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 31, 1998

         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)

                   2 South Main Street S. Norwalk, Conn. 06856
               (Address of principal executive offices) (Zip Code)

       Registrant's telephone number, including area code: (860) 276-8660

     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

     13,098,009 Common Shares, par value $.001 per share, were outstanding as of
December 31, 1998


<PAGE>


                                   FORM 10-QSB

                      THE RATTLESNAKE HOLDING COMPANY, INC.

                                December 31, 1998

                                      INDEX
<TABLE>
<CAPTION>


         Part I - Financial Information                                                                         Page No.
         ------------------------------                                                                         --------

<S>                                                                                                             <C>
Item 1:Financial Statements

Condensed Consolidated Balance Sheets December 31, 1998  (Unaudited)                                            3
         and June 28, 1998

Unaudited Condensed  Consolidated  Statements  of  Operations  for  three and six months                        4
         ended December 31, 1998 and December 28, 1997

Unaudited Condensed  Consolidated  Statements  of Cash  Flows for the six  months ended                         5
         December 31, 1998 and December 28, 1997

Notes to Unaudited Condensed Consolidated Financial Statements                                                  6

Management's Discussion and Analysis                                                                            9

Liquidity                                                                                                       11

Safe Harbor Statement                                                                                           13

         Part II - Other Information

Item 1: Legal Proceedings                                                                                       14

Item 2: Changes in Securities and Use of Proceeds                                                               15

Item 3: Defaults Upon Senior Securities                                                                         15

Item 4: Submission of Matters                                                                                   15

Item 5: Other Information                                                                                       15

Item 6: Exhibits and Reports on Form 8-K                                                                        16

Signatures                                                                                                      17

</TABLE>



<PAGE>


             THE RATTLESNAKE HOLDING COMPANY, INC. AND SUBSIDIARIES
                      Condensed Consolidated Balance Sheets
<TABLE>
<CAPTION>


                                                                                December 31,                June 28,
         ASSETS                                                                    1998                       1998
                                                                                (unaudited)
                                                                               -------------              -------------
<S>                                                                             <C>                        <C>
Current assets:
       Cash                                                                     $      18,135              $    311,328
     Accounts receivable                                                                5,978                    16,831
     Note receivable, current installments                                              4,080                     4,080
     Inventory                                                                         15,860                    29,397
     Prepaid expenses and other current assets                                              -                     7,200
                                                                                -------------              ------------

         Total current assets                                                          44,053                   368,836

Notes receivable, less current installment                                            225,920                   225,920
Property and equipment, net                                                            89,553                    81,375
Intangible assets, net                                                                 24,235                    30,598
Other assets, net                                                                      90,380                    78,443
                                                                                -------------              ------------

                                                                                $     474,141              $    785,172
                                                                                =============              ============

            LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities
Current maturities of notes payable                                             $   1,402,539              $  1,282,539
     Accounts payable                                                               1,043,223                 1,019,139
     Accrued expenses                                                                 839,397                   629,414
     Dividends payable                                                                259,545                   207,636
     Other current liabilities                                                        197,492                   182,971
                                                                                -------------              ------------
         Total current liabilities                                                  3,742,196                 3,321,699

Notes payable, net of current maturities                                              520,006                   525,006
                                                                                -------------              ------------

         Total liabilities                                                          4,262,202                 3,846,705

Stockholders' equity:
     Preferred Stock, $.10 par value, 5,000,000 shares
         authorized, 56,500 issued and outstanding, at
         December 31, 1998 and June 28, 1998                                            5,650                     5,650
     Common Stock, $.001 par value, 20,000,000 shares authorized
         13,183,729 and 10,889,285 issued and outstanding at
         December 31, 1998 and June 28, 1998, respectively                             13,183                    10,890
     Additional paid-in capital                                                    12,735,155                12,554,618
     Accrued dividends                                                               (259,545)                 (207,636)
     Accumulated deficit                                                          (16,282,504)              (15,425,055)
                                                                                -------------               -----------
                                                                                   (3,788,061)               (3,061,533)
                                                                                -------------               -----------

                                                                                $     474,141             $     785,172
                                                                                =============             =============
</TABLE>

See accompanying notes to unaudited condensed consolidated financial statements.


<PAGE>



             THE RATTLESNAKE HOLDING COMPANY, INC. AND SUBSIDIARIES
            Unaudited Condensed Consolidated Statements of Operations

<TABLE>
<CAPTION>



                                                           Three months ended                           Six months ended
                                                           ------------------                           ----------------
                                                     December 31,       December 28,           December 31,         December 28,
                                                        1998                1997                   1998                 1997
                                                     -----------        ------------           ------------         ------------

<S>                                                  <C>                     <C>                  <C>                  <C>
Restaurant sales                                     $   414,001             865,542              1,099,265            2,131,123
Less: promotional sales                                   14,377              16,509                 44,983               65,679
                                                     -----------        ------------           ------------         ------------
Net restaurant sales                                     399,624             849,033              1,054,282            2,065,444

Costs and expenses
  Cost of food and beverage sales                        152,587             275,483                421,998              665,897
  Restaurant salaries and benefits                       154,014             280,941                446,665              666,732
  Occupancy and other                                    136,766             192,765                376,078              526,383
  Depreciation and amortization expense                   11,189              76,667                 22,282              183,334
                                                     -----------        ------------           ------------         ------------
     Total restaurant costs and operating expenses       454,556             825,856              1,267,023            2,042,346


Selling, general and administrative                      156,650             369,761                377,473              603,598
Interest expense, net                                     63,755              45,646                131,185               97,347
Litigation award                                        (400,000)                  -                225,000                    -
Miscellaneous expenses                                         -               1,958                      -                7,131
                                                     -----------        ------------           ------------         ------------
     Net income (loss) before extraordinary gain         124,663            (394,188)              (946,399)            (684,978)
                                                     -----------        ------------           ------------         ------------
Extraordinary item:
Gain on extinguishment of debt                            88,950                   -                 88,950                    -
                                                     -----------        ------------           ------------         ------------
    Net income (loss)                                    213,613            (394,188)              (857,449)            (684,978)
                                                      -----------        ------------           ------------         ------------
Dividends on preferred shares                            (25,954)            (25,954)               (51,909)             (51,909)
                                                     -----------        ------------           ------------         ------------
Net income (loss) available to common stockholders   $   187,659            (420,142)              (909,358)            (736,887)
                                                     ===========        ============           ============         ============

Net income (loss) per share:
Income (loss) before extraordinary item              $      0.01               (0.16)                 (0.08)               (0.28)
Extraordinary item                                          0.01                   -                   0.01                    -
                                                     -----------        ------------           ------------         ------------
    Net income (loss) - Basic and diluted            $      0.01               (0.16)                 (0.07)               (0.28)
                                                     ===========        ============           ============         ============
Weighted average number of common
and common equivalent shares outstanding -
  Basic and diluted                                   13,130,503           2,650,227             12,693,324            2,650,227
                                                     ===========        ============           ============         ============
</TABLE>

See accompanying notes to unaudited condensed consolidated financial statements.


<PAGE>



             THE RATTLESNAKE HOLDING COMPANY, INC. AND SUBSIDIARIES
            Unaudited Condensed Consolidated Statements of Cash Flows



<TABLE>
<CAPTION>
                                                                                    December 31,             December 28,
                                                                                        1998                     1997
                                                                                      -----------              ------------

<S>                                                                                 <C>                        <C>
Cash flows from operating activities:
  Net loss                                                                          $    (857,449)             (684,978)
  Adjustment to reconcile net loss to net cash used in operating activities:
     Depreciation and amortization                                                         25,085               198,653
     Litigation award                                                                     225,000                     -
     Gain on extinguishment of debt                                                       (88,950)                    -
     Valuation of warrants for services                                                     4,331                     -
     Stock issued for services provided                                                    25,000                     -
     Changes in assets and liabilities:
          (Increase) decrease in accounts receivable                                       10,853               (22,785)
          Decrease in inventory                                                            13,537                   219
          Increase in prepaids and other assets                                            (4,738)               (5,982)
          Increase in accounts payable and accrued expenses                                88,017               294,753
          (Decrease) increase in other current liabilities                                 14,521               (61,927)
                                                                                          -------               -------

          Net cash used in operating activities                                          (544,793)             (282,047)
                                                                                          -------               -------
Cash flows from investing activities
   Capital expenditures                                                                   (26,900)                    -
                                                                                          -------              --------

          Net cash used in investing activities                                           (26,900)                    -
                                                                                          -------              --------
Cash flows from financing activities:
   Proceeds from issuance of convertible notes                                            150,000               750,000
   Net proceeds from issuance of common stock                                             153,500                     -
   Principal repayments of borrowings                                                     (25,000)             (515,854)
                                                                                     -------------             ---------

          Net cash provided by financing activities                                       278,500               234,146

Net decrease in cash                                                                     (293,193)              (47,901)
                                                                                     -------------             ---------

Cash, beginning of period                                                                 311,328                68,022
                                                                                         --------                ------

Cash, end of period                                                                  $     18,135           $    20,121
                                                                                     ============           ===========

Cash paid during the period for:
   Interest                                                                          $     51,036          $      7,599
   Income taxes                                                                                 -                 6,891
                                                                                     ============          ============

</TABLE>

See accompanying notes to unaudited condensed consolidated financial statements.




<PAGE>




             THE RATTLESNAKE HOLDING COMPANY, INC. AND SUBSIDIARIES
         NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS



     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  31,  1998 and June 28,  1998;  the  results of
operations  for the three and six month  periods  ended  December  31,  1998 and
December 28, 1997;  and the cash flows for the six month periods ended  December
31, 1998 and December  28, 1997.  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 the year end June 28, 1998. The results of operations for the
period ended December 31, 1998 are not  necessarily  indicative of the operating
results that may be achieved for the full year.

     3. Basis of presentation

     Management  of the Company has made a number of estimates  and  assumptions
relating  to the  reporting  of assets and  liabilities  and the  disclosure  of
contingent  assets and  liabilities  to prepare  these  financial  statements in
conformity with generally accepted accounting  principles.  Actual results could
differ from those estimates.

     The accompanying  consolidated financial statements have been prepared on a
going  concern  basis  which  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 $16,282,504,
inclusive of a net loss for the six months ended  December 31, 1998 of $946,399,
excluding an  extraordinary  gain of $88,950 on the  forgiveness of debt.  Based
upon  interim  financial  information  prepared by  management,  the Company has
continued  to incur losses in fiscal  1999.  Additionally,  $303,749 of Series C
subordinated  notes payable matured on August 6, 1997, of which noteholders with
principal balances  aggregating  $62,499 extended the repayment date to December
15, 1997, $425,000 note payable matured on January 2, 1997, $100,000 convertible
subordinated  note  payable  matured on August 31,  1998,  $11,709  note payable
matured in February  1998,  $190,000 note payable  matured on December 31, 1997,
$150,000 notes payable matured on May 31, 1998,  $50,000 note payable matured on
October 31, 1998, and a $2,089  subordinated  note payable  matured on August 6,
1996, such obligations aggregating $1,232,547 and all of which are in default as
of December 31, 1998. Additionally,  $259,545 of accumulated dividends on Series
A Preferred Stock were also past due and unpaid.

     Subsequent  to the  completion  of the private  placement in February  1999
which  effectively  satisfied all short and  long-term  debt that was in default
(see  Private  Placement  Offering  below),  the  Company  has  assembled  a new
management team and developed a new restaurant theme which will be introduced at
the recently reacquired Danbury, Connecticut location.

     Management  believes that the  finalization  of its cost reduction plan and
its approximately $6,000,000 private placement financing will enable the Company
to achieve profitable  operations and restore liquidity.  However,  no assurance
can be made  regarding the  achievement  of the goals  outlined in the strategic
plan as  outlined  above,  or if such  plans are  achieved,  that the  Company's
operations will be profitable.

     Private Placement Offering

     On October 27, 1998, the Company  commenced an offering (the "Offering") of
its Series B Convertible  Preferred Shares, $.10 par value. Between February 17,
1999 and July 2, 1999,  the Company sold  approximately  $6,000,000  of Series B
Preferred Shares pursuant to the Offering and converted approximately $1,350,000
of its debt to Company equity.  During the Offering,  the Company satisfied,  by
payment of cash and/or equity in the form of preferred  and/or common stock, the
following:   (a)  all  outstanding   Series  C  promissory  notes;  (b)  certain
outstanding  Series B promissory  notes;  (c) all outstanding  promissory  notes
related to the Fairfield facility; and (d) all outstanding promissory notes from
(i) September 1997, (ii) March through June 1998, and (iii) October and November
1998,  effectively  satisfying  all short  term and long term debt  which was in
default.

     The preferred  shares will be  convertible,  at the option of the holder at
any time after November 1999, at a conversion price initially equal to $0.05 per
share of common stock.  The conversion rate will be reduced by 10% per month for
each month the Company fails to comply with its obligations to file, and in good
faith process, a registration statement.

     The conversion  price is subject to the  adjustments on the terms set forth
in the Certificate of Designation.  The  outstanding  preferred  shares shall be
converted,  with no action  on the part of the  holder,  if,  at any time  after
February  2000,  the common stock into which the same is converted is registered
under the  Securities  Act and the  closing  bid price of the  common  stock for
twenty  consecutive  trading  days is at least four times the  conversion  price
($0.20 based on the initial conversion price of $0.05).

     Holders of preferred shares are entitled to receive,  quarterly,  dividends
at the rate of 8% per annum before any dividends may be paid with respect to the
Common Stock, which shall be paid in cash or preferred shares at the election of
the Company.  If there is a failure to pay dividends,  the Placement  Agent,  on
behalf of such holders, has the right to designate one director to the Company's
Board. In addition,  if the Company fails to comply with its obligations to file
and process a Registration Statement, the dividend rate will increase to 14% per
annum from issuance.

     Pursuant  to the March 1998  agreement  to acquire the  Ottomanelli  Group,
additional  consideration  due  to  anti-dilution  provisions  contained  in the
agreements  in the form of common  stock was  payable to the  Ottomanelli  Group
shareholders as a result of the private placement.  In February 1999,  5,000,000
shares of common stock were issued pursuant to such provisions, as amended.

     4. Financing Arrangements

     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 indebtedness  (including  accrued interest)
resulting from a financing the Company conducted in March 1997. In October 1998,
$50,000 of this was paid and the  remaining  $100,000 of this debt was converted
into common stock of the Company.

     In August  1998,  the Company  issued a sixty day  convertible  note in the
principal  amount of $100,000 at an interest rate of 8% to an investment bank in
consideration for professional  services  rendered.  In February 1999, such note
was satisfied by conversion into Company equity.

     During the quarter ended  September 30, 1998,  the Company  privately  sold
1,100,000  shares of its  common  stock at $.15 per share  for an  aggregate  of
$165,000.

     In October 1998, a noteholder of a $100,000 remaining  outstanding  balance
from a $500,000  convertible  note due  September 4, 1997,  with unpaid  accrued
interest of  approximately  $90,000,  accepted common stock with a fair value of
$100,000  in  exchange  for  the  forgiveness  of all  outstanding  obligations.
Accordingly,  the Company has recorded an  extraordinary  gain of $88,950 in the
quarter ended December 31, 1998.

     Between  October and  December  1998,  the  Company  entered  into  private
financing  arrangements  with three  individuals  to provide  $150,000 of bridge
financing  at 16%  interest  per  annum,  plus  warrants,  with due dates of the
earlier  of the  closing  of the  proposed  private  placement  or ninety  days,
respectively.  All notes were satisfied by payment of cash and/or  conversion to
Company equity at the initial  closing of the private  placement on February 17,
1999.

     5. Restaurant Operations

     On July 2, 1998, The Rattlesnake Holding Company,  Inc. signed an agreement
to  purchase  some of the assets of 1562  Restaurant  Corp.  located at 1562 2nd
Avenue,  New York City.  The  purchase  price was  $425,000  payable  $20,000 on
contract,  $105,000  at closing,  and a  promissory  note at 8.5%  payable in 72
payments of $5,332.52. The Company decided not to pursue the acquisition of this
restaurant.

     On July 3, 1998, the Company  entered into a contract for the purchase of a
restaurant  facility in Greenwich,  Connecticut for $400,000 in a combination of
cash and notes. The Company ultimately chose not to purchase this property.

     On April 15, 1999, the Company reacquired the Danbury, Connecticut facility
for $1,350,000 in cash.

     6. Recent Accounting Pronouncements

     In June 1997, the FASB issued Statement 131, "Disclosures About Segments of
an Enterprise  and Related  Information",  effective for fiscal years  beginning
after  December 15, 1997.  This  statement  establishes  standards for reporting
information about operating segments in annual financial statements and requires
selected  information  about  operating  segments in interim  financial  reports
issued to  shareholders.  It also  establishes  standard for related  disclosure
about products and services,  geographic  areas and major  customers.  Operating
segments  are  defined as  components  of an  enterprise  about  which  separate
financial  information  is available  that is  evaluated  regularly by the chief
operating  decision maker in deciding how to allocate resources and in assessing
performance.  This Statement requires reporting segment profit and loss, certain
specific  revenue  and  expense  items  and  segment  assets.  It also  requires
reconciliations of total segment revenues,  total segment profit and loss, total
segment assets and other amounts disclosed for segments to corresponding amounts
reported in the consolidated  financial  statements.  Restatement of comparative
information  for earlier  periods  presented  is required in the initial year of
application.  Interim  information  is not  required  until the  second  year of
application,  at which time comparative information is required. The adoption of
the  Statement in fiscal 1999 will not have a material  impact on its  financial
reporting as the Company has one operating segment.

     In  June  1998,   Statement  of  Financial  Accounting  Standards  No.  133
"Accounting  for  Derivative  Instruments  and Hedging  Activities"  ("Statement
133"),  was issued which is effective for fiscal years  beginning June 15, 2000.
Statement  133  standardizes  the  accounting  for  derivative  instruments  and
requires that all derivative  instruments be carried at fair value.  The Company
has  not  yet  determined  the  impact  that  Statement  133  will  have  on its
consolidated  financial statements and believes that such determination will not
be meaningful until closer to the date of initial adoption.

     7. Litigation

     The  Company  is a  co-defendant  in an  action  brought  by an owner of an
apartment  above the South Norwalk  Company  restaurant  for  negligence per se,
intentional infliction of emotional distress,  negligent infliction of emotional
distress,  and violations of the Connecticut  Unfair Trade Practices Act (CUTPA)
based  upon  alleged  excessive  noise and rude  and/or  threatening  conduct of
employees.  The jury awarded a verdict in the amount of $625,000 against various
defendants,   including  the  Company's  former  Chairman  on  August  5,  1998.
Accordingly,  the Company has  recorded a $625,000  charge in the quarter  ended
September 30, 1998 to accrue this judgment.  On November 20, 1998, the Court set
aside the  jury's  verdict  as to all  counts  against  the  Company  except for
plaintiff's claim for negligence per se and accordingly reduced the jury's award
to $225,000.  Accordingly, the Company reduced by $400,000, in the quarter ended
December  31, 1998,  the amount of the charge  recognized  in the quarter  ended
September 30, 1998. The jury's award is currently on appeal by the Company,  and
plaintiff has appealed the Court's decision to set aside a portion of the jury's
verdict and reduce the award. There are also potential claims of indemnification
by other defendants  against the Company in the event the plaintiff's  appeal is
successful.

     In July 1999,  a demand  letter was  tendered  to the  Company by the legal
counsel  of  the  former  Chairman   seeking   indemnification   from  potential
liabilities   arising  out  of  this   matter.   This  demand  is  based  on  an
indemnification  provision in an agreement  between the former  Chairman and the
Company.   The  Company   believes   that  there  are  valid   defenses  to  the
indemnification claim.

     Plaintiff's negligence claims in this matter are arguably covered by one or
more  of  the  Company's   insurance   policies.   Farmington  Casualty  Company
("Farmington")  and Insurance  Company of Greater New York  ("GNY"),  two out of
three of the Company's  insurance  carriers,  retained  counsel to represent the
Company and defended the Company in this case under a reservation of rights. The
third, Public Service Mutual Ins. Co., denied coverage for the claim altogether.
GNY and Farmington  have  continued to prosecute the appeal in this matter,  but
under a reservation of rights.  The Company has advised  Farmington and GNY that
it intends to pursue its rights in an action for damages and declaratory  relief
in the event that the appeal is unsuccessful  and the insurance  carriers refuse
to provide  coverage for  plaintiff's  claims.  GNY and  Farmington  continue to
reserve all rights with respect to coverage.

     Settlement negotiations are ongoing,  however, there can be no assurance of
a satisfactory settlement.

     The  Company  is a  defendant  in an  action  for an  alleged  breach  of a
commercial  lease in which  damages  exceeding  $190,000 are being  sought.  The
Company has disputed this claim and believes that the plaintiff has inadequately
responded  to  the   Company's   demand  for  discovery   and   inspection   and
interrogatories.  A compliance  conference  was adjourned to September 15, 1999.
The Company intends to vigorously defend this action.

     The Company is also a party in various  other legal  actions  incidental to
the  normal  conduct  of its  business.  Management  does not  believe  that the
ultimate  resolution of these actions will have a material adverse effect on the
Company's consolidated financial position, results of operations or liquidity.

     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 31, 1998,  the accrued
dividends aggregated $259,545.

     In July 1999, the Company  completed a private  placement of  approximately
$6,000,000 of Series B preferred stock.  Coincident with the private  placement,
the  holders  of 56,500  shares  of Series A  preferred  stock  exchanged  their
holdings for 55,370  shares of Series B preferred  stock and waived their rights
to the unpaid and accumulated dividends.

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


     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 31, 1998 AS
COMPARED WITH DECEMBER 28, 1997

     Gross  restaurant  sales  decreased 52.2% to $414,001 for the quarter ended
December 31, 1998 from $865,542 for the quarter ended December 28, 1997. For the
six months ended December 31, 1998.  Gross  restaurant  sales decreased 48.4% to
$1,099,265 from  $2,131,123.  Likewise,  net restaurant sales decreased 52.9% to
$399,624 for the quarter  ended  December 31, 1998 from $849,033 for the quarter
ended  December  28,  1997.  For the six  months  ended  December  31,  1998 net
     restaurant  sales  decreased  49.0%  to  $1,054,282  from  $2,065,444.  The
decrease in
restaurant sales resulted from a decrease in the number of restaurants operating
during fiscal 1999.

     Promotional sales decreased for the three and six months ended December 31,
1998 by $2,132 and $20,696, respectively. These decreases were attributable to a
reduction in the number of units operating in fiscal 1999.

     For the three months ended  December 31, 1998,  the Company's  cost of food
and beverage  sales  increased as a percentage of net sales to 38.2% as compared
to 32.5% for the three  months ended  December  28,  1997.  The cost of food and
beverage  sales  decreased to $152,587  for the three months ended  December 31,
1998 from $275,483 for the three months ended December 28, 1997. As a percentage
of net sales for the six months ended  December 31, 1998 cost of sales was 40.0%
as compared to 32.2% for the six months ended  December  28,  1997.  The cost of
food and beverage sales  decreased to $421,998 for the six months ended December
31,  1998  from  $665,897  for the six  months  ended  December  28,  1997.  The
percentage  increase is  attributable to  inefficiencies  of the Flemington unit
closed in November 1998. The decrease in cost is  attributable  to the reduction
in the number of restaurants operating during the period.

     Restaurant  salaries and fringe benefits,  which consist of direct salaries
of restaurant  managers,  hourly  employee  wages and related  fringe  benefits,
decreased to $154,014  for the three months ended  December 31, 1998 as compared
to $280,941 for the three months ended December 28, 1997. As a percentage of net
restaurant sales, these costs increased to 38.5% in 1998 as compared to 33.1% in
1997. For the six months ended December 31, 1998 restaurant  salaries and fringe
benefits  increased  as a  percentage  of sales to 42.4%  from 32.3% for the six
months ended  December 28, 1997.  The  percentage  increase is  attributable  to
allocating  manager salaries over a smaller  restaurant base.  Actual restaurant
salaries  and fringe  benefits  decreased  to $446,665  for the six months ended
December 31, 1998 from $666,732 for the six months ended December 28, 1997. This
decrease is attributable to the closed units.

     Occupancy  and  other  related  expenses,  which  include  linen,  repairs,
maintenance,  utilities,  rent,  insurance and other occupancy related expenses,
decreased to $136,766 for the three months ended December 31, 1998 from $192,765
for the three months ended  December 28, 1997. As a percentage of net restaurant
sales,  these costs  increased to 34.2% in the three  months ended  December 31,
1998 from 22.7% in the three months ended  December 28, 1997. For the six months
ended  December  31, 1998 these costs  increased to 35.7% from 25.5% for the six
months ended December 28, 1997. The actual occupancy and related costs decreased
to $376,078 for the six months  ended  December 31, 1998 as compared to $526,383
for the six months ended December 28, 1997.  The decrease in occupancy  costs is
attributable to the closed units.

     Depreciation and amortization expenses, decreased to $11,189 or 2.8% of net
restaurant  sales for the three months  ended  December 31, 1998 from $76,667 or
9.0% for the three  months ended  December  28,  1997.  For the six months ended
December 31, 1998 these expenses decreased as a percentage of sales to 2.1% from
8.9% for the six months  ended  December  28,  1997.  Depreciation  and  related
expenses were $22,282 for the six months ended  December 31, 1998 as compared to
$183,334  for  the  six  months  ended  December  28,  1997.  This  decrease  is
attributable  to fewer units in operation as compared to the prior period due to
restaurant closures.

     Selling,  general and administrative  expenses decreased as a percentage of
net sales from 43.6% for the three months  ended  December 28, 1997 to 39.2% for
the three months ended December 31, 1998.  General and  administrative  expenses
decreased to $156,650 for the three months ended December 31, 1998 from $369,761
for the three  months  ended  December  28,  1997.  General  and  administrative
expenses  increased as a  percentage  of net sales from 29.2% for the six months
ended  December  28, 1997 to 35.8% for the six months  ended  December 31, 1998.
General and  administrative  expenses  decreased  to $377,473 for the six months
ended December 31, 1998 from $603,598 for the six months ended December 28 1997.
The decrease in selling,  general and administrative expenses is attributable to
further cost reduction measures.

     Interest  expense  increased to $63,755 for the three months ended December
31, 1998 from  $45,646 for the three months  ended  December 28, 1997.  Interest
expense  increased to $131,185  for the six months ended  December 31, 1998 from
$97,347 for the six months ended  December  28,  1997.  The increase in interest
expense is attributable to equity.

     In October 1998, a noteholder of a $100,000 remaining  outstanding  balance
from a $500,000  convertible  note due  September 4, 1997,  with unpaid  accrued
interest of  approximately  $90,000,  accepted common stock with a fair value of
$100,000  in  exchange  for  the  forgiveness  of all  outstanding  obligations.
Accordingly,  the Company has recorded an  extraordinary  gain of $88,950 in the
quarter ended December 31, 1998.

    The  Company  is a  co-defendant  in an  action  brought  by an owner of an
apartment  above the South Norwalk  Company  restaurant  for  negligence per se,
intentional infliction of emotional distress,  negligent infliction of emotional
distress,  and violations of the Connecticut  Unfair Trade Practices Act (CUTPA)
based  upon  alleged  excessive  noise and rude  and/or  threatening  conduct of
employees.  The jury awarded a verdict in the amount of $625,000 against various
defendants,   including  the  Company's  former  Chairman  on  August  5,  1998.
Accordingly,  the Company has  recorded a $625,000  charge in the quarter  ended
September 30, 1998 to accrue this judgment.  On November 20, 1998, the Court set
aside the  jury's  verdict  as to all  counts  against  the  Company  except for
plaintiff's claim for negligence per se and accordingly reduced the jury's award
to $225,000.  Accordingly, the Company reduced by $400,000, in the quarter ended
December  31, 1998,  the amount of the charge  recognized  in the quarter  ended
September 30, 1998. The jury's award is currently on appeal by the Company,  and
plaintiff has appealed the Court's decision to set aside a portion of the jury's
verdict and reduce the award. There are also potential claims of indemnification
by other defendants  against the Company in the event the plaintiff's  appeal is
successful.

     YEAR 2000 MODIFICATIONS

     The Year 2000 Issue is the result of computer  programs being written using
two digits rather than four to define the applicable  year. Any of the Company's
computer programs that have  date-sensitive  software may recognize a date using
"00" as the year 1900 rather than the year 2000.  This could  result in a system
failure or miscalculations causing disruptions of operations,  including,  among
other  things,  a temporary  inability  to process  certain  transactions,  send
invoices, or engage in similar normal business activities.

     The Company does not believe the Year 2000 Issue will significantly  affect
its operations since it is in a "re-start" mode with respect to its business and
uses little or no computer equipment outside of its accounting programs.

     Based  on  recent  assessments,  the  Company  determined  that it will not
require  significant  modifications  of its  hardware  or software so that those
systems  will  properly  utilize  dates beyond  December  31, 1999.  The Company
presently  believes  that  with  little  or no  modifications  to  its  existing
software, the Year 2000 Issue can be mitigated.

     The  Company's  plan to resolve the Year 2000 Issue  involves the following
four phases: assessment,  remediation,  testing, and implementation.  As of June
30, 1999, the Company has fully completed its assessment of all internal systems
that could be significantly  affected by the Year 2000. The completed assessment
indicated that most of the Company's significant  information technology systems
will  not be  significantly  affected,  particularly  the  general  ledger,  and
inventory  systems.  The Company does not believe that the Year 2000  presents a
material  exposure  as it relates to the  Company's  products  or  services.  In
addition,  the  Company  has  begun to  gather  information  about the Year 2000
compliance  status  of its  external  agents  and  continues  to  monitor  their
compliance.  To date, the Company is not aware of any external agent with a Year
2000 issue that would  materially  impact the Company's  results of  operations,
liquidity,  or capital  resources.  The Company has  requested  from its bank an
assessment  of the  extent of the  bank's  Year 2000  compliance.  However,  the
Company has no means of ensuring that  external  agents will be Year 2000 ready.
The inability of external agents to complete their Year 2000 resolution  process
in a timely  fashion  could  materially  and adversely  impact the Company.  The
effect of non-compliance by external agents is not determinable.

     The  Company  will  utilize  external  software  and service  providers  to
reprogram, test and implement software for the Year 2000 modification as needed,
the cost of which is not expected to be  significant.  The Company will evaluate
the status of  completion of Year 2000  modifications  in September 30, 1999 and
will undertake all remaining  necessary  steps to seek to ensure its systems are
Year 2000 compliant.

     In the  event the  Company's  computer  systems  are  materially  adversely
affected by the Year 2000 issue, the Company's  business and operations could be
materially adversely affected by disruptions in the operations of other entities
with which the Company  interacts.  However,  the Company believes that the most
likely worst case scenario is that there will be some  localized  disruptions of
systems  that will affect  individual  facilities  or services  for a short time
rather than systematic or long-term problems  affecting its business  operations
as a whole. In such event the Company has contingency plans for certain critical
applications  and is  working  on plans  for  others.  These  contingency  plans
involve,  among other actions,  increasing  inventories,  and adjusting staffing
strategies.


     LIQUIDITY

     At  September  30,  1998,  the  Company  was past due and in  default  of a
majority of its  financing  arrangements  as  $303,749 of Series C  subordinated
notes  payable  matured  August 6, 1997,  of which  noteholders  with  principal
balances  aggregating  $62,499 extended the repayment date to December 15, 1997,
$100,000  convertible  subordinated  notes  payable  matured  August 31, 1998, a
$425,000 note payable matures on January 2, 1997, a $11,709 note payable matured
in February 1998, a $190,000 note payable matured on December 31, 1997, $150,000
notes payable matured on May 31, 1998, a $50,000 note payable matured on October
31, 1998, and a $2,089 subordinated note payable matured on August 6, 1996, such
obligations  aggregating  $1,232,547  and all of  which  were in  default  as of
December 31, 1998.  Additionally,  $259,545 of  accumulated  dividends  Series A
Preferred  Stock  were  also  past due and  unpaid.  All of the  foregoing  have
subsequently  been satisfied  through the proceeds from the private placement of
the Series B preferred  stock and the  exchange of Series A preferred  stock for
Series B preferred stock.

     The Company's  cash position  decreased by $ 293,193  during the six months
ended  December  31,  1998,  principally  as a result  of the net  cash  used in
operating  activities  offset by cash  provided by the sale of common  stock and
placement of convertible notes.

     Net cash used in operating activities was $544,793, principally relating to
the  Company's  net loss,  offset by  expenses  related to  warrants  issued for
services and an increase in accounts payable and accrued  expenses.  The Company
generated $278,500 from financing activities principally relating to the receipt
of proceeds  from bridge  financing  borrowings  and  issuance of common  stock,
offset by repayments of outstanding indebtedness.

     Employment Agreements

     In  October  1998,  the  Company  entered  into  a  three  year  employment
agreement,  as revised,  with an  individual  to act as  President  and/or Chief
Executive  Officer and as a member of the Board of Directors of the Company.  In
consideration,  the  employee  is to  receive  a  monthly  fee  of  $7,917  plus
reasonable  expenses.  In  addition,   the  employee  shall  be  entitled  to  a
performance  bonus and shall  receive a warrant to  purchase an amount of Common
Stock equal to ten (10%) percent of the outstanding common stock of the Company,
on a fully  diluted  basis,  representing  30,000,000,  shares after the private
placement  financing  at $0.05 per  share,  the fair value on the date of grant,
exercisable  for a period of five (5)  years,  one third  (1/3) of the number of
shares covered thereby vesting at the time of the private  placement  financing,
and one third (1/3) at the end of each one (1) year period thereafter during the
term.

     In  October  1998,  the  Company  entered  into  a  three  year  employment
agreement, as revised, with an individual to provide services as Chief Financial
Officer and Vice President of the Company. In consideration,  the employee is to
receive a monthly fee of $4,333 plus reasonable expenses. In addition, an option
to purchase up to 300,000  shares of the Company's  common stock with an initial
exercise price of $0.05 per share,  exercisable for five (5) years, which option
will vest as to one-third  (1/3) of the number of shares covered  thereby at the
end of each one year period during the term. Additionally, the right to purchase
200,000 shares in each of years two and three were granted.

     Consulting Agreements

     On  July  20,  1998,  the  Company  entered  into a three  year  consulting
agreement  with an  individual  to provide  services to design and implement the
future expansion of the Company's planned restaurant concepts. In consideration,
the consultant is to receive a monthly fee of $1,000 plus  reasonable  expenses.
In addition a warrant to purchase an additional  300,000 shares of the Company's
non-restricted common stock with an initial exercise price of $0.48 per share.

     In  October  1998,  the  Company  entered  into  a  three  year  consulting
agreement,  as revised, with an individual to provide advice and consultation in
the  implementation of the future expansion of the Company's planned  restaurant
concepts. In consideration, the consultant shall serve without regular, periodic
compensation.  The consultant shall be entitled to a performance bonus and shall
receive a warrant,  immediately  exercisable,  to  purchase  an amount of Common
Stock equal to fifteen (15%) of the outstanding Common Stock of the Company on a
fully diluted basis after the offering of Series B Preferred  Stock at $0.05 per
share,  exercisable  for a period  of five (5)  years,  representing  45,000,000
shares,  and a right to  purchase  an  amount of  Common  Stock  equal to 15% of
outstanding options and warrants.

     Subsequent Events

     In  February  1999,  the  Company  converted  all of its Series A Preferred
Shares, 56,500 shares, into 55,370 shares of Series B Preferred Shares, pursuant
to an Exchange and Waiver  Agreement  previously  entered into with the Series A
Preferred Shareholders in February 1998.

     Between February and July 1999, the Company  conducted the Offering raising
approximately  $6,000,000  and  issued  a new  Series  B  Preferred  stock at an
issuance price of $25 per share.  Each preferred  shares is convertible into 500
shares of the Company's  common stock ($0.05 per share).  The proceeds were used
for the acquisition of the Danbury property and other future  acquisitions,  the
payment of debt and to provide working capital .

     In February 1999 and in connection with the financing, warrants were issued
to various individuals for services rendered in connection with the Offering and
note holders of the Company.


     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)  or  achievements  expressed  or  implied  by  such  forward  looking
statements. 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 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 1998,
each of which could adversely affect the Company's  business and the accuracy of
the forward looking statements contained herein.


<PAGE>



     PART II

     Item 1: - Legal Proceedings


     South Norwalk, Connecticut

     The  Company  is a  co-defendant  in an  action  brought  by an owner of an
apartment  above the South Norwalk  Company  restaurant  for  negligence per se,
intentional infliction of emotional distress,  negligent infliction of emotional
distress,  and violations of the Connecticut  Unfair Trade Practices Act (CUTPA)
based  upon  alleged  excessive  noise and rude  and/or  threatening  conduct of
employees.  The jury awarded a verdict in the amount of $625,000 against various
defendants,  including  the  Company's  former  Chairman  on August 5, 1998.  On
November  20,  1998,  the Court set aside the  jury's  verdict  as to all counts
against the  Company  except for  plaintiff's  claim for  negligence  per se and
accordingly reduced the jury's award to $225,000.  The jury's award is currently
on appeal by the Company, and plaintiff has appealed the Court's decision to set
aside a portion of the  jury's  verdict  and  reduce  the award.  There are also
potential claims of  indemnification  by other defendants against the Company in
the event the plaintiff's appeal is successful.

     In July 1999,  a demand  letter was  tendered  to the  Company by the legal
counsel  of  the  former  Chairman   seeking   indemnification   from  potential
liabilities   arising  out  of  this   matter.   This  demand  is  based  on  an
indemnification  provision in an agreement  between the former  Chairman and the
Company.   The  Company   believes   that  there  are  valid   defenses  to  the
indemnification claim.

     Plaintiff's negligence claims in this matter are arguably covered by one or
more  of  the  Company's   insurance   policies.   Farmington  Casualty  Company
("Farmington")  and Insurance  Company of Greater New York  ("GNY"),  two out of
three of the Company's  insurance  carriers,  retained  counsel to represent the
Company and defended the Company in this case under a reservation of rights. The
third, Public Service Mutual Ins. Co., denied coverage for the claim altogether.
GNY and Farmington  have  continued to prosecute the appeal in this matter,  but
under a reservation of rights.  The Company has advised  Farmington and GNY that
it intends to pursue its rights in an action for damages and declaratory  relief
in the event that the appeal is unsuccessful  and the insurance  carriers refuse
to provide  coverage for  plaintiff's  claims.  GNY and  Farmington  continue to
reserve all rights with respect to coverage.

     Settlement negotiations are ongoing,  however, there can be no assurance of
a satisfactory settlement.

     Danbury, Connecticut

     A  foreclosure  action was  commenced in September or October 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.

     Lynbrook, New York

     The  Company is  defending  an action  brought by Jack  Cioffi  Trust,  the
landlord of a former  Rattlesnake  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 $190,000.


     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 noteholders with principal  balances  aggregating  $62,499 had extended
the repayment date to December 15, 1997. All of these Series C notes and accrued
interest are in default for non payment. A $425,000 note payable associated with
the acquisition of a restaurant matured on January 2, 1997, $150,000 of notes or
similar  obligations  matured May 1998, $190,000 of notes or similar obligations
matured December 1997,  $100,000 of notes or similar  obligations matured August
1998,  $50,000 of notes or similar  obligations  matured  October 1998,  $11,709
matured  February 1998, and $2,089 matured August 1996 are currently in default.
All of the above  were,  with the  exception  of  approximately  $229,000 of the
Series B Notes,  satisfied  by the Company  from the proceeds of the sale of its
Series B Preferred Stock in 1999.


     Item 4 - Submission of Matters to a Vote of Stockholders

     No matters were submitted to a vote of stockholders  during the quarter for
which this report was filed.


     Item 5. - Other Information

     The Company's Common Stock is not listed on the NASDAQ Small Cap Market 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 traded on the NASDAQ 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.

     (b) Reports on Form 8-K

     During the quarter ended December 31, 1998, the Company filed no reports on
Form 8-K.


<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)


By: /s/
    -----------------------
    Kenneth Berry
    Chief Executive Officer

By: /s/
    -----------------------
    Frank Ferro
    Chief Financial Officer



Date:  August 12, 1999