SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-Q

  X             Quarterly Report Pursuant to Section 13 or 15 (d) of the
-----           Securities Exchange Act of 1934.  For the quarterly period
                ended December 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
        --------------------------------------------------



        (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 December 31, 2000,  there were  1,523,231  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 December 31, 2000 and
         June 30, 2000........................................................3

         Condensed Consolidated Statements of Earnings - Three and Six Months
         Ended December 31, 2000 and 1999.....................................4

         Condensed Consolidated Statements of Cash Flows - Six Months Ended
         December 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 4.   Submission of Matters to a Vote of Security Holders............11

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

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




<PAGE>


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

                            SONOMAWEST HOLDINGS, INC.
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                                   (UNAUDITED)
                              AMOUNTS IN THOUSANDS
<TABLE>
<CAPTION>

CURRENT ASSETS:                                                                          12/31/00                6/30/00
---------------                                                                          --------                -------
<S>                                                                                      <C>                      <C>
Cash and cash equivalents                                                                $ 7,003                  $8,359
Restricted cash  (see note 6)                                                                600                       -
Accounts Receivable, less allowance for uncollectible accounts of $10 and
 $47, respectively                                                                           110                     110
Prepaid income taxes                                                                         316                     816
Prepaid expenses                                                                              61                      87
Current deferred income taxes, net                                                           643                     621
                                                                                        --------                --------
Total current assets                                                                       8,733                   9,993

Real property, net                                                                         2,624                   2,854
Net assets of discontinued operations                                                        122                     122
Investment                                                                                   329                       -
                                                                                        --------                 -------

Total Assets                                                                             $11,808                 $12,969
                                                                                         =======                 =======

CURRENT LIABILITIES:
-------------------
Accounts payable and accrued expenses                                                    $  148                   $ 225
Unearned rents and deposits                                                                 162                     143
Current maturities of long term debt                                                         55                     617
Net liabilities of discounted operations                                                    251                     628
                                                                                        --------               --------
Total current liabilities                                                                   616                   1,613
Long term debt-net of current maturities                                                  1,947                   1,974
Deferred income taxes, net                                                                  147                     147
                                                                                        --------               --------
Total Liabilities                                                                         2,710                   3,734
                                                                                        --------               --------
SHAREHOLDERS' EQUITY:
Preferred stock: 2,500 shares authorized; no shares outstanding                               -                       -
Common stock: 5,000 shares authorized, no par value; 1,523 and 1,522                      3,254                   2,905
   shares outstanding, respectively
Warrants for common stock                                                                     -                     456
Retained earnings                                                                         5,844                   5,874
                                                                                       ---------                -------
Total shareholders' equity                                                                9,098                   9,235
                                                                                       ---------                -------

Total Liabilities and Shareholders' Equity                                              $11,808                 $12,969
                                                                                       =========                =======

            See Notes to Condensed Consolidated Financial Statements
</TABLE>

<PAGE>


                            SONOMAWEST HOLDINGS, INC.
                  CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
                                   (UNAUDITED)
                 AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS

<TABLE>
<CAPTION>

                                                                                   Six Months               Three Months
                                                                               Ended December 31         Ended December 31
                                                                               -----------------         -----------------
                                                                               2000         1999         2000         1999
                                                                               ----         ----         ----         ----
<S>                                                                             <C>          <C>          <C>           <C>
Rental revenue                                                                  $ 554        $ 666        $ 311         $465
Operating costs                                                                 1,030          964          513          585
Interest and Other income (expense), net                                          179          (3)           91           45
                                                                              --------     ---------    ---------    -------
Loss from continuing operations before income taxes                             (297)        (301)         (111)         (75)
Benefit for income taxes                                                        (120)        (120)          (45)         (30)
                                                                              --------     ---------    ---------    -------
Net loss from continuing operations                                             (177)        (181)         (66)         (45)
DISCONTINUED OPERATIONS:
   Earnings (loss) from discontinued operations, net of income taxes             147          278           57         (134)
   Gain (loss) on sale of discontinued business, net of income taxes               -        2,900            -         (349)
                                                                              --------     ---------    ----------   -------
NET EARNINGS (LOSS) FROM DISCONTINUED OPERATIONS                                 147        3,178           57         (483)
                                                                              --------     ---------    ----------   -------
NET EARNINGS (LOSS)                                                            $ (30)      $ 2,997        $ (9)      $ (528)
                                                                              ========     =========    ==========   =======
WEIGHTED AVERAGE COMMON SHARES AND
EQUIVALENTS
   Basic                                                                        1,522        1,520        1,522        1,520
   Diluted                                                                      1,545        1,551        1,548        1,542

EARNINGS (LOSS) PER COMMON SHARE
Continuing operations:
   Basic                                                                      $ (0.12)     $ (0.12)     $ (0.05)     $ (0.03)
   Diluted                                                                    $ (0.12)     $ (0.12)     $ (0.05)     $ (0.03)

Discontinued operations:
   Basic                                                                      $  0.10       $ 2.09      $  0.04      $ (0.32)
   Diluted                                                                    $  0.10       $ 2.05      $  0.04      $ (0.32)

Net earnings (loss):
   Basic                                                                      $ (0.02)      $  1.97    $  (0.01)    $  (0.35)
   Diluted                                                                    $ (0.02)      $  1.93    $  (0.01)    $  (0.35)

            See Notes to Condensed Consolidated Financial Statements
</TABLE>


<PAGE>


                            SONOMAWEST HOLDINGS, INC.
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)
                              AMOUNTS IN THOUSANDS
               FOR THE SIX MONTHS ENDED DECEMBER 31, 2000 AND 1999
<TABLE>
<CAPTION>

CASH FLOWS FROM OPERATING ACTIVITIES                                      2000                      1999
                                                                          ----                      ----
<S>                                                                        <C>                       <C>
Net earnings (loss)                                                        $(30)                     $2,997
Adjustments to reconcile net earnings (loss)
to net cash used for operating activities:
    Earnings from discontinued operations, net                             (147)                     (278)
    Gain on sale of discontinued business, net                                 -                   (2,900)
    Depreciation and amortization expense                                   242                       124

Changes in assets & liabilities:
    Prepaid income taxes                                                    500                        566
    Prepaid and other assets                                                 25                         74
    Accounts payable and accrued expenses                                   (77)                      (250)
    Income taxes payable                                                      -                        712
    Deferred income taxes, net                                              (22)                       748
    Unearned rents and deposits                                              19                          -
                                                                       ---------                  ----------
Net cash provided by continuing operating
    Activities                                                              510                      1,793
                                                                       ---------                  ----------
    Net cash provided by (used for) discontinued operations                (230)                    13,445
                                                                       ---------                  ----------
    Net cash provided by operating activities                               280                     15,238
                                                                       ---------                  ----------
CASH FLOWS USED IN INVESTING ACTIVITIES:
    Capital expenditures                                                    (11)                         -
    Investments                                                            (329)                         -
    Investing activities of discontinued operations                           -                         (38)
                                                                     -----------                   ---------
Net cash used in investing Activities                                      (340)                        (38)
                                                                     -----------                   ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
    Borrowings under the line of credit                                       -                           -
    Payments on the line of credit                                            -                      (5,745)
    Principal payments of long term debt                                   (589)                     (1,367)
    Issuance of common stock                                                   5                          7
    Warrant repurchase                                                     (112)                          -
                                                                     -----------                  -----------
    Net cash used for financing activities                                 (696)                      (7,105)
                                                                     -----------                  ------------
NET INCREASE (DECREASE) IN CASH                                            (756)                        8,095

CASH AND CASH EQUIVALENTS, BEGINNING OF
THE YEAR                                                                  8,359                           548
                                                                     -----------                  ------------
TOTAL CASH AND CASH EQUIVALENTS AT THE                                   $7,603                        $8,643
END OF THE PERIOD                                                    ===========                  ============

            See Notes to Condensed Consolidated Financial Statements
</TABLE>




<PAGE>



                            SONOMAWEST HOLDINGS, INC.
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                       SIX MONTHS ENDED DECEMBER 31, 2000

Note 1-

The  accompanying  fiscal 2001 and 2000 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,  2000.  The results of
operations  for the three and six month periods ended  December 31, 2000 are not
necessarily  indicative of the results that will be achieved for the entire year
ending June 30, 2001.

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

Note 2-

Cash and cash equivalents consist of demand deposits and short term money market
accounts.

Note 3-

The Company has  committed  itself to a $3 million  investment  in the preferred
stock of a privately held  telecommunications  company,  which is expected to be
funded in fiscal 2001 and 2002. The Company has invested $329,000 as of December
31, 2000. The Company has accounted for the investment using the cost method. It
is  expected  that the Company  will make the  remaining  investment  in several
installments throughout the fiscal years ending June 30, 2001 and 2002.

Note 4-

During the quarter ended  December 31, 2000,  the  Corporation  repurchased  and
retired  112,000  warrants for  $112,000.  The warrants  represented  a right to
purchase  112,000  shares of common  stock and had an  exercise  price of $8 per
share. The warrants were originally assigned a valued of $456,000.  Common stock
was increased by the difference  between the repurchase price and the originally
assigned value.

Note 5-

The Company's  Board of Directors  has  authorized a program to repurchase up to
375,000 shares of the Company's stock at $8.00 per share in a tender offer.  The
tender offer expires,  unless extended by the Company, on February 15, 2001. The
tender  offer is subject to  regulatory  filings and  approval by the  Company's
lender.

Note 6-

During December 2000, the Company entered into an agreement with its sole lender
in order to  modify  the  terms  of the  lending  agreement.  As a  result,  the
financial based debt covenant was amended. The new covenant requires the Company
to maintain a debt  service  coverage  ratio at least 1:15 to 1. Until such time
this ratio reaches 1.25 to 1, the Company is required to maintain  unrestricted,
unencumbered cash or marketable  securities of at least $600,000. As of December
31,  2000,  the  Company's  debt  service  ratio  was  between  1.15  and  1.25.
Consequently,  $600,000 is  classified as  restricted  cash on the  accompanying
balance  sheet.  Furthermore,  the terms of the loan  restrict  the Company from
incurring any additional indebtedness during the term of the loan.

Note 7-

In July 1999, the Company  consummated an asset purchase agreement (the Purchase
Agreement) with Tree Top, Inc. The Purchase  Agreement  governed 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  excluded other product lines within the
Company's  ingredient  segment,  the Company decided to actively seek 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
consolidated financial statements for all periods presented.

The purchase  price for the sale of the  processed  apple  products  line of $12
million was paid in cash at the closing  date of the sale on July 30,  1999.  In
addition,  equipment  with a net book value of $1,478,000  was sold for $500,000
and apple  product  inventories  with a cost of $1.7 million were  purchased for
$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 addition,
as part of the transaction,  the Company sold the Vacu-dry trademark.  Thus, the
Company changed its name to SonomaWest Holdings, Inc. in December 1999.

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. On August 4, 2000, the Company's motion to dismiss
the  complaint  was granted with leave to amend.  The Company  feels the suit is
without  merit and  intends to continue to defend  itself  vigorously  should an
amended complaint be filed.

In the third  quarter  of fiscal  2000,  the  Company  decided to dispose of its
organic  packaged  foods  operations.  Accordingly,  the organic  packaged foods
segment is included in discontinued operations in the accompanying  consolidated
financial  statements  for all  periods  presented.  The Company  received  $1.1
million for all  intellectual  property,  consisting of the Made In Nature brand
name and all related  trademarks,  and  certain  dried  fruit  inventory  of the
organic  packaged  goods segment from Premier  Valley  Foods,  Inc. in May 2000.
Remaining  assets of this  segment  consist  primarily  of organic  orange juice
concentrate  inventories,  which are being actively  marketed by the Company for
liquidation.

Upon the disposal of the Company's  remaining  ingredients and organic  packaged
foods  assets,  the sole  remaining  line of  business  will be its real  estate
management and rental operations.

During fiscal 2000,  the Company  recorded a net after-tax  gain of $3.2 million
from the sale of the  processed  apple  product  line  and the  disposal  of the
remaining  product  lines of the  ingredients  segment and the organic  packaged
foods  segment.  The net after-tax  gain included $16.1 million of proceeds from
the sales offset by: a) the  write-down  of assets  related to the  discontinued
segments to their estimated net realizable  value (assets which were impaired as
a direct result of the decision to discontinue the segments);  b) costs incurred
in closing the discontinued  segments (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) losses on sale of
equipment.

Summarized historical information of the discontinued operations is as follows:

<TABLE>
<CAPTION>

(in thousands)                                                                Six Months Ended December 31,
                                                                              -----------------------------
                                                                               2000                   1999
                                                                               ----                   ----
Income statement data:
<S>                                                                             <C>                  <C>
    Revenues                                                                    $326                 $8,877
    Costs and expenses                                                           (81)                (8,413)
                                                                                ----                -------
    Operating income                                                             245                    464
    Income tax expense                                                           (98)                  (186)
                                                                                ----                  -----
    Income from discontinued operations, net of income taxes                    $147                  $ 278
                                                                                ====                  =====

                                                                         December 31, 2000        June 30, 2000
                                                                         -----------------        -------------
Balance sheet data:
Accounts receivable, net of reserves of $0 and $57                               $16                    $ -
                                                                                 ---                    ---
    Total current assets of discontinued operations                               16                      -
Property, plant and equipment, net                                               122                    122
                                                                                 ---                    ---
    Total assets of discontinued operations                                      138                    122
                                                                                 ===                    ===

Accounts payable                                                                   -                    234
Provision for severance, transaction costs, wind-down costs and                  267                    394
other liabilities related to the decision to discontinue the segments
                                                                                 ---                    ---
    Total liabilities of discontinued operations                                 267                    628
                                                                                 ---                    ---
    Net liabilities of discontinued operations                                $ (129)                 $(506)
                                                                               ======                 ======
</TABLE>

Note 8 -

Statement  of Cash Flows - Interest  and income tax  payments  reflected  in the
Consolidated Statement of Cash Flows were as follows:

        (in thousands)                         2000             1999
                                               ----             ----
        Interest paid                          $ 83             $ 166
        Income taxes paid                      $ -              $ 220
<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 six months
ended December 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 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,  net assets  and  liabilities  are  reflected  outside  of the  Company's
continuing operations. The Company's sole remaining line of business is its real
estate management and rental operations.  Additionally, the Company is committed
to a $3 million minority investment in a telecommunications company to be funded
over the next two fiscal years.

                             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.  This sale, which was recorded in the first quarter
of fiscal  2000,  is an important  element of the  Company's  strategic  plan to
improve 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. Following completion of the sale, the Company determined
in  August  1999  that  the  remaining  product  lines in the  Company's  vacuum
ingredients  segment of its business  would be  discontinued  and held for sale.
These  product  lines  included  the  Company's  dried  ingredients,   Perma-Pak
long-term food storage,  and drink mix businesses.  In January 2000, the Company
decided to sell or discontinue its organic packaged goods business.  As a result
of these  decisions,  the  Company has  classified  these  business  segments as
discontinued operations.  Accordingly, the Company has segregated the net assets
of the discontinued operations in the consolidated balance sheets at December 31
and June 30, 2000, the operating  results of the discontinued  operations in the
consolidated  statements  of  operations  for the  three  and six  months  ended
December 31, 2000 and 1999 and the cash flows from  discontinued  operations  in
the consolidated  statements of cash flows for the six months ended December 31,
2000 and 1999.

     For the six months ended December 31, 2000, the Company recorded  after-tax
earnings from discontinued  operations of $147,000 on revenue of $326,000.  This
compares to an after-tax  earnings of $278,000 on revenue of $8,877,000  for the
six months ended  December 31 1999.  The decline in revenue in the  discontinued
operations  is due to the sale of the apple  ingredients  and  organic  packaged
goods  businesses in fiscal 2000.  After the allocation of selling,  general and
administrative  expenses  between  continuing and discontinued  operations,  the
discontinued  businesses  generated  $245,000  of  operating  income for the six
months ended  December  31, 2000 versus an operating  income of $464,000 for the
six months ended December 31, 1999.

<PAGE>
     The Company is actively  marketing all remaining assets of its discontinued
businesses (primarily inventory), but there can be no assurances that there will
be a sale of all or any of the remaining assets.

                        RESULTS OF CONTINUING OPERATIONS

     The  Company's  continuing  line of  business  consists  of the leasing and
development  of  the  Company's  real  estate.  Additionally,  the  Company  has
committed to a $3 million minority  investment in a  telecommunications  company
(of which  $329,000 has been invested to date).  The Company  intends to develop
its real estate largely for agricultural and industrial  rental. The current use
permit for the Company's  former  production  site requires that the facility be
used  exclusively  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.  The Company's
other piece of real estate is already zoned for industrial use.

Results of Operations
---------------------

     The Company's continuing line of business is its real estate management and
rental  operations  consisting  of several  buildings  and yards on two property
locations.  The two properties have a combined  leaseable area of  approximately
476,000 square feet on 81 acres of land.  Twenty-four  tenants that have varying
original lease terms ranging from  month-to-month to eight years with options to
extend the leases by approximately 278,000 square feet or 58% of the properties'
available  lease space.  Additionally,  the Company has  committed to $3 million
minority investment in a  telecommunications  company.  Currently,  there are no
other plans to make any additional investments.

     Rental Revenue. The Company leases warehouse, cold storage, production, and
office space as well as outside storage space at both of its properties. For the
six months ending December 31, 2000, rental revenue decreased 17% or $112,000 to
$554,000 compared to the  corresponding  period in the prior year. This decrease
was  primarily a result of losing a significant  tenant at the Company's  former
production facility.  This facility is approximately 54% occupied. The Company's
other property is approximately 74% occupied. 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.

     Operating  Costs.  Operating  costs  consist  of direct  costs  related  to
continuing  operations and all general  corporate  costs.  Only direct  selling,
general and administrative costs related to the ingredients and organic packaged
goods  businesses were allocated to discontinued  operations in the consolidated
statements of  operations.  The Company's  operating  results will be negatively
impacted as long as the tenant  rental  revenue  stream fails to cover  existing
operating costs. Cost reduction efforts to minimize any avoidable  spending have
been undertaken to minimize  negative  operating results while the tenant search
continues.  For the  six  months  ending  December  31,  2000,  operating  costs
increased 7% or $66,000 to $1,030,000  compared to the  corresponding  period in
the prior year,  this was  primarily  due to  increased  legal and  professional
costs.

     Interest  and Other  Income  (Expense),  Net.  Interest  and  other  income
(expense)  net  consists  primarily  of interest  income on the  Company's  cash
balances, and interest expense on mortgage debt and shareholder loans. In Fiscal
2000,  proceeds from the sale of the  ingredients  business were used to pay off
the Company's  revolving bank line of credit and substantially  reduce long-term
debt. As a result,  for the six months ending December 31, 2000, the Company was
a net investor of cash,  generating  $260,000 of interest  income and  incurring
$83,000 of interest expense,  while in the corresponding period in prior year it
was a net  borrower,  generating  interest  income  of  $163,000  and  incurring
interest expense of $166,000.

     Income Taxes.  The effective tax rate for the six months ended December 31,
2000 was 40%, or approximately  the statutory rate after the federal benefit for
state income taxes.

Liquidity and Capital Resources
-------------------------------

     The Company  had cash of $7.6  million at December  31,  2000,  and current
maturities  of long-term  debt of $55,000.  In fiscal  2000,  the Company used a
portion of the $16.1  million net proceeds from its  discontinued  businesses to
pay off  borrowings  under  its bank  line of credit  and  retire a  significant
portion of its long-term  debt. In August 2000, the Company elected to prepay in
full a remaining  shareholder note payable (scheduled to mature in 2003), in the
amount of  $564,000  plus  accrued  interest.  Although  the  Company  generated
$510,000  from  operating  activities,  the cash  balances  decreased  from $8.4
million at June 30, 2000  primarily  as a result of an  investment  in Metro PCS
(see  below),  the  repurchase  of  warrants,  the  shareholder  note payoff and
payments of liabilities related to discontinued operations.

<PAGE>
     During  December 2000, the Company  entered into an agreement with its sole
lender in order to modify the terms of the lending  agreement.  As a result, the
financial based debt covenant was amended. The new covenant requires the Company
to maintain a debt  service  coverage  ratio at least 1:15 to 1. Until such time
this ratio reaches 1.25 to 1, the Company is required to maintain  unrestricted,
unencumbered cash or marketable  securities of at least $600,000. As of December
31,  2000,  the  Company's  debt  service  ratio  was  between  1.15  and  1.25.
Consequently,  $600,000 is  classified as  restricted  cash on the  accompanying
balance  sheet.  Furthermore,  the terms of the loan  restrict  the Company from
incurring any additional indebtedness during the term of the loan.

     The  Company  has  committed  itself  to a $3  million  investment  in  the
preferred stock of a privately held telecommunications  company, MetroPCS, Inc.,
which is expected to be funded in fiscal 2001 and 2002. As of December 31, 2000,
the Company had invested $329,000 on its $3 million commitment.  The Company has
accounted  for the  investment  using the cost method.  It is expected  that the
remaining  $2,671,000  is to be funded in several  installments  throughout  the
fiscal years ending June 30, 2001 and 2002.

     During the quarter ended December 31, 2000, the Corporation repurchased and
retired  112,000  warrants for  $112,000.  The warrants  represented  a right to
purchase  112,000  shares of common  stock and had an  exercise  price of $8 per
share. The warrants were originally assigned a valued of $456,000.  Common stock
was increased by the difference  between the repurchase price and the originally
assigned value.

     The Company's  Board of Directors has authorized a program to repurchase up
to 375,000  shares of the Company's  stock at $8.00 per share in a tender offer.
The tender offer expires,  unless extended by the Company, on February 15, 2001.
The tender offer is subject to regulatory  filings and approval by the Company's
lender.


<PAGE>


PART II.  OTHER INFORMATION

Item 1.  Legal Proceedings

On February 23, 2000 several local apple growers filed a complaint in the United
States District Court for the Northern District of California naming the Company
and Tree Top, Inc. as defendants.  The complaint alleged 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 sought
treble  damages,  punitive  damages,  interest and attorney fees, all in unnamed
amounts.  On August 4, 2000,  the Company's  motion to dismiss the complaint was
granted with leave to amend.  To date there has been no  amendment.  The Company
believes the suit was without merit and will defend itself  vigorously should an
amended complaint be filed.

On October 10, 2000 the holder of 97,000  warrants  to  purchase  the  Company's
common stock filed a complaint in the  Superior  Court in and for Sonoma  County
against the Company.  The complaint  alleged  breach of contract with respect to
the  warrants  and seeks  declaratory  relief  as to the  holder's  rights,  the
imposition of a constructive trust, damages, and a preliminary injunction baring
the  Company  from  distributing   certain  cash  proceeds  resulting  from  the
liquidation of operating  assets.  During December 2000, the Company settled the
complaint by repurchasing all outstanding warrants for $112,000.

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

     At the Company's  Annual Meeting of Stockholders  held on November 9, 2000,
the  following  matters  were  submitted  to a vote of the  stockholders  of the
Company:

     (i) The  election of Gary L. Hess,  Roger S. Mertz,  Fredric  Selinger  and
Craig Stapleton as directors to serve a one-year term.

        Nominees                Shares Voted in Favor           Shares Withheld
        --------                ---------------------           ---------------

        Gary L. Hess            1,332,144                       46,457
        Roger S. Mertz          1,332,144                       46,457
        Fredric Selinger        1,332,144                       46,457
        Craig Stapleton         1,332,144                       46,457

        (ii)  A proposal to ratify the appointment of Arthur Andersen LLP as the
Company's independent auditors for the fiscal year 2001 was approved by a total
of 1,369,025 votes in favor, 4,956 votes against, and 4,620 shares abstaining.

Item 6.  Exhibits and Reports on Form 8-K

        a.  Exhibits

            27.  Financial Data Schedule

        b.  Reports on Form 8-K

              None

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: February 9, 2001



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