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                        SECURITIES & EXCHANGE COMMISSION
                             Washington, D.C. 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 September 30, 1999

                                       OR

[ ] TRANSITION  REPORT  PURSUANT  TO  SECTION  13  OR  15(d) OF  THE  SECURITIES
    EXCHANGE ACT OF 1934

    For the transition period from ___________________ to ___________________

                         Commission file number: 0-30002

                             RAVENSWOOD WINERY, INC.
        (Exact Name of Small Business Issuer as Specified in its Charter)

                California                                 94-3026706
      (State or Other Jurisdiction of                   (I.R.S. Employer
      Incorporation or Organization)                   Identification No.)

          18701 Gehricke Road
           Sonoma, California                                95476
  (Address of Principal Executive Offices)                 (Zip Code)

                    Issuer's Telephone Number: 707-938-1960

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

                                 Yes [X]  No [ ]

The number of shares  outstanding  of the  Issuer's  Common Stock on November 8,
1999 was 4,568,352.

Transitional Small Business Disclosure Format: Yes [ ] No [X]


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<PAGE>


                             RAVENSWOOD WINERY, INC.

                          PART I. FINANCIAL INFORMATION

ITEM 1.       FINANCIAL STATEMENTS                                          Page
                                                                            ----

    Balance Sheets as of September 30, 1999 and June 30, 1999.                2

    Statements of Income for the three months ended
    September 30, 1999 and 1998.                                              3

    Statements  of Cash Flows for the three months ended
    September 30, 1999 and 1998.                                              4

    Notes to Financial Statements.                                            5

ITEM 2.       MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
              CONDITION AND RESULTS OF OPERATIONS                             7

              FACTORS THAT MAY AFFECT FUTURE RESULTS                         14


                           PART II. OTHER INFORMATION                        19

ITEM 2.       CHANGES IN SECURITIES AND USE OF PROCEEDS                      19

ITEM 6.       EXHIBITS AND REPORTS ON FORM 8-K                               19



                                       1


<PAGE>



<TABLE>
                                                       RAVENSWOOD WINERY, INC.
                                                    PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

                                                       RAVENSWOOD WINERY, INC.
                                                            BALANCE SHEET

<CAPTION>
                                                                                                   September 30,          June 30,
                                                                                                       1999                 1999
                                                                                                   -----------          -----------
                                                                                                   (unaudited)
<S>                                                                                                 <C>                  <C>
                                     ASSETS
Current assets:
 Cash and cash equivalents                                                                          $ 8,910,861          $11,390,903
 Accounts receivable, less allowance for doubtful accounts of $10,000                                 3,967,575            2,763,418
 Prepaid income taxes                                                                                      --                 15,850
 Inventories                                                                                         16,438,952           14,581,973
 Prepaid expenses                                                                                       153,784              100,826
 Deferred tax assets                                                                                    155,000              162,800
                                                                                                    -----------          -----------
 Total current assets                                                                                29,626,172           29,015,770

 Property, plant and equipment, less accumulated depreciation, net                                   11,700,114            9,001,147
 Notes receivable from shareholder                                                                      318,583              314,475
 Other assets                                                                                           156,240              186,921
                                                                                                    -----------          -----------

                                                                                                    $41,801,109          $38,518,313
                                                                                                    ===========          ===========

                      LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities:
 Current portion of long-term debt                                                                  $    79,200          $   109,722
 Current portion of capital lease obligations                                                           134,934              368,203
 Short-term borrowings                                                                                  750,000            1,700,000
 Accounts payable                                                                                     4,028,628            3,382,118
 Income taxes payable                                                                                   929,480                 --
 Accrued commissions                                                                                    492,669              396,358
 Accrued liabilities                                                                                    523,508              433,011
                                                                                                    -----------          -----------
 Total current liabilities                                                                            6,938,419            6,389,412

Long-term liabilities:
 Long-term debt, net                                                                                  4,827,770            4,525,231
 Capital lease obligations, net                                                                       2,431,642            1,551,762
 Convertible debentures                                                                               2,502,500            2,502,500
 Other long-term liabilities                                                                             15,989                 --
                                                                                                    -----------          -----------
 Total liabilities                                                                                   16,716,320           14,968,905
                                                                                                    -----------          -----------

Shareholders' equity:

Preferred stock, no par value; 1 million shares authorized, none issued                                    --                   --
 Common stock, no par value; 20 million shares authorized; 4,568,352
    issued and outstanding                                                                           14,211,018           14,211,018
 Retained earnings                                                                                   10,836,204            9,338,390
 Unrealized gain on available-for-sale securities                                                        37,567                 --
                                                                                                    -----------          -----------
 Total shareholders' equity                                                                          25,084,789           23,549,408
                                                                                                    -----------          -----------

                                                                                                    $41,801,109          $38,518,313
                                                                                                    ===========          ===========

<FN>
                                           See accompanying notes to financial statements.
</FN>
</TABLE>

                                                                  2

<PAGE>


                             RAVENSWOOD WINERY, INC.
                               STATEMENT OF INCOME
                                   (UNAUDITED)

                                                  Three Months     Three Months
                                                  September 30,    September 30,
                                                     1 9 9 9          1 9 9 8
                                                   -----------      -----------

Gross sales                                        $ 8,288,976      $ 6,341,947

Less excise taxes                                     (334,645)        (225,059)

Less discounts, returns and allowances                (262,148)        (155,110)
                                                   -----------      -----------

Net sales                                            7,692,183        5,961,778

Cost of goods sold                                   3,463,418        2,528,325
                                                   -----------      -----------

Gross profit                                         4,228,765        3,433,453

Operating expenses                                   1,739,850        1,214,826
                                                   -----------      -----------

Operating income                                     2,488,915        2,218,627
                                                   -----------      -----------

Other (expense):
 Interest expense                                     (123,766)         (97,768)
 Other, net                                             85,796           24,567
                                                   -----------      -----------
                                                       (37,970)         (73,201)
                                                   -----------      -----------

Income before income taxes                           2,450,945        2,145,426

Provision for income taxes                             953,130          928,500
                                                   -----------      -----------

Net income                                         $ 1,497,815      $ 1,216,926
                                                   ===========      ===========


Net income per common share:
  Basic                                            $      0.33      $      0.35
                                                   ===========      ===========
  Diluted                                          $      0.31      $      0.32
                                                   ===========      ===========

Weighted average number of shares used in
   income per share computation:
   Basic                                             4,568,352        3,498,945
                                                   ===========      ===========
   Diluted                                           5,006,581        3,801,694
                                                   ===========      ===========

                See accompanying notes to financial statements.

                                       3

<PAGE>


                             RAVENSWOOD WINERY, INC.
                             STATEMENT OF CASH FLOWS
                                   (UNAUDITED)

                                                   Three Months    Three Months
                                                   September 30,   September 30,
                                                     1 9 9 9         1 9 9 8
                                                   ------------    ------------
Operations:
Net income                                         $  1,497,815    $  1,216,926
 Items not requiring the current use of cash:
 Depreciation and amortization                          143,390          50,536
 Unrealized capital appreciation                         37,568            --
 Changes in other operating items:
 Accounts receivable                                 (1,204,158)       (703,486)
 Inventories                                         (1,856,979)        733,589
 Prepaid expenses and deferred cost                     (37,108)         46,093
 Other assets                                             3,628            --
 Accounts payable                                       350,165      (1,252,700)
 Income taxes payable                                   929,480            --
 Accrued liabilities and accrued commissions            477,061         944,148
                                                   ------------    ------------
Cash provided by operations                             340,862       1,035,106
                                                   ------------    ------------

Investments:
 Shareholder receivables                                 (4,108)           (468)
 Additions to plant and equipment                    (2,102,449)       (261,311)
                                                   ------------    ------------
 Cash used for investing activities                  (2,106,557)       (261,779)
                                                   ------------    ------------

Financing:
 Short-term borrowings, net                            (950,000)       (700,000)
 Proceeds from long-term debt                           318,527            --
 Repayments of long-term debt                           (82,874)        (42,285)
                                                   ------------    ------------
 Cash used by financing activities                     (714,347)       (742,285)
                                                   ------------    ------------

Increase (decrease) in cash and cash equivalents     (2,480,042)         31,042

Cash and cash equivalents at beginning of period     11,390,903         102,272
                                                   ------------    ------------

Cash and cash equivalents at end of period         $  8,910,861    $    133,314
                                                   ============    ============

Cash paid during the period for:
 Interest, net of amount capitalized               $    123,989    $     95,615
                                                   ============    ============
 Income taxes                                      $       --      $       --
                                                   ============    ============

Noncash investing and financing information:
 Equipment purchased with capital leases           $    705,055    $       --
                                                   ============    ============

                See accompanying notes to financial statements.

                                       4

<PAGE>


                             RAVENSWOOD WINERY, INC.

                          NOTES TO FINANCIAL STATEMENTS

NOTE 1 - Financial statements:

The balance  sheet as of September  30, 1999,  the  statements of income for the
three months ended  September  30, 1999,  and 1998,  and the  statements of cash
flows for the three months ended September 30, 1999, and 1998 have been prepared
by the Company,  without audit.  In the opinion of management,  all  adjustments
(which include only normal  recurring  adjustments)  necessary to present fairly
the  Company's  financial  position,  results  of  operations  and cash  flow at
September 30, 1999, and for all periods presented above have been made.

Certain  information  and footnote  disclosures  normally  included in financial
statements prepared in accordance with generally accepted accounting  principles
have been condensed or omitted.  For further  information,  reference  should be
made to the Company's Form 10-KSB for the fiscal year ended June 30, 1999, filed
with the Securities and Exchange Commission.

NOTE 2 - Reclassifications:

Certain prior period amounts have been reclassified in order to conform with the
current period presentation.

NOTE 3 - Inventories:

Inventories are summarized as follows:

                                          September 30,             June 30,
                                               1999                   1999
                                         --------------         ---------------
                                            (unaudited)

          Bulk wine                      $   10,670,328          $    10,355,759
          Bottled wine                        5,382,174                3,870,548
          Crop costs                            156,796                   88,725
          Supplies                               89,070                  124,298
          Tasting room merchandise              140,584                  142,463
                                         --------------         ----------------
                                         $   16,438,952         $     14,581,973
                                         ==============         ================

                                       5

<PAGE>


NOTE 4 - Property, plant and equipment:

Property, plant and equipment is summarized as follows:

                                              September 30,           June 30,
                                                   1999                 1999
                                              --------------      --------------
                                              (unaudited)

      Land                                    $      245,135      $      245,135
      Vineyards                                      134,033             134,033
      Vineyards under development                    217,659             211,440
      Building and improvements                    1,647,637           1,647,637
      Leasehold improvements                         174,331             174,331
      Machinery and equipment                        835,850             835,850
      Barrels and equipment held under
           capital leases                          3,329,032           2,623,977
      Tanks                                          145,688             145,688
      Office equipment                               131,127             131,127
      Transportation equipment                        38,469              38,469
                                              --------------      --------------
                                                   6,898,961           6,187,687
      Less - accumulated depreciation              1,761,611           1,653,074
                                              --------------      --------------
                                                   5,137,350           4,534,613
      Construction in progress                     6,562,764           4,466,534
                                              --------------      --------------
                                              $   11,700,114      $    9,001,147
                                              ==============      ==============

NOTE 5 - Comprehensive income:

In June 1997,  the  Financial  Accounting  Standards  Board issued  Statement of
Financial Accounting  Standards No. 130 - Reporting  Comprehensive Income ("SFAS
130").  SFAS 130  requires the  additional  reporting of a new measure of income
which takes into account certain elements  otherwise recorded as part of equity.
For all periods  presented,  the difference between net income and comprehensive
income   consists  of  the  changes  in  the   unrealized   gain  in  securities
available-for-sale included as part of the Company's equity.

The following is a reconciliation of net income and comprehensive income:

                                              Three Months Ended September 30,
                                            ------------------------------------
                                                  1999                 1998
                                            --------------       ---------------
                                               (unaudited)

      Net income                            $    1,497,815       $     1,216,926
      Change in unrealized gain on
        available-for-sale securities               37,567                  --
                                            --------------       ---------------
      Comprehensive income                  $    1,535,382       $     1,216,926
                                            ==============       ===============

                                       6


<PAGE>




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

Forward-Looking Statements

From time to time,  statements  made by  Ravenswood's  employees or  information
included in  Ravenswood's  filings with the Securities  and Exchange  Commission
(including  this Form  10-QSB) may contain  statements  that are not  historical
facts, so called  "forward-looking  statements,"  which are subject to risks and
uncertainties   that  could   cause   actual   results  to  differ   materially.
Forward-looking  statements  are made pursuant to the safe harbor  provisions of
the Private  Securities  Litigation  Reform Act of 1995.  When used in this Form
10-QSB, the terms "anticipates,"  "expects," "estimates,"  "believes," and other
similar  terms as they relate to Ravenswood  or its  management  are intended to
identify such forward-looking  statements.  For example,  statements made herein
relating to operating  expenses,  gross sales  attributable to specific  product
series, and future capital expenditures, are forward-looking statements. Factors
that may cause  actual  results to vary  include,  but are not  limited  to: (i)
future and past  weather and general  farming  conditions  affecting  the annual
grape  harvest;  (ii)  variations in consumer  taste and  preference;  and (iii)
changes in the wine industry regulatory environment.  Each of these factors, and
others,  are  discussed  beginning  on page 14 of this report and in the section
entitled  "Factors that May Affect Future Results" in  Ravenswood's  Form 10-KSB
for the fiscal year ended June 30, 1999,  filed with the Securities and Exchange
Commission.  Readers  are  cautioned  not  to  place  undue  reliance  on  these
forward-looking  statements,  which speak only as of the date hereof. Ravenswood
undertakes no obligation to update or revise these statements.

Overview

Ravenswood  produces,  markets and sells premium  California  wines  exclusively
under the Ravenswood brand name. The vast majority of wines produced and sold by
Ravenswood   are  red  wines,   including   Merlot,   Cabernet   Sauvignon  and,
particularly,  Zinfandel.  To a lesser extent,  Ravenswood produces white wines,
including  Chardonnay,  French  Colombard and  Gewurztraminer.  Ravenswood's red
wines  accounted for  approximately  93% of gross sales in the 1999 fiscal year,
with sales of Zinfandel accounting for approximately 67% of gross sales for that
period. Ravenswood believes that sales of its red wines, particularly Zinfandel,
will continue to account for a significant portion of its sales in the future.

Since its inception in 1976,  Ravenswood  has grown by increasing its production
volume and its  portfolio of wine  products.  For the fiscal year ended June 30,
1999,  Ravenswood  realized  total gross sales of $23.7 million from the sale of
270,760 cases of wine and Ravenswood branded merchandise.

The mix of products sold in any given period affects  Ravenswood's  gross profit
as a percentage of net sales,  or gross margin.  In particular,  as sales of the
value-priced  Vintners  Blend Series have  increased  as a  percentage  of gross
sales,  Ravenswood's  gross  margin  has  decreased.  The gross  margin  for the
Vintners  Blend  Series  traditionally  is  also  more  variable  than  that  of
Ravenswood's  higher-priced  product series because a significant portion of the
wine used in the Vintners  Blend  Series is purchased in the bulk market  rather
than produced by Ravenswood  from grapes  acquired  from its  traditional  grape
suppliers.  Ravenswood has no bulk wine purchase contracts.  The price,  quality
and available  quantity of bulk wine have  fluctuated in the past and Ravenswood
expects that they will continue to fluctuate in the future.

The timing for release of Ravenswood's products,  particularly its County Series
and Vineyard Designate Series, also significantly  affects Ravenswood's sales in
specific periods. Ravenswood traditionally releases new vintages of its Vineyard
Designate Series in the fourth fiscal quarter or the first fiscal quarter of the
subsequent  fiscal year. In addition,  the release dates of some of Ravenswood's
County Series wines  fluctuate  between the third and fourth fiscal  quarters of
each fiscal year. The timing of these release dates is based

                                       7
<PAGE>

upon the winemakers'  determination as to the optimal flavor  characteristics of
these  wines and  available  inventory.  Fluctuation  of release  dates may make
comparison of results on a period-to-period basis less meaningful. The nature of
the  winemaking  process,  including  the need for wine to be aged  before it is
released,  requires  Ravenswood  to  incur  significant  expenses  in  producing
products  which  may not  generate  revenues  until up to two years  later.  Any
factors that may prevent or delay the sale of  Ravenswood's  wines at the prices
anticipated at the time of their production could adversely affect its liquidity
and reduce its profits.

Pricing for grapes  purchased by Ravenswood is determined  annually by reference
to benchmark price quotations or through  negotiation.  As a result, the cost of
grapes used in  Ravenswood's  wine  production has fluctuated and is expected to
continue to fluctuate.  Ravenswood has  traditionally  attempted to moderate and
stabilize  price  increases  from  year to  year.  Consequently,  gross  margins
realized by Ravenswood  have fluctuated in the past and are expected to continue
to fluctuate with the price of grapes used in production.

Within the United States, Ravenswood utilizes distributors in every state except
California.  Brokers are used to assist the sales  effort in  California  and 29
other  states.  Ravenswood  uses both  brokers and  distributors  in most of the
foreign countries in which Ravenswood's wines are sold.

Brokers  act  as  an  independent   sales  force  and  receive   commissions  as
compensation for their sales.  Brokers do not take title to the wines they sell.
Distributors purchase wine from Ravenswood and sell the wine to their own retail
accounts such as restaurants, grocery stores and wines shops.

Ravenswood primarily uses smaller,  well-positioned brokers and distributors for
whom  Ravenswood  is a key brand.  Although  Ravenswood  has very few  long-term
agreements  for  distribution  of its  products,  Ravenswood  believes  that its
relationships with existing brokers and distributors are excellent. Ravenswood's
executive  management  also  takes  an  active  role in  assisting  brokers  and
distributors  with sales within  California and within major geographic  markets
outside California.

Ravenswood sells its products directly in California,  utilizing five warehouses
throughout  the  state  and a  network  of seven  brokers.  Ravenswood  realizes
significantly  greater  gross  margins in areas,  such as  California,  where it
relies  on  direct  sales  facilitated   through  brokers  without  the  use  of
distributors.  Sales  within  California  accounted  for  approximately  48%  of
Ravenswood's gross sales in the 1999 fiscal year. Of this amount,  approximately
9% of gross sales were  purchases by  California  and  non-California  consumers
through  Ravenswood's  tasting  room and  approximately  39% of gross sales were
sales to retail  accounts.  Ravenswood  expects similar results for fiscal 2000.
Ravenswood  believes that sales within California will continue to account for a
substantial portion of its sales in the future.


                                       8
<PAGE>


Results of Operations

The  following  table sets forth items from  Ravenswood's  statement  of income,
expressed as a percentage of net sales, for the periods indicated:

                                                       Three Months Ended
                                                          September 30,
                                                           (unaudited)
                                                          -------------
Statement of Income Data:                              1999             1998

Net Sales                                              100.0%           100.0%
Cost of Goods Sold                                      45.0             42.4
                                                       -----            -----
Gross Profit                                            55.0             57.6
Operating Expenses                                      22.6             20.4
                                                       -----            -----
Operating Income                                        32.4             37.2
Other Expense, net                                        .5              1.2
                                                       -----            -----
Income Before Income Taxes                              31.9             36.0
Provision for Income Taxes                              12.4             15.6
                                                       -----            -----
Net Income                                              19.5%           20.4%
                                                       =====            =====

Three Months Ended September 30, 1999 and 1998

Sales

Net sales of Ravenswood's products increased to $7.7 million in the three months
ended  September 30, 1999, from $6.0 million in the three months ended September
30, 1998.  This increase is primarily  attributable to an increase in the volume
of wines  produced and sold by Ravenswood.  In the three months ended  September
30,  1999,  case sales  increased to 86,687 cases from 63,463 cases in the three
months ended  September 30, 1998,  while the average price per case decreased to
$94.37 from $98.33 in these respective  periods.  While there was an increase in
gross sales of all three product  series,  Vintners  Blend grew at a faster rate
than the Vineyard Designate and County series. The decrease in average price per
case is primarily  attributable  to the increase in sales of the Vintners  Blend
Series as a percentage of gross sales.

The percentages of gross sales attributable to the Vintners Blend Series, County
Series and Vineyard  Designate Series were 50%, 21% and 27%,  respectively,  for
the three months  ended  September  30,  1999,  as compared to 41%, 25% and 32%,
respectively,  in the three months ended September 30, 1998. Sales of Ravenswood
branded merchandise  accounted for approximately 2% of gross sales for the three
months ended September 30, 1999, and September 30, 1998.

Cost of Goods Sold

Cost of goods sold  increased to $3.5  million,  or 45.0% of net sales,  for the
three months ended September 30, 1999, from $2.5 million, or 42.4% of net sales,
for the three months  ended  September  30, 1998.  The increase in cost of goods
sold as a percentage of net sales is primarily  attributable  to the increase in
sales of Ravenswood's Vintners Blend Series as a percentage of gross sales.

Gross Profit

Ravenswood's  gross profit  increased to $4.2 million for the three months ended
September 30, 1999,  from $3.4 million for the three months ended  September 30,
1998,  and  decreased as a percentage  of net sales to 55.0% from 57.6% in these
respective  periods.  The  increase  in  aggregate  gross  profit  is  primarily
attributable  to increases in sales volumes across all of  Ravenswood's  product
series.  Traditionally Vintners Blend series wines have a lower percentage gross
margin than those of the Vineyard Designate and County series wines. The

                                       9
<PAGE>

decrease in gross profit as a percentage of net sales is primarily  attributable
to an increase in sales of the Vintners  Blend  Series as a percentage  of gross
sales.

Operating Expenses

Operating  expenses  increased  to $1.7  million  for  the  three  months  ended
September 30, 1999,  from $1.2 million for the three months ended  September 30,
1998,  and  increased as a percentage  of net sales to 22.6% from 20.4% in these
respective  periods.  The increase in the amount of other operating  expenses is
attributable to several different  factors.  Increased sales volumes resulted in
increased brokerage commissions.  A portion of estimated annual employee bonuses
will be accrued in each quarter of fiscal 2000. In fiscal 1999,  these  expenses
were accrued in the third and fourth  quarters  only.  Ravenswood  also incurred
start-up costs associated with preparing for and receiving a temporary permit to
begin operations at its new Quarry  production  facility which Ravenswood refers
to as the Quarry facility . During the first quarter of fiscal 2000,  Ravenswood
also  recognized  the  additional  expenses  of  maintaining  a public  company.
Ravenswood became a public company in the fourth quarter of fiscal 1999.


Other Expense, Net

Other expense amounted to $37,970 and $73,201,  or .5% and 1.2% of net sales, in
the three months ended September 30, 1999, and 1998, respectively.  The decrease
as a percentage of sales was due to an offset of interest income  generated from
investment of proceeds from Ravenswood's December 1998, private equity offering
and its initial public offering in April 1999.

Provision for Income Taxes

The provision for income taxes  reflects an estimated  annualized  effective tax
rate of 38.9% for the three months ended  September 30, 1999,  and 43.3% for the
three months ended  September 30, 1998. The decrease is due to the effective tax
rate for the three months ended  September 30, 1998 not reflecting an adjustment
for deferred taxes and recognition of manufacturer's  tax credit until the third
and fourth quarters of fiscal 1999.

                                       10
<PAGE>


Selected Quarterly Results of Operations

<TABLE>
The following table presents  Ravenswood's results of operations for each of the
six quarters  prior to and including the quarter ended  September 30, 1999.  The
quarterly information is unaudited, but management believes that the information
regarding  these  quarters  has been  prepared  on the same basis as the audited
financial  statements appearing in Ravenswood's  Form 10-KSB for the fiscal year
ended June 30, 1999. In the opinion of  management,  all  necessary  adjustments
(which include only normal  recurring  adjustments)  have been included to present
fairly  the  unaudited  quarterly  results  when  read in  conjunction  with the
financial  statements and related notes appearing  elsewhere in this Form 10-QSB
filing.

<CAPTION>
                                                                               Quarter Ended
                                                                              (In Thousands)
                                    ------------------------------------------------------------------------------------------------
                                      June 30,    September 30,  December 31,     March 31,      June 30,     September 30,
                                       1998           1998           1998           1999           1999           1999
                                    ----------     ----------     ----------     ----------     ----------      --------
<S>                                    <C>            <C>            <C>            <C>            <C>            <C>
Statement of Income Data:
Gross Sales                         $    4,367     $    6,342     $    5,853     $    5,415     $    6,119      $   8,289
 Less Excise Taxes                         272            225             51            272            361            335
 Less Discounts,
   Allowance and Returns                   165            155            182            182            234            262
                                    ----------     ----------     ----------     ----------     ----------      --------
Net Sales                                3,930          5,962          5,620          4,961          5,525          7,692
Cost of Goods Sold                       1,958          2,528          2,538          2,405          2,788          3,463
                                    ----------     ----------     ----------     ----------     ----------      --------
Gross Profit                             1,972          3,434          3,082          2,556          2,737          4,229
                                    ----------     ----------     ----------     ----------     ----------      --------
Operating Expenses:
 Deferred Compensation
     Expense                             2,206             --             --             --             --             --
 Other Operating Expenses                1,269          1,215          1,125          1,396          1,503          1,740
                                    ----------     ----------     ----------     ----------     ----------      --------
Operating Income (Loss)                (1,503)          2,219          1,957          1,160          1,234          2,489
Other (Income) Expense                     260             73             74             92           (12)             38
                                    ----------     ----------     ----------     ----------     ----------      --------
Income (Loss) Before Income Taxes      (1,763)          2,146          1,884          1,068          1,247          2,451
Provision for Income Taxes                 144            929            815            312            385            953
                                    ----------     ----------     ----------     ----------     ----------      --------
Net Income (Loss)                   $   (1,907)    $    1,217     $    1,068     $      756     $      862      $   1,498
                                    ===========    ==========     ==========     ==========     ==========      =========
</TABLE>


Ravenswood  experiences seasonal and quarterly  fluctuations in sales, operating
expenses  and net income.  Because  Ravenswood  manages its  business to achieve
long-term  strategic  objectives,  it may make  decisions  that it believes will
enhance  its  long-term  growth  and  profitability,  even  if  these  decisions
adversely  affect  quarterly  earnings.  These  decisions  include:  (a) when to
release its wines for sale; (b) how to position its wines competitively; and (c)
which grape and bulk wine sources to use to produce its wines. In addition,  the
release dates of Ravenswood's  Vineyard  Designate Series and County Series have
resulted in fluctuations in Ravenswood's results on a quarter-to-quarter  basis.
Ravenswood's  sales  volume may also  change  depending  upon its  distributors'
inventory levels.  The results of operations for any quarter are not necessarily
indicative of the results of any future period. The market price of Ravenswood's
common stock may fluctuate significantly in response to these quarter-to-quarter
variations.

Results of  operations  for the quarter  ended June 30,  1998,  were  materially
affected by a $2.2 million  expense  recognized  in  connection  with a deferred
compensation  arrangement with W. Reed Foster,  Ravenswood's  chairman and chief
executive  officer.  This  arrangement  was  terminated  as of July 1, 1998.  No
additional deferred compensation expenses relating to this arrangement have been
or will be incurred in subsequent periods.

                                       11

<PAGE>

FINANCIAL CONDITION

Assets

Ravenswood's total assets increased to $41.8 million at September 30, 1999, from
$38.5 million,  or 8.5%, at June 30, 1999.  Ravenswood's  inventory increased by
12.7% or $1.9  million from $14.5  million at June 30, 1999 to $16.4  million on
September  30,  1999.  Property,  plant  and  equipment,  net  of  depreciation,
increased 30.0% from $9.0 million at June 30, 1999 to $11.7 million at September
30, 1999.  Ravenswood  expects total assets to continue to increase as Ravenwood
expands inventory and builds its Quarry Facility.

Liabilities

Ravenswood's total liabilities increased 11.7% to $16.7 million at September 30,
1999,  from $15.0 million at June 30, 1999. At September 30, 1999,  Ravenswood's
long-term  liabilities  outstanding  were  $9.8  million  and $1.3  million  was
available under the terms of Ravenswood's lines of credit.

Liquidity and Capital Resources

Ravenswood  has funded its capital  requirements  primarily with cash flows from
operations,  a mix of short-term and long-term  borrowings,  and the sale of its
securities,  most recently with its initial public offering in April, 1999. Cash
and cash equivalents  totaled $8.9 million at September 30, 1999, as compared to
$11.4  million at June 30, 1999.  The decrease in cash and cash  equivalents  is
primarily due to cash required to expand inventory,  to continue construction on
the Quarry Facility and to retire indebtedness.

Net cash  provided  by  operations  was  $340,862  for the  three  months  ended
September  30,  1999,  as compared to $1.0  million for the three  months  ended
September 30, 1998. The principal use of cash from operations in this period was
the acquisition of additional inventory through increased production and funding
accounts receivable, while the principal source of cash was net income.

Net cash used for investing activities totaled $2.1 million for the three months
ended  September  30,  1999,  as compared to $261,779 for the three months ended
September 30, 1998. The increase was primarily a result of costs associated with
construction of the Quarry Facility.  Ravenswood  expects that net cash used for
investing  activities will increase in the future as additional  investments for
plant and equipment are made to complete the Quarry Facility.

Net cash used by  financing  activities  was $714,347 for the three months ended
September 30, 1999, as compared to $742,285 for the three months ended September
30, 1998. The principal use of cash during these periods was to repay short-term
borrowings on the revolving line of credit.

The majority of Ravenswood's grape purchases occur in the second fiscal quarter,
when the fruit is harvested. Most grape purchase contracts specify the timing of
payment for these  purchases.  The actual  payment dates vary depending upon the
terms of the individual  contract.  Based upon its grape purchase  contracts for
the 1998 harvest, these payments were made in the following manner: 42%, 19% and
21% in the second, third and fourth quarters of fiscal 1999,  respectively,  and
the  remaining  18% in the first  quarter of fiscal 2000. As a result of harvest
costs and the  timing of grape and bulk  wine  purchase  payments,  Ravenswood's
inventory  and related  cash  requirements  generally  peak during the second or
third fiscal quarters. Cash requirements also fluctuate depending upon the level
and timing of capital spending and tax payments.

Ravenswood  leases  barrels and other  equipment  used in the  production of its
wines.  Ravenswood estimates that aggregate lease payments for barrels and other
equipment will be  approximately  $545,000 for the 2000 fiscal year.  Ravenswood
anticipates  that it will  enter  into  additional  leasing  arrangements  as it
increases its

                                       12
<PAGE>

production.

In December 1994, Ravenswood completed a private sale of $865,000 of convertible
debentures due December 31, 2004.  Each $10,000  debenture is  convertible  into
3,500  shares of common  stock at any time  prior to  December  31,  1999,  upon
request of the holder.  Ravenswood  anticipates that all $815,000 of outstanding
convertible  debentures  will convert to 285,250 shares of common stock prior to
December 31, 1999. If the debentures  are not  converted,  Ravenswood may redeem
them at face value at any time during the period from  January 1, 2000 until the
maturity date.  Ravenswood pays interest  quarterly on the debentures based on a
floating  index tied to prime bank rates for a five-year  period.  The  interest
rate is adjusted every 18 months, except that in no period may the interest rate
adjustment exceed 2%, or the maximum interest rate exceed 11%.

In  December  1998,  Ravenswood  completed  a private  sale of $1.7  million  of
convertible  debentures  due December 31, 2008 and $1.7 million of common stock.
Each  $10,000  debenture is  convertible  into 900 shares of common stock at any
time prior to December 31, 2003,  upon request of the holder.  If the debentures
are not  converted,  Ravenswood may redeem them at face value at any time during
the period  from  January  1, 2004  until the  maturity  date.  Ravenswood  pays
interest  quarterly on the  debentures in an amount equal to the prime  interest
rate  quoted by Bank of America  NT&SA plus 1%. The  interest  rate is  adjusted
every 18 months,  except  that in no period  may the  interest  rate  adjustment
exceed 2%, or the maximum interest rate exceed 11%.

Ravenswood  has a line of credit with  Pacific  Coast Farm  Credit  Association,
under which  Ravenswood may borrow up to a total of $2 million.  As of September
30, 1999,  Ravenswood  had $750,000  outstanding  under this line of credit.  In
addition, on April 26, 1999 Ravenswood obtained a $4.6 million construction loan
from Pacific Coast for the purpose of financing the  construction  of the Quarry
Facility.  The loan will be used as funds for construction are needed.  The loan
is secured by the Quarry  Facility  and its lease.  The  estimated $5 million in
remaining  costs to complete the  facility  are to be funded from  the  December
1998,  private  equity  offering and proceeds from  Ravenswood's  initial public
offering  in April,  1999.  Equipment  will be  acquired  through  a $3  million
commitment for leases.

In April,  1999  Ravenswood  completed an initial public offering of one million
shares of its  common  stock at a price of $10.50 per share.  W.R.  Hambrecht  &
Company,  LLC acted as underwriter  for the offering.  The net proceeds from the
offering  have  been  and  will  continue  to be used  for:  investment  in wine
inventory,  expansion of production facilities,  general corporate purposes, and
retirement  of  indebtedness.  Ravenswood's  shares  are  listed  on the  Nasdaq
National Market under the trading symbol RVWD.

The full extent of Ravenswood's future capital  requirements and the adequacy of
its  available  funds  will  depend  on many  factors,  not all of which  can be
accurately  predicted.  Although no assurance can be given,  Ravenswood believes
that anticipated cash flow from operations, borrowings under its existing credit
agreements, proceeds from its initial public offering and the private placements
in 1994  and 1998  described  above,  will be  sufficient  to fund  its  capital
requirements,  including its planned expansion, for at least the next 12 months.
In the event that additional  capital is required,  Ravenswood may seek to raise
that capital through public or private equity or debt financings. Future capital
funding transactions may result in dilution to shareholders.

There can be no assurance that additional capital will be available on favorable
terms,  if at all.  Ravenswood's  inability  to  obtain  additional  capital  on
acceptable  terms would limit its growth and could have a negative impact on its
business. Ravenswood uses substantial amounts of its working capital to purchase
grapes  and bulk wine  supplies  from  third  parties  and to pay for the use of
third-party  production facilities in its wine production.  Ravenswood also uses
capital to fund its own  grape-growing  and  winemaking  activities.  Ravenswood
expects that it will need an increased  amount of working  capital over the next
several years to

                                       13

<PAGE>

fund increases in its production levels and inventory.

Risks associated with potential Year 2000 problems

Many currently  installed  computer  systems and software  products are coded to
accept  only  two-digit  entries  in the date  code  field and  cannot  reliably
distinguish  dates  beginning  on January  1, 2000 from dates  prior to the year
2000. Many companies'  software and computer  systems may need to be upgraded or
replaced in order to  correctly  process  dates  beginning in 2000 and to comply
with the Year 2000 requirements. Ravenswood has reviewed its information systems
for any  potential  Year 2000  problems  that  might  arise as a result of these
requirements,  and does not believe its systems will be affected by the upcoming
change in  century.  However,  Ravenswood  utilizes  third-party  equipment  and
software that may not be Year 2000 compliant.  If this third-party  equipment or
software  fails to  process  dates  for the  year  2000 and  dates  that  follow
properly,  Ravenswood could incur unanticipated expenses to remedy any problems,
which could harm its business.

In addition,  Ravenswood relies on various service  providers,  including banks,
and on grape and bulk wine  suppliers,  third-party  production  facilities  and
distributors.  The software and computer  systems of any of these entities could
have Year 2000  problems.  A  disruption  in the supply of  services or products
Ravenswood  receives from any of these  entities due to Year 2000 problems could
harm its business.

FACTORS THAT MAY AFFECT FUTURE RESULTS

A reduction in consumer demand for premium red wines could harm our business

Because a large  percentage  of the wines we  produce  are  premium  red  wines,
including Merlot, Cabernet Sauvignon and, in particular, Zinfandel, our business
would be harmed if consumer  demand for red wines in general,  or  Zinfandel  in
particular,  failed to grow or declined. An overall reduction in consumer demand
for premium wine would also harm our business.

A  reduction  in the  supply of grapes  and bulk wine  available  to us from the
independent  grape growers and bulk wine  suppliers on whom we rely could reduce
our annual production of wine

We rely on  annual  contracts,  many of which are not in  writing,  with over 60
independent growers to purchase substantially all of the grapes used in our wine
production.  We  cannot  assure  you  that we will be able to  contract  for the
purchase of grapes at  acceptable  prices from these or other  suppliers  in the
future. The terms of many of our purchase  agreements also constrain our ability
to discontinue  purchasing grapes in circumstances where we might want to do so.
Those  agreements  typically  provide that, while either party may terminate the
agreement  at any time,  both  parties  must  continue to abide by its terms for
three years following termination.

We are  dependent on bulk wine  suppliers  for the  production of several of our
wines,  particularly  our Vintners  Blend Series.  We do not have contracts with
bulk wine suppliers or agreements that would protect us from fluctuations in the
price or  availability  of bulk wine.  The  availability  and price of bulk wine
significantly  affect the quality and  production  levels of our  products  that
contain bulk wine. The price,  quality and available  quantity of bulk wine have
fluctuated in the past. It is possible that we will not be able to purchase bulk
wine of acceptable  quality at acceptable  prices and  quantities in the future,
which could  increase the cost or reduce the amount of wine we produce for sale.
This could cause reductions in our sales and profits.

Bad weather, plant diseases and other factors could reduce the amount or quality
of the grapes we need to produce our wines

A shortage in the supply of quality grapes may result from the occurrence of any
number of the factors which

                                       14
<PAGE>

determine the quality and quantity of grape supply,  such as weather conditions,
pruning  methods,  the existence of diseases and pests,  and the number of vines
producing grapes, as well as the level of consumer demand for wine. Any shortage
could  cause an  increase  in the  price of some or all of the  grape  varieties
required for our wine production and/or a reduction in the amount of wine we are
able to produce, which could harm our business and reduce our sales and profits.

For example, due to the effects of El Nino, the grape supply available to us for
the 1998  harvest was lower than for the 1997  harvest,  which we believe was an
unusually  large  harvest.  Therefore,  the inventory of our 1998 vintage may be
less than that of our 1997 vintage.  As a result, the growth of our sales may be
limited in fiscal  years 2000 and 2001,  when most of our 1998  vintage  will be
released for sale.

Factors which reduce the quantity of grapes may also reduce their quality, which
in turn could reduce the quality or amount of wine we produce.  A  deterioration
in the  quality of our wines  could harm our brand  name,  and a decrease in our
production could reduce our sales and profits.

Although  we grow only a small  portion of the grapes we use,  our  business  is
still subject to numerous  agricultural risks. Most of the vineyards that supply
our grapes are  primarily  planted to  rootstocks  believed to be  resistant  to
Phylloxera,  a pest that feeds on  susceptible  grape  rootstocks.  However,  we
cannot be certain that these vineyards, or vineyards from which we obtain grapes
in the  future,  will not  become  susceptible  to  current  or new  strains  of
Phylloxera,  plant insects or diseases.  Any resulting reduction in grape supply
could reduce our sales and profits.

An oversupply  of grapes may also harm our business by increasing  the supply of
wine sold by our competitors

The recent  increase in demand for premium  wine has resulted in the planting of
additional vineyards, both domestically and internationally,  and the replanting
of existing vineyards to greater densities,  which could result in a significant
increase  in the supply of premium  wine  grapes.  An  oversupply  of grapes may
significantly  increase the amount of premium wine produced.  An increase in the
supply of premium wine may reduce the price of premium wines. This oversupply of
premium  wines could harm our business  because we only produce  premium  wines.
Oversupply  may also  increase  the  amount of  premium  wine  available  to our
distributors  and  retail  outlets,  which  would  increase  competition  in our
distribution channels.

The loss of Mr.  Foster,  Mr.  Peterson or other key employees  would damage our
reputation and business

We believe that our success  largely  depends on the  continued  employment of a
number of our key  employees,  including W. Reed Foster,  our chairman and chief
executive  officer,  and Joel E.  Peterson,  our  president and  winemaker.  Any
inability or unwillingness  of Mr. Foster,  Mr. Peterson or other key management
team members to continue in their present capacities could harm our business and
our reputation.  For instance,  if Mr.  Peterson's  relationship with Ravenswood
were to terminate for any reason,  we would need to find a successor  winemaker.
We cannot be  certain  that we could  find or hire a  successor  winemaker  with
skills equivalent to those of Mr. Peterson.

Because  a  significant  amount  of  our  sales  is  made  through  brokers  and
distributors,  a change  in our  relationship  with any of them  could  harm our
business

In the 1999 fiscal year,  approximately 75% of our gross sales were made through
brokers.  A change in our  relationship  with any of our brokers  could harm our
business and reduce our sales.  Our most  successful  broker was responsible for
22% of our gross  sales in the 1999  fiscal  year,  and our ten most  successful
brokers were responsible for 70% of our gross sales in the 1999 fiscal year.

Our sales outside of California  largely depend on the use of distributors.  Our
ten largest distributors

                                       15
<PAGE>

accounted for approximately 23% of our gross sales for the 1999 fiscal year, and
we expect that sales to our ten largest  distributors will continue to represent
a substantial  portion of our sales in the future.  The laws and  regulations of
several states prohibit distributor changes except under limited  circumstances.
As a result,  it may be  difficult  for us to replace  distributors  that do not
perform adequately, which may reduce our sales and profits.

Our  business  may be harmed if our  distributors  fail to market  our  products
effectively

We depend largely on our distributors in areas outside  California to market our
products to the restaurants and retail outlets they service.  Other premium wine
producers,  as well as the producers of alternative  beverages,  compete for our
distributors'  marketing resources.  A failure by our distributors to market our
products as effectively as they, or other distributors,  market our competitors'
products could harm our business.

The market price of our stock may fluctuate due to seasonal  fluctuations in our
wine sales, operating expenses and net income

We experience seasonal and quarterly  fluctuations in sales,  operating expenses
and net income. Generally, the second and third quarters of our fiscal year have
lower sales volumes than the first and fourth  quarters.  We have  managed,  and
will continue to manage, our business to achieve long-term objectives.  In doing
so,  we  may  make   decisions  that  we  believe  will  enhance  our  long-term
profitability,  even if these  decisions may reduce  quarterly  earnings.  These
decisions  include:  (a) when to release our wines for sale; (b) how to position
our wines  competitively;  and (c) which  grape and bulk wine  sources to use to
produce our wines.  In addition,  fluctuations  in our  distributors'  inventory
levels  may  affect  our  sales  volume.  These and other  factors  relating  to
seasonality and business decisions may cause fluctuations in the market price of
our common stock.

We also compete with popular low-priced  "generic" wines and with beer and other
alcoholic  and  non-alcoholic  beverages  both  for  demand  and for  access  to
distribution  channels.  Many of the  producers  of these  beverages  also  have
significantly  greater  financial,  technical,  marketing  and public  relations
resources  than we do.  Our sales may be harmed to the  extent  any  alternative
beverages are  introduced  that compete with wine. We may not be able to compete
successfully against these wine or alternative beverage producers.

A reduction  in our access to, or an  increase  in the cost of, the  third-party
services we use to produce our wine could harm our business

We utilize several third-party  facilities,  of which there is a limited supply,
for the production  activities  associated with our wines.  Our inability in the
future to use these or alternative  facilities,  at reasonable prices or at all,
could  increase  the cost or reduce the amount of our  production,  which  could
reduce our sales and our profits.  We do not have long-term  agreements with any
of these facilities. The activities conducted at outside facilities include: (a)
crushing;  (b) fermentation;  (c) storage; (d) blending;  and (e) bottling.  Our
reliance on these  third  parties  varies  according  to the type of  production
activity.  As  production  increases,  we  must  increasingly  rely  upon  these
third-party production facilities. Reliance on third parties will also vary with
annual harvest volumes.

A failure to complete the expansion of our facilities as planned could limit our
production of wine and harm our business

We are  currently  building  a new  facility,  which we are  calling  the Quarry
Facility,  in order to  increase  our  production  capacity.  While  the  Quarry
Facility is still under construction,  we crushed and fermented a portion of the
1999 harvest at the facility.  Our failure to complete the Quarry  Facility,  or
otherwise  expand  our  production  capabilities,  would  limit  our  production
capacity,  would require greater use of third-party

                                       16
<PAGE>

production  facilities,  and could  reduce our sales  and/or  profits.  Upon its
completion,  we expect to use both the Quarry Facility and our current  Gehricke
Road Facility for a majority of our operations.

We expect to utilize the Quarry Facility fully upon its completion. As a result,
any  further  expansion  of  our  production  capacity  may  require  us to  use
third-party  production  facilities or to continue to expand our own  production
capacity.  Our failure to expand our production capacity,  or to secure capacity
from third  parties,  either at  acceptable  prices or at all,  could  limit our
production and reduce our sales and/or profits.

Adverse public opinion about alcohol may harm our business

While a number of research studies suggest that moderate alcohol consumption may
provide various health benefits,  other studies conclude or suggest that alcohol
consumption has no health  benefits and may increase the risk of stroke,  cancer
and other  illnesses.  An  unfavorable  report on the health  effects of alcohol
consumption could significantly reduce the demand for wine, which could harm our
business and reduce our sales and profits.

In recent  years,  activist  groups have used  advertising  and other methods to
inform the public about the societal harms  associated  with the  consumption of
alcoholic  beverages.  These  groups  have also  sought,  and  continue to seek,
legislation to reduce the availability of alcoholic  beverages,  to increase the
penalties associated with the misuse of alcoholic beverages,  or to increase the
costs  associated with the production of alcoholic  beverages.  Over time, these
efforts  could cause a  reduction  in the  consumption  of  alcoholic  beverages
generally, which could harm our business and reduce our sales and profits.

Contamination of our wines would harm our business

Because our products are designed for human consumption, our business is subject
to hazards and liabilities  related to food products,  such as contamination.  A
discovery of contamination in any of our wines,  through tampering or otherwise,
could result in a recall of our products.  Any recall would significantly damage
our  reputation  for product  quality,  which we believe is one of our principal
competitive assets, and could seriously harm our business and sales. Although we
maintain  insurance  to  protect  against  these  risks,  we may  not be able to
maintain insurance on acceptable terms and this insurance may not be adequate to
cover any resulting liability.

Increased regulatory costs or taxes would harm our financial performance

The wine  industry is regulated  extensively  by the Federal  Bureau of Alcohol,
Tobacco and  Firearms,  various  foreign  agencies,  and state and local  liquor
authorities. These regulations and laws dictate various matters, including:

        o Excise taxes
        o Licensing requirements
        o Trade and pricing practices
        o Permitted distribution channels
        o Permitted and required labeling
        o Advertising
        o Relationships with distributors and retailers

Recent and future zoning ordinances,  environmental restrictions and other legal
requirements may limit our plans to expand our production  capacity,  as well as
any future  development  of new  vineyards and  wineries.  In addition,  federal
legislation has been proposed that could significantly  increase excise taxes on
wine.  Other federal  legislation  has been proposed which would prevent us from
selling  wine  directly  through  the  mail  or  the  Internet.   This  proposed
legislation,  or other new  regulations,  requirements  or taxes  could harm

                                       17
<PAGE>

our business and operating results. Future legal or regulatory challenges to the
wine industry could also harm our business and impact our operating results.

Because our  directors and officers have  significant  control over  Ravenswood,
other  investors do not have as much  influence  on corporate  decisions as they
would if control were less concentrated

Assuming  conversion  of all  debentures  held by our  directors  and  executive
officers and their respective  affiliates,  our directors and executive officers
and their  respective  affiliates  would  beneficially  own 2,203,641  shares of
common stock, or approximately 44.02% of our outstanding common stock and common
stock equivalents.  Of these shares, 2,085,651 shares, plus an additional 19,530
shares  not held of record by  Ravenswood's  affiliates,  have been  placed in a
voting trust.  The trustees of this voting trust are Messrs.  Foster,  Peterson,
and Faggioli, and Ms. Konno, all of whom serve as directors of Ravenswood.  As a
result,  Messrs.  Foster,  Peterson, and Faggioli and Ms. Konno have significant
influence  in the election of  directors  and the approval of corporate  actions
that must be submitted for a vote of shareholders.

The  interests  of these  affiliates  may conflict  with the  interests of other
shareholders,  and the  actions  they take or approve  may be  contrary to those
desired by the other shareholders. This concentration of ownership may also have
the effect of delaying,  preventing or deterring an acquisition of Ravenswood by
a third party.

Natural disasters,  including earthquakes or fires, could destroy our facilities
or our inventory

The Gehricke  Road  Facility,  the Quarry  Facility  and all of the  third-party
facilities  we use to produce  and store our wine are  located in areas that are
subject to earthquake activity. If we lost all or a portion of our wine prior to
its sale or distribution as a result of earthquake  activity,  we would lose our
investment in, and  anticipated  profits and cash flows from,  that wine. Such a
loss would seriously harm our business and reduce our sales and profits.

In  addition,  we must  store our wine in a limited  number of  locations  for a
period of time prior to its sale or distribution. Any intervening catastrophies,
such as a fire,  that result in the  destruction of all or a portion of our wine
would result in a loss of our  investment in, and  anticipated  profits and cash
flows from,  that wine. Such a loss would seriously harm our business and reduce
our sales and profits.

Our small size and  relatively  low trading  volume may limit the market  price,
liquidity or trading volume of our stock

Our small  size and  relatively  low  trading  volume  may  reduce the amount of
research coverage from market analysts. This reduced level of coverage may limit
the market price, liquidity or trading volume of our common stock.


                                       18

<PAGE>

                             RAVENSWOOD WINERY, INC.

                           PART II. OTHER INFORMATION

Item 2. Changes in Securities and Use of Proceeds

<TABLE>
The following  table  describes the use of proceeds  from  Ravenswood's  initial
public offering in April, 1999.

<CAPTION>
(IN THOUSANDS)

<S>                                                                            <C>
Effective Date of the Company's Registration Statement:                        April 8, 1999
Commission File Number                                                         333-71729
Date Offering Commenced:                                                       April 9, 1999
Date Offering Completed:                                                       Upon the sale of all the shares
                                                                               registered
Names of Managing Underwriters:                                                W. R. Hambrecht & Co., LLP
Class of Securities Registered:                                                Common Stock
Shares Registered and Sold:                                                      1,000*
Sold by Company:                                                                 1,000*
Sold by Shareholders:                                                                0
Aggregate Price of Offering Amount Registered and Sold:                        $10,500
Gross Proceeds to Company:                                                     $10,500
Gross Proceeds to Selling Shareholders                                               0
Underwriter's Discounts and Commission Charged to the Company:                 $   420
Other issuance costs:                                                          $   552
Net offering proceeds to the Company:                                          $ 9,528
Approximate use of net offering proceeds through
   September 30, 1999:
         Working capital                                                       $   500
         Retirement of debt                                                    $ 1,000
<FN>
-------------
*In  connection  with  the  initial  public  offering,  Ravenswood  granted  the
underwriters an over-allotment  option to purchase 150,000  additional shares of
Ravenswood's  common stock at the original  initial public offering  price.  The
option was not exercised.
</FN>
</TABLE>


Item 6. Exhibits and Reports on Form 8-K

(a)      Exhibits.

         Exhibit Number
         --------------
               27.1                      Financial Data Schedule

(b)      Reports on Form 8-K.

         None.


                                       19
<PAGE>

                             RAVENSWOOD WINERY, INC.

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


Dated: November 11, 1999                         Ravenswood Winery, Inc.

                                                 /s/ Callie S. Konno
                                                 -------------------------------
                                                 Callie S. Konno
                                                 Chief Financial Officer

Dated: November 11, 1999

                                                 /s/ W. Reed Foster
                                                 -------------------------------
                                                 W. Reed Foster
                                                 Chairman of the Board and Chief
                                                 Executive Officer


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