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 September 30, 1998

                                       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 No. 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, So. Norwalk, Conn. 06854
               (Address of principal executive offices) (Zip Code)

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

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

                  Yes                       No   X

     12,489,285 Common Shares,  par value $.001 per share were outstanding as of
September 30, 1998.




<PAGE>


                                   FORM 10-QSB

                      THE RATTLESNAKE HOLDING COMPANY, INC.

                               September 30, 1998

                                      INDEX
<TABLE>
<CAPTION>

                                                                                                          Page No.
Part I - Financial Information

<S>                                                                                                       <C>
Condensed Consolidated Balance Sheets September 30, 1998 (Unaudited)                                      3
         and June 28, 1998

Unaudited Condensed Consolidated  Statements of Operations for three months ende                          4
         September 30, 1998 and September 28, 1997

Unaudited Condensed Consolidated Statements of Cash Flows for three months ended                          5
         September 30, 1998 and September 28, 1997

Notes to Unaudited Condensed Consolidated Financial Statements                                            6

Management's Discussion and Analysis                                                                      9

Liquidity                                                                                                 10

Safe Harbor Statement                                                                                     12


Part II - Other Information

Item 1:  Legal Proceedings                                                                                14

Item 2:  Defaults Upon Senior Securities                                                                  15

Item 3:  Recent Sales of Unregistered Securities                                                          15

Item 4:  Submission of Matters                                                                            15

Item 5:  Other Information                                                                                16

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>

                                                                          September 30,              June 28,
                                                                              1998                     1998
                                                                          (unaudited)
                                                                          -------------              --------
                  ASSETS
<S>                                                                    <C>                            <C>
Current assets:
     Cash                                                              $      5,721                  $311,328
     Accounts receivable                                                     16,670                    16,831
     Notes receivable, current installments                                   4,080                     4,080
     Inventory                                                               29,397                    29,397
     Prepaid expenses and other current assets                                3,450                     7,200
                                                                       ------------                   -------
Total current assets                                                         59,318                   368,836

Notes receivable, less current installments                                 225,920                   225,920
Property and equipment, net                                                  98,913                    81,375
Intangible assets, net                                                       26,064                    30,598
Other assets, net                                                            98,058                    78,443
                                                                       ------------                   -------
                                                                       $    508,273                  $785,172
                                                                       ============                   =======

                      LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
     Current maturities of notes payable                               $  1,382,539               $1,282,539
     Accounts payable                                                       917,375                1,019,139
     Accrued expenses                                                     1,308,631                  629,414
     Dividends payable                                                      233,590                  207,636
     Other current liabilities                                              212,517                  182,971
                                                                       ------------                ---------
     Total current liabilities                                            4,054,652                3,321,699

Notes payable, net of current maturities                                    520,006                  525,006
                                                                       ------------                ---------
         Total liabilities                                                4,574,658                3,846,705
                                                                       ------------                ---------
Stockholders' equity:
     Preferred Stock, $.10 par value, 5,000,000 shares
         authorized, 56,500 issued and outstanding,
         at September 30, 1998 and June 28, 1998.                             5,650                   5,650
     Common Stock,  $.001 par value - 20,000,000 shares  authorized,
         12,489,285 and 10,889,285 issued and outstanding at
         September 30, 1998 and  June 28, 1998 respectively                  12,490                  10,890
     Additional paid-in capital                                          12,645,184              12,554,618
     Accrued dividends                                                     (233,590)               (207,636)
     Accumulated deficit                                                (16,496,119)            (15,425,055)
                                                                        ------------            ------------
                                                                         (4,066,385)             (3,061,533)
                                                                        ------------            ------------
                                                                        $   508,273             $   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
                                                                                 September 30,                 September 28,
                                                                                      1998                          1997
                                                                                -----------------             ------------------

<S>                                                                             <C>                           <C>
Restaurant sales                                                                $  685,264                    1,265,581
Less:  promotional sales                                                            30,607                       49,170
                                                                                ----------                    ---------
Net restaurant sales                                                               654,657                    1,216,411

Costs and expenses:
     Cost of food and beverage sales                                               269,408                      390,414
     Restaurant salaries and benefits                                              292,651                      385,791
     Occupancy and other                                                           232,715                      333,618
     Depreciation and amortization expense                                          11,093                      106,667
                                                                                ----------                    ---------
         Total restaurant costs and operating expenses                             805,867                    1,216,490

Selling, general and administrative                                                227,423                      233,837
Interest expense, net                                                               67,430                       51,701
Litigation award                                                                   625,000                            -
Miscellaneous expenses                                                                   -                        5,173
                                                                                ----------                    ---------
Net loss                                                                        (1,071,063)                    (290,790)

Dividends on preferred shares                                                      (25,954)                     (25,954)
                                                                                ----------                    ---------
Net loss available to common stockholders                                      $(1,097,017)                    (316,744)
                                                                                ==========                    =========

Net loss per share:
   Basic and diluted                                                            $    (0.09)                       (0.12)
                                                                                ==========                    =========

Weighted average number of common
   shares outstanding                                                           12,256,143                    2,645,335
                                                                                ==========                    =========
</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>

                                                                                         Three months ended
                                                                                 September 30,           September 28,
                                                                                     1998                     1997
                                                                                 -------------           -------------
<S>                                                                             <C>                         <C>
Cash flows from operating activities:
     Net loss                                                                   $(1,071,063)                (290,790)
     Adjustments to reconcile net loss to net cash used in operating activities:
         Depreciation and amortization                                               13,896                  106,169
         Issuance of stock for services                                              25,000                       --
         Valuation of warrants for services                                           2,166                       --
         Changes in assets and liabilities:
              (Increase) decrease in accounts receivable                                161                  (40,038)
              Decrease in inventory                                                      --                    1,074
              Increase in prepaids expenses and other assets                        (15,866)                 (31,583)
              Increase in accounts payable and
                   accrued expenses                                                 577,453                   31,565
              (Decrease) increase in other current liabilities                       29,546                  (44,086)
                                                                                -----------                 --------
Net cash used in operating activities                                              (438,707)                (267,689)

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 common stock                                         165,000                       --
     Proceeds from borrowings                                                            --                  250,000
     Principal repayments of borrowings                                              (5,000)                 (10,110)
                                                                                -----------                 --------

         Net cash provided by financing activities                                  160,000                  239,890
                                                                                -----------                 --------
Net decrease in cash                                                               (305,607)                 (27,799)

Cash beginning of period                                                            311,328                   68,022
                                                                                -----------                 --------
Cash end of period                                                              $     5,721                   40,223
                                                                                ===========                 ========
Cash paid during the period for:
     Interest                                                                   $     1,036                    6,560
     Income taxes                                                                        --                    5,173
                                                                                ===========                 ========
</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 and include all adjustments which, in the opinion of management,  are
necessary to present fairly the consolidated  financial  position of the Company
as of September 30, 1998 and June 28, 1998,  and the results of  operations  and
cash flows for the periods  ended  September 30, 1998 and September 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 September 30, 1998 are not necessarily  indicative of the operating
results which 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 $16,496,119,
inclusive of a net loss for the quarter ended  September 30, 1998 of $1,071,063.
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, $100,000  convertible  subordinated notes payable matured September 4,
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,  $220,000 note payable  matured on December 31, 1997,
$150,000 notes payable matured on May 31, 1998, and a $2,089  subordinated  note
payable matured on August 6, 1996, such obligations  aggregating  $1,312,547 and
all of which are in default as of September 30, 1998. Additionally,  $233,590 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 July  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.

     For 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.

     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.

     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 accrual  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 September  30, 1998 there are
$233,590 dividends accrued.

     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

     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 issued in its 10-K report for the fiscal
period June 28, 1998.


     OPERATING RESULTS FOR THE QUARTER ENDED SEPTEMBER 30, 1998 AS COMPARED WITH
SEPTEMBER 29, 1997

     Gross  restaurant  sales  decreased 45.9% to $685,264 for the quarter ended
September  30,  1998 from  $1,265,581  for quarter  ended  September  28,  1997.
Likewise,  net  restaurant  sales  decreased  46.2%  to  $654,657  in 1998  from
$1,216,411 in 1997. The decrease in restaurant sales resulted from a decrease in
the number of restaurants  operating  during the period as two restaurants  were
operating for the entire  quarter ended  September 30, 1998 as compared to three
during the quarter ended September 28, 1997.

     Promotional  sales  decreased  from  $49,170  for the  three  months  ended
September  28,  1997 to $30,607 in 1998.  This  decrease  is  attributable  to a
reduction in the number of restaurants operating during fiscal 1999.

     Cost of food and beverage sales increased as a percentage of net sales from
32.1% for the three  months  ended  September  28, 1997 to 41.2% for the quarter
ended   September  30,  1998.  The  percentage   increase  is   attributable  to
inefficiencies  of the Flemington unit closed in November 1998. The cost of food
and beverage  sales  decreased to $269,408 for the three months ended  September
30, 1998 from  $390,414  for the three  months ended  September  28,  1997.  The
decrease is attributable to a reduction in the number of units 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 $292,651 for the three months ended  September 30, 1998 as compared
to $385,791  for the three  months ended  September  28,  1997.  The decrease is
attributable to a reduction in the number of units operating  during the period.
As a percentage of net restaurant sales,  these costs increased to 44.7% in 1998
as  compared  to 31.7% in 1997.  The  percentage  increase  is  attributable  to
allocating manager salaries over a smaller restaurant base.

     Occupancy  and  other  related  expenses,  which  include  linen,  repairs,
maintenance,  utilities,  rent,  insurance and other occupancy related expenses,
decreased  to  $232,715  for the three  months  ended  September  30,  1998 from
$333,618 for the three months ended  September 28, 1997.  The decrease is due to
the closed units. As a percentage of net restaurant sales, these costs increased
to 35.6% in the three  months ended  September  30, 1998 from 27.4% in the three
months ended September 28, 1997.

     Depreciation and amortization expenses, decreased to $11,093 or 1.7% of net
restaurant  sales for the three months ended September 30, 1998 from $106,667 or
8.8% for the three months ended  September 28, 1997. This decrease is attributed
to less units in operation as compared to the prior period.

     Selling,  general and administrative  expenses were reasonably  consistent,
$233,837 for the three months ended  September 28, 1997, as compared to $227,423
for the three months ended September 30, 1998.

     Interest expense  increased to $67,430 for the three months ended September
30,  1998 from  $51,701 for the three  months  ended  September  28,  1997.  The
increase is attributable to higher borrowings.

     In August 1998, a jury awarded a verdict in the amount of $625,000  against
various  defendants,  including  the  Company  and its former  Chairman  and the
Company  recorded the amount of the award as a charge to earnings in the quarter
ended  September 30, 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  and
recorded the $400,000  adjustment  in the quarter ended  December 31, 1998.  The
jury's  award is  currently  on appeal by the  Company,  and the  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  September 4, 1997, a
$425,000 note payable matures on January 2, 1997, a $11,709 note payable matured
in February 1998, a $220,000 note payable matured on December 31, 1997, $150,000
notes payable matured on May 31, 1998, a $100,000 convertible  subordinated note
payable  matured on August 31,  1998,  and a $2,089  subordinated  note  payable
matured on August 6, 1996, such  obligations  aggregating  $1,312,547 and all of
which  were in default as of  September  30,  1998.  Additionally,  $233,590  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 $305,607  during the three months
ended  September  30,  1998,  principally  as a result  of the net cash  used in
operating activities exceeding the proceeds from the sale of common stock.

     Management  of the Company is completing  its Cost  Reduction  Plan,  which
included a further  reduction in workforce  and  continuation  of the closure of
unprofitable restaurants,  in fiscal 1998. Such plan included the closing and/or
sale of the Yorktown Heights, White Plains, New York, Fairfield, Connecticut and
Lynbrook,  New York  locations,  as well as the unopened New York City property.
The Flemington restaurant was subsequently closed in fiscal 1999. Effective upon
the  completion  of the  private  placement,  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 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.

     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.
The  consultant  purchased  $100,000 of commons  tock and  received a warrant to
purchase an  additional  300,000  shares of the  Company's  common stock with an
initial  exercise  price of $.48  per  share,  expiring  in July  2002,  vesting
one-third annually.

     Subsequent Events

     In  October  1998,  the  Company  entered  into  a  three  year  employment
agreement, as amended, 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 the first year for
part-time services and commercially standard compensation for full time services
in years two and three. In addition,  an option to purchase up to 300,000 shares
of the  Company's  common  stock  with an  exercise  price  of $.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.

     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%) of the  outstanding  Common Stock of the Company  after
the offering of Series B Preferred  Stock at $0.05 per share,  the fair value at
the date of grant,  representing  30,000,000  shares,  on a fully diluted basis,
exercisable  for a period of five (5) years,  which  warrant will vest as to one
third (1/3) of the number of shares covered thereby at the time of the financing
and one third  (1/3) at the end of each one year  period  thereafter  during the
term.

     In October 1998, the Company entered into a three year consulting agreement
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.

     In November  1998,  the  Company  issued  $150,000  16%  convertible  notes
maturing  December 31, 1998.  These notes were paid and/or  converted  either in
preferred  shares  or cash with the  offering  of  Series B  preferred  stock in
February 1999.

     In December 1998, certain management  personnel deferred a portion of their
salary  pending  completion of the  Offering.  In February  1999,  this debt was
satisfied by paying 20% in cash and the  remaining  balance  with the  Company's
common stock.

     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.

     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,
successful  implementation  of the  Company's  cost  containment  plan  and  new
operating  strategy,  immediate need for additional  capital,  competition,  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 - OTHER INFORMATION

     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. The Company negotiated the purchase of this property
from the mortgage holder for $1,350,000 in March 1999.


     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. The Company intends to vigorously defend this action.

     Item 2 - Changes in Securities and Use of Proceeds

     None.

     Item 3 - Defaults Upon Senior Securities

     See footnote 3 above.

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

     Item 4 - Submission of Matters to a Vote of Stockholders

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




<PAGE>


     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 September 30 1998, the Company filed no reports on
Form 8-K.



<PAGE>


                                   SIGNATURES




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



THE RATTLESNAKE HOLDING COMPANY, INC.
(Registrant)



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


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


Date:  August 12, 1999