SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549

                                   ----------

                                   FORM 10-QSB

(Mark One)
     [X]  QUARTERLY  REPORT  PURSUANT  TO SECTION 13 OR 15(d) OF THE  SECURITIES
EXCHANGE ACT OF 1934

For the quarterly period ended December 28, 1997

     [ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT

For the transition period from__________________  to_________________ 
Commission file number 1-13818

                      THE RATTLESNAKE HOLDING COMPANY, INC.
             (Exact name of registrant as specified in its charter)

       Delaware                                       06-1369616         
(State or other jurisdiction of                    (I.R.S. Employer
incorporation or organization)                    Identification Number)

439 East 82nd Street, New York, NY                       10028          
(Address of principal executive offices)              (Zip Code)

(212) 452-2359                                           
Registrant's telephone number, including area code

________________________________________________________________________________
Former  name,  former  address and former  fiscal  year,  if changed  since last
report.

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

     APPLICABLE ONLY TO CORPORATE ISSUERS State the number of shares outstanding
of each of the issuer's classes of common equity,  as of the latest  practicable
date: 11,303,564


<PAGE>


                                   FORM 10-QSB

                      THE RATTLESNAKE HOLDING COMPANY, INC.

                                December 28, 1997

                                      INDEX

                                                                        Page No.
         Part I - Financial Information

Item 1:Financial Statements

Consolidated Balance Sheet December 28, 1997                                 3
     (Unaudited) and June 29, 1997

Consolidated Statements of Operations                                        4
     for six months ended December 28, 1997
     (Unaudited) and December 29, 1996 (Unaudited)

Consolidated Statements of Cash Flows                                        5
     for the six months ended December 28, 1997
     (Unaudited) and December 29, 1996 (Unaudited)

Consolidated Statements of Operations                                        6
     for three and six months ended December 28, 1997
     (Unaudited) and December 29, 1996 (Unaudited)

Notes to Consolidated Financial Statements                                   7
     (Unaudited)

Management's Discussion and Analysis                                        11

Liquidity                                                                   13

Safe Harbor Statement                                                       16

         Part II - Other Information

Item 1: Legal Proceedings                                                   18

Item 2: Changes in securities and Use of Proceeds                           19

Item 3: Defaults Upon Senior Securities                                     19

Item 4: Submission of Matters                                               20

Item 5: Other Information                                                   20

Item 6: Exhibits and Reports on Form 8-K                                    20

Signatures                                                                  21


                                       2
<PAGE>


             THE RATTLESNAKE HOLDING COMPANY, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEET
<TABLE>
<CAPTION>
                                                                                   (UNAUDITED)
                                                                                   December 28,              June 29,
                               ASSETS                                                  1997                    1997
                                                                                   ------------          ------------
Current Assets:
<S>                                                                                <C>                   <C>         
      Cash                                                                         $     20,121          $     68,022
      Accounts receivable, net                                                           36,072                13,287
      Inventory                                                                          41,900                42,119
      Prepaid expenses and other current assets                                          55,137                23,272
      Assets held for sale                                                              318,559               679,544
                                                                                   ------------          ------------
                  Total current assets                                             $    471,789          $    826,244

Property and equipment, net                                                             809,703             1,007,092
Intangible assets, net                                                                  297,838               299,102
Other assets, net                                                                       103,574               129,457
                                                                                   ------------          ------------

                                                                                   $  1,682,904          $  2,261,895
                                                                                   ============          ============


                  LIABILITIES AND STOCKHOLDER' EQUITY
Current liabilities:
      Current maturities of notes payable                                          $  1,074,489          $    835,335
      Accounts payable                                                                  737,180               280,528
      Liabilities related to assets held for sale                                       628,373             1,133,257
      Accrued expenses                                                                  339,407               357,407
      Dividends payable                                                                       0               103,818
      Other current liabilities                                                         156,293               218,220
                                                                                   ------------          ------------
                  Total current liabilities                                        $  2,935,742          $  2,928,565

Notes payable, net of current maturities                                                539,998               545,006
                                                                                   ------------          ------------

Stockholders' equity
      Preferred stock, $.10 par value, 5,000,000 shares
      authorized, 56,000 issued and outstanding, on                                       5,650                 5,650
      December 28, 1997 and June 29, 1997,  respectively                    
      Common Stock, $.001 par value -20,000,000 shares authorized,          
      2,650,227 issued and outstanding at                                   
      December 28, 1997 and June 29, 1997, respectively                                   2,651                 2,651
      Additional paid-in capital                                                     11,072,857            11,072,857
      Accrued Dividends                                                                       0              (103,818)
      Accumulated deficit                                                           (12,873,994)          (12,189,016)
                                                                                   ------------          ------------
                                                                                     (1,792,836)           (1,211,676)

                                                                                   $  1,682,904          $  2,261,895
                                                                                   ============          ============
</TABLE>
See accompanying notes to unaudited consolidated financial statements.


                                       3
<PAGE>


             THE RATTLESNAKE HOLDING COMPANY, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENT OF OPERATIONS

<TABLE>
<CAPTION>
                                                                         (Unaudited)                          (Unaudited)
                                                                     Three months ended                    Six months ended
                                                            ------------------------------------------------------------------------

                                                            December 28,       December 29,        December 28,         December 29,
                                                               1997               1996                1997                 1996
                                                            -----------         -----------         -----------         -----------
<S>                                                         <C>                 <C>                   <C>                 <C>      
Restaurant sales                                            $   865,542         $ 2,143,801           2,131,123           4,823,340
Less: promotional sales                                          16,509             112,526              65,679             223,536
                                                            -----------         -----------         -----------         -----------
  Net restaurant sales                                          849,033           2,031,275           2,065,444           4,599,804

Costs and expenses:
  Cost of food and beverage sales                               275,483             651,494             665,897           1,477,201
  Restaurant salaries and benefits                              280,941             745,726             666,732           1,695,166
  Occupancy and other                                           192,765             579,971             526,383           1,202,833
  Depreciation and amortization expense                          76,667             195,450             183,334             399,920
                                                            -----------         -----------         -----------         -----------
  
     Total restaurant costs
       and operating expenses                                   825,856           2,172,641           2,042,346           4,775,120

General and administration                                      369,761             648,888             603,598           1,372,387
Restaurant closing costs                                              0             243,218                   0             243,218
Interest expense, net                                            45,646              41,553              97,347              68,089
Miscellaneous expenses                                            1,958               9,972               7,131              14,637
                                                            -----------         -----------         -----------         -----------

     Net loss                                                  (394,188)         (1,084,997)           (684,978)         (1,873,647)
                                                            ===========         ===========         ===========         ===========

Basic and diluted Net
  loss per common share                                     ($     0.15)        ($     0.41)        ($     0.26)        ($     0.71)

Weighted average number of common
  and common equivalent shares
  outstanding                                                 2,650,227           2,643,734           2,650,227           2,643,734
</TABLE>


See accompanying notes to unaudited consolidated financial statements.


                                       4
<PAGE>


             THE RATTLESNAKE HOLDING COMPANY, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENT OF CASH FLOWS

<TABLE>
<CAPTION>
                                                                                          (Unaudited)
                                                                                       Six months ended
                                                                    ------------------------------------------------------

                                                                            December 28,            December 29,
                                                                               1997                    1996
                                                                            -----------             -----------
<S>                                                                          <C>                     <C>         
Cash Flow from operating activities:
  Net Loss                                                                   ($  684,978)            ($1,873,647)
  Adjustment to reconcile net loss to net cash used
  in operating activities:
     Depreciation and amortization                                               198,653                 430,802
     Loss on closure of restaurant sites                                                                 243,218
     Changes in assets and liabilities:
          (Increase) decrease in accounts receivable                             (22,785)                 31,035
          Decrease (increase) in inventory                                           219                   4,260
          (Increase) decrease in prepaids and other assets                        (5,982)                 44,559
          (Increase) decrease accounts payable and accrued expenses              294,753                  24,822
          (Decrease) increase in other current liabilities                       (61,927)                276,169
                                                                             -----------             -----------

          Net cash used in operating activities                                 (282,047)               (818,782)

Cash Flow from investing activities
   Capital expenditures                                                                0                (250,352)
   Payments for acquisitions of leaseholds                                             0                (206,515)
                                                                             -----------             -----------

          Net cash used in investing activities                                        0                (456,867)
                                                                             -----------             -----------

Cash flow from financing activities:
  Net proceeds from issuance of convertible notes                                      0                       0
   Proceeds from issuance of preferred stock                                           0               1,272,387
   Deferred financing costs                                                            0                       0
   Proceeds from borrowings                                                      750,000                       0
     Principal repayment of borrowings                                          (515,854)               (252,155)
                                                                             -----------             -----------

          Net cash provided by financing activities                              234,146               1,020,232

Net decrease in cash and cash equivalents                                        (47,901)               (255,417)

Cash, beginning of period                                                         68,022                 684,414
                                                                             -----------             -----------

Cash, end of period                                                          $    20,121             $   428,997
                                                                             ===========             ===========

Cash paid during the period for:
   Interest                                                                  $     7,599             $    71,917
                                                                             ===========             ===========
   Income taxes                                                              $     6,891             $     4,736
                                                                             ===========             ===========
</TABLE>

See accompanying notes to unaudited consolidated financial statements.


                                       5
<PAGE>


             THE RATTLESNAKE HOLDING COMPANY, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENT OF OPERATIONS

THREE OPERATING STORES ONLY
<TABLE>
<CAPTION>
                                                                       (Unaudited)                             (Unaudited)
                                                                    Three months ended                      Six months ended
                                                            ------------------------------------------------------------------------

                                                            December 28,        December 29,        December 28,        December 29,
                                                               1997                1996                1997                 1996
                                                            -----------         -----------         -----------         -----------
<S>                                                         <C>                 <C>                   <C>                 <C>      
Restaurant sales                                            $   865,543         $ 1,042,722           1,867,058           2,284,817
Less: promotional sales                                          18,573              47,984              59,564              94,335
                                                            -----------         -----------         -----------         -----------
  Net restaurant sales                                          846,970             994,738           1,807,494           2,190,482

Costs and expenses:
  Cost of food and beverage sales                               274,754             311,920             576,388             686,462
  Restaurant salaries and benefits                              280,941             345,634             567,937             760,080
  Occupancy and other                                           204,120             203,219             411,767             454,687
  Depreciation and amortization expense                          91,667              74,622             183,334             160,718
                                                            -----------         -----------         -----------         -----------

     Total restaurant costs
       and operating expenses                                   851,482             935,395           1,739,426           2,061,947

General and administration                                      445,587             578,936             670,949           1,215,971
Restaurant closing costs                                              0                   0                   0                   0
Interest expense, net                                            46,187              30,649              93,127              53,185
Miscellaneous expenses                                            1,718               6,299               6,891                (456)
                                                            -----------         -----------         -----------         -----------

     Net loss                                                  (498,004)           (556,541)           (702,899)         (1,140,165)
                                                            ===========         ===========         ===========         ===========

Per share:
Book and diluted net loss per common                        ($     0.19)        ($     0.21)        ($     0.27)        ($     0.43)
share

Weighted average number of common
   and common equivalent shares
   outstanding                                                2,650,227           2,643,734           2,650,227           2,643,734
</TABLE>

See accompanying notes to unaudited consolidated financial statements.


                                       6
<PAGE>


             THE RATTLESNAKE HOLDING COMPANY, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                December 28, 1997
                                   (Unaudited)


1.   Principles of consolidation

     The  consolidated   financial   statements  include  the  accounts  of  The
Rattlesnake  Holding  Company,  Inc.  and  subsidiaries  (the  "Company").   All
significant  intercompany  accounts and  transactions  have been  eliminated  in
consolidation.

2.   Consolidated financial statements

     The accompanying  unaudited  consolidated  financial statements as shown in
the index  were  prepared  in  accordance  with  generally  accepted  accounting
principles.  These statements  include all adjustments  which, in the opinion of
management are necessary to present fairly the consolidated  financial  position
of the  Company  as of  December  28,  1997 and June 29,  1997;  the  results of
operations  for the three and six month  periods  ended  December  28,  1997 and
December 29, 1996;  and the cash flows for the six month periods ended  December
28, 1997 and December  29, 1996.  In the opinion of  management,  all  necessary
adjustments that were made are of a normal recurring nature.

     Certain information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting  principles
have been  condensed,  reclassified  or  omitted.  It is  suggested  that  these
consolidated  financial  statements be read in conjunction with the consolidated
financial  statements and notes thereto  included in the Company's Annual Report
on Form 10-KSB for fiscal year end June 29, 1997.  The results of operations for
the  period  ended  December  28,  1997 are not  necessarily  indicative  of the
operating results that may be achieved for the full year.

3.   Basis of presentation

     The accompanying  consolidated financial statements have been prepared on a
going  concern  basis  that  contemplates  the  realization  of  assets  and the
satisfaction  of liabilities  and  commitments in the normal course of business.
However, due to the matters discussed below, its continuation as a going concern
cannot be reasonably assured.

     The Company has incurred  aggregate  losses since inception of $12,873,994,
inclusive of a net loss for the quarter ended  December 28, 1997 of $394,188 and
for the six months  ended  December  28, 1997 of  $684,978.  Based upon  interim
financial information prepared by management, the Company has continued to incur
losses in fiscal 1998.  Additionally,  $303,749 of Series C  subordinated  notes
payable matured on August 6, 1997, of which note holders with principal balances


                                       7
<PAGE>


aggregating  $62,499 have extended the repayment  date to December 15, 1997. The
Series C notes  may be  converted  to  common  stock or  repaid at the time of a
future  private  placement  of  securities  by the  Company.  Also,  $500,000 of
convertible  subordinated  notes  payable  matured  September 4, 1997,  of which
$400,000 was repaid from an interim financing on December 8, 1997. The remaining
$150,000 (which includes  accrued  interest of $50,000) is payable $50,000 on or
before March 15, 1998 or earlier in certain events,  $50,000 on or before May 1,
1998 and $50,000 on or before July 1, 1998. In addition, a $425,000 note payable
associated with the acquisition of the Fairfield  restaurant  matured on January
2,  1997.  The  restaurant  was  sold on  March  24,  1998 and the note has been
restructured to provide for interest  payments of $5,500.44 monthly through June
24, 1998,  with the remaining  principal and any unpaid interest due on June 24,
1998. The outstanding principal balance is $440,035.  The noteholder has taken a
$230,000  note due the company and  received  on the sale of the  restaurant  as
additional  collateral  for  the  $440,035  note.  It is  anticipated  that  the
difference  between  the  oustanding  balance  due and the note due the  company
assigned be repaid from a private placement anticipated by the Company.

4.   Financing Arrangements

     Between April 1998 and July 1998, the Company sold  approximately  $750,000
of  common  stock  (at $.15 per  share)  and  issued  notes  with  warrants  for
approximately $50,000.00.

     The Company is seeking to consummate a significant private placement, which
will permit it to consummate several pending restaurant acquisitions and further
develop its business.  It is expected to try to consummate the private placement
during August 1998.

     On December 8, 1997, the Company entered into a refinancing  arrangement in
which it raised  $500,000.  $400,000 of the proceeds  therefrom  were applied to
reduce the approximately  $550,000 of indebtedness  (including accrued interest)
resulting  from a financing  the company  conducted in March 1997.  The $150,000
balance from the March refinancing was restructured as follows: $50,000 shall be
payable  on or before  March 15,  1998 or earlier  in  certain  events,  $50,000
payable on or before May 1, 1998 and $50,000  payable on or before July 1, 1998.
If the private  placement  is closed prior to March 15, 1998 and if the price is
$.50 or less per share,  the Company,  at it's  option,  may pay the $50,000 due
March 15, 1998 in cash or may satisfy the entire $150,000 obligation in stock at
a price per share equal to eighty  percent  (80%) of the per share price sold in
the private  placement.  If the private placement price is more than fifty cents
($.50) per share the note  holders  may  request  payment of the  remaining  two
installments  in stock  rather  than cash at 100% of the per share price sold at
the proposed private placement.


                                        8
<PAGE>


5.   Restaurant closing costs

     In  fiscal  1997 the  Board of  Directors  authorized  the  closing  of the
Rattlesnake Southwestern Grill Restaurant located in Fairfield Connecticut.  The
facility was closed on January 4, 1997. The fixed assets, leasehold improvements
and intangibles at the facility have been written off. The building is reflected
at  the  estimated  realizable  value  and  is  currently  accounted  for in the
financial  statements in "net assets held for sale." The  restaurant was sold on
March  24,  1998 and the note has been  restructured  to  provide  for  interest
payments  of  $5,500.44  monthly  through  June 24,  1998,  with  the  remaining
principal  and  any  unpaid  interest  due on June  24,  1998.  The  outstanding
principal balance is $440,035.  The noteholder has taken a $230,000 note due the
company and received on the sale of the restaurant as additional  collateral for
the $440,035  note. It is anticipated  that the difference  between the note due
and  the  note  receivable  assigned  will  be  paid  from a  private  placement
anticipated by the Company.

     As of December  28,  1997,  consistent  with the Board's  approval  for the
closure  of the  Fairfield  location  the  assets  held  for  sale  and  related
liabilities  have been  reclassified as "assets held for sale" and  "liabilities
related  to  assets  held  for  sale".  The   accompanying   December  28,  1997
consolidated balance sheet includes the following components:


            Fairfield restaurant facility                   $318,559
                                                            --------

              Assets held for sale                          $318,559
                                                            ========

            Notes payable                                   $425,000
            Accounts payable and accrued interest            203,373
                                                            --------
              Liabilities related to assets
               held for sale                                $628,373
                                                            ========


6.   Recent Accounting Pronouncements

     In February 1997, the Financial Accounting Standards Board issued Statement
128,   "Earnings  Per  Share"  (Statement  128).   Statement  128  replaces  the
calculation  of  primary  and fully  diluted  earnings  per share with basic and
diluted earnings per share.  Basic earnings per share excludes any dilution.  It
is based upon the weighted  average number of common shares  outstanding  during
the period.  Dilutive  earnings per share  reflects the potential  dilution that
would  occur  if  securities  or other  contracts  to issue  common  stock  were
exercised or converted into common stock. Adoption of Statement 128 did not have
any effect on the  Company's  December 28, 1997 earnings per share or previously
reported   earnings  per  share  because  all  common  stock   equivalents  were
antidilutive in those periods.


                                       9


<PAGE>


7.   Recent Accounting Pronouncements

     The  Financial   Accounting   Standards  Board  has  issued  Statement  130
"Reporting   Comprehensive  Income".  This  Statement  requires  that  companies
disclose  comprehensive  income,  which  includes net income,  foreign  currency
translation adjustments,  minimum pension liability adjustments,  and unrealized
gains and losses on marketable securities classified as available-for-sale.  The
provisions of Statement 130 are  effective for financial  statements  issued for
fiscal years  beginning  after  December 15, 1997. In the opinion of management,
adoption of Statement 130 will not have a material effect on the Company because
the Company does not have any foreign currency translation adjustments,  minimum
pension  liability  adjustments,  or  unrealized  gains or losses on  marketable
securities classified as available-for-sale.

8.   Dividends in arrears

     The  Company's  preferred  stock bears a dividend rate of 7-1/2% per annum.
These dividends are payable  semi-annually  in arrears on May 15 and November 15
of each year,  commencing  November 15, 1996. At December 28, 1997,  the accrued
dividends aggregated $103,818 in February 1998, all accrued dividends in arrears
were waived by the preferred shareholders.


                                       10
<PAGE>


                       MANAGEMENT DISCUSSION and ANALYSIS
                      Of OPERATIONS and FINANCIAL CONDITION


     The  following  discussion  of the  results  of  operations  and  financial
condition should be read in conjunction with the Company's audited  consolidated
financial statements and notes thereto.


OPERATING  RESULTS  FOR THE QUARTER AND SIX MONTHS  ENDED  DECEMBER  28, 1997 AS
COMPARED WITH DECEMBER 29, 1996

     Gross  restaurant  sales  decreased 59.6% to $865,542 for the quarter ended
December 28, 1997 from  $2,143,801  for the quarter ended December 29, 1996. For
the six months ended December 28, 1997 Gross restaurant sales decreased 55.8% to
$2,131,123 from  $4,823,340.  Likewise,  net restaurant sales decreased 58.2% to
$849,033 for the quarter ended December 28, 1997 from $2,031,275 for the quarter
ended  December  29,  1996.  For the six  months  ended  December  28,  1997 net
restaurant sales decreased 55.1% to $2,065,444 from $4,599,804.  The decrease in
restaurant sales resulted from a decrease in the number of restaurants operating
during the period. Three restaurants were operating for the entire quarter ended
December 28, 1997 as compared to six during the quarter ended December 29, 1996.
For the three restaurants  operating for both periods, same store sales declined
17.5% from  $2,190,482  in 1996 to  $1,807,494  in 1997.  The  decrease in sales
resulted  from the  transition  of  management,  The  reduction  in  advertising
expenditures and the maturity of the concept in the markets being served.

     Promotional  sales  decreased as a percentage  of gross sales from 5.2% for
the three months ended  December 29, 1996 to 1.9% for the quarter ended December
28, 1997.  This decrease is attributable to no new units being opened during the
second quarter ended December 28, 1997.  Also  contributing to this decline is a
concentrated focus on reducing manager complimentary sales at the units.

     For the three months ended  December 28, 1997,  the Company's  cost of food
and beverage sales  increased  slightly as a percentage of net sales to 32.4% as
compared  to December  29, 1996 cost of sales which was 32.1%.  The cost of food
and beverage sales decreased to $275,483 for the three months ended December 28,
1997 from $651,494 for the three months ended December 29, 1996. As a percentage
of net sales for the six months ended  December 28, 1997 cost of sales was 32.2%
as compared to December 29, 1996 cost of sales which was 32.1%. The cost of food
and beverage  sales  decreased to $665,897 for the six months ended December 28,
1997 from  $1,477,201  for the six months ended  December 29, 1996.  The nominal
percentage increase in cost of sales is due to higher food costs for


                                       11
<PAGE>


various  items and also due to inflation  trends.  The Company has  attempted to
diminish the effect of these  increased  prices through changes to the Company's
menu, centralized purchasing and low food cost specials.

     Restaurant  salaries and fringe benefits,  which consist of direct salaries
of restaurant  managers,  hourly  employee  wages and related  fringe  benefits,
decreased to $280,941  for the three months ended  December 28, 1997 as compared
to $745,726 for the three months ended December 29, 1996. As a percentage of net
restaurant sales, these costs decreased to 33.1% in 1997 as compared to 36.7% in
1996. For the six months ended December 28, 1997 restaurant  salaries and fringe
benefits  decreased  as a  percentage  of sales to 32.2%  from 36.8% for the six
months ended December 29, 1996. Actual  restaurant  salaries and fringe benefits
were  $666,732  for  the  six  months-ended  December  28,1997  as  compared  to
$1,695,166  for the six  months  ended  December  29,  1996.  This  decrease  is
attributed to a reduction in restaurant managers and other personnel.

     Occupancy  and  other  related  expenses,  which  include  linen,  repairs,
maintenance,  utilities,  rent,  insurance and other occupancy related expenses,
decreased to $192,765 for the three months ended December 28, 1997 from $579,971
for the three months ended  December 29, 1996. As a percentage of net restaurant
sales,  these costs  decreased to 22.7% in the three  months ended  December 28,
1997 from 28.5% in the three months ended  December 29, 1996. For the six months
ended  December  28, 1997 these costs  decreased to 25.5% from 26.1% for the six
months ended  December 29, 1996.  The actual  occupancy  and related  costs were
$526,383 for the six months-ended December 28,1997 as compared to $1,202,833 for
the six months  ended  December  29,  1996.  The  decrease  is  attributable  to
occupancy costs relating to the closed units.

     Depreciation and amortization expenses, decreased to $76,667 or 9.0% of net
restaurant  sales for the three months ended  December 28, 1997 from $195,450 or
9.6% for the three  months ended  December  29,  1996.  For the six months ended
December 28, 1997 these expenses  increased  slightly as a percentage of sale to
8.8%  from  8.7%  for the  six  months  ended  December  29,  1996.  The  actual
depreciation  and  related  expenses  were  $183,334  for the  six  months-ended
December  28,1997 as compared to $399,920 for the six months ended  December 29,
1996. This decrease is attributed to fewer units in operation as compared to the
prior period.

     General and administrative  expenses increased as a percentage of net sales
from 31.9% for the three months  ended  December 29, 1996 to 43.6% for the three
months ended December 28, 1997. General and administrative expenses decreased to
$369,761 for the three months ended December 28, 1997 from


                                       12
<PAGE>


$648,888   for  the  three  months   ended   December  29,  1996.   General  and
administrative  expenses  decreased as a percentage  of net sales from 29.8% for
the six  months  ended  December  29,  1996 to 29.2%  for the six  months  ended
December 28, 1997. General and administrative expenses decreased to $603,598 for
the six months ended December 28, 1997 from  $1,372,387 for the six months ended
December 29, 1996. The percentage  increase during the three months period ended
December 28, 1997 is primarily  attributed  to expenses  incurred in relation to
the  severance  of  prior  management's  employment  agreements  as  part of the
Company's implementation of its cost reduction plan. The Company has implemented
cost reduction measures, which should reduce general and administrative costs at
both the corporate and unit levels.

     Interest  expense  increased to $45,646 for the three months ended December
28, 1997 from  $41,553 for the three months  ended  December 29, 1996.  Interest
expense  increased  to $97,347 for the six months  ended  December 28, 1997 from
$68,089 for the six months ended  December  29,  1996.  The increase in interest
expense is attributable to the Company's additional financing arrangements.

     The net loss as a  percentage  of net sales  decreased  from  53.4% for the
three  months  ended  December  29,  1996 to 46.4%  for the three  months  ended
December 28,  1997.  The net loss as a percentage  of net sales  decreased  from
40.7% for the six months  ended  December  29,  1996 to 33.2% for the six months
ended  December 28, 1997.  This  improvement in net loss is primarily due to the
decrease in general and administrative costs at the unit level, reduction of the
restaurant salaries and benefits, and reduced occupancy costs.


LIQUIDITY

     At  December  28,  1997,  the  Company  had a working  capital  deficit  of
$2,463,953.  At  such  date  (but  after  giving  effect  to the  December  1997
Refinancing described herein) (i)$500,000 of notes payable (inclusive of $50,000
of accrued interest) had been declared in default, (ii)$303,749 of notes payable
(inclusive  of $72,140 of accrued  interest)  had become due and payable but had
not  yet  been  declared  in  default  (note  holders  with  principal  balances
aggregating  $62,499 have  extended the  repayment  date to December 15,  1997),
(iii)$270,740 of notes or similar  obligations  becomes due in the period ending
September  27,  1998,  and  (iv)$366,673  was  owed or  owing  to the  Company's
suppliers.  A $425,000  note  payable  associated  with the  acquisition  of the
Fairfield Rattlesnake  restaurant matured on January 2, 1997. The restaurant was
sold on  March  24,  1998 and the note has  been  restructured  to  provide  for
interest  payments of $5,500 monthly  through June 24, 1998,  with the remaining
principal  and  any  unpaid  interest  due on June  24,  1998.  The  outstanding
principal balance is $440,035. The $425,000 note and


                                       13
<PAGE>


$47,812 of accrued  interest is included in  liabilities  related to assets held
for sale.

     Management  has  used  the  equity  raised  and the  sale of the  Fairfield
Restaurant  to meet these  liquidity  and capital  resource  shortfalls.  In the
future, management anticipates additional equity or debt financing, deferment of
payment of accounts payable, the conversion of certain indebtedness into equity,
and the  implementation of certain cost containment steps including reducing the
general and  administrative  expenses at the corporate and unit levels in fiscal
1998 to meet any future  liquidity and capital  shortfalls.  No assurance can be
given that any or all of such steps  will be  accomplished  or that they will be
sufficient to overcome these  financial  problems.  The failure to address these
shortfalls would have a material adverse effect on the Company. Additional funds
may  be  required  in  connection  with  the  Ottomanelli  transaction  and  the
transactions  contemplated  thereby.  No assurance  can be given that such funds
will be available.

     The  Company's  cash  position  decreased by $ 47,902 during the six months
ended  December  28,  1997,  principally  as a result  of the net  cash  used in
operating activities exceeded the borrowing proceeds.

     Net cash used in operating activities was $282,047, principally relating to
the  Company's  net loss,  increases in accounts  receivable,  prepaid and other
assets and decrease in other  current  liabilities  offset by  depreciation  and
amortization  expenses and an increase in accounts payable and accrued expenses.
The Company generated $234,146 from financing activities principally relating to
the receipt of proceeds from bridge financing  borrowings,  offset by repayments
of outstanding indebtedness.

     In August 1997 the Company  entered into a Stock  Exchange  Agreement  (the
"Agreement") with The Ottomanelli Group (the "Group"). The Agreement was amended
on  several  occasions,  and closed in March of 1998.  At such  time,  the Group
caused the merger with newly formed subsidiaries of the Company of Ottomanelli's
Cafe Franchising  Corp.,  the franchisor of Ottomanelli's  Cafe (R) restaurants,
and Garden  State Cafe  Corp.,  the  operator  of two  restaurants  at the Macys
department store in Paramus,  New Jersey.  The  consideration  was approximately
5,000,000  shares of common stock of the Company.  Nicolo  Ottomanelli  became a
director and Chief Executive Officer of the Company. Joseph Ottomanelli became a
Vice President.  Each of the Ottomanellis  entered into an employment  agreement
with the Company.  An affiliate of the Ottomanelli'  licensed the  Ottomanelli's
Cafe(R) trademark to the Company.


                                       14
<PAGE>


     During  September  1997,  the  Company  entered  into a  private  financing
arrangement  to provide  $250,000 of bridge  financing at 10% interest per annum
and  with  a  due  date  of  December  31,  1997  or  earlier,   under   certain
circumstances.  At December 28, 1997 this  financing has not been repaid.  It is
anticipated that these amounts will be repaid from future financing activity.

     On December 8, 1997, the Company entered into a refinancing  arrangement in
which  it  raised  $500,000.  Four  hundred  thousand  dollars  of the  proceeds
therefrom  were  applied to reduce the  approximately  $550,000 of  indebtedness
(including accrued interest) resulting from a financing the Company conducted in
March 1997. The $150,000 balance from the March  refinancing was restructured as
follows: $50,000 is to be paid on or before March 15, 1998 or earlier in certain
events, $50,000 on or before May 1, 1998 and $50,000 on or before July 1, 1998.

     On July 2, 1998 The Company  signed an  agreement  to purchase  some of the
assets of 1562  Restaurant  Corp.  located  at 1562 2nd  Avenue,  New York City.
Rattlesnake  has the right to assign the contract to a subsidiary.  The purchase
price is $425,000  payable  $20,000 on  contract,  $105,000  at  closing,  and a
$300,000  promissory  note at 8.5%  payable in 72 payments of $5,333.  The first
payment is due thirty days after closing, and may be prepaid at any time without
penalty.  The  note is  secured  by a  security  interest  in the  fixtures  and
equipment  purchased,  as well as by a re-assignment of the lease to the seller.
In the event of a subsequent  sale of the  restaurant  by the Company,  the note
shall become due at the option of the seller. The sale is subject to Rattlesnake
obtaining  a  temporary  liquor  permit and the  consent of the  landlord  to an
assignment  of the lease to the  Company.  The closing  shall take place 10 days
after the issuance of the liquor permit.

     On July 3, 1998 Rattlesnake Greenwich, Inc. signed an agreement to purchase
some of the assets of Max Water  Street,  LLC located at 2 South  Water  Street,
Greenwich,  Connecticut.  The  purchase  price is  $400,000  payable  $20,000 on
contract,  $155,000 at closing,  and a $225,000 promissory note at 8% payable in
60 payments of $2,729.88 based on a 10 year pay out and a five year balloon. The
first payment is due thirty days after  closing,  and may be prepaid at any time
without penalty.  The note is secured by a security interest in the fixtures and
equipment purchased,  as well as by a conditional assignment of the lease to the
seller. In the event of a subsequent sale of the restaurant by the Company,  the
note shall  become due at the option of the  seller.  The sale is subject to the
consent  of the  landlord  to an  assignment  of the lease to the  Company.  The
Company  also  executed a  management  agreement  under the terms of which,  the
Company is presently  managing the  restaurant.  The  management  agreement will
terminate at the closing of the sale of the assets.


                                       15
<PAGE>


     Management  of the Company is  continuing  the  implementation  of its cost
reduction  plan,  which  addresses the restaurant  operating  losses.  Such plan
included the closing and sale of the Yorktown Heights and White Plains, New York
and  Fairfield,  Connecticut  locations as well as the sale of its New York City
property. In September 1997, the Company closed its Lynbrook, New York location.
The  Company  has  reduced  its  work  force  and  is  implementing  other  cost
containment   measures  designed  to  reduce  operating   expenses  and  improve
restaurant-operating  performance.  The sales of the above  mentioned  locations
were  completed in the fourth  quarter of fiscal year 1997 and first  quarter of
fiscal year 1998;  therefore the Company  anticipates  recognizing the impact of
these reductions in the third and fourth quarters of fiscal 1998.

     Between April 1998 and July 1998, the Company sold  approximately  $750,000
of  common  stock  (at $.15 per  share)  and  issued  notes  with  warrants  for
approximately $50,000.00.

     The Company is seeking to consummate a significant private placement, which
will permit it to consummate several pending restaurant acquisitions and further
develop its business.  It is expected to try to consummate the private placement
during August 1998.

     Liquidity  remains a  critical  factor in the  further  development  of the
restaurants' two concepts and the  implementation  of the current business plan.
Continued short-term operations will depend on, among other matters, the receipt
of additional financing.

                              SAFE HARBOR STATEMENT

     Certain  statements in this Form 10-QSB,  including  information  set forth
under  "Management's   Discussion  and  Analysis"  constitute   "forward-looking
statements" within the meaning of the Private  Securities  Litigation Reform Act
of 1995 (the  "Act").  The  Company  desires to avail  itself of  certain  "safe
harbor"  provisions of the Act and is therefore  including  this special note to
enable the Company to do so.  Forward-looking  statements  included in this Form
10-QSB or hereafter  included in other publicly  available  documents filed with
the Securities and Exchange  Commission,  reports to the Company's  stockholders
and other  publicly  available  statements  issued or  released  by the  Company
involve known and unknown  risks,  uncertainties,  and other factors which could
cause the  Company's  actual  results,  performance  (financial or operating) or
achievements  to differ  from the  future  results,  performance  (financial  or
operating)  achievements expressed or implied by such forward looking statement.
Such  future  results  are based upon  management's  best  estimates  based upon
current  conditions  and the most  recent  results of  operations.  These  risks
include,  but are not limited to, risks  associated with potential  acquisitions
and  development of new locations;  successful  implementation  of the Company's
cost containment plan and new operating strategy;  immediate need for


                                       16
<PAGE>


additional  capital;   competition;  new  management;  the  addition  of  a  new
restaurant  format;  and other risks  detailed in the Company's  Securities  and
Exchange Commission filings,  including its Annual Report on Form 10-KSB for the
fiscal year 1997,  each of which could adversely  affect the Company's  business
and the accuracy of the forward looking statements contained herein.


                                       17
<PAGE>


PART II

Item 1: - Legal Proceedings


South Norwalk, Connecticut

     An action was commenced in 1996 by Ellen Peck against Rattlesnake Ventures,
Inc.  ("RVI"),  a wholly owned  subsidiary of the Company (and the tenant of the
RVI Rattlesnake  restaurant),  a former chief  executive  officer of the Company
(the "Former CEO"), and the landlord of the RVI Rattlesnake  restaurant in South
Norwalk,  Connecticut (the "Landlord"). The action was based on an allegation of
excessive  noise from the  restaurant.  A jury verdict was rendered on August 4,
1998 against RVI for  $425,000,  against the Former CEO for $200,000 and against
the  Landlord for  $250,000.  The Company has an  indemnity  agreement  with the
Former CEO and RVI has an indemnity  agreement  with the  Landlord.  The Company
believes  that the verdicts are  excessive in that the plaintiff did not show or
offer evidence of loss of work,  medical  treatment or any injury.  The verdicts
are  being  appealed  on that and other  legal  bases.  RVI had three  different
insurance  policies  covering the period of the alleged  offensive  behavior and
although the insurance carriers have or may disclaim or reserve as to liability,
RVI will  vigorously  pursue its rights  under said  policies.  If claimed,  the
Company will resist indemnification of the Former CEO, since his alleged actions
were  wrongful.  In view of the above,  the Company  does not  believe  that the
verdicts will have a material adverse effect on the Company or RVI.

Danbury, Connecticut

     A  foreclosure  action was  commenced  in 1998 by Union  Savings  Bank (the
"Bank") against the landlord of The Rattlesnake  Southwestern  Grill (closed for
renovations) in Danbury,  Connecticut  based on the landlords  mortgage arrears.
Rattlesnake  Danbury,  Inc., the lessee of the restaurant,  has been joined as a
defendant. The Bank has obtained an order of strict foreclosure,  and unless the
mortgage  debt of  $1,177,000  is paid off or  restructured  with the Bank,  the
restaurant  will become a tenant at will,  and will be subject to eviction.  The
Company,  however,  has a letter of intent  with the  landlord  owner,  which is
believed to be acceptable  to the Bank,  whereby some or all of the arrearage to
the bank, totaling approximately  $350,000,  will be brought up to date by a new
entity  consisting  of the present  owner and the Company.  The letter of intent
provides  that the Company  supply all  necessary  arrearage  funds and that the
Company  and the  present  owner each have a one-half  interest in the new owner
entity and that the current  lease amount  payments  will amortize the mortgage.
Binding  agreements have not been entered into with respect to such transaction.
In the event that such  agreements are not entered into,  the Company's  Danbury
restaurant may be evicted if title is transferred to an owner-user, or may


                                       18
<PAGE>


be  subjected  to a  renegotiation  of its lease on terms less  favorable to the
Company  than the present  lease.  The Company may also choose to not enter into
binding agreement based on the letter of intent.

Lynbrook, New York

     The  Company is  defending  an action  brought by Jack  Ciotti  Trust,  the
landlord of a former  restaurant  in Lynbrook New York leased by a subsidiary of
the Company.  The action against the Company is based on an alleged  guaranty of
the lease payments due from the subsidiary of the Company. The Company is of the
position that the landlord  waived the guarantee at the time of the surrender of
the  premises  in  September  1997.  The action  seeks the sum of  approximately
$200,000.

Collection Actions

     The Company is defending a series of  collection  actions,  under which the
aggregate  sum  sought is  approximately  not more than  $100,000.  The  Company
believes  it has full or  partial  defenses  to a  number  of such  actions  and
believes  it can  settle  all or  most of the  others  for a sum  which,  in the
aggregate, is lower than that set forth above.

Judgments

The  Company  was subject to a judgment  for  $150,000  granted to the holder of
certain notes issued in March 1997. However, the Company has a written agreement
with the judgment holder to convert the sum due into Common stock at the time of
the Offering at prices  ranging  form $0.25 to $0.225 per share.  The Company is
subject to another  note  holder  judgment  for  approximately  $50,000,  and is
discussing  a  similar  conversion  with the  judgment  holder.  There can be no
assurance that such conversions will be effected.


Item 2 - Changes in Securities and Use of Proceeds

     None.


Item 3. - Defaults upon Senior Securities

     $303,749 of Series C subordinated  notes payable matured on August 6, 1997,
of which note holders with principal balances  aggregating $62,499 have extended
the  repayment  date to  December  15,  1997.  These  Series C notes and accrued
interest  of $60,749 are in default for  non-payment.  The Series C  noteholders
have  waived  the  accrued  interest  on their  notes  in  return  for  $500,000
convertible subordinated notes dated March 4, 1997, matured


                                       19
<PAGE>


September  4,  1997.  These  notes  were in default  for  non-payment,  but were
restructured on December 8, 1997, and are no longer in default.

     A $425,000 note payable  associated  with the  acquisition of the Fairfield
restaurant matured on January 2, 1997. The restaurant was sold on March 24, 1998
and the note has been restructured to provide for interest payments of $5,500.44
monthly  through  June 24, 1998,  with the  remaining  principal  and any unpaid
interest due on June 24, 1998. The outstanding principal balance is $440,034.81.
The  noteholder  has taken a $230,000  note due the company and  received on the
sale of the restaurant, as additional collateral for the $440,034.81 note.

     The Company is currently prohibited from paying cash dividends by virtue of
the Delaware General Corporation Law.


Item 4. - Submission of Matters to A Vote of Security Holders

     None.

Item 5. - Other Information

     The Company's  Common Stock was delisted from the NASDAQ SmallCap Market in
September  1997 and as of November  4, 1997 was  suspended  from  trading on the
Boston Stock Exchange (the "BSE").  The BSE has applied for the delisting of the
Company common stock from such exchange pursuant to Rule 12d-2f2.

     The  Company  securities  are  quoted on the "pink  sheets"  or the  NASD's
Electronic  Bulletin  Board.  Due to the nature of such  markets  and the "penny
stock" rules to which the common stock trades (Rule 15g-9  promulgated under the
SEC Act) there may not be a liquid trading market in the common stock.


Item 6. - Exhibits and Reports on Forms 8-K.

During the quarter ended  December 28 1997, the Company filed no reports on Form
8-K.


                                       20
<PAGE>


                                   SIGNATURES

     In accordance  with the  requirements  of the Exchange Act, the  Registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.




THE RATTLESNAKE HOLDING COMPANY, INC.
         (Registrant)

Date October 15, 1998              /s/ Nicolo Ottomanelli
     -------------------           ------------------------
                                    Nicolo Ottomanelli
                                    Chief Executive Officer


                                       21