the Company's operating results
for such period(s). This is a non-cash transaction which will have no effect on
the Company's shareholders' equity in the period recorded. See "Security
Ownership of Management and Certain Shareholders" and Note 5 to the Notes to
Financial Statements.

LACK OF PUBLIC MARKET; IRREVOCABILITY OF SUBSCRIPTIONS. There is no public
market for the Company's Common Stock and there can be no assurance that an
active public market will develop in the near future as a result of the
Offering. Accordingly, an investor in the Shares may not be able to sell his or
her Shares readily, if at all, and therefore must be able to bear the economic
risk of the investment in the Company for an indefinite period of time or be
able to afford the loss of his or her entire investment. In addition, PLCB
regulations prohibit ownership of the Company's Common Stock by persons or
entities holding a wholesale or retail PLCB license or which have certain
financial or business interests in an entity holding a wholesale or retail PLCB
license. This restriction does not preclude a person or entity from owning
shares in more than one brewery licensed by the PLCB. Subscriptions in the
Offering are generally irrevocable. See "Plan of Distribution" and "Description
of Common Stock -- Limitations on Transfers of Shares."

CONTROL BY EXISTING SHAREHOLDERS. Upon completion of the Offering,
depending upon the number of Shares sold, Edward J. Lauth III, the Company's
Chairman of the Board, and PFG, a corporation wholly owned by Sandra F. Poole, a
Director of the Company, will beneficially own in the aggregate 24.8%, if the
Maximum is sold, and 45.2%, if the Minimum is sold, of the outstanding shares of
the Company's Common Stock. By virtue of this beneficial stock ownership, the
existing shareholders will be in a position to exert considerable control over
the election of the members of the Board of Directors of the Company (including
any new members of the Board to be appointed after completion

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of the Offering), and will exert considerable control over the management,
policies and operations of the Company. See "Management" and "Security Ownership
of Management and Certain Shareholders."

DILUTION. Investors participating in the Offering will incur immediate and
substantial dilution of $3.29 per share, or 32.9%, assuming the Minimum is sold
($1.60 per share or 16.0% assuming the Maximum is sold), in the net tangible
book value of their Shares. See "Dilution."

DEPENDENCE ON MANAGEMENT. The Company's success will be heavily dependent
upon the efforts of Edward J. Lauth, III, the Company's Chairman of the Board,
and Michael D. Graham, the Company's President. The Company intends to hire a
Brewmaster and Chief Financial Officer and to obtain additional management,
sales and marketing services from its employees and outside consultants, but is
dependent upon Mr. Lauth and Mr. Graham for the development and start-up
activities of the Company. The loss of Mr. Lauth's or Mr. Graham's services for
any reason could have a material adverse effect on the Company's financial
condition and operations. Mr. Lauth is a full-time employee, Chairman and
President and a director of AquaPenn Spring Water Company, Inc. ("AquaPenn").
Mr. Lauth is not expected to devote his full time to the Company's activities.
See "Risk Factors Conflict of Interest." The Company anticipates that Mr. Lauth
will devote such time, on a part-time basis, to his duties with the Company as
is reasonably necessary in connection with the Company's activities and
objectives, and consistent with his other activities. The Company intends to
obtain a key-man insurance policy for its benefit on the lives of Mr. Lauth and
Mr. Graham in the amount of $500,000. Although Mr. Lauth has extensive
experience in various aspects of beverage production and marketing, Mr. Lauth
has never overseen the construction of a brewery nor acted in the capacity of
Chairman of the Board of a brewery. See "Management."

PROCUREMENT OF BREWERY SITE. The Company plans to locate and build its
brewery at the Match Factory in Bellefonte, Pennsylvania, and has obtained an
option to purchase such site. Any delay in the selection, negotiation and
closing on the acquisition of the site could delay the commencement of
construction, which would also delay the commencement of brewery production. The
Company may attempt to obtain or lease a different building as an alternative to
the site. However, there can be no assurance that the Company will be able to
locate and/or acquire such a building. See "Business -- Initial Operations."

CONSTRUCTION AND EQUIPMENT COSTS; FOREIGN CURRENCY RISK. The Company has
prepared a preliminary design of its proposed brewery and developed an estimate
to cover the total costs of renovating, constructing and equipping the brewery
of approximately $9 million, but it has not obtained a bid or binding estimate
of the total cost. Consequently, the actual cost of construction and equipment
could be higher than presently expected, which would require the Company to
utilize any available working capital for construction purposes and/or obtain
additional financing to complete construction and commence operations. In
addition, a significant portion of the equipment cost estimates, including the
premium brewhouse, was quoted in Deutsche Marks. As a result of fluctuations in
currency exchange rates, it is possible that the dollar cost of the equipment
will be higher than originally estimated. If significant construction or
equipment cost overruns or delays occur, the Company's scheduled goal for
beginning production at its proposed brewery would be delayed and the Company's
operating results would be materially and adversely affected. See "Use of
Proceeds" and "Business -- Initial Operations."

PURCHASE OF EQUIPMENT. Following the Initial Closing, the Company intends
to place an order for a brewhouse and for bottle filling and labelling equipment
from two separate premier manufacturers. The anticipated delivery date is six to
eight months after the order is placed. Any significant delay in receiving
and/or installing the brewhouse and other equipment, as well as any difficulties
in initial brewing production, would materially and adversely affect the
Company's operations. See "Business -- Initial Operations."

SUBSTANTIAL LEAD TIME TO COMMENCE BREWING OPERATIONS. Following the Initial
Closing, which could occur as long as one year from the date of this Prospectus,
the Company will commence with

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obtaining the site for the proposed brewery, construction, if needed, and
ordering the brewhouse and other equipment. The Company anticipates that it will
take approximately thirteen months from the commencement of renovations of the
site to commence brewing operations, due to lead times needed before the
brewhouse and other equipment will be delivered. Since the Offering could last
as long as one year and brewery production could take another thirteen months or
more to commence, investors in the Offering may have to wait an extended period
of time before the Company actually produces beer products for sale. See
"Business -- Initial Operations."

RECIPES AND LICENSES. Following the Initial Closing, the Company intends to
create its own lager recipes and/or license lager recipes from other brewers. To
date, the Company has not employed a brewmaster. There can be no assurance that
the Company will be able to create or license suitable lager recipes, or that
any recipes created or obtained by the Company will yield commercially
successful lager beer.

SHORTAGES OF SUPPLY. Shortages or increased costs of fuel, water, raw
materials (certain of which will be obtained from foreign suppliers) or power,
or allocations by suppliers or governmental authorities could restrict the
operations of the Company's proposed brewery, or otherwise materially and
adversely affect the ability of the Company to produce and market its proposed
beer products. The Company does not anticipate entering into any long-term
contracts for its supplies of foreign malt. See "Business -- Inventory and Raw
Materials."

DEPENDENCE ON DISTRIBUTORS. The Company will be dependent upon licensed
distributors and/or wholesalers for the distribution and sale of its proposed
products. The Company currently has no agreements with any distributors or
wholesalers. Moreover, it is not anticipated that the Company will be in a
position to enter into any such agreements until the Company has commenced
operations and can satisfy the distributor requirements for product quality,
availability, pricing and marketing support. No assurance can be given as to
when or whether the Company will enter into agreements with distributors. If the
Company is unable to enter into satisfactory distribution arrangements in a
timely manner, its operations will be materially and adversely affected. See
"Business -- Sales and Distribution."

UNCERTAINTY OF TRADEMARK PROTECTION. The Company has applied for a Federal
trademark registration for the Company's logo, trademarks and brands. However,
there can be no assurance that the Company's application will be granted. While
not required for the use of the trademark by the Company, obtaining a Federal
registration may enhance the Company's ability to enforce its right to the
trademark. See "Business -- Intellectual Property."

SEASONALITY. Sales of beer in general are seasonal in nature and are at
their highest level in the second and third calendar quarters and at their
lowest in the first and fourth calendar quarters. This seasonality is expected
to have a significant impact on the Company's operations on a quarter to quarter
basis. See "Business -- Sales and Distribution."

COMPETITION. The beer industry, in general, and the craft brewing segment
of the beer industry, in particular, is highly competitive. The Company expects
competition and the number of competitors in the craft brewing segment to
increase. The Company's proposed products will compete with products from large
and small domestic and foreign breweries, and an increasing number of regional
specialty breweries, microbreweries, brewpubs and contract brewers. Many of
these competing breweries, including some existing microbreweries, have
significantly greater financial, production, distribution and marketing
resources than the Company. There can be no assurance that the Company's
proposed brewery will be successful in penetrating the beer market to the extent
necessary to become profitable. See "Business -- Competition."

UNCERTAINTY OF CONTINUED GROWTH OF THE CRAFT/MICROBREWERY INDUSTRY. The
sale and consumption of craft/microbrewed beer has increased substantially in
recent years. There can be no assurance that the demand for craft/microbrewed
beer will continue to grow at such rate. New craft/microbreweries, like the
Company's proposed brewery, are being developed and existing
craft/microbreweries are

8
<PAGE>
increasing their production capacities. If the demand for craft/microbrewed beer
does not continue to increase to match increases in supply, the Company's
proposed brewery will face intensified competition. See "Competition."

GOVERNMENT REGULATION; ENVIRONMENTAL MATTERS; PROPOSED LEGISLATION. The
manufacture and sale of alcoholic beverages is regulated by both federal and
state authorities. The Company has not yet obtained the required federal and
state permits, licenses and bonds to operate the Company's proposed brewery.
Furthermore, the Company has not obtained the required city or county permits to
construct the proposed brewery. In addition, the Company's brewery will be
subject to regulation by the water pollution control divisions of the United
States Environmental Protection Agency and the Pennsylvania Department of
Environmental Resources. Although the Company does not expect to encounter any
difficulties in obtaining these required approvals, the process often requires
considerable lead time. Failure to obtain such permits, licenses and bonds would
prevent the proposed brewery from engaging in any operations, and delays in
obtaining such governmental approvals could have a material adverse effect on
the Company's results of operations. See "Business -- Government Regulation."

PLCB regulations limit the Company's ability to increase its prices to
distributors within 180 days after a price decrease, except under certain
limited circumstances or with the prior consent of the PLCB. See "Business --
Government Regulation."

PLCB regulations also prohibit ownership of the Company's Common Stock by
persons or entities holding a wholesale or retail PLCB license or which have
certain financial or business interests in an entity holding a wholesale or
retail PLCB license. This restriction does not preclude a person or entity from
owning shares in more than one brewery licensed by the PLCB. In the event the
PLCB determines that a holder of the Company's Common Stock also holds a
wholesale or retail PLCB license or has an "interest" in a wholesale or retail
license holder, the PLCB may compel such stockholder to divest or otherwise
terminate its interest with one of the conflicting license holders. Failure by
such holder to comply with the PLCB licensure requirements may subject the
Company to enforcement action, which may include fines, penalties or other
sanctions, including suspension and revocation of the Company's license. See
"Description of Common Stock -- Limitations on Transfers of Shares."

In addition, the alcoholic beverage industry has become the subject of
considerable societal and political attention in recent years due to increasing
public concern over alcohol-related social problems including drunk driving,
underage drinking, and health consequences from the misuse of alcohol, including
alcoholism. The possibility exists that advertising by beer producers could be
restricted or that additional cautionary labeling or packaging requirements
might be imposed. If beer consumption in general were to come into disfavor
among domestic consumers, or if the domestic beer industry were subjected to
significant additional governmental regulations, the Company's business could be
materially adversely affected. In addition, there can be no assurance that the
operations of the Company's proposed brewery will not become subject to
increased taxation by federal or state agencies, which may materially and
adversely affect the operations, revenues and potential profitability of the
Company. Congress and many state legislatures are considering various proposals
to impose additional excise taxes on the production and sale of alcoholic
beverages, including beer. Some of the excise tax rates being considered are
substantial. Any increase in the taxes imposed on beer can be expected to have
an adverse impact on overall sales of such products, and may materially
adversely affect the Company's result of operations. See "Business -- Government
Regulation."

PRODUCT LIABILITY. The production of beer can be prone to certain hazards,
such as product contamination and broken glass fragments. The Company intends to
obtain product liability insurance in amounts it deems appropriate. No assurance
can be given, however, that the Company will be able to obtain such insurance on
terms acceptable to the Company. Moreover, the amount and scope of any coverage
may be inadequate to protect the Company in the event that a product liability
claim is successfully asserted against the Company. See "Business."

9
<PAGE>
SINGLE PRODUCTION FACILITY AND UNINSURED LOSSES. The Company plans to have
only one production facility. The Company intends to obtain comprehensive
insurance, including liability, fire and extended coverage, as is customarily
obtained by businesses similar to the Company. No assurance can be given,
however, that the Company will be able to obtain such insurance on terms
acceptable to the Company or that such insurance can be obtained in amount and
scope of coverage adequate to protect the Company. In addition, certain types of
losses of a catastrophic nature, such as losses resulting from floods,
tornadoes, thunderstorms and earthquakes, are either uninsurable or not
economically insurable to the full extent of potential losses. Such "Acts of
God," work stoppages, regulatory actions or other causes, could interrupt
production and materially and adversely affect the Company's results of
operations. See "Business."

LIMITATION OF DIRECTORS' LIABILITY. The By-laws of the Company provide that
directors of the Company will not be personally liable for monetary damages to
the Company or its shareholders for breaches of their duties as directors,
except in instances involving self dealing, willful misconduct or recklessness,
criminal violations or liabilities involving the payment of taxes. See
"Description of Common Stock -- Limitation of Directors' Liability and
Indemnification of Directors and Officers."

DIVIDEND POLICY. The Company has never paid dividends and does not
anticipate paying dividends in the foreseeable future. See "Dividend Policy."

NO UNDERWRITER OR DEALER; EXTENDED OFFERING PERIOD. The Offering is being
made by the Company on a best-efforts basis. The Company has not retained an
underwriter or securities dealer to assist in selling the Shares, and no broker
or dealer is under any obligation to purchase the Shares, although the Company
may attempt to engage brokers or dealers and pay them a commission on such
sales. Instead, the Offering will be made directly by the Company through its
officers and employees, primarily Edward J. Lauth, III. While this method of
offering securities is less expensive for the Company since no commissions or
underwriting discounts are being paid in connection with the Offering, it may be
more difficult for the Company to complete the Offering without the assistance
of an underwriter or dealer. In addition, the absence of an underwriter or
market maker may further impede the development of an active trading market for
the Company's Common Stock. The period during which the Offering will be made is
from the date of this Prospectus until the earlier of the date the Maximum is
sold or October 1, 1997 (which is one year after the commencement of the
Offering), unless earlier terminated by the Company. As a result, subscribers
may not have the availability of the funds used to purchase the Shares for an
extended period of time. See "Plan of Distribution."

PENNY STOCK REGULATION. If a trading market for the Common Stock develops,
such trading activity may become subject to rules that regulate broker-dealer
practices in connection with transactions in "penny stocks." Penny stocks
generally are equity securities with a price of less than $5.00 (other than
securities listed on certain national securities exchanges or quoted on The
Nasdaq Stock Market, provided that current price and volume information with
respect to transactions in such securities is provided by the exchange or
market). Prior to a transaction in a penny stock not otherwise exempt from the
rules, a broker-dealer is required to deliver a standardized risk disclosure
document prepared by the Commission that provides information about penny stocks
and the nature and level of risks in the penny stock market. The broker-dealer
also must provide the customer with bid and offer quotations for the penny
stock, the compensation of the broker-dealer and its salesperson in the
transaction, and monthly account statements showing the market value of each
penny stock held in the customer's account. In addition, the penny stock rules
require that prior to a transaction in a penny stock not otherwise exempt from
such rules, the broker-dealer must make a special written determination that the
penny stock is a suitable investment for the purchaser and receive the
purchaser's written agreement to the transaction. These disclosure requirements
may have the effect of reducing the level of trading activity in the secondary
market for a stock that becomes subject to the penny stock rules.

SHARES ELIGIBLE FOR FUTURE SALE. All of the 412,500 shares of Common Stock
currently outstanding were offered and sold by the Company in private
transactions in reliance upon an exemption from

10
<PAGE>
registration under the Securities Act. Accordingly, all of such shares are
"restricted securities" as defined by Rule 144 ("Rule 144") under the Securities
Act and cannot be resold without registration except in reliance on Rule 144 or
another applicable exemption from registration. In general, under Rule 144 a
person (or persons whose shares are required to be aggregated), including any
affiliate of the Company, who beneficially owns restricted shares for a period
of at least two years (currently proposed to be reduced to one year) is entitled
to sell within any three month period shares equal in number to the greater of
(i) 1 percent of the then outstanding shares of Common Stock or (ii) the average
weekly trading volume of the same class of shares during the four calendar weeks
preceding the filing of the required notice of sale with the Commission. The
seller must also comply with the notice and manner of sale requirements of Rule
144, and there must be current public information available about the Company.
In addition, any person (or persons whose shares are required to be aggregated)
who is not, at the time of sale, nor during the preceding three months, an
affiliate of the Company, and who has beneficially owned restricted shares for
at least three years (currently proposed to be reduced to two years), can sell
such shares without regard to notice, manner of sale, public information or the
volume limitations described above. Shares of Common Stock will be eligible for
resale under Rule 144 in May 1998 (assuming the other requirements of Rule 144
are met and assuming the proposed reductions in holding period are not adopted).
See "Security Ownership of Management and Certain Shareholders" and "Description
of Common Stock -- Shares Available for Future Sale."

No prediction can be made as to the effect, if any, that future sales of
restricted shares of Common Stock, or the availability of such Common Stock for
sale, will have on the market price of the Common Stock prevailing from time to
time. Sales of substantial amounts of such Common Stock in the public market, or
the perception that such sales may occur, could adversely affect the then
prevailing market price of the Common Stock. See "Description of Common Stock --
Shares Available for Future Sale."

In addition, the Company may issue shares of Common Stock in the future. No
prediction can be made as to the effect, if any, that future issuances of Common
Stock may have on the market price of the Common Stock prevailing from time to
time. Sales of substantial amounts of such Common Stock, or the perception that
such sales may occur, could adversely affect the then prevailing market price of
the Common Stock. See "Description of Common Stock -- Shares Available for
Future Sale." See also "Security Ownership of Management and Certain
Shareholders -- Escrow of Founder Shares."

DETERMINATION OF OFFERING PRICE

There is no public trading market for the Company's Common Stock, and the
price of the Shares offered hereby bears no relationship to the assets, book
value, net worth or any other recognized criteria of value of the Company. The
offering price of the Shares was determined arbitrarily by management of the
Company, and should not be considered as an indication of the actual value of
the Company. Each prospective investor should make an independent evaluation of
the fairness of such price. See "Plan of Distribution." See also "Security
Ownership of Management and Certain Shareholders -- Escrow of Founder Shares."

11
<PAGE>
USE OF PROCEEDS

The net proceeds from the Offering (after payment of offering expenses) are
expected to range from $9,800,000 at the Minimum (including any financing
obtained to consummate the Initial Closing) to $17,300,000 at the Maximum. After
release from escrow (for proceeds on the sale of shares up to the Minimum), the
proceeds will be invested by the Company in short-term obligations of the U.S.
Government, its agencies and divisions, pending the uses described below. The
net proceeds from the Offering (including any financing obtained to consumate
the Initial Closing), will be used in a manner which management believes is best
suited to develop, renovate, equip and operate the brewery and the public areas
on the brewery property based upon the size and timing of receipt of such net
proceeds.

The following table sets forth the Company's present expectations as to the
Use of Proceeds from the Offering:

<TABLE>
<CAPTION>
MINIMUM MAXIMUM
------------- --------------
<S> <C> <C>
Total proceeds from sale of shares................................................. $ 5,000,000 $ 12,500,000
Less: offering expenses.......................................................... 200,000 200,000
------------- --------------
Net proceeds from the sale of Shares............................................... 4,800,000 12,300,000
Proceeds from additional financing (1)............................................. 5,000,000 5,000,000
------------- --------------
Net proceeds....................................................................... $ 9,800,000 $ 17,300,000
------------- --------------
------------- --------------
</TABLE>

Uses of net proceeds:

<TABLE>
<CAPTION>
APPROXIMATE APPROXIMATE
PERCENTAGE OF PERCENTAGE OF
MINIMUM(1) NET PROCEEDS MAXIMUM NET PROCEEDS
------------- ------------- -------------- -------------
<S> <C> <C> <C> <C>
Brewery facility, restoration and related costs
(2)................................................. $ 2,500,000 25.5% $ 3,500,000 20.2%
Brewhouse (2)........................................ 4,000,000 40.8% 7,000,000 40.5%
Bottling and other equipment (2)..................... 2,000,000 20.4% 3,200,000 18.5%
Fixtures, furniture and vehicles..................... 150,000 1.5% 250,000 1.4%
Installation......................................... 500,000 5.1% 650,000 3.8%
Start-up costs and initial inventories............... 314,000 3.2% 364,000 2.1%
Facility and equipment initial financing costs....... 100,000 1.0% 150,000 0.9%
Contingency fund and working capital (3)............. 200,000 2.1% 2,150,000 12.4%
Repayment of Loans................................... 36,000 0.4% 36,000 0.2%
------------- ----- -------------- -----
Total Use of Net Proceeds........................ $ 9,800,000 100.0% $ 17,300,000 100.0%
------------- ----- -------------- -----
------------- ----- -------------- -----
</TABLE>

- ------------------------
(1) It is a condition to the Initial Closing that the Company have sold at least
the Minimum and received financing in an amount which, together with the
sale of Shares aggregates to at least $10,000,000 (before offering expenses
payable by the Company). Assumes Initial Closing upon the sale of the
Minimum plus additional financing of $5,000,000. There is no requirement of
additional financing in order to close at the Maximum.

(2) In the event the Company closes on the Minimum, it shall purchase, renovate
and equip a premier regional craft brewery capable of producing 30,000
barrels of premium lager beer per year. In the event that the Company closes
on the Maximum, it shall use the additional proceeds to purchase equipment
and fund additional renovations to the brewhouse necessary to produce
100,000 barrels per year.

(3) It is anticipated that the Company will use the contingency fund and working
capital for expenses related to product advertising, officer salaries and
other payroll and related payroll taxes, insurance premiums, lease payments,
taxes and any other proper corporate purposes.

The Company is actively engaged in efforts to obtain the additional $5
million financing it may need in order to consumate the Initial Closing upon the
Minimum. In addition, the Company is also

12
<PAGE>
seeking additional financing of $1 million (if the Company closes on the
Minimum) or $2 million (if the Company closes on the Maximum due to the
increased size and scope of brewery operations) for working capital for the
first twelve months of operations following the Offering. See "Plan of
Operations" and "Business -- Initial Operations." Sources of financing which the
Company is contemplating include commercial bank credit facilities, construction
and development loans, equipment leases, and private debt or equity financings.
Among the alternatives being explored by the Company are state and local
low-interest development loans for up to approximately $1.8 million to cover a
portion of the site acquisition, construction, equipment and/or start-up costs.
There can be no assurance that the Company or the proposed brewery will be
eligible for such loans, or that such loans will be available at the time of the
Company's application. The Company also intends to try to secure discounts
and/or price reductions from the amounts set forth above for the site
acquisition, construction, brewhouse, equipment, furniture and fixtures,
vehicles, inventory and raw materials and other expenses associated with the
Company's proposed activities. However, there can be no assurances that any
discounts or price reductions will be obtained.

13
<PAGE>
CAPITALIZATION

The following table shows the capitalization of the Company as of July 31,
1996 on an actual basis and as adjusted to give effect to the Offering (assuming
the Minimum or the Maximum is sold and the payment of offering expenses
estimated at $200,000).

<TABLE>
<CAPTION>
AS ADJUSTED
-----------------------------
ACTUAL MINIMUM MAXIMUM
--------- ------------- --------------
<S> <C> <C> <C>
Long-term indebtedness:(1)............................................. -- $ 5,000,000 $ 5,000,000
--------- ------------- --------------
--------- ------------- --------------

Shareholders' equity:
Preferred stock, $1 par value, 25,000,000 shares authorized; none
issued and outstanding;............................................. -- -- --
Common stock, no par value, 50,000,000 shares authorized; 412,500
issued and outstanding, actual;..................................... $ 50,000 -- --
912,500 issued and outstanding, as adjusted --
Minimum............................................................. -- $ 4,850,000 --
1,662,500 issued and outstanding, as adjusted -- Maximum............. -- -- $ 12,350,000
Retained deficit..................................................... (6,849) (6,849) (6,849)
--------- ------------- --------------
Total shareholders' equity......................................... $ 43,151 $ 4,843,151 $ 12,343,151
--------- ------------- --------------
--------- ------------- --------------
</TABLE>

- ------------------------
(1) Assumes additional financing needed to consummate the Initial Closing.

DILUTION

The net tangible book value of the Company as of July 31, 1996 was $(60,246)
or approximately $(0.15) per share of Common Stock outstanding at that date. Net
tangible book value per share represents the amount of the Company's
shareholders' equity less intangible assets and deferred stock offering costs,
divided by the number of shares of Common Stock outstanding. As of July 31,
1996, the Company had intangible assets and deferred stock offering costs with a
net book value of $(103,397). Net tangible book value per share dilution
represents the difference between the amount per share paid by purchasers of
Shares in the Offering and the pro forma net tangible book value per Share after
the Offering.

The following tables set forth as of July 31, 1996, assuming both the
Minimum and Maximum levels of the Offering, the difference between the existing
shareholders and the purchasers of Shares in the Offering with respect to the
number of Shares purchased from the Company, the total consideration paid and
the average price per share paid.

SALE OF MINIMUM NUMBER OF SHARES*

<TABLE>
<CAPTION>
SHARES PURCHASED TOTAL CONSIDERATION
---------------------- -------------------------- AVERAGE PRICE
NUMBER PERCENT AMOUNT PERCENT PER SHARE
--------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C>
Existing Shareholders............................. 412,500 45.2% $ 50,000 1.0% $ 0.12
New Investors..................................... 500,000 54.8% 5,000,000 99.0% 10.00
--------- ----- ------------- ----- -------------
Total......................................... 912,500 100.0% $ 5,050,000 100.0% $ 5.53
--------- ----- ------------- ----- -------------
--------- ----- ------------- ----- -------------
</TABLE>

- ------------------------
* Assumes the sale of 500,000 Shares.

14
<PAGE>
SALE OF MAXIMUM NUMBER OF SHARES*

<TABLE>
<CAPTION>
SHARES PURCHASED TOTAL CONSIDERATION
------------------------ --------------------------- AVERAGE PRICE
NUMBER PERCENT AMOUNT PERCENT PER SHARE
----------- ----------- -------------- ----------- -------------
<S> <C> <C> <C> <C> <C>
Existing Shareholders.......................... 412,500 24.8% $ 50,000 .4% $ 0.12
New Investors.................................. 1,250,000 75.2% 12,500,000 99.6% 10.00
----------- ----- -------------- ----- -------------
Total...................................... 1,662,500 100.0% $ 12,550,000 100.0% $ 7.55
----------- ----- -------------- ----- -------------
----------- ----- -------------- ----- -------------
</TABLE>

- ------------------------
* Assumes the sale of 1,250,000 Shares.

After giving effect to the sale by the Company of 500,000 Shares (Minimum)
and 1,250,000 Shares (Maximum) at a purchase price of $10.00 per share, the pro
forma net tangible book value of the Company, the increase in net tangible book
value to the existing shareholders and the decrease in net tangible book value
to purchasers of Shares in the Offering are summarized in the following table:

<TABLE>
<CAPTION>
MINIMUM MAXIMUM
----------- -----------
<S> <C> <C>
Offering price per Share................................................................... $ 10.00 $ 10.00
Net tangible book value per Share at March 1, 1996 (date of inception)(1).................. $ 0.12 $ 0.12
Pro forma net tangible book value per Share after the Offering(2).......................... $ 6.71 $ 8.40
Net tangible book value increase to existing shareholders after the Offering(2)............ $ 6.86 $ 8.55
Net tangible book value decrease (dilution) to purchasers of Shares in the Offering(2)..... $ 3.29 $ 1.60
Percentage dilution to new shareholders.................................................... 32.9% 16.0%
</TABLE>

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

(1) Calculated based on 412,500 shares outstanding.

(2) Calculated based on 206,250 shares which are net of Condition Shares (as
defined below) placed in escrow.

DIVIDEND POLICY

The Company has never paid dividends on its Common Stock and has no
intention of paying dividends for the foreseeable future. Future dividend policy
will depend upon the Company's earnings, financial needs, covenants in loan
agreements and other pertinent factors.

PLAN OF OPERATION

The following discussion should be read in conjunction with the financial
statements and notes thereto included elsewhere in this Prospectus.

The Company was organized on March 1, 1996, has no operating history and is
in the developmental stage. The Company believes that the net proceeds of the
sale of the Minimum in this offering, together with additional financing in the
amount of $5,000,000 which the Company must obtain before it closes on the
Minimum, will be sufficient for the Company to commence the purchase, renovation
and installation of a premier regional craft brewery and the development of high
quality lager beer and to continue the operation of such business for the twelve
month period following this Offering. There can be no assurance that the net
proceeds of this Offering will be sufficient or that the Company can obtain
financing in an amount necessary to permit the Company to operate during such
twelve month period.

15
<PAGE>
location for the Company's proposed brewery. The terms of such option entitle
the Company, at its option, to buy the site from M.L. Clasters & Sons, Inc.
("Clasters") for a purchase price of approximately $800,000 within ninety days
following the Company's exercise of the option. The site is currently vacant and
has not been used for manufacturing since 1949.

In the event the Company closes on the Minimum, it shall purchase, renovate
and equip a premier regional craft brewery capable of producing 30,000 barrels
of premium lager beer per year. In the event that the Company closes on the
Maximum, it shall use the additional proceeds to purchase equipment necessary to
produce 100,000 barrels per year.

In addition, after the Initial Closing on the Minimum, the Company plans to
order the brewhouse and bottle filling and labelling equipment from premier
manufacturers, and the Company anticipates that these items will take six to
eight months for delivery. In addition, the Company will order the tanks and
equipment for the utilities systems (steam boiler, refrigeration plant, water
treatment plant, etc.). The Company believes that the lead time for these items
will be approximately between two and four months. Once the equipment arrives,
the Company believes it will take approximately three months to install and
commission the brewhouse. Thereafter, the Company believes that brewing
operations will commence immediately, with initial packaging approximately eight
weeks later.

After the Initial Closing, the Company will begin to take other
organizational steps necessary to begin production and sales. These steps will
include hiring a management team, creating or licensing lager recipes, designing
the Company's logo, artwork and packaging materials, filing for necessary
federal and state operating permits. See "Business -- Initial Operations."

16
<PAGE>
BUSINESS

GENERAL

The Company was formed on March 1, 1996 as a Pennsylvania corporation for
the purpose of building a premier regional craft brewery to produce and sell
high quality lager beer initially in the Northeastern and Mid-Atlantic regions
and eventually throughout the United States. The Company intends to develop its
line of products to compete in the rapidly growing specialty beer market in the
U.S. All of the Company's beers will be brewed utilizing the natural spring
water from the Bellefonte Big Spring in Bellefonte, Pennsylvania. In addition,
the Company's equipment will enable it to produce hard ciders, draft ciders and
certain soft drinks.

The Company may also enter into arrangements for the Company to provide
contract brewing services to existing American breweries and other third parties
which would market and sell beer products brewed in the Company's proposed
brewery under their own proprietary labels. Such arrangements would be directly
between the Company and the third party. To date, the Company has not entered
into any arrangements for contract brewing, and there can be no assurance that
the Company will be successful in obtaining any contract brewing business.

THE U.S. BEER INDUSTRY*

The U.S. beer market is dominated by six large brewing companies.
Anheuser-Busch, Miller, Coors, Stroh, Heileman and Pabst produced over 90% of
the 190.6 million barrels sold in the U.S. in 1994. The next group consists of
the older regional brewers, including Latrobe (brewers of Rolling Rock),
Genesee, Stevens Point, Pearl, Pittsburgh Brewing, Yuengling and The Lion.
Together, these regional breweries accounted for about 3% of the total barrels
sold in the U.S. in 1995. The rest of the market was represented by imports
(6.0% or 11.2 million barrels sold in the U.S. in 1995) and craft brewers (2.3%
or 4.3 million barrels sold in the U.S. in 1995).

BEER STYLES

While the beers from the major American brewers are brewed to high quality
standards, they are relatively neutral in flavor. They are brewed with less hops
and malt than traditional European or craft-brewed beers, creating a less
bitter, lighter bodied flavor. In addition, these beers are usually brewed with
a high percentage of rice, corn or corn syrup, which further dilutes the flavor
and body of the beers. Traditional lager beers use 100% malted barley in the
mash (with the exception of specialty wheat beers), which ensures a robust,
full-bodied character. The major U.S. brewers have been successful in creating
products that appeal to a wide consumer base and have spent heavily to advertise
and promote their products. As a result, they have achieved a dominant position
in the market for their mass-produced beers.

The older regional brewers traditionally produced beers similar in style to
the products of major breweries, but several have benefitted from the recent
boom in specialty, craft-brewed beers as both contract producers and marketers
of their own products. Imported beers have long been viewed by the beer-drinking
public as being more flavorful and "authentic" than the standard American beers.
Although this has not always been the case, the high price and foreign origin of
the imported beers created a niche category of "specialty" beers. In recent
years, craft-brewed beers have further expanded the "specialty" beer market, and
have increased in sales and visibility.

The vast majority of existing craft/microbrewed products in the U.S. are
ales. According to a survey published in THE NEW BREWER, the five most popular
beer styles produced in brewpubs are all ales, and among the 130 responding
craft/microbrewers, only the fourth most popular style (European Pilsner) is a
lager. The cost of building and operating a lager brewery is substantially
greater than that

- ------------------------
* The industry and market data included herein was obtained from the INSTITUTE
FOR BREWING STUDIES and BEVERAGE MARKETING CORPORATION and the following
industry publications: BEVERAGE INDUSTRY (January 1995), MODERN BREWERY AGE
(March 13, 1995); THE NEW BREWER (November/December 1994 and May/June 1995).

17
<PAGE>
for an ale brewery. The Company believes craft/microbrewed lager beers have a
potentially greater market appeal than ales. Among imported beers (a market that
closely competes with craft brewers for the "specialty beer" consumers), the top
eight brands, constituting two-third's of U.S. import sales volume, are lagers.

The following terms are helpful in understanding the Company's business and
industry:

CRAFT BREWING: Beers produced by microbreweries, regional specialty
breweries, brewpubs and contract brewers. The common appeal of these beers is a
more robust flavor than the standard domestic beers, and an image based on
traditional, European beer styles.

MICROBREWERY: Originally used to refer to a small brewery producing less
than 10,000 barrels a year, which packages and distributes its beers for sale
off site. The cutoff volume has since been increased to 15,000 barrels a year.
The new breweries that were founded in the late 1970s and early 1980s were the
first to be called microbreweries.

REGIONAL SPECIALTY BREWERY: A term used to describe those breweries which
were founded as microbreweries, but have since outgrown the category. A new
category was needed to distinguish these breweries from the older, established
regional breweries. Examples of regional specialty breweries are: Sierra Nevada
(Chico, California), Anchor Brewing (San Francisco, California), Rockies Brewing
(Boulder, Colorado) and Abita Brewing (Abita Springs, Louisiana).

BREWPUB: A brewery that sells its beers exclusively or primarily at its own
bar or restaurant. Since the market is restricted to one outlet, brewpubs tend
to be quite small (typically in the 500 to 2,000 barrel range). Examples of
brewpubs are Zip City (New York, New York), Crescent City Brewhouse (New
Orleans, Louisiana), Wynkoop (Denver, Colorado) and Commonwealth (Boston,
Massachusetts).

CONTRACT BREWER: A company that does not have its own brewery but rather
markets beer produced "under contract" by an existing (usually regional)
brewery. Examples of contract brewers are Boston Beer Company (Samuel Adams
brand beers), Pete's Brewing Company and Neuweiler.

HARD CIDER: A fermented apple cider with an alcohol content between 7 and
14 percent.

DRAFT CIDER: A fermented apple cider with an alcohol content of less than 7
percent.

DEVELOPMENT OF CRAFT-BREWING INDUSTRY

Fritz Maytag bought and revived the failing Anchor Brewery in San Francisco
in 1965 and is considered the grandfather of the microbrewing movement. However,
it wasn't until the late 1970s and early 1980s that the first new microbreweries
opened in the U.S., such as New Albion, Redhook, Yakima Brewing & Malting and
Sierra Nevada on the West Coast and Newman Brewing Co. (Albany, New York) on the
East Coast. By 1983, there were 11 operating microbreweries in the U.S., which
were defined as breweries producing less than 10,000 barrels per year (although
all were much smaller in 1983). At least one of these (Buffalo Bill's Brewery,
Hayward, California) was a brewpub. In the early to mid 1980s, the first
contract brewers appeared.

What all of the craft-brewed beers have in common is an appeal based on
traditional, highly flavored European beer styles. They have benefitted from
their contrast with the products of the major brewers, which are much lighter in
body and flavor. The Company believes they also were helped by an increasing
concern by consumers about how alcoholic beverages fit into a healthy, active,
contemporary lifestyle. As a result, consumers have been drinking less (per
capita consumption of beer has declined every year since 1990), but have been
"trading up" to beers with more flavor and character. Like fine wines, the
Company believes that consumers view craft-brewed beers as beverages of
moderation.

18
<PAGE>
MARKET TRENDS

Since the mid 1980s, the total volume of beer consumed in the U.S. has
increased only modestly, and has been virtually flat since 1991. However, two
small but important segments experienced significant growth: craft-brewed beers
and imports increased by 59.3% and 21.7%, respectively, in the period 1993 to
1995. BEVERAGE MARKETING CORPORATION has recently reported the following data:

TOTAL U.S. BEER CONSUMPTION

<TABLE>
<CAPTION>
PER CAPITA
YEAR MILL. BARRELS % CHANGE GALS. PER YR.
- --------- ------------- ----------- -------------
<S> <C> <C> <C>
1993 188.4 0.1% 22.6
1994 188.7 0.2% 22.4
1995 187.5 -0.6% 22.0
</TABLE>

SPECIALTY BEER PRODUCTION

<TABLE>
<CAPTION>
% OF TOTAL US
YEAR MILL. BARRELS % CHANGE BEER MKT.
- --------- ------------- ----------- ---------------
<S> <C> <C> <C>
1993 2.7 28.1% 1.3%
1994 3.3 36.2% 1.7%
1995 4.3 31.7% 2.3%
</TABLE>

IMPORTED BEER CONSUMPTION

<TABLE>
<CAPTION>
% OF TOTAL US
YEAR MILL. BARRELS % CHANGE BEER MKT.
- --------- ------------- ----------- ---------------
<S> <C> <C> <C>
1993 9.2 12.2% 4.9%
1994 10.5 14.2% 5.6%
1995 11.2 6.7% 6.0%
</TABLE>

The Company believes that the growth rate of these two segments in the face
of a flat overall market indicates that the higher-priced, specialty beers are
developing a significant acceptance in the market. However, there can be no
assurance that the Company's assessment of consumer trends is correct, or, if
correct, that such consumer trends will continue or that the Company's proposed
beer products will also receive acceptance by consumers.

COMPANY STRATEGY

The Company intends to renovate the historic one hundred year old Match
Factory building in Bellefonte, Pennsylvania and acquire and install a premier
brewhouse (which comprises the main brewery production equipment), capable of
annually producing initially 30,000 barrels and eventually as much as 100,000
barrels of high-quality lagers. The Company also intends to construct and equip
a beer hall and pub in the brewery buildings for the purpose of servicing tours
and special events at the brewery. Upon completion of the Company's proposed
brewery and the commencement of operations, the Company's strategy will be to
market its products through third party distributors for resale in bars,
restaurants, retail stores and other retail license holders initially in the
Northeastern and Mid-Atlantic regions and eventually throughout the East Coast.

The Company believes that there is currently an overabundance of
craft/microbrewed ales on the market due to the relative simplicity and
inexpensiveness of the ale brewing process. Therefore, by offering premium
lagers, the Company believes it can fill a niche in the market for
craft/microbrewed beer that has not yet been satisfied. In addition, the Company
also believes that it can participate in the growing market for draft ciders.

19
<PAGE>
INITIAL OPERATIONS

The Company believes its success will be dependent upon its ability to (i)
produce high-quality products, (ii) procure advantageous distribution
arrangements to distribute and sell its bottles and kegs through bars,
restaurants and other retail license holders, (iii) implement a successful
marketing and promotion strategy to penetrate the market for specialty beers in
the Company's initial marketing region and (iv) develop unique point of sale
displays and packaging.

After the Initial Closing, the Company will begin taking the steps necessary
to restore, construct and equip the Match Factory site for its regional craft
brewery. The Company has obtained an option for the purchase of the historic
Match Factory building in Bellefonte, Pennsylvania as a potential location for
the Company's proposed brewery. The terms of such option entitle the Company, at
its option, to buy the site from Clasters for a purchase price of approximately
$800,000 within ninety days following the Company's exercise of the option. The
site is currently vacant.

In addition, after the Initial Closing on the Minimum, the Company plans to
order the brewhouse and bottle filling and labelling equipment from premier
manufacturers, and the Company anticipates that these items will take
approximately eight months for delivery. If the Company utilizes foreign
manufacturers, it could involve the risk of additional delays in delivery due to
distance and risks related to fluctuations in foreign currency exchange rates.
In addition, the Company will order the tanks and equipment for the utilities
systems (steam boiler, refrigeration plant, water treatment plant, etc.). The
Company believes that the lead time for these items will be approximately
between two and four months. Once the equipment arrives, the Company believes it
will take approximately three months to install and commission the brewhouse.
Thereafter, the Company believes that brewing operations will commence
immediately, with initial packaging approximately eight weeks later.

After the Initial Closing, the Company will begin to take other
organizational steps necessary to begin production and sales. These steps will
include:

- Hiring a management team.

- Procuring necessary insurance coverage.

- Working with a graphic designer to design the Company's logos, artwork and
packaging materials.

- Working with packaging suppliers to "set-up" the artwork.

- Filing for federal brand registration and label approval.

- Filing for state brand registration and label approval.

- Filing for necessary federal and state operating permits.

- Purchasing necessary inventory and materials requirements.

It is anticipated that brewing will begin approximately thirteen months
after commencement of construction or improvements, and packaging will begin two
months after the initial brewing. The Company anticipates that the first beer
produced at the brewery will be available for sale approximately fifteen months
after the Initial Closing, and that the brewery will produce approximately
30,000 barrels in the first year of production. However, there can be no
assurance that the Company will not experience other delays in commencing
operations.

20
<PAGE>
PRODUCTS

The Company intends to produce premium lager beers under a number of
proprietary brands, including Bellefonte and Beast of the East. The Company
intends to create its own lager recipes and/or license lager recipes from other
brewers. The Company believes that its exciting and unique product designs will
enable make its products attractive to consumers, and that its commitment to
high quality lagers will help to ensure product loyalty.

The Company may also enter into arrangements for the Company to provide
contract brewing services to existing breweries and other third parties which
would market and sell beer products brewed in the Company's proposed brewery
under their own proprietary labels. Such arrangements would be directly between
the Company and the third party. To date, the Company has not entered into any
arrangements for contract brewing, and there can be no assurance that the
Company will be successful in obtaining any contract brewing business.

In addition to premium lager beers, the Company anticipates developing a
line of draft ciders and hard ciders. These beverages are popular in Europe and
the Company believes that such alcoholic non-beer products will also become
popular in the United States.

SALES AND DISTRIBUTION

The Company intends to produce bottled and kegged beer for sale off-premises
and at an on-site beer hall. In all of the states in which its proposed products
will be sold, a strict three-tier system for sales is in effect. This system,
consisting of manufacturers, wholesale distributors and retail license holders
(such as bars, restaurants and retail stores), is principally attributable to
state licensure requirements, which generally restrict a business to having a
license for only one tier of the trade. The Company believes it will be able to
negotiate distribution arrangements with existing distributors in the markets in
which the Company intends to sell its products. However, no assurance can be
given that such distribution arrangements will be obtained. Moreover, it is not
anticipated that any such arrangements will be possible until the Company is in
operation and can satisfy distributor requirements for product quality,
availability, pricing and marketing support.

The distributor or distributors would be responsible for distributing the
Company's products to retail establishments, including bars, restaurants, retail
stores and other retail license holders. The Company's sales staff will aid in
the effort of servicing retail accounts. The Company's planned advertising and
promotional efforts will be designed to raise the visibility of the brands and
their attractiveness to potential distributors.

Sales of beer in general are seasonal in nature and are at their highest
level in the second and third calendar quarters and at their lowest in the first
and fourth calendar quarters. This seasonality is expected to have a significant
impact on the Company's operations on a quarter to quarter basis.

MARKETING

The Company intends to market its products initially in the Northeast and
Mid Atlantic regions, and eventually throughout the Eastern United States. The
Company intends to promote its products through the use of point of sale
promotional materials, such as table tents, posters and signs in retail outlets.
In addition, the Company intends to create a homepage on the internet at which
it will provide public relations information concerning the renovation of its
Match Factory site, events such as beer-tastings and brewery tours, as well as
the development of its Bellefonte lager beers and other products. The Company
will focus at the outset on developing unique design concepts to increase brand
strength at point of sale. In order to develop such unique and recognizable
designs for its products, the Company has selected graphic designers to create
its labels, artwork and promotional items.

The Company believes that the quality and uniqueness of its package design
will create strong demand for its products. Moreover, the Company expects to
engage management personnel whose knowledge and experience in the beverage
industry, will be beneficial in negotiating and arranging distribution contracts
with distributors.

21
<PAGE>
MANUFACTURING/PRODUCTION FACILITIES

The Company intends to use the proceeds of the Offering, in part, to
establish a brewery capable of producing premium lagers. The Company will
selected preeminent industry leaders to design, build and install a fully
automated, stainless steel brewhouse in the Company's proposed brewery. The
brewhouse is the main production equipment of a brewery and consists of brewing
vessels, automated controls, cleaning systems and related pumps, valves, pipes
and electrical systems. The Company intends to acquire the bottle filling and
labelling equipment from a premier manufacturer of such equipment. The Company
believes that this packaging equipment will be capable of meeting the highest
quality standards for sanitation, low air pick-up in the bottle, consistent
fill-height and proper label application. To date, the Company has not entered
into any purchase orders or other binding agreements relating to the brewhouse
or packaging equipment.

The Company anticipates that its proposed brewhouse will be capable of
producing at least 230 barrel brews per day. The initial brewery design will
include sufficient fermenting and storage tanks for an annual output of
approximately 30,000 barrels. The Company intends that the brewery will be
easily expandable, primarily by the addition of fermenting and storage tanks, to
an eventual output of approximately 100,000 barrels per year. The brewhouse,
utilities and packaging operation are intended to be sized appropriately so that
they can support this level of production with only minimal additional
investment for upgrading. The Company believes it is important to begin with an
easily-expandable facility to take full advantage of the growing market for
specialty beers in the U.S., both as a brewer of its own products and as a
contract brewer.

PROPERTY

The historic Match Factory site is set on a nine acre site, adjacent to the
Bellefonte Big Spring in downtown Bellefonte, Pennsylvania. In addition, the
site is located near Interstate I-80 as well as the campus of The Pennsylvania
State University. The Company has an option to purchase the site from Clasters
for a purchase price of approximately $800,000 within ninety days following the
Company's exercise of the option. The Company paid $44,000 to Clasters in order
to obtain the option. See "Certain Transactions."

The Match Factory building has not been used for manufacturing since 1949.
Until November 1995, it has been used for warehouse and storage space, but is
now vacant except for certain limited office space. Once the Match Factory site
has been completely renovated, the Company believes that there will be excess
leasable space which the Company anticipates leasing.

INVENTORY AND RAW MATERIALS

The Company anticipates that the proposed brewery's operations will
primarily utilize the following ingredients: spring water, hops, malt and yeast.
Certain of the ingredients for the Company's proposed beer products are
anticipated to be available only through particular suppliers. The Company
expects to use local natural spring water supplied from the adjacent Bellefonte
Big Spring for the Company's proposed brewing operations. The Company does not
have any contractual arrangements for purchases of ingredients or other raw
materials. As a result, the Company's ability to commence and maintain the
proposed brewery's operations would be materially adversely impacted by
shortages in supply and/or price increases. The Company's operations will also
utilize glass bottles, caps, labels, kegs and corrugated and other paper
products, all of which are anticipated to be available from several sources.

INTELLECTUAL PROPERTY

All beer recipes developed on behalf of the Company will be the property of
the Company. The Company has filed an application for trademark protection for
its logo, and intends to file applications for the labels and logos for each of
its products, which will be the exclusive property of the Company. Should any
contract brewing and/or product development work be done by the Company for
other parties, including American or foreign brewing companies, the ownership of
the formulas would be held by such third parties.

22
<PAGE>
In addition, the Company may obtain licenses to produce beer products on
behalf of third parties. The Company will have to pay royalties, commissions or
other fees for the rights to such production, and, accordingly, it may receive
less money from the sale of such products than from the sale of its own proposed
products.

COMPETITION

The Company expects to compete on the basis of product quality and
freshness, packaging design, distribution, marketing support and regional
identification. However, the beer industry in general, and the craft brewing
segment of the beer industry in particular, is highly competitive and the
Company expects competition and the number of competitors in the craft brewing
segment to increase. The INSTITUTE FOR BREWING STUDIES estimated in June 1995
that there were 658 regional specialty breweries, microbreweries and brewpubs
operating in the United States. The Company's proposed products will compete
with products from large and small domestic and foreign breweries, and from an
increasing number of regional specialty breweries, microbreweries, brewpubs and
contract brewers, including, but not limited to, Boston Beer Co. in
Massachusetts; Pete's Brewing Company in California; Red Hook Ale Brewery in
Washington (and expected to soon be in New Hampshire); Independence Brewing Co.,
Stoudt Brewery and Whitetail Brewing Co. in Pennsylvania; Spring Street Brewing
Co. in New York; Oxford Brewing Co. and Wild Goose Brewery in Maryland; and
Abita Brewing Co. and Rikenjaks Brewery in Louisiana. Many of these competing
breweries, including some existing microbreweries, have significantly greater
financial, production, distribution and marketing resources than the Company.
One particular large domestic brewery, Anheuser-Busch, has recently made an
equity investment in a regional specialty brewery, and others may follow. There
can be no assurance that the Company's proposed brewery will be successful in
penetrating the beer market to the extent necessary to become profitable.

EMPLOYEES

In addition to Mr. Graham, at the initial planned level of production, the
Company intends to employ a Brewmaster, a Chief Engineer/Head of Maintenance and
such other employees as are necessary to operate the Company's business. In
addition, the Company intends to employ initially two or three employees, who
will be needed primarily during packaging shifts. However, the Company has no
other employees at the current time. Certain of the Company's officers may not
be expected to devote their full-time to the Company's operations. See
"Management."

GOVERNMENT REGULATION AND RELATED MATTERS

The Company's proposed brewery will be subject to regulation by various
federal, state and local agencies. The Bureau of Alcohol, Tobacco and Firearms
of the Department of Treasury ("BATF") regulates the production of beverages
containing alcohol, including beer. The Company is subject to regulation and
inspection by the BATF to ensure compliance with federal tax provisions. For a
brewery of the size that the Company intends to build, the current federal
excise tax is $7 per barrel for the first 60,000 barrels of annual production.
The federal tax on all barrelage in excess of 60,000 annually is $18 per barrel.
In addition, BATF approval is required for all primary packaging materials (such
as labels and crowns) to ensure compliance with laws regarding government
warnings and other required statements, as well as for truthfulness and accuracy
of all claims and representations made. The BATF also issues annual operating
permits to manufacturers of beverages containing alcohol.

The Pennsylvania Liquor Control Board ("PLCB") issues operating licenses to
manufacturers of beverages containing alcohol located in the Commonwealth of
Pennsylvania. The PLCB also ensures compliance with state tax provisions. The
PLCB regulations provide certain operating, record-keeping and marketing
requirements for license holders. These requirements include posting of a
$10,000 bond upon issuance of a license, inspections of the brewery by
representatives of the PLCB, maintaining records of the amount of beer produced
and sold, limiting certain promotional activities and prohibiting sales by the
Company on Sundays. Failure by the Company to comply with PLCB requirements
could result in fines, penalties or sanctions being imposed against the Company
which could range from written warnings to revocation of the Company's license.
The temporary or permanent

23
<PAGE>
loss of the Company's PLCB license would have a material adverse affect on the
Company's operations. PLCB regulations also limit the Company's ability to
increase its prices to distributors within 180 days after a price decrease,
except under certain limited circumstances or with the prior consent of the
PLCB. In addition, the license issued by the PLCB to the Company will not be
transferable or assignable without the approval of the PLCB. As a result, a sale
of the Company or its business would be subject to, and may be delayed by, the
required approval by the PLCB.

In addition, the Company's proposed brewery will be subject to regulation
and inspection by (i) the Food and Drug Administration and the Pennsylvania
Department of Health to ensure compliance with good manufacturing regulations
for food production; (ii) the federal Occupational Safety and Health
Administration and the Pennsylvania Department of Labor & Industry to ensure
compliance with workplace safety regulations; (iii) the federal Environmental
Protection Agency, the Pennsylvania Department of Environmental Resources and
other governmental agencies to ensure compliance with air, water and soil
pollution regulations; and (iv) local building and fire inspectors to ensure
compliance with local building and fire codes.

ENVIRONMENTAL MATTERS. The Company's business activities will be regulated
pursuant to federal, state and local environmental laws. Federal laws such as
the Clean Air Act and Clean Water Act and their state counterparts govern
discharges of pollutants to air and water, and other federal, state and local
laws such as the Resource Conservation and Recovery Act and the Pennsylvania
Solid Waste Management Act comprehensively govern the generation,
transportation, storage, treatment and disposal of solid waste (collectively,
"Environmental Regulatory Laws"). The Environmental Regulatory Laws and other
federal, state and local laws, such as the Comprehensive Environmental Response,
Compensation and Liability Act and the Pennsylvania Hazardous Sites Cleanup Act
may make the Company potentially liable for environmental contamination
associated with its activities on the Property ("Environmental Remediation
Laws").

The Environmental Regulatory Laws may require that a variety of permits be
issued for the renovation and operation of the Company's brewery. These permits
often are issued by state regulatory agencies under delegated federal authority
but also may contain standards or conditions that are imposed under state
regulatory programs. State or local air permits may be required. State or local
wastewater or stormwater discharge permits are also often required. State and
local law may require permits to be obtained for all activities associated with
construction and preparation of the Property prior to operation of the Project.
There can be no assurance that all permits required by Environmental Regulatory
Laws will be issued, and the process of obtaining such permits can often cause
lengthy delays, including delays caused by third party appeals challenging
permit issuance. Delays in the issuance of the required permits, or cancellation
of the Project for failure to receive such permits, may have a material adverse
effect on the Company's operation in cases where it has already made substantial
expenditures in connection with the Project.

The Environmental Regulatory Laws and regulations or permits issued
thereunder could also establish operational standards, including specific
limitations upon emissions of certain air and water pollutants. Such standards
may apply to any and all phases of the Project, including new construction and
renovation of existing structures. Failure to meet these standards may subject
the Company to regulatory enforcement actions, third party actions and, unless
excused by particular circumstances, liabilities or damages.

Standards established pursuant to the Environmental Regulatory Laws and
governmental policies governing their enforcement may change. For example, new
technology may be required or stricter standards may be established for the
control of discharges of air or water pollutants or for solid waste handling and
disposal. Such future developments could affect the manner in which the Company
operates and could require significant additional expenditures to achieve
compliance with such requirements or policies.

24
<PAGE>
Finally, the Environmental Remediation Laws, including CERCLA, may subject
the Company, like any other entity that generates waste, to strict, joint and
several liability for the costs of remediating contamination associated with
contaminated sites, including landfills, which the Company will utilize for the
disposal of residue or other waste handled or processed by the Company, and the
Property, to the extent that it has been or will be utilized for the disposal,
storage or treatment of solid waste. Some such state and local laws may create
liabilities for injury to persons or property caused by site contamination.

The Company commissioned a modified Phase I Environmental Assessment
("Assessment") of the Property, which included groundwater sampling. The
Assessment does not identify any state or federal enforcement activity with
respect to the environmental condition of the Property. The Assessment revealed
contaminants in the groundwater consistent with a spill of petroleum-based
materials and above state minimum concentration levels. The Assessment notes
that there have been no reports to state or federal environmental agencies of
leaking above- or below-ground storage tanks in the immediate area. However, the
Assessment indicates that the contaminants may be associated with the operations
of one or more nearby gasoline service stations. The Assessment notes that the
gasoline service stations are within 2,500 feet of the location of the
contamination. Under Pennsylvania law, there is a rebuttable presumption that
owners or operators of any above or below ground storage tanks are strictly
liable for all contamination within 2,500 feet of the perimeter of their
property.

The Assessment also suggests that the source of the contamination may be
from a documented spill of petroleum products from an adjacent gasoline service
station. The Pennsylvania Department of Environmental Protection ordered the
owner of that station to clean up the spill. The cleanup is ongoing. As a
result, if the spill is the source of contamination on the Property, the
Assessment reports that concentrations of contaminants on the Property should
decrease over time.

The expense of having to remediate any environmental problems, and the
potential unavailability of such site or facility for the Company's proposed
brewery, could materially adversely affect the Company's ability to complete its
planned construction and equipping of the proposed brewery.

As part of its start-up and operating activities, the Company intends to
review and comply with all federal, state and local regulations regarding all
aspects of its operations. The Company does not anticipate any difficulties or
delays in obtaining all necessary licenses and permits.

FUTURE LEGISLATION. The alcoholic beverage industry has become the subject
of considerable societal and political attention in recent years due to
increasing public concern over alcohol-related social problems including drunk
driving, underage drinking, and health consequences from the misuse of alcohol,
including alcoholism. The possibility exists that advertising by beer producers
could be restricted or that additional cautionary labeling or packaging
requirements might be imposed. If beer consumption in general were to come into
disfavor among domestic consumers, or if the domestic beer industry were
subjected to significant additional governmental regulations, the Company's
business could be materially adversely affected. In addition, there can be no
assurance that the operations of the Company's proposed brewery will not become
subject to increased taxation by federal or state agencies, which may materially
and adversely affect the operations, revenues and potential profitability of the
Company. Congress and many state legislatures are considering various proposals
to impose additional excise taxes on the production and sale of alcoholic
beverages, including beer. Some of the excise tax rates being considered are
substantial. Any increase in the taxes imposed on beer can be expected to have
an adverse impact on overall sales of such products, and may materially
adversely affect the Company's result of operations.

LEGAL PROCEEDINGS

There are no legal proceedings pending to which the Company or its employees
are a party or to which any of its property is subject, and the Company's
management does not know of any such action being contemplated.

25
<PAGE>
MANAGEMENT

DIRECTOR AND EXECUTIVE OFFICERS

Set forth below is certain information regarding the Company's directors and
executive officers:

<TABLE>
<CAPTION>
NAME AGE POSITION
- ------------------------ --- ---------------------------
<S> <C> <C>
Edward J. Lauth, III 41 Chairman of the Board
Michael D. Graham President
Matthew J. Suhey 37 Director
Sandra L. Poole 40 Director
J. Randall Woolridge 45 Director
</TABLE>

EDWARD J. LAUTH, III is the founder, Chairman and Director of the Company.
Mr. Lauth has been Chairman and President and a Director of AquaPenn Spring
Water Company, Inc. ("AquaPenn") since he founded AquaPenn in 1986. Prior to
founding AquaPenn, Mr. Lauth spent several years developing and selling
commercial real estate, in addition to founding and selling two restaurants in
State College, Pennsylvania. Mr. Lauth received a B.S. from Rollins College.

MICHAEL D. GRAHAM became the Company's President effective September 1,
1996. Prior to joining the Company, Mr. Graham was the President and Chief
Operating Officer of the Pittsburgh Brewing Company ("Pittsburgh Brewing"), the
ninth largest brewer in the United States with approximately $65 million in
sales and 325 employees. Prior to 1993, Mr. Graham served as Pittsburgh
Brewing's Vice President -- Sales and Marketing. Mr. Graham received an M.B.A.
from Duquesne University and a B.S. from The American University.

MATTHEW J. SUHEY has been a director of the Company since its inception in
March 1996. Mr. Suhey played professional football with the Chicago Bears of the
National Football League from 1980 to 1989. He has been an independent
commodities trader at the Chicago Board of Trade since 1983. Mr. Suhey is a
director of AquaPenn Spring Water Company, Inc.

SANDRA L. POOLE has been a director of the Company since May 1996. For the
past thirteen years, Ms. Poole has been employed by S&A Custom Built Homes as a
Design Consultant. Her duties include furnishing model homes, designing new
floor plans, developing marketing brochures and signage for subdivisions.

J. RANDALL WOOLRIDGE, a director of the Company since August 1996, has been
the Goldman, Sachs & Co. and Frank P. Smeal Endowed University Fellow in Finance
at the Pennsylvania State University since 1991.

Mr. Lauth is not expected to devote his full time to the Company's
activities. The Company anticipates that he will devote such time, on a
part-time basis, to his duties with the Company as is reasonably necessary in
connection with the Company's activities and objectives, and consistent with
their other activities.

The Company intends to hire a Brewmaster and Chief Financial officer
following the Initial Closing.

EXECUTIVE COMPENSATION

The Company has only recently been organized and, prior to July 31, 1996,
had not paid or accrued any executive compensation.

The Company has entered into an employment agreement, dated as of September
1, 1996, with Mr. Graham providing for his full-time service as the Company's
President. The agreement has an initial term of one year, and is automatically
renewable for additional five year period. Mr. Graham's initial annual salary
shall be $150,000, which amount shall be increased to $160,000 upon the renewal
of the employment agreement. In addition, Mr. Graham shall receive 12,500 shares
of the Company's Common Stock for each year he is employed by the Company,
beginning on September 1, 1997, for a

26
<PAGE>
maximum period of five years and a maximum of 62,500 shares. Beginning on
September 1, 1997, Mr. Graham shall be entitled to participate in any incentive
plan instituted by the Company. Mr. Graham will have certain expenses relating
to his relocation to the State College, Pennsylvania area reimbursed by the
Company. Mr. Graham will also be entitled to receive such employee benefits as
shall be granted by the Company to its other employees. To date, no compensation
has been accrued for, or paid to, Mr. Graham by the Company.

The Company anticipates entering into employment agreements with certain
other management personnel. In addition, the Company intends to implement an
incentive stock option plan and to grant to key employees, advisors and
consultants, which the Board of Directors determines to be necessary or
appropriate to promote and foster the loyalty and dedication of its directors,
officers and employees.

SECURITY OWNERSHIP OF MANAGEMENT AND CERTAIN SHAREHOLDERS

The following table sets forth certain information with respect to the
beneficial ownership of the Company's Common Stock, as of July 31, 1996, by each
person who is an officer or director of the Company, each beneficial owner of
more than 10% of the Common Stock and by all directors and officers as a group.

<TABLE>
<CAPTION>
PERCENTAGE OWNED
AMOUNT OWNED AMOUNT OWNED AFTER THE OFFERING
BEFORE THE AFTER THE ---------------------------
NAME AND ADDRESS OF BENEFICIAL OWNER (1) OFFERING OFFERING MINIMUM MAXIMUM
- ---------------------------------------------------- ----------------- ---------------- ------------ -------------
<S> <C> <C> <C> <C>
Edward J. Lauth, III................................ 206,250 206,250 22.6% 12.4%
Michael D. Graham (2)............................... 0 0 0 0
Sandra L. Poole (3)................................. 206,250 206,250 22.6% 12.4%
Matthew J. Suhey.................................... 0 0 0 0
Randall Woolridge................................... 0 0 0 0
All directors and officers as a group (5 persons)... 412,500 412,500 45.2% 24.8%
</TABLE>

- ------------------------
(1) A person is deemed to be the beneficial owner of securities that can be
acquired by such person within 60 days from the date of this Prospectus upon
the exercise of options or warrants. Each beneficial owner's percentage
ownership is determined by assuming that options or warrants that are held
by such person (but not those held by any other person) and that are
exercisable within 60 days from the date of this Prospectus having been
exercised. Unless otherwise noted, the Company believes that all persons
named in the table have sole voting and investment power with respect to all
shares of Common Stock beneficially owned by them. The address of each
director is P.O. Box 389, Bellefonte, Pennsylvania 16823.

(2) Under Mr. Graham's employment agreement, he will receive 12,500 shares of
the Company's Common Stock for each year he is employed by the Company,
beginning on September 1, 1997, for a maximum period of five years and a
maximum of 62,500 shares.

(3) Includes 206,250 shares of Common Stock owned by PFG, a Pennsylvania
corporation created for the purpose of holding shares of the Company, of
which Ms. Poole is the sole shareholder.

ESCROW OF FOUNDER SHARES

Mr. Lauth and PFG have agreed with the Company, upon the initial closing of
the Offering, to place the 412,500 shares of the Company's Common Stock owned by
Mr. Lauth and PFG (the "Escrow Shares") in escrow with an independent escrow
agent. Of the Escrow Shares, 206,250 shares (the "Condition Shares") will be
returned to the Company if the Company does not satisfy one or more of the
following conditions during any one the seven fiscal years following such
closing:

- The Company has net revenues of at least $1,500,000 in any fiscal year; or

- The Company has net earnings of at least $275,000 in any fiscal year; or

27
<PAGE>
- The Company is acquired through sale, merger, consolidation, sale of all,
or substantially all, of its assets or otherwise at a per share price, in
the form of cash, debt, stock, cash equivalent or any combination thereof,
with a value equal to or greater than the amounts specified below during
the periods indicated following such closing; provided, however, that if
all or part of the consideration is in the form of stock, that such stock
must be freely tradeable upon receipt by the Company's shareholders:

From closing until the end of Fiscal Year 1 -- $11.00
Fiscal Year 2 -- $12.10
Fiscal Year 3 -- $13.31
Fiscal Year 4 -- $14.64
Fiscal Year 5 -- $16.10
Fiscal Year 6 -- $17.71
Fiscal Year 7 -- $19.48

For the purposes of the escrow, the Company's operating results shall be
determined by reference to the Company's financial statements as audited by the
Company's independent accountants in each fiscal year, and all share and share
price amounts will be adjusted to reflect any stock dividends, stock splits, or
other recapitalization transactions.

If the Company has satisfied any of the conditions described above during
the first three years after the closing on the Minimum, the Condition Shares
shall no longer be conditioned but will remain Escrow Shares subject to the
restrictions on transfer described below. If the Company has satisfied any of
the conditions described above during the fourth through seventh years after the
closing on the Minimum, the escrow shall terminate and all of the Escrow Shares
(whether or not such shares are Condition Shares) shall be returned to Mr. Lauth
and PFG.

If, by the end of the seven year period, the Company has not satisfied at
least one of the conditions described above, Mr. Lauth and PFG have agreed with
the Company to return to the Company a pro rata portion of the Condition Shares
determined by multiplying the Condition Shares by the highest percentage of
satisfaction of any of such conditions during such period, with 100%
representing successful satisfaction of at least one condition, up to a maximum
of all of the Condition Shares. Mr. Lauth and PFG may, at their option at any
time after the end of the third fiscal year following the initial closing, elect
to terminate the escrow by returning the number of Condition Shares, if any,
determined, in the manner described above, based upon satisfaction of one or
more of the conditions described above on or prior to the date of Mr. Lauth's or
PFG's election.

In the alternative, even if none of the conditions described above are
satisfied, Mr. Lauth and PFG shall not be required to return any of the
Condition Shares if the Common Stock is quoted in the over-the-counter
inter-dealer market, included in the Nasdaq SmallCap Market, listed on a
national securities exchange or included in the Nasdaq Stock Market for a period
of at least six (6) months) and such stock attains a mean average price (as
reported by such market, exchange or independent quotations reporting service
with the price being defined as the mean average of the high and low bid prices,
the mean average closing bid prices or the mean average closing price) equal to
or greater than the amounts set forth below during any consecutive 6-week period
during the fiscal years indicated after such closing:

Fiscal Year 3 -- $13.31
Fiscal Year 4 -- $14.64
Fiscal Year 5 -- $16.10
Fiscal Year 6 -- $17.71
Fiscal Year 7 -- $19.48

For purposes of determining whether the stock price targets have been
satisfied, any 6-week periods during which the Company, its officers or
directors, Mr. Lauth and PFG, or any affiliates of any of such persons or
entities have executed any purchases of Common Stock will not be eligible
periods.

28
<PAGE>
If the stock price target condition is satisfied during fiscal year 3, the
Condition Shares will not thereafter be subject to possible return to the
Company, but all of the Escrow Shares will continue to be subject to the
restrictions on transfer by Mr. Lauth and PFG described below. If the stock
price target condition is satisfied during fiscal years four through seven, then
the escrow shall terminate and all of the Escrow Shares (whether or not such
shares are Condition Shares) will be returned to Mr. Lauth and PFG.

In addition, Mr. Lauth and PFG have agreed with the Company not to sell,
transfer or otherwise dispose of any of the Escrow Shares during the time period
that the Escrow Shares are subject to escrow. However, if the escrow conditions
are satisfied within the first three years after closing on the Minimum, Mr.
Lauth and PFG have agreed with the Company not to sell, transfer or otherwise
dispose of any of its shares of Common Stock (other than in a transaction
described in the condition relating to the sale of the Company as described
above) in the first year after the closing on the Minimum at all, in the second
year after the closing on the Minimum unless the sale price is equal to or
greater than double the offering price of the Shares offered by this Prospectus,
or in the third year after the closing of the Minimum unless the sale price is
equal to or greater than the offering price of the Shares offered by this
Prospectus. After the third year (assuming the escrow is released), there will
be no restrictions on Mr. Lauth and PFG's ability to dispose of their shares of
Common Stock, the escrow shall terminate and all of the Escrow Shares will be
returned to Mr. Lauth and PFG.

While the Escrow Shares are in escrow, Mr. Lauth and PFG shall retain voting
rights to all of the Escrow Shares (whether or not such shares are Condition
Shares) and shall have the right to receive at the termination of the escrow all
accrued dividends and distributions on the Escrow Shares to the extent such
shares are released to Mr. Lauth and PFG.

Because the Escrow Shares may be released early if the Company achieves
performance goals, all of the Escrow Shares will be deemed to be compensatory.
During the period the Escrow Shares are released from escrow, the Company will
record compensation expense for such period in an amount equal to the fair
market value of the Escrow Shares at the time of their release.

The revenues, earnings or stock price figures presented above should not be
regarded as projections of future performance. There can be no assurances that
such revenues, earnings or stock prices, or results approaching such amounts,
will actually be attained or that the Company will have revenues or net earnings
in future years. All of the fees of the escrow of the Escrow Shares will be
borne by the Company.

CERTAIN TRANSACTIONS

The Company's option to obtain the Match Factory site was originally granted
by Clasters to AquaPenn, a company in which Mr. Lauth serves as Chairman,
President and a Director. Subsequently, AquaPenn decided it was no longer
interested in purchasing the Match Factory site and assigned the option to the
Company in consideration of the Company's payment to Clasters of the option
purchase price, after which Clasters returned to AquaPenn its original deposit.

In order to finance the Company's start-up, Mr. Lauth and PFG have each
loaned the Company $18,000, which funds shall be repaid, together with interest
at the prime rate, with the proceeds from this Offering.

The Company's Board of Directors has adopted a resolution which requires
that all future material transactions between the Company and its officers,
directors, principal shareholders and affiliates will be approved by a majority
of any independent members of the Company's Board of Directors who do not have
an interest in the transactions, and will be on terms no less favorable to the
Company than could be obtained from unaffiliated third parties. The Company does
not currently have any independent directors. The Company plans to add up to
three independent directors following the completion of the Offering. There can
be no assurance that the Company will be successful in identifying persons
willing to serve as directors of the Company.

29
<PAGE>
DESCRIPTION OF SECURITIES

COMMON STOCK

The Company is authorized to issue 50,000,000 shares of Common Stock, no par
value, of which 412,500 shares were issued and outstanding as of November 1,
1996. As of November 1, 1996, there were two holders of the Company's Common
Stock. Each shareholder is entitled to one vote per share on all matters to be
voted on by shareholders, without any right to cumulate their votes.
Shareholders have no preemptive rights and have no liability for further calls
or assessments on their shares. The shares of Common Stock are not subject to
repurchase by the Company or conversion into any other securities. All
outstanding shares of Common Stock are, and those to be outstanding upon
completion of the Offering will be, fully paid and nonassessable.

Shareholders are entitled to receive such dividends as may be declared by
the Board of Directors of the Company out of funds legally available therefor
and, upon the liquidation, dissolution or winding up of the Company, are
entitled to share ratably in all net assets available for distribution to such
holders after satisfaction of all obligations of the Company. It is not
anticipated that any dividends will be paid by the Company in the foreseeable
future since the Company intends to retain its earnings, if any, to finance the
growth of its business. Future dividend policy will depend upon the Company's
earnings, financial needs, covenants in loan agreements and other pertinent
factors.

PREFERRED STOCK

The Company is authorized to issue 25,000,000 shares of Preferred Stock, par
value $1.00 per share. The Board of Directors of the Company, without further
action by the shareholders, is authorized to issue the shares of Preferred Stock
in one or more series and to determine the voting rights, preferences as to
dividends, and the liquidation, conversion, redemption and other rights of each
series. The issuance of a series with voting and conversion rights may adversely
affect the voting power of, and be dilutive to, the holders of Common Stock. The
issuance of Preferred Stock may have the effect of delaying, deferring or
preventing a change in control of the Company without further action by the
shareholders. The Company has no present plans to issue any shares of Preferred
Stock.

LIMITATION OF DIRECTORS' LIABILITY AND INDEMNIFICATION OF DIRECTORS AND OFFICERS

The By-laws of the Company provide that directors of the Company will not be
personally liable for monetary damages to the Company or its shareholders for
breaches of their duties as directors, except in instances involving self
dealing, willful misconduct or recklessness, criminal violations or liabilities
involving the payment of taxes.

The Company has included provisions in its By-Laws providing for
indemnification of its directors and officers by the Company to the maximum
extent permitted under applicable law, including the advancement of expenses
incurred by a director or officer in any suit in which the director or officer
is involved. The Company believes that such actions will assist it in attracting
and retaining qualified individuals to serve as directors and officers.
Prospective investors should be aware, however, that the cost associated with
indemnifying a director or officer could be significant and, if not covered by
insurance, could adversely affect the Company's results of operations.
Furthermore, in situations where the Company has advanced litigation expenses to
a director or officer and the director or officer is required to repay the
expenses because it is ultimately adjudged that the director or officer is not
entitled to indemnification, the director or officer may not have sufficient
cash or assets to repay the expenses advanced.

Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the Company
pursuant to the foregoing provisions, or otherwise, the Company has been advised
that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Securities Act and
is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Company of expenses
incurred or paid by a director, officer or controlling person of the Company in
the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Company will,

30
<PAGE>
unless in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.

LIMITATIONS ON TRANSFERS OF SHARES

There is currently no public market for the Company's Common Stock and there
is little likelihood that an active trading market will develop in the near
future as a result of this Offering. The Registration Statement of which this
Prospectus is a part has been registered with the Securities and Exchange
Commission pursuant to the Securities Act and, as such, the Shares are freely
tradeable under the federal securities laws. The Shares, however, have been
registered in only a limited number of states, and may not be sold or otherwise
transferred to persons who are residents of any state in which the Shares have
not been registered unless they are subsequently registered or there exists an
exemption from the applicable state's registration requirements with respect to
such sale or transfer.

The Company intends to apply for listing of the Common Stock on the Nasdaq
SmallCap Market when, and if, the Company meets the listing requirements of the
Nasdaq SmallCap Market. The principal listing requirements are $4,000,000 of
total assets, $2,000,000 of total stockholders' equity, a minimum bid price of
$3.00 per share and a minimum of the two market makers. To date, the Company has
not contacted any potential market makers for the Company's Common Stock.
Following the completion of the sale of the Minimum, the Company intends to
begin contacting potential market makers in this regard. However, there can be
no assurance that the Company will be able to interest brokers or dealers in
acting as market makers for the Company's Common Stock. No assurance can be
given as to when or whether the Company's Common Stock will qualify for listing
on the Nasdaq SmallCap Market.

Since the Company's intention is to establish and operate a brewery in the
Commonwealth of Pennsylvania, the Company will be subject to licensure by the
PLCB. As a result of such licensure, ownership of the Company's Common Stock is
not permitted for persons or entities which hold a wholesale or retail PLCB
license or have an "interest" (i.e., officer, director or owner; or creditor,
lessor, lender or guarantor; etc.) in an entity holding a wholesale or retail
PLCB license. This restriction does not preclude a person or entity from owning
shares in more than one brewery licensed by the PLCB. The Company will use
reasonable efforts to assure that subsequent purchasers of shares of the
Company's Common Stock comply with this PLCB restriction. However, there can be
no assurance that the Company will be able to prevent shares of the Company's
Common Stock from being acquired by persons or entities in violation of this
PLCB restriction. In the event the PLCB determines that a holder of the
Company's Common Stock also holds a wholesale or retail PLCB license or has an
"interest" in a wholesale or retail license holder, the PLCB may compel such
stockholder to divest or otherwise terminate its interest with one of the
conflicting license holders. Failure by such holder to comply with the PLCB
licensure requirements may subject the Company to enforcement action, which may
include fines, penalties or other sanctions, including suspension and revocation
of the Company's license.

SHARES ELIGIBLE FOR FUTURE SALE

All of the 412,500 shares of Common Stock currently outstanding were offered
and sold by the Company in a private transaction in reliance upon an exemption
from registration under the Securities Act. Accordingly, all of such shares are
"restricted securities" as defined by Rule 144 ("Rule 144") under the Securities
Act and cannot be resold without registration except in reliance on Rule 144 or
another applicable exemption from registration. In general, under Rule 144 a
person (or persons whose shares are required to be aggregated), including any
affiliate of the Company, who beneficially owns restricted shares for a period
of at least two years (currently proposed to be reduced to one year) is entitled
to sell within any three month period shares equal in number to the greater of
(i) 1 percent of the then outstanding shares of Common Stock or (ii) the average
weekly trading volume of the same class of shares during the four calendar weeks
preceding the filing of the required notice of sale with the Commission. The
seller must also comply with the notice and manner of sale requirements of Rule
144, and there must be current public information available about the Company.
In addition, any

31
<PAGE>
person (or persons whose shares are required to be aggregated) who is not, at
the time of sale, nor during the preceding three months, an affiliate of the
Company, and who has beneficially owned restricted shares for at least three
years (currently proposed to be reduced to two years), can sell such shares
without regard to notice, manner of sale, public information or the volume
limitations described above. Shares of Common Stock will be eligible for resale
under Rule 144 in June 1998 (assuming the other requirements of Rule 144 are met
and assuming the proposed reductions in holding period are not adopted).

ANTI-TAKEOVER PROVISIONS

The Pennsylvania Business Corporation Law of 1988, as amended (the "1988
BCL"), includes certain shareholder protection provisions, some of which may
apply to the Company, and as to which the Company has not yet determined whether
or not to opt out. The following is a description of those provisions of the
1988 BCL that apply to the Company and that may have an anti-takeover effect.
This description of the 1988 BCL is only a summary thereof, does not purport to
be complete and is qualified in its entirety by reference to the full text of
the 1988 BCL.

(i) The Control Transaction provisions allow holders of voting shares of
a corporation to "put" their stock to an acquiror for fair value in the
event of a control transaction (the acquisition of 20% of the voting stock
of the corporation). Fair value is defined as not less than the highest
price paid by the acquiror during a certain 90 day period.

(ii) An interested shareholder (the beneficial owner of twenty percent
of the voting stock either of a corporation or of an affiliate of the
corporation who was at any time within the five-year period immediately
prior to the date in question the beneficial owner of twenty percent of the
voting stock of the corporation) cannot engage in a business combination
with the corporation for a period of five years unless: (a) the board
approves the business combination or the acquisition of shares in advance,
or (b) if the interested shareholder owns 80% of such stock, the business
combination is approved by a majority of the disinterested shareholders and
the transaction satisfies certain "fair price" provisions. After the
five-year period, the same restrictions apply, unless the transaction either
is approved by a majority of the disinterested shareholders or satisfies the
fair price provisions.

(iii) Corporations may adopt shareholders' rights plans with
discriminatory provisions (sometimes referred to as poison pills) whereby
options to acquire shares or corporate assets are created and issued which
contain terms that limit persons owning or offering to acquire a specified
percentage of outstanding shares from exercising, converting, transferring
or receiving options and allows the exercise of options to be limited to
shareholders or triggered based upon control transactions. Such poison pills
take effect only in the event of a control transaction. Pursuant to the 1988
BCL, such poison pills may be adopted by the Board without shareholder
approval.

32
<PAGE>
(iv) In taking action with respect to tender offers or takeover proposals
(as for any other action), directors may, in considering the best interests
of the corporation, consider the effects of any action upon employees,
suppliers, customers, communities where located and all other pertinent
factors.

(v) Shareholders of a corporation no longer have a statutory right to
call special meetings of shareholders or to propose amendments to the
articles under the provisions of the 1988 BCL.

The foregoing provisions may discourage certain types of transactions that
involve a change of control of the Company and ensure a measure of continuity in
the management of the business and affairs of the Company. While the Company
does not currently have a shareholder rights plan or poison pill, the effect of
the above-described provisions may be to deter hostile takeovers at a price
higher than the prevailing market price for the Common Stock and to permit
current management to remain in control of the Company. In some circumstances,
certain shareholders may consider these anti-takeover provisions to have
disadvantageous effects. Tender offers or other non-open market acquisitions of
stock are frequently made at prices above the prevailing market price of a
company's stock. In addition, acquisitions of stock by persons attempting to
acquire control through market purchases may cause the market price of the stock
to reach levels that are higher than would otherwise be the case. These
anti-takeover provisions may discourage any or all of such acquisitions,
particularly those of less than all of the Company's shares, and may thereby
deprive certain holders of the Company's Common Stock of an opportunity to sell
their stock at a temporarily higher market price.

In addition to the provisions of the 1988 BCL, PLCB regulations provide that
changes in stockholder ownership of 10% or more must be reported to the PLCB
within 15 days of the change.

TRANSFER AGENT

The transfer agent for the Common Stock will be American Securities Transfer
& Trust, Inc., Denver, Colorado.

PLAN OF DISTRIBUTION

The Company is offering to sell, on a best efforts basis, a Minimum of
500,000 Shares and a Maximum of 1,250,000 Shares at a price of $10.00 per Share.
The Company will need additional financing of approximately $5 million for
working capital during the proposed brewery's first eighteen months of
operations following the Offering. The Company will not close on the Minimum
until such financing is obtained. The Offering will begin on the date of this
Prospectus and continue until the earlier of when all of the Shares offered are
sold or the Offering Termination Date (which is October 1, 1997), unless earlier
terminated by the Company.

Subject to applicable federal and state securities laws, the Company's
officers and employees may participate in the selling effort, which is expected
to be handled primarily by Edward J. Lauth, III. The Company anticipates that it
may send copies of the Prospectus to as many as 30,000 potential investors. The
Company will not pay any underwriting discounts, commissions or other
compensation to officers, employees or others in connection with the sale of the
Shares and intends to comply with Rule 3a4-1 under the Securities Exchange Act
of 1934 so as not to require such officers, employees or other "associated
persons", as defined, to be registered as broker-dealers.

The Company may also attempt to engage brokers or dealers who are members of
the National Association of Securities Dealers, Inc. to sell the Shares.
Although the Company has had preliminary discussions with several brokers or
dealers, no broker or dealer has been retained by the Company, and no broker or
dealer is under any obligation to purchase any Shares. Accordingly, the Company
is not able to indicate: (i) the number of brokers or dealers who may
participate in the Offering; or (ii) the number of Shares which may be sold by
brokers or dealers. In the event that any broker or dealer effects sales of
Shares accounting for five (5%) percent or more of the total shares offered in
the Offering, the Company will amend the Offering Circular to identify such
broker or dealer. In the event

33
<PAGE>
Shares are sold by such brokers or dealers, the Company anticipates paying such
brokers or dealers a commission within a range of 8% to 12% of the offering
price of the Shares sold by such brokers or dealers. Such brokers or dealers may
be deemed to be underwriters as that term is defined in the Securities Act. The
Company anticipates entering into a Selected Dealer Agreement with any broker or
dealer which sells Shares in the Offering. Such agreement is expected to provide
for the payment of the commissions described above, and provide for
indemnification of such broker or dealer by the Company against certain
liabilities, including liabilities under the Securities Act.

Shares may be purchased by completing and delivering the Company's
Subscription Agreement along with the purchase price by check to the Company.
Checks should be made payable to "Bellefonte Brewery Proceeds Account." Within
five days of its receipt of a Subscription Agreement accompanied by a check for
the purchase price, the Company will send by first class mail a written
confirmation to notify the subscriber of the extent, if any, to which such
subscription has been accepted by the Company.

All subscription proceeds received and accepted will be deposited by the
Company with the Escrow Agent until the Initial Closing. The funds held in
escrow will be invested by the Escrow Agent in short-term obligations of the
U.S. Government, its agencies and divisions. If closing on the Minimum does not
occur by the Offering Termination Date, all proceeds held in escrow will be
returned by the Escrow Agent to the investors with interest. When the Company
has sold the Minimum number of shares, the Company will close on the Minimum,
investors will be sent stock certificates representing the number of Shares they
have purchased, and all of the proceeds held in escrow, including interest
thereon, will be disbursed by the Escrow Agent to the Company. After the Initial
Closing, the escrow will be closed. Thereafter, the Company may continue the
Offering for the remaining term. All proceeds from the sale of Shares above the
Minimum will be immediately available for use by the Company. See "Use of
Proceeds."

There is no public trading market for the Company's Common Stock, and there
can be no assurance that an active public market will develop in the near future
as a result of this Offering. The offering price of the Shares was determined
arbitrarily by the Company, and should not be considered as an indication of the
actual value of the Company. In determining the offering price, the Company
considered, among other things, the Company's lack of operating history, its
limited financial resources, its growth and profit potential, the amount of
dilution to investors in the Offering and the risk of investing in the Company.
The Company intends to apply for listing of the Common Stock on The Nasdaq
SmallCap Market when, and if, the Company meets applicable listing requirements.
The principal requirements for listing on The Nasdaq SmallCap Market are
$4,000,000 of total assets, $2,000,000 of total stockholders' equity, a minimum
bid price of $3.00 per share and a minimum of two market makers. To date, the
Company has not contacted any potential market makers for the Company's Common
Stock. Following the completion of the sale of the Minimum, the Company intends
to begin contacting potential market makers in this regard. However, there can
be no assurance that the Company will be able to interest brokers or dealers in
acting as market makers for the Company's Common Stock. No assurance can be
given as to when or whether the Company's Common Stock will qualify for listing
on The Nasdaq SmallCap Market.

LEGAL MATTERS

The validity of the Common Stock offered hereby will be passed upon for the
Company by Ballard Spahr Andrews & Ingersoll, 1735 Market Street, Philadelphia,
Pennsylvania 19103.

INDEPENDENT ACCOUNTANTS

The financial statements of The Historic Bellefonte Brewery, Inc. as of July
31, 1996 and for the period from March 1, 1996 (inception) to July 31, 1996
included in this Prospectus have been audited by KPMG Peat Marwick LLP,
independent accountants, as stated in their report appearing herein.

34
<PAGE>
INDEX TO FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
PAGE
-----
<S> <C>
Independent Auditors' Report............................................................................... F-2
Balance Sheet.............................................................................................. F-3
Statement of Operations.................................................................................... F-4
Statement of Stockholders' Equity.......................................................................... F-5
Statement of Cash Flows.................................................................................... F-6
Notes to Financial Statements.............................................................................. F-7
</TABLE>

F-1
<PAGE>
FINANCIAL STATEMENTS

INDEPENDENT AUDITORS' REPORT

The Board of Directors and Stockholders of
The Historic Bellefonte Brewery, Inc.:

We have audited the accompanying balance sheet of The Historic Bellefonte
Brewery, Inc. (a development stage enterprise) as of July 31, 1996 and the
related statements of operations, stockholders' equity and cash flows for the
period March 1, 1996 (inception) to July 31, 1996. These financial statements
are the responsibility of the Company's management. Our responsibility is to
express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of The Historic Bellefonte
Brewery, Inc. (a development stage enterprise) as of July 31, 1996 and the
results of its operations and cash flows for the period March 1, 1996
(inception) to July 31, 1996, in conformity with generally accepted accounting
principles.

KPMG Peat Marwick LLP

August 15, 1996
State College, Pennsylvania

F-2
<PAGE>
THE HISTORIC BELLEFONTE BREWERY, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
BALANCE SHEET

ASSETS

<TABLE>
<CAPTION>
JULY 31,
1996
------------
<S> <C>
Cash................................................................................................ $ 924
Deposit -- land escrow.............................................................................. 44,000
Deferred organization and offering expenses......................................................... 103,397
------------
Total assets.................................................................................... 148,321
------------
------------

LIABILITIES AND STOCKHOLDERS' EQUITY

Accounts payable -- trade........................................................................... 69,170
Loan payable -- officers............................................................................ 36,000
------------
Total liabilities:.............................................................................. 105,170
------------
Stockholders' equity:
Preferred stock, $1 par value, 25,000,000 shares authorized, none issued and outstanding.......... --
Common stock, no par value, 50,000,000 shares authorized, 412,500 issued and outstanding.......... 50,000
Deficit accumulated during development stage...................................................... (6,849)
------------
Total stockholders' equity...................................................................... 43,151
------------
Total liabilities and stockholders' equity...................................................... $ 148,321
------------
------------
</TABLE>

See accompanying notes to financial statements.

F-3
<PAGE>
THE HISTORIC BELLEFONTE BREWERY, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
STATEMENT OF OPERATIONS
PERIOD MARCH 1, 1996 (DATE OF INCEPTION)
TO JULY 31, 1996

<TABLE>
<CAPTION>
MARCH 1, 1996
(DATE OF
INCEPTION)
TO JULY 31, 1996
-----------------
<S> <C>
Expenses incurred in the development stage:
Professional expenses........................................................................ $ 4,635
Miscellaneous expenses....................................................................... 2,214
--------
Net loss....................................................................................... 6,849
--------
--------
Net loss per common share...................................................................... $ (.02)
--------
--------
Weighted average number of common shares outstanding........................................... 307,353
--------
--------
Pro forma net loss per common share (1)........................................................ $ (.04)
--------
--------
Pro forma weighted average number of common shares outstanding (1)............................. 153,677
--------
--------
</TABLE>

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

(1) Calculated based on 206,250 shares which are net of condition shares placed
in escrow.

See accompanying notes to financial statements.

F-4
<PAGE>
THE HISTORIC BELLEFONTE BREWERY, INC.
(A DEVELOPMENT STATE ENTERPRISE)
STATEMENT OF STOCKHOLDERS' EQUITY
PERIOD MARCH 1, 1996 (DATE OF INCEPTION)
TO JULY 31, 1996

<TABLE>
<CAPTION>
COMMON STOCK TOTAL
-------------------- ACCUMULATED STOCKHOLDERS'
SHARES AMOUNT DEFICIT EQUITY
--------- --------- ------------- ------------
<S> <C> <C> <C> <C>
Original stock issuance....................................... 412,500 $ 50,000 -- $ 50,000
Net loss...................................................... -- -- (6,849) (6,849)
--------- --------- ------ ------------
Balance at July 31, 1996...................................... 412,500 $ 50,000 (6,849) $ 43,151
--------- --------- ------ ------------
--------- --------- ------ ------------
</TABLE>

See accompanying notes to financial statements.

F-5
<PAGE>
THE HISTORIC BELLEFONTE BREWERY, INC.
(A DEVELOPMENT STATE ENTERPRISE)
STATEMENT OF CASH FLOWS

PERIOD MARCH 1, 1996 (DATE OF INCEPTION)
TO JULY 31, 1996

<TABLE>
<CAPTION>
MARCH 1, 1996
(DATE OF
INCEPTION)
TO JULY 31, 1996
-----------------
<S> <C>
Cash flows from operating activities:
Net loss..................................................................................... $ (6,849)
Increase (decrease) in cash due to changes in:
Deposit -- land escrow..................................................................... (44,000)
Deferred organization and offering expenses................................................ (103,397)
Accounts payable........................................................................... 69,170
-----------------
Net cash used in operating activities.......................................................... (85,076)
-----------------
Cash flows from investing activities........................................................... --
-----------------
Cash flows from financing activities:
Proceeds from note payable................................................................... 36,000
Proceeds from issuance of common stock....................................................... 50,000
-----------------
Net cash from financing activities............................................................. 86,000
-----------------
Net increase in cash........................................................................... 924
Cash at beginning of period.................................................................... --
-----------------
Cash at end of period.......................................................................... $ 924
-----------------
-----------------
</TABLE>

See accompanying notes to financial statements.

F-6
<PAGE>
THE HISTORICAL BELLEFONTE BREWERY, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
NOTES TO FINANCIAL STATEMENTS
JULY 31, 1996

(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

ORGANIZATION AND DEVELOPMENT STAGE

The Historic Bellefonte Brewery, Inc. (a development stage enterprise) (the
Company) was incorporated on March 1, 1996 and was formed to build and operate a
regional craft brewery in Bellefonte, Pennsylvania.

The Company is in the development stage and has been engaged in principally
organizational activities, including raising capital, recruiting officers and
employees, application to state and federal authorities for necessary approvals,
and execution of certain agreements.

DEPOSIT -- LAND ESCROW

Deposit consists of funds placed in escrow for the purchase of property
located in Bellefonte, Pennsylvania.

ACCOUNTING ESTIMATES

The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the recorded amounts of revenues and expenses during the
reporting period. Actual results could differ from these estimates.

EARNINGS PER SHARE

The net loss per common share was determined by dividing the net loss by the
applicable shares outstanding during the period.

(2) LOAN PAYABLE -- OWNER
The Company has financed a portion of its development stage operations
through borrowing from certain officers and directors. The amounts have been
advanced on an as needed basis at the prime rate and principal repayment terms
have not been determined as of July 31, 1996.

(3) INCOME TAXES
The Company, a Pennsylvania corporation, will incur federal and state income
tax expense (benefit) based on its taxable income (loss). The Company will use
the asset and liability method of accounting for income taxes. Under the asset
and liability method, deferred tax assets and liabilities are recognized for the
estimated future tax consequences attributable to differences between the
financial statement carrying amounts of existing assets and liabilities and
their respective tax bases. Deferred tax assets and liabilities are measured
using enacted tax rates in effect for the year in which those temporary
differences are expected to be recovered or settled. The effect on deferred tax
assets and liabilities of a change in tax rates is recognized in income in the
period that includes the enactment date.

Future benefit of tax loss carryforwards has not been recorded as management
believes that the net tax benefit is not likely to be realized.

Certain costs incurred in the organization, start up and financing of the
Company will be capitalized under the Internal Revenue Code and will be
amortized over a 60 month period.

F-7
<PAGE>
THE HISTORICAL BELLEFONTE BREWERY, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JULY 31, 1996

(4) LINE OF CREDIT
The Company entered into a $100,000 unsecured line of credit agreement in
July 1996. Under terms of the agreement, borrowings under the line of credit
bear interest at prime and are personally guaranteed by certain officers of the
Company. There were no borrowings on the line at July 31, 1996.

(5) ESCROW OF COMMON STOCK

The Company and its principal shareholders have entered into an agreement to
place into escrow the 412,500 shares of the Company's common stock owned by the
principal shareholders. Of the escrowed shares, 206,250 shares (the "condition
shares") are subject to a return to the Company if the performance goals as
defined in the agreement are not satisfied. Regardless of the Company's
performance, however, the remaining 206,250 shares will be released to the
principal shareholders no later than at the end of seven years as set forth in
the agreement. This agreement is effective upon the initial closing of the
Company's offering of common stock filed on a Form SB-2.

If performance goals are met, all 412,500 shares will be released to the
principal shareholders as set forth in the agreement and the Company will record
compensation expense in the period the shares are released based on the then
fair market value of the Common Stock. No compensation expenses was recorded for
the period March 1, 1996 (inception) to July 31, 1996.

The calculation of earnings per share at July 31, 1996 considered the
412,500 common shares outstanding in determining the weighted average number of
shares. When the initial closing occurrs, 206,250 condition shares will be
excluded from the calculation of earnings per share, as they represent
contingent shares, for all periods until the condition shares are released to
the principal shareholders.

During the term of the escrow, the principal shareholders will retain voting
rights to all of the escrowed shares. The escrow agreement also provides for the
accumulation of dividends during the escrow period to the extent shares are
released to the principal shareholders.

F-8
<PAGE>
- -------------------------------------------
-------------------------------------------
- -------------------------------------------
-------------------------------------------

IN CONNECTION WITH THE OFFERING, NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS
PROSPECTUS AND, IF GIVEN OR MADE, SUCH OTHER INFORMATION OR REPRESENTATIONS
SHOULD NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY. THIS
PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL, OR A SOLICITATION OF AN OFFER
TO BUY, SHARES IN ANY STATE WHERE THE OFFER AND SALE OF THE SHARES IS NOT
LAWFUL. THE DELIVERY OF THIS PROSPECTUS AT ANY TIME DOES NOT IMPLY THAT THE
INFORMATION HEREIN CONTAINED IS CORRECT AS OF ANY TIME SUBSEQUENT TO THE DATE
HEREOF. THE COMPANY RESERVES THE RIGHT TO REJECT OR ACCEPT SUBSCRIPTIONS FOR THE
PURCHASE OF SHARES IN WHOLE OR IN PART FOR ANY REASON.

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

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
---------
<S> <C>
Available Information.......................... 2
Summary........................................ 3
Investor Suitability........................... 5
Risk Factors................................... 5
Determination of Offering Price................ 11
Use of Proceeds................................ 12
Capitalization................................. 14
Dilution....................................... 14
Dividend Policy................................ 15
Plan of Operation.............................. 15
Business....................................... 17
Management..................................... 26
Security Ownership of Management and Certain
Shareholders.................................. 27
Certain Transactions........................... 29
Description of Common Stock.................... 29
Plan of Distribution........................... 33
Legal Matters.................................. 34
Independent Accountants........................ 34
</TABLE>

A MINIMUM OF 500,000 AND A MAXIMUM OF 1,250,000

THE HISTORIC BELLEFONTE BREWERY, INC.

COMMON STOCK

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

PROSPECTUS
---------------------

, 1996

ITEM 24. INDEMNIFICATION OF DIRECTORS AND OFFICERS.

The Company's By-laws provide that the Company shall indemnify its officers
and directors to the fullest extent permitted by Pennsylvania law. Sections 1741
and 1742 of the Pennsylvania Business Corporation Law (the "PBCL") provide that
a business corporation may indemnify directors and officers against liabilities
that may incur as such provided that the particular person acted in good faith
and in a manner he or she reasonably believed to be in, or not opposed to, the
best interests of the corporation, and, with respect to any criminal proceeding,
had no reasonable cause to believe his or her conduct was unlawful. In general,
the power to indemnify under these sections does not exist in the case of
actions against a director or officer by or in the right of the corporation if
the person otherwise entitled to indemnification shall have been adjudged to be
liable to the corporation unless it is judicially determined that, despite the
adjudication of liability but in view of all the circumstances of the case, the
person is fairly and reasonably entitled to indemnification for speciifed
expenses. The Corporation is required to indemnify directors and officers
against expenses they may incur in defending actions against them in such
capacities if they are successful on the merits or otherwise in the defense of
such actions.

Section 1713 of the PBCL permits the shareholders to adopt a bylaw provision
relieving a director (but not an officer) of personal liability for monetary
damages except where (i) the director has breached the applicable standard of
care, and (ii) such conduct constitutes self-dealing, willful misconduct or
recklessness. The statute provides that a director may not be relieved of
liability for the payment of taxes pursuant to any federal, state or local law
or responsibility under a criminal statute.

Section 1746 of the PBCL grants a corporation broad authority to indemnify
its directors, officers and other agents for liabilities and expenses icurred in
such capacity, except in circumstances where the act or failure to act or
failure to act giving rise to the claim for indemnification is determined by a
court to have constituted willful misconduct or recklessness.

ITEM 25. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.

The following table sets forth the estimated expenses in connection with the
offering of the Common Stock pursuant to this Registration Statement, which
shall be borne by the Company.

<TABLE>
<S> <C>
Securities and Exchange Commission Registration Fee.............. $ 4,310
Printing and Engraving Expenses.................................. 25,000
Accounting Fees and Expenses..................................... 25,000
Legal Fees and Expenses.......................................... 100,000
Blue Sky Fees and Expenses....................................... 15,000
Fees of Transfer Agent and Registrar............................. 1,500
Miscellaneous Expenses........................................... 29,190
---------
Total........................................................ $ 200,000
---------
---------
</TABLE>

- ------------------------
* To be filed by amendment.

ITEM 26. RECENT SALES OF UNREGISTERED SECURITIES.

Since March 1, 1996 (inception), the Company has issued the following shares
of Common Stock and options to purchase shares of Common Stock without
registration in reliance on Section 4(2) of the Securities Act of 1933, as
amended:

<TABLE>
<CAPTION>
NUMBER OF
DATE SHARES PURCHASER CONSIDERATION
- ----------------- --------- -------------------------------- -------------
<S> <C> <C> <C>
March 1, 1996 206,250 Edward J. Lauth, III $ 25,000
May 17, 1996 206,250 Poole Financial Group, Inc. $ 25,000
</TABLE>

II-1
<PAGE>
ITEM 27. EXHIBITS.

<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ----------- ---------------------------------------------------------------------------------------------------
<C> <S>
3.1 Articles of Incorporation of the Company, filed March 1, 1996+
3.2 By-Laws of the Company+
4 Specimen Common Stock Certificate+
5 Opinion of Ballard Spahr Andrews & Ingersoll+
10.1 Purchase and Sale Agreement between Clasters and AquaPenn+
10.2 Assignment of Purchase and Sale Agreement between AquaPenn and the Company+
10.3 Amendment to Purchase and Sale Agreement between Clasters and the Company+
10.4 Extension of Agreement of Sale+
10.5 Employment Agreement between Michael D. Graham and the Company.+
10.6 Escrow Agreement between American Securities Transfer & Trust, Inc. and the Company.+
10.7 Form of Stock Escrow and Lock-In Agreement between Edward J. Lauth, III, PFG, the Company and the
Escrow Agent.+
23.1 Consent of KPMG Peat Marwick LLP*
23.2 Consent of Ballard Spahr Andrews & Ingersoll (included as part of Exhibit 5)
</TABLE>

- ------------------------
* Filed herewith.
+ Previously filed.

ITEM 28. UNDERTAKINGS.

The undersigned small business issuer hereby undertakes to:

(1) File, during any period in which it offers or sells securities, a
post-effective amendment to this registration statement to:

(i) Include any prospectus required by section 10(a)(3) of the
Securities Act;

(ii) Reflect in the prospectus any facts or events which, individually
or together, represent a fundamental change in the information in the
registration statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum offering range
may be reflected in the form of prospectus filed with the Commission
pursuant to Rule 424(b)(Section 230.424(b) of this chapter) if, in the
aggregate, the changes in volume and price represent no more than a 20%
change in the maximum aggregate offering price set forth in the "Calculation
of Registration Fee" table in the effective registration statement; and

(iii) Include any additional or changed material information on the plan
of distribution.

(2) For determining any liability under the Securities Act, treat each
post-effective amendment as a new registration statement of the securities
offered, and the offering of the securities at that time to be the initial bona
fide offering.

(3) File a post-effective amendment to remove from registration any of the
securities that remain unsold at the end of the offering.

Insofar as indemnification for liabilities arising under the Securities Act
of 1933 (the "Act") may be permitted to directors, officers and controlling
persons of the small business issuer pursuant to the

II-2
<PAGE>
foregoing provisions, or otherwise, the small business issuer has been advised
that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable.

In the event that a claim for indemnification against such liabilities
(other than the payment by the small business issuer of expenses incurred or
paid by a director, officer or controlling person of the small business issuer
in the successful defense of any action, suit, or proceeding) is asserted by
such director, officer or controlling person in connection with the securities
being registered, the small business issuer will, unless in the opinion of its
counsel the matter has been settled by controlling precedent, submit to a court
of appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act and will be governed by
the final adjudication of such issue.

For determining any liability under the Securities Act, treat the
information omitted from the form of prospectus filed as part of this
registration statement in reliance upon rule 430A and contained in a form of
prospectus filed by the small business issuer pursuant to Rule 424(b)(1) or (4)
or 497(h) under the Securities Act (Sections 424(b)(1),(4) or 230.497(h)) as
part of this registration statement as of the time the Commission declared it
effective.

For determining any liability under the Securities Act, treat each
post-effective amendment that contains a form of prospectus as a new
registration statement for the securities offered in the registration statement,
and that offering of the securities at that time as the initial bona fide
offering of those securities.

II-3
<PAGE>
SIGNATURES

In accordance with the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements of filing on Form SB-2 and authorized this Amendment No. 4
to Registration Statement to be signed on its behalf by the undersigned, in the
City of Bellefonte, Pennsylvania, on the 22nd day of November, 1996.

THE HISTORIC BELLEFONTE BREWERY, INC.

By: /s/ EDWARD J. LAUTH, III

-----------------------------------
Edward J. Lauth, III
CHAIRMAN AND DIRECTOR

SIGNATURES

In accordance with the requirements of the Securities Act of 1933, this
Amendment No. 4 to Registration Statement was signed by the following persons in
the capacities and on the dates indicated.

<TABLE>
<CAPTION>
SIGNATURES TITLE DATE
- ------------------------------------------------------ -------------------------------- -----------------------

<C> <S> <C>
Chairman and Director (Principal
/s/ EDWARD J. LAUTH, III Executive Officer and Principal
------------------------------------------- Financial and Accounting November 22, 1996
Edward J. Lauth, III Officer)

------------------------------------------- Director November 22, 1996
Matthew J. Suhey

/s/ SANDRA L. POOLE
------------------------------------------- Director November 22, 1996
Sandra L. Poole

/s/ J. RANDALL WOOLRIDGE
------------------------------------------- Director November 22, 1996
J. Randall Woolridge
</TABLE>

<PAGE>

EXHIBIT 23.1

ACCOUNTANT'S CONSENT

The Board of Directors and Stockholders of
The Historic Bellefonte Brewery, Inc.:

We consent to the use of our report included herein and to the reference to
our firm under the heading "Independent Accountants" in the prospectus.

KPMG Peat Marwick LLP

November 22, 1996
State College, Pennsylvania