EXHIBIT 18



February 4, 2002


VIA FACSIMILE & CERTIFIED MAIL

Ms. Sarah McDaniel
Investor Relations
Mendocino Brewing Company, Inc.
P. O. Box 547
Mountain Ranch, CA 95246

         RE:      Notification of Potential Delisting Action

Dear Ms. McDaniel:

PCX Equities,  Inc.  ("PCXE") has reviewed  Mendocino  Brewing  Company,  Inc.'s
("Company")  compliance  with  PCXE's  continued  listing  requirements  and has
determined  that the Company's  Common Stock may be subject to the initiation of
delisting   proceedings.   This   determination   was  based  on  the  Company's
non-compliance with PCXE's listing  maintenance  requirement for share bid price
[PCXE Rule 5.5(h)(4)].

At its Tuesday, March 5, 2002 meeting (to be held at PCXE corporate headquarters
at 11:00  a.m.),  PCXE will  conduct a formal  review of the  Company's  listing
status and actions taken to specifically  address the share bid price deficiency
in evaluating  whether  continued  listing is appropriate.  That meeting will be
conducted pursuant to PCXE rule 5.5(m). If PCXE decides in favor of delisting at
such meeting,  the Company's  Common Stock will be suspended from trading before
the opening of business on Wednesday, March 6, 2002.

You are  invited to submit in writing  any  relevant  information  for review at
PCXE's March 5 meeting no later than  February 25, 2002.  PCXE will consider any
reasons  you provide in writing as to why you  believe  the  Company's  security
should not be delisted.

The Company will receive written notification of PCXE's decision (via facsimile)
by the close of  business  on  Tuesday,  March 5,  2002.  In the event that PCXE
determines to delist the Company's  Common Stock,  PCXE's  written  notification
will also provide relevant  information  regarding the Company's right to appeal
PCXE's decision to the Board of Directors and request a hearing pursuant to PCXE
Rule  5.5(m)(4  through 9).  Such  process is only  designed  to review  whether
cause(s)  for the  decision  were valid and whether  such  decision was effected
pursuant to PCXE rules.


                              Exhibit 18 - page 1





In the meantime,  the Company is reminded of its ongoing obligation to keep PCXE
apprised of any  corporate  development(s)  that may  reasonably  be expected to
impact the Company's operations and/or listing status. Any corporate disclosures
so provided will be handled with the strictest confidentiality.

Please contact me at (415) 393-4254 or Aaron Autajay at (415)  393-4208,  if you
have any questions.

Sincerely,


Michael A. Tomars
Managing Director,
Securities Qualification & Regulatory Services

cc:      A. L. Autajay
         K. L. Beck
         J. F. Chapin
         M. K. Levine


                              Exhibit 18 - page 2