SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

                                    FORM 10-Q

           Quarterly Report Pursuant to Section 13 or 15(d)
|X|        of the Securities Exchange Act of 1934.
           For the quarterly period ended March 31, 2000 or


           Transition Report Pursuant to Section 13
           or 15(d) of the Securities Exchange Act of 1934.
           For the transition period from _________ to _________.


                          Commission File Number 01912

                            SONOMAWEST HOLDINGS, INC.

             (Exact name of registrant as specified in its charter)
             ------------------------------------------------------

CALIFORNIA                                       94-1069729
----------                                       ----------
(State of incorporation)                         (IRS Employer Identification #)


1448 INDUSTRIAL AVENUE, SEBASTOPOL, CA           95472-4848
--------------------------------------           ----------
(Address of principal executive offices)         (Zip Code)


Registrant's telephone number, including area code:                 707/824-2548
--------------------------------------------------


              100 Stony Point Road, Suite 200, Santa Rosa, Ca 95401
              -----------------------------------------------------
              (Former Name, Former Address and Former Fiscal Year,
                         if Changed Since Last Report)


Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days.

YES:   X             NO:
     -----               -----


As of May 15, 2000,  there were 1,521,467  shares of common stock, no par value,
outstanding.


<PAGE>

                            SONOMAWEST HOLDINGS, INC.

                                TABLE OF CONTENTS

PART  I.   FINANCIAL INFORMATION                                            PAGE
                                                                            ----
   Item 1. Condensed Consolidated Financial Statements

     Condensed Consolidated Balance Sheets at March 31, 2000 and
       June 30, 1999...........................................................3
     Condensed Consolidated Statements of Earnings - Three and Nine Months
       Ended March 31, 2000 and 1999...........................................4
     Condensed Consolidated Statements of Cash Flows - Nine Months Ended
       March 31, 2000 and 1999.................................................5
     Notes to Condensed Consolidated Financial Statements......................6

   Item 2.  Management's Discussion and Analysis of Financial Condition
                               and Results of Operations.......................8



PART II.  OTHER INFORMATION

   Item 1.  Legal Proceedings.................................................11

   Item 6.  Exhibits and Reports on Form 8-K..................................11



   Signature..................................................................11






                                       2
<PAGE>

PART I. FINANCIAL INFORMATION
ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

                            SONOMAWEST HOLDINGS, INC.
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                                   (UNAUDITED)
                              AMOUNTS IN THOUSANDS
                              --------------------

                                                           3/31/00       6/30/99
                                                           -------       -------
CURRENT ASSETS:
---------------

Cash                                                       $ 7,962       $   548

Accounts receivable, net                                        99            --

Prepaid income taxes                                            --           566


Inventories, net                                                --            --

Prepaid expenses                                                42           165

Current deferred taxes, net                                  1,439         2,032

Net current assets of
 discontinued operations                                        --         6,473
                                                           -------       -------

Total current assets                                         9,542         9,784
                                                           -------       -------

Property, plant, equipment, net                              2,685         3,026


Net assets of discontinued operations                           --         3,968




Deferred income taxes, net                                     171           326

Other assets                                                    25            --
                                                           -------       -------
Total assets                                               $12,423       $17,104
                                                           =======       =======


                                                           3/31/00       6/30/99
                                                           -------       -------
CURRENT LIABILITIES:
--------------------

Borrowings under line of credit                            $    --       $ 5,745

Current maturities of long term debt                            51         1,416


Accounts payable                                                74           170

Income taxes payable                                            63            --

Accrued payroll and related liabilities                        139           277

Other accrued expenses                                          --           126

Net current liabilities of
   discontinued operations                                     358            --
                                                           -------       -------

Total current liabilities                                      685         7,734
                                                           -------       -------

Net liabilities of discontinued operations                     340            --

Long term debt-net of
    current maturities                                       2,553         2,860
                                                           -------       -------

Total liabilities                                            3,578        10,594
                                                           -------       -------

SHAREHOLDERS' EQUITY:
Capital stock                                                2,901         2,890
Warrants for common stock                                      456           456
  Retained earnings                                          5,488         3,164
Total shareholders' equity                                   8,845         6,510
                                                           -------       -------
Total liabilities and shareholders' equity                 $12,423       $17,104
                                                           =======       =======




            See Notes to Condensed Consolidated Financial Statements


                                       3
<PAGE>
                            SONOMAWEST HOLDINGS, INC.
                  CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
                                   (UNAUDITED)
                 AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS
<TABLE>
<CAPTION>
                                                                               Nine Months                Three Months
                                                                              Ended March 31             Ended March 31
                                                                           --------------------        ------------------
                                                                              2000         1999           2000       1999
                                                                           -------      -------        -------    -------

<S>                                                                        <C>          <C>            <C>        <C>
Rental revenue                                                             $   954      $   398        $   289    $   119

Operating costs                                                              1,543        1,256            709        743
                                                                           -------      -------        -------    -------
Other income (expense), net                                                    132         (375)            77       (147)
                                                                           -------      -------        -------    -------
Loss from continuing operations before income taxes                           (457)      (1,233)          (343)      (771)
Benefit for income taxes                                                      (183)        (432)          (137)      (285)
                                                                           -------      -------        -------    -------
Net loss from continuing operations                                           (274)        (801)          (206)      (486)
                                                                           -------      -------        -------    -------
DISCONTINUED OPERATIONS:
   Earnings (loss) from discontinued operations, net of income taxes            32        2,161           (133)     1,653
   Gain (loss) on sale of discontinued business, net of income taxes         2,566           --           (334)        --
                                                                           -------      -------        -------    -------
NET EARNINGS (LOSS) FROM DISCONTINUED OPERATIONS                             2,598        2,161           (467)     1,653
                                                                           -------      -------        -------    -------
NET EARNINGS (LOSS)                                                         $2,324       $1,360          $(673)    $1,167
                                                                           =======      =======        =======    =======
WEIGHTED AVERAGE COMMON SHARES AND EQUIVALENTS:
  Basic                                                                      1,520        1,513          1,521      1,516
                                                                           =======      =======        =======    =======
  Diluted                                                                    1,546        1,548          1,521      1,564
                                                                           =======      =======        =======    =======
EARNINGS (LOSS) PER COMMON SHARE
Continuing operations
  Basic                                                                    $ (0.18)     $ (0.53)       $ (0.14)   $ (0.32)
                                                                           =======      =======        =======    =======
  Diluted                                                                  $ (0.18)     $ (0.53)       $ (0.14)   $ (0.32)
                                                                           =======      =======        =======    =======
Discontinued operations:
  Basic                                                                     $ 1.71       $ 1.43        $ (0.31)    $ 1.09
                                                                           =======      =======        =======    =======
  Diluted                                                                   $ 1.68       $ 1.40        $ (0.31)    $ 1.06
                                                                           =======      =======        =======    =======
Net earnings (loss):
  Basic                                                                     $ 1.53       $ 0.90        $ (0.44)    $ 0.77
                                                                           =======      =======        =======    =======
  Diluted                                                                   $ 1.50       $ 0.88        $ (0.44)    $ 0.75
                                                                           =======      =======        =======    =======
</TABLE>


            See Notes to Condensed Consolidated Financial Statements



                                       4

<PAGE>

                            SONOMAWEST HOLDINGS, INC.
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)
                              AMOUNTS IN THOUSANDS
                FOR THE NINE MONTHS ENDED MARCH 31, 2000 AND 1999

<TABLE>
<CAPTION>
CASH FLOWS FROM OPERATING ACTIVITIES:                                    2000                  1999
                                                                         ----                  ----

<S>                                                                    <C>                    <C>
Net earnings                                                           $2,324                 $1,360

Adjustments to reconcile net earnings (loss)
      to net cash used for operating activities:
      Earnings from discontinued operations, net                          (32)                (2,161)
      Gain on sale of discontinued business, net                       (2,566)                    --
      Depreciation and amortization expense                               265                    333

      Changes in assets & liabilities:
      Accounts receivable, net                                            (99)                    --
      Prepaid income taxes                                                566                   (735)
      Prepaid and other assets                                             98                     --
      Accounts payable                                                    (96)                    --
      Income taxes payable                                                63
      Accrued payroll & related liabilities                              (138)                    --
      Other accrued expenses                                             (126)                    --
                                                                       ------                 ------
Net cash provided by
      (used for) continuing operating activities                          259                 (1,203)
                                                                       ------                 ------
      Net cash provided by (used for) discontinued operations          13,275                 (2,743)
                                                                       ------                 ------
      Net cash provided by (used for) operating activities             13,534                 (3,946)
                                                                       ------                 ------

CASH FLOWS FROM INVESTING ACTIVITIES
      Capital expenditures                                                (63)                  (219)
                                                                       ------                 ------
      Net cash provided by (used for) discontinued operations           1,349                   (503)
                                                                       ------                 ------
      Net cash provided by (used for) investing activities              1,286                   (722)
                                                                       ------                 ------

CASH FLOWS FROM FINANCING ACTIVITIES:
      Borrowings under the line of credit                               3,727                 20,540
      Payments on the line of credit                                   (9,472)               (17,837)
      Principal payments of current debt                               (1,672)                  (388)
      MINCO financing proceeds                                            --                   2,100
      Issuance of common stock                                             11                     40
                                                                       ------                 ------
      Net cash provided by (used for) financing activities             (7,406)                 4,455
                                                                       ------                 ------

NET INCREASE (DECREASE) IN CASH                                         7,414                   (213)

CASH AT THE BEGINNING OF THE YEAR                                         548                    385
                                                                       ------                 ------

TOTAL CASH AT THE END OF THE PERIOD                                    $7,962                   $172
                                                                       ======                   ====
</TABLE>

            See notes to Condensed Consolidated Financial Statements


                                       5
<PAGE>

                            SONOMAWEST HOLDINGS, INC.
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                        NINE MONTHS ENDED MARCH 31, 2000
                        --------------------------------

Note 1-

The  accompanying  fiscal 2000 and 1999 unaudited  interim  statements have been
prepared  pursuant  to the  rules of the  Securities  and  Exchange  Commission.
Certain  information  and  disclosures  normally  included  in annual  financial
statements prepared in accordance with generally accepted accounting  principles
have been condensed or omitted pursuant to such rules and regulations,  although
the Company believes these  disclosures are adequate to make the information not
misleading.  In the opinion of management,  all adjustments necessary for a fair
presentation  for the periods  presented have been reflected and are of a normal
recurring nature except as discussed below.  These interim financial  statements
should be read in  conjunction  with the financial  statements and notes thereto
for each of the three years in the period  ended June 30,  1999.  The results of
operations  for the three- and  nine-month  periods ended March 31, 2000 are not
indicative  of the results that will be achieved for the entire year ending June
30, 2000.

Reclassifications  - Certain  previously-reported  amounts were  reclassified to
conform to the current presentation with respect to discontinued operations.

Note 2-

In July 1999, the Company  consummated an asset purchase agreement (the Purchase
Agreement)  with Tree Top, Inc. The Purchase  Agreement  governs the sale of all
intangible  assets  (primarily  trademarks,  know how and  customer  lists)  and
certain of the equipment  relating to the  Company's  processed  apple  products
line.  Although the Purchase  Agreement  excludes other product lines within the
Company's  ingredient  segment,  the Company is actively  seeking buyers for the
remaining  product  lines  of  the  ingredients  segment  and  has  discontinued
production of all ingredients  segment products.  Consequently,  the ingredients
segment has been  presented  as a  discontinued  operation  in the  accompanying
condensed consolidated financial statements.  The purchase price for the sale of
the processed  apple product line of $12,000,000 was paid in cash at the closing
date of the sale on July 30, 1999. In addition,  apple products inventories with
a net book value of $1.7 million  were purchased by Tree Top, Inc. at a price of
$1.9 million. Tree Top, Inc. did not assume any of the Company's liabilities. In
connection with the Purchase  Agreement,  the Company and certain  shareholders,
directors,  and  management  have agreed not to compete  with Tree Top,  Inc. in
processed  apple product  lines for a period of three to ten years.  In February
2000 certain  local apple  growers  filed suit against the Company and Tree Top,
Inc.  alleging that this sale and related  activities  created a monopoly in the
dried apple business in violation of federal and California law. The growers are
seeking treble damages,  punitive damages,  interest,  and attorney fees, all in
unnamed  amounts.  The Company feels that this suit is without merit and intends
to vigorously defend itself in this matter.

In the current  quarter the Company  decided to dispose of its organic  packaged
foods  operations  by the end of calendar  year 2000.  Accordingly,  the organic
packaged   foods  segment  is  included  in   discontinued   operations  in  the
accompanying  condensed  consolidated  financial  statements.  The  Company  has
received a preliminary  asset purchase offer for the  intellectual  property and
dried fruit inventory of the organic packaged goods segment. A loss on this sale
is not  anticipated.  The  Company  believes  that  final  negotiations  will be
successful and that the sale will close before June 30, 2000.  Upon the disposal
of the Company's organic packaged foods  operations,  the sole remaining line of
business will be its real estate management and rental operations.

During  the first  nine  months of  fiscal  2000,  the  Company  recorded  a net
after-tax gain of $2.6 million from the sale of the processed apple product line
and the disposal of the remaining product lines of the ingredients  segment. The
net after-tax  gain included $15.8 million of proceeds from the sales offset by:
a) the  write-down  of  assets  related  to the  ingredients  segment  to  their
estimated net realizable value (assets which were impaired as a direct result of
the decision to discontinue  the segment and sell the apple product  lines);  b)
costs to be incurred in closing the discontinued ingredients segment (consisting
primarily of severance  costs,  professional  fees,  relocation  costs and lease
buy-outs);  c) estimated  operating  losses to be incurred  during the wind-down
period; and d) estimated loss on sale of equipment at auction.


                                       6
<PAGE>


Summarized historical information of the discontinued operations is as follows:

<TABLE>
<CAPTION>
                                                                                           NINE MONTHS ENDED MARCH 31,
                                                                                           ---------------------------
                                                                                            2000                  1999
                                                                                            ----                  ----
<S>                                                                                      <C>                   <C>
Income statement data:
      Revenues                                                                           $9,264,000            $29,929,000
      Costs and expenses                                                                ($9,211,000)           (26,604,000)
                                                                                        -----------            -----------
      Operating income                                                                       53,000              3,325,000
      Income tax expense                                                                    (21,000)            (1,164,000)
                                                                                        -----------            -----------
      Income from discontinued operations, net of income taxes                             $ 32,000             $2,161,000
                                                                                        ===========            ===========

</TABLE>



<TABLE>
<CAPTION>
                                                                                     March 31, 2000           June 30,1999
                                                                                     --------------           ------------
<S>                                                                                      <C>                   <C>
Balance sheet data:

Accounts receivable, net of reserves of $106,000 and $463,000                              $149,000             $2,614,000
Inventories, net of reserves of $4,605,000 and $4,346,000                                   786,000              8,715,000
Prepaid expenses                                                                             31,000                323,000
                                                                                         ----------            -----------
      Total current assets of discontinued operations                                       966,000             11,652,000
Property, plant and equipment, net                                                           33,000              4,557,000
                                                                                         ----------            -----------
      Total assets of discontinued operations                                               999,000             16,209,000

Accounts payable                                                                            383,000              3,760,000
Accrued payroll and related liabilities                                                      58,000                972,000
Other accrued expenses                                                                        6,000                237,000
Capital lease liability for computer system                                                 624,000                799,000
Provision for severance, transaction costs, wind-down costs and other
      liabilities related to the decision to discontinue the segments                       626,000                     --
                                                                                          ---------            -----------
      Total liabilities of discontinued operations                                        1,697,000              5,768,000

      Net assets (liabilities) of discontinued operations                                 $(698,000)           $10,441,000
                                                                                          =========            ===========

The inventories included above have been adjusted to net realizable value.

Note 3 -

STATEMENT  OF CASH FLOWS - Interest  and income tax  payments  reflected  in the
Consolidated Statement of Cash Flows were as follows:
</TABLE>

                                             2000                    1999
                                             ----                    ----

     Interest paid                         $285,000               $ 338,000
     Income taxes paid                     $420,000               $ 108,000



                                       7

<PAGE>



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

SonomaWest Holdings,  Inc. (the "Company") is including the following cautionary
statement in this Form 10-Q to make  applicable  and take  advantage of the safe
harbor  provisions of the Private  Securities  Litigation Reform Act of 1995 for
any forward looking  statements  made by, or on behalf of, the Company.  Forward
looking  statements  include  statements  concerning plans,  objectives,  goals,
strategies,  future events or performance and underlying assumptions,  and other
statements  which  are  other  than  statements  of  historical  facts.  Certain
statements  contained  herein are forward looking  statements and,  accordingly,
involve risks and uncertainties  which could cause actual results or outcomes to
differ  materially from those expressed in the forward  looking  statements.  In
addition to other factors and matters discussed  elsewhere  herein,  these risks
and uncertainties  include, but are not limited to, uncertainties  affecting the
food processing  industry,  risks associated with  fluctuations in the price and
availability of raw materials, management of growth, adverse publicity affecting
organic  foods or the Company's  products,  and product  recalls.  The Company's
expectations,  beliefs  and  projections  are  expressed  in good  faith and are
believed  by  the  Company  to  have  a  reasonable  basis,   including  without
limitation,  management's  examination  of  historical  operating  trends,  data
contained in the Company's  records and other data available from third parties,
but  there  can be no  assurance  that  management's  expectations,  beliefs  or
projections  will result or be achieved or accomplished.  The Company  disclaims
any  obligation to update any  forward-looking  statements to reflect  events or
circumstances after the date hereof.

The  financial  statements  herein  presented  for the quarters  and  nine-month
periods  ended March 31, 2000 and 1999 reflect all the  adjustments  that in the
opinion of management are necessary for the fair  presentation  of the financial
position and results of operations for the periods then ended.  All  adjustments
during the periods  presented are of a normal  recurring nature unless otherwise
stated.

                                    OVERVIEW

Since the  Company  acquired  certain of the assets and  liabilities  of Made in
Nature,  Inc. in June 1998, the Company has operated in three business segments:
industrial dried fruit ingredients,  organic packaged foods and real estate. The
Company  commenced  a  strategic  reorganization  upon the  announcement  of the
proposed sale of the bulk of its apple-based industrial ingredients product line
in June 1999.  In August 1999 the decision was made to sell or  discontinue  all
product  lines in the  Company's  industrial  dried fruit  ingredients  business
segment. In January 2000, the Company decided to sell or discontinue its organic
packaged foods business. As a result of these decisions,  both business segments
are considered discontinued  operations and their operating results,  results of
cash flows and net  assets are  reflected  outside of the  Company's  continuing
operations.  The  Company's  sole  remaining  line of business  will be its real
estate management and rental operations.

                             DISCONTINUED OPERATIONS

In July 1999 the Company sold the bulk of its apple-based industrial ingredients
product  line to Tree  Top,  Inc.,  of  Selah,  Washington.  This  product  line
represented 55% and 81% of the Company's sales for the years ended June 30, 1999
and 1998, respectively.  At the same time, the Company also decided to close its
only apple  processing  plant in Sebastopol,  California.  This sale,  which was
recorded in the first  quarter of fiscal 2000,  is an  important  element of the
Company's  strategic plan to increase the return on its investments and increase
shareholder  value by  exiting  businesses  with low  returns  and high  capital
requirements.  The  transaction  provided  financial  resources  to support  the
Company's real estate and other business opportunities.

The terms of the sale included the payment of $12 million cash to the Company in
July 1999.  Tree Top also purchased  related  product line  inventories for $1.9
million in September and October 1999.  The after-tax  gain on the sale was $2.6
million.  The net gain is based upon the cash proceeds and the disposal value of
assets not  acquired by Tree Top,  offset by  severance  and  relocation  costs,
wind-down costs,  transaction costs and identified  liabilities directly related
to the  decision  to  discontinue  the  business  segments.  These  costs may be
adjusted in the future  depending  upon the final  wind-down  of the  businesses
which is expected to run through June 30, 2000.

As  discussed  further  in  Note  2  to  the  Condensed  Consolidated  Financial
Statements,  certain local apple growers filed suit against the Company and Tree
Top,  Inc.  in February  2000  alleging  that this sale and  related  activities
unlawfully monopolized the dried apple business. Unspecified treble and punitive
damages, interest and attorney fees are sought by the growers. The Company feels
that the suit is without merit and intends to  vigorously  defend itself in this
matter.


                                       8

<PAGE>



In the first nine months of fiscal 2000, the Company recorded after-tax earnings
from  discontinued  operations of $32,000,  as compared with  $2,161,000 for the
corresponding  period in fiscal  1999.  The  after-tax  earnings  resulted  from
ingredients and organic  packaged foods business sales of $9.3 million in fiscal
2000 versus $29.9  million in fiscal  1999.  The decline in sales was due to the
liquidation of the apple ingredients business during the first quarter of fiscal
2000 and a significant  decline in the sales of Perma Pak products.  The Company
is actively  marketing  all of its  discontinued  businesses  and has received a
preliminary  offer for a portion  of the  organic  packaged  foods  business  as
discussed  more  fully  in  Note  2  to  the  Condensed  Consolidated  Financial
Statements.  There can be no assurances  that there will be a sale of all or any
of the  remaining  businesses.  However,  the Company  plans to exit the organic
packaged  foods business by seeking  additional  buyers should the proposed sale
not be completed.  The  anticipated  pick up in demand for low  moisture,  shelf
stable  foods  in late  1999  and  early  2000  surrounding  Y2K  fears  did not
materialize.  As a result, the Company recorded  additional reserves of $557,000
in March 2000 to reflect the estimated  impairment of its Perma Pak inventories.
These reserves are included in the gain (loss) on sale of discontinued business,
net of income taxes, in the accompanying  Condensed  Consolidated  Statements of
Earnings.

                        RESULTS OF CONTINUING OPERATIONS

The  Company's   continuing  line  of  business  consists  of  the  leasing  and
development  of the Company's  real estate.  The Company  intends to develop its
real  estate  largely  for  industrial  rental.  The  current use permit for the
Company's former  production site requires that the facility be used in part for
diversified  agricultural purposes. The Company is attempting to broaden the use
permit to allow other types of  activities,  but there can be no assurance  that
such efforts will be successful.

RESULTS OF OPERATIONS

Rental revenue  represents the Company's  leasing of warehouse  space in several
buildings  and a yard,  as well as its  former  production  facility.  There are
leases with  approximately  twenty  tenants that have varying terms ranging from
month-to-month  to eight  years with  options  to extend.  Several of the larger
tenants  did  not  exercise  their  options  and  vacated  the  premises  at the
expiration of their leases during the current quarter.  Replacement tenants have
not yet been obtained,  resulting in an increase in overall vacancy at March 31,
2000.  While the Company and its  retained  broker are  actively  marketing  the
properties to prospective  tenants,  there can be no assurance that tenants will
be found in the near term. As a result, the Company's  operating results will be
negatively  impacted  as  long  as  the  tenant  rental  revenue  stream  is not
sufficient to cover existing  overhead costs. Cost reduction efforts to minimize
any avoidable  spending  have been  undertaken  to minimize  negative  operating
results and cash flows while the tenant  search  progresses.  Fiscal 2000 rental
revenues have increased $556,000 and $170,000, or 140% and 143% for the nine and
three months ended March 31,  respectively,  as compared with the  corresponding
periods in the prior year.  The  increased  revenues  are  primarily  due to the
short-term  rental of warehouse and cold storage  facilities  during fiscal 2000
that had been used in the Company's  apple  ingredients  business  during fiscal
1999.  Higher  market  rental  rates,  CPI  increases,  and the  leasing of some
previously  vacant space also contributed to the revenue increase in the current
fiscal year.

Operating costs include only direct costs related to real estate  operations and
all general corporate overhead costs. Only direct operating costs related to the
ingredients and organic packaged foods businesses were allocated to discontinued
operations in the Condensed Consolidated Statements of Operations. For the three
months ended March 31, 2000,  operating  costs related to continuing  operations
decreased 5% from the  corresponding  period of the prior year to $709,000.  For
the nine months  ended March 31, 2000,  operating  costs  related to  continuing
operations  increased  23% from the  corresponding  period of the prior  year to
$1,543,000.  The decline for the three months ended March 31, 2000 was primarily
due to reduced  corporate  costs due to the  downsizing  of the operation in the
third  quarter  and the  cost  reduction  efforts  in the real  estate  business
discussed  above.  The  increase  for the nine  months  ended March 31, 2000 was
primarily due to increased  temporary  labor costs incurred during the first two
quarters of fiscal year 2000.

The  effective  tax rate for the three and nine months  ended March 31, 2000 was
40%, or  approximately  the statutory  rate after the federal  benefit for state
income taxes.

                                       9
<PAGE>

LIQUIDITY AND CAPITAL RESOURCES

The Company  utilized  the $15.8  million  net  proceeds  from its  discontinued
operations  (including  $12 million from the sale of its apple product lines) to
reduce  borrowings  under the bank line of  credit  and to retire a  significant
portion of its debt.  Cash balances  increased from $548,000 at June 30, 1999 to
$7,962,000 at March 31, 2000. The Company retired two share  repurchase notes in
January 2000 to reduce long-term debt another  $271,000.  It is anticipated that
existing  cash  balances  will be adequate to meet the  Company's  needs for the
coming year.


                                       10

<PAGE>



PART II
OTHER INFORMATION

Item 1. Legal Proceedings

A complaint was filed  February 23, 2000 by several  local apple growers  naming
the Company and Tree Top, Inc. as  defendants.  The  complaint  alleges that the
July 1999 sale of the Company's apple ingredients business to Tree Top, Inc. was
an unlawful  combination in restraint of trade in the dried apple business under
federal and  California  law; that the Company  conspired with Tree Top, Inc. to
monopolize the dried apple business; and that such acts also constitute unlawful
business practices under the California  Business and Professions Code. The suit
seeks treble  damages,  punitive  damages,  interest and attorney  fees,  all in
unnamed  amounts.  The Company  feels this suit is without  merit and intends to
defend itself vigorously.

Item 6. Exhibits & Reports on Form 8-K

a.    Exhibits
      (27) Financial Data Schedule (by electronic filing only)

b.    Reports on Form 8-K -

On March 23, 2000 the Company filed a Form 8-K relating to the relocation of its
corporate offices to Company-owned facilities in Sebastopol, CA.




SIGNATURES

Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned thereunto duly authorized.

Date: May 15, 2000


/s/ Gary L. Hess

--------------------------------------------------------------
Gary L. Hess,
Chief Executive Officer, President and Chief Financial Officer




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