<PAGE> 1
     U.S. Securities and 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 March 31, 1997
  [  ]    TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF
          THE SECURITIES EXCHANGE ACT OF 1934 
          For the transition period from __________ to ____________ 

            Commission File No.: 0-26276


               R.H. PHILLIPS, INC.
(Exact name of small business issuer in its charter)

     California                                68-0313739
(State or other jurisdiction of         (IRS Employer Identificatioin No.)
 incorporation or organization)
 
       26836 County Road 12A, Esparto, California  95627
            (Address of principal executive offices)

                 (916) 662-3215
           (Issuer's telephone number)


Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for
such shorter period that the registrant was required to file such reports)
and (2) has been subject to such filing requirements for the past 90 days. 
Yes  X   No    

Number of shares outstanding of each of the issuer's classes of common
equity as of May 9, 1997: 6,002,902 

Transitional Small Business Disclosure Format:    Yes      No  X 


This document consists of 14 pages.  The Document Index is on Page 14.
<PAGE> 2
Item 1.  Financial Statements

R.H. PHILLIPS, INC.

NOTES TO FINANCIAL STATEMENTS

1.  BASIS OF PRESENTATION

     The interim financial statements as of March 31, 1997 and for the
three month periods ended March 31, 1996 and 1997 have been prepared
by R.H. Phillips, Inc. (the "Company") without audit.  In the opinion of
management, the financial statements include all adjustments (which
include only normal recurring entries) necessary for a fair presentation. 
The operating results for the  three month periods ended March 31, 1996
and 1997 are not necessarily indicative of the results which might be
realized for the full year.

     Certain information and footnote disclosures normally included
in financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted. These statements
should be read in conjunction with the financial statements and notes
included in the Company's Annual Report on Form 10-KSB for the fiscal
year ended December 31, 1996.

     Net income per share for the three month period ended March 31,
1997 was computed using the weighted average number of shares of
Common Stock and dilutive Common Stock equivalents outstanding
during this period, plus  43,352 shares which were issued in April 1997
as a stock dividend.  Net income per share and common shares
outstanding for the three month period ended March 31, 1996 have been
restated to account for a stock dividend of 37,500 shares which was paid
in September 1996 and the 43,352 shares which were issued in April
1997. 

2.  SUBSEQUENT EVENTS

     In April 1997 the Company converted subordinated promissory
notes  in the aggregate amount of $1,500,000 into 387,077 shares of
Common Stock.  The notes became automatically convertible into
Common Stock at a price of $3.875 when the average of the closing bid
and ask price for the Common Stock exceeded $3.50 for five consecutive
trading days subsequent to December 6, 1996.  All outstanding interest
and fractional shares were paid in cash at the same time.  If the
promissory notes had been converted prior to March 31, 1997, total
shareholders' equity would have been $15,548,302 at that time.

         In May 1997 the Company completed a sale and leaseback of
approximately 371 acres of its land.  The Company will lease the land
from the purchaser, John Hancock Mutual Life Insurance Company
("Hancock") for a period of fifteen years, after which the Company has
an option to repurchase the land at a price of approximately $8,362,000. 
The Company received approximately $4,209,000 upon closing, and will
receive an additional payment of approximately $1,176,000 upon
completion of certain vineyard improvements to be performed by the
Company by June 1997.  The projected gain on the transaction is
approximately $400,000.  Payments on the lease will begin in 1999 and
continue through 2012 at an annual rate of approximately $645,000,
payable quarterly.  
                              -2-
<PAGE> 3
                    R.H. PHILLIPS, INC., dba
                   THE R.H. PHILLIPS VINEYARD
                  (A California Corporation) 
                                
                         BALANCE SHEET 
                         MARCH 31, 1997
                          (UNAUDITED) 


                               ASSETS                                           
                                                            
CURRENT ASSETS:
   Cash                                                        $   218,536 
   Accounts receivable                                           1,957,859 
   Inventories                                                   7,799,040 
   Deferred income taxes and prepaid expenses                      493,342 
                                                               -----------
       Total current assets                                     10,468,777 

PROPERTY, PLANT, AND EQUIPMENT - net                            28,597,365 

OTHER ASSETS:
   Note receivable from shareholder                                214,404 
   Deferred loan fees and other, net                               529,734 
                                                               -----------
       Total other assets                                          744,138 
                                                               -----------
TOTAL ASSETS                                                   $39,810,280 
                                                               ===========
              LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES:
   Current maturities of long-term debt                        $ 1,058,000 
   Notes payable                                                 1,134,270 
   Accounts payable                                              1,143,150 
   Accrued liabilities                                             839,152 
                                                               -----------
      Total current liabilities                                  4,174,572 

LONG-TERM DEBT                                                  14,657,183 
SUBORDINATED DEBT                                                1,500,000 
DEFERRED INCOME TAXES                                              935,000 
COMMITMENTS AND CONTINGENCIES                                           --  
REDEEMABLE PREFERRED STOCK, redeemable at $5,000,000             4,495,146 
SHAREHOLDERS' EQUITY:
   Non-redeemable preferred stock, no par value, 4,500,000              -- 
      shares authorized, none issued and outstanding
   Common stock, no par value, 12,500,000 shares authorized,
      5,959,550 shares issued and outstanding                   12,331,225
   Additional paid-in capital                                      336,697 
   Retained earnings                                             1,380,457 
                                                               -----------
      Total shareholders' equity                                14,048,379 
                                                               -----------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY                     $39,810,280 
                                                               ===========
                                

See accompanying notes to financial statements.

                              -3-
<PAGE> 4
                   R.H. PHILLIPS, INC., dba 
                  THE R.H. PHILLIPS VINEYARD 
                  (A California Corporation) 
                                
                   STATEMENTS OF OPERATIONS 
           THREE MONTHS ENDED MARCH 31, 1996 AND 1997
                          (UNAUDITED)


                                                  1996          1997       
                                                          
NET SALES                                      $ 3,185,822   $ 3,485,618 

COST OF SALES                                    1,909,074     2,111,649 
                                               -----------   -----------
GROSS PROFIT                                     1,276,748     1,373,969 

SELLING, GENERAL AND  ADMINISTRATIVE EXPENSES      801,116       950,837 
                                               -----------   -----------
OPERATING INCOME                                   475,632       423,132 

INTEREST EXPENSE                                  (307,490)     (223,578)

OTHER INCOME (EXPENSE) - NET                        13,346        40,455 
                                               -----------   -----------
INCOME BEFORE INCOME TAXES                         181,488       240,009 

PROVISION FOR INCOME TAXES                         (66,000)      (86,400)
                                               -----------   -----------
NET INCOME                                     $   115,488   $   153,609 
                                               ===========   ===========

NET INCOME                                     $   115,488   $   153,609 

DIVIDENDS ON REDEEMABLE PREFERRED STOCK                 --       (75,000)

ACCRETION OF REDEEMABLE PREFERRED STOCK                 --        (8,366)
                                               -----------   -----------
NET INCOME APPLICABLE TO COMMON STOCK          $   115,488   $    70,243 
                                               ===========   ===========

NET INCOME  PER SHARE                          $       .02   $       .01 
                                               ===========   ===========
COMMON AND COMMON EQUIVALENT 
   SHARES OUTSTANDING                            4,713,837     6,001,240 
                                               ===========   ===========


See accompanying notes to financial statements
                                 -4-

<PAGE> 5

                    R.H. PHILLIPS, INC., dba
                   THE R.H. PHILLIPS VINEYARD
                  (A California Corporation) 
                                
                   STATEMENTS OF CASH FLOWS 
           THREE MONTHS ENDED MARCH 31, 1996 AND 1997
                          (UNAUDITED)

                                                         1996         1997   
CASH FLOWS FROM OPERATING ACTIVITIES:                            
   Net income                                       $   115,488  $   153,609 
   Adjustments to reconcile net income to net cash 
      provided by operating activities:
      Depreciation and amortization                     347,717      501,499 
      Gain on disposal of property, plant and equipment               (8,342)
      Changes in assets and liabilities:
         Accounts receivable                            790,785    1,173,391 
         Inventories                                   (239,540)      11,588 
         Prepaid expenses                                57,489      (21,804)
         Other assets                                   (38,625)     (11,347)
         Accounts payable and accrued liabilities       602,592   (1,132,289)
                                                    -----------  -----------
            Net cash provided by operating activities 1,635,906      666,305 
                                                                               
CASH FLOWS FROM INVESTING ACTIVITIES:
    Purchase of property, plant and equipment        (1,499,354)  (1,569,473)
    Proceeds from equipment sold                             --        8,342 
                                                    -----------  -----------
           Net cash used in investing activities     (1,499,354)  (1,561,131)

CASH FLOWS FROM FINANCING ACTIVITIES:
    Issuance of redeemable preferred stock            4,807,057           --
    Issuance of common stock                                           7,750 
    Payment of cash dividend                                 --     (150,000)
    Proceeds from long-term debt and notes payable      901,328    4,446,242 
    Principal payments on long-term debt and
      notes payable                                  (6,147,690)  (3,494,171)
    Payment of loan origination fees                     (1,500)      (1,000)
    Note to shareholder                                  (4,152)      (3,994)
                                                    -----------  -----------
           Net cash provided by (used in)
             financing activities                      (444,957)     804,827
                                                    -----------  -----------
DECREASE IN CASH                                       (308,405)     (89,999)
CASH AT BEGINNING OF PERIOD                             317,624      308,535
                                                    ===========  ===========
CASH AT END OF PERIOD                               $     9,219  $   218,536 
                                                    ===========  ===========
OTHER CASH FLOW INFORMATION: 
    Interest paid (including capitalized interest  
    of $99,500 and $178,900 in 1996 and
    1997, respectively)                             $   272,268  $   329,572
NONCASH TRANSACTIONS:                               ===========  ===========
    Issuance of notes payable to finance inventory 
      and equipment purchased                       $        --  $    49,740 
                                                    ===========  ===========
    Accretion of redeemable preferred stock         $        --  $     8,366
                                                    ===========  ===========

See accompanying notes to financial statements
                                   -5-
<PAGE> 6
Item 2.  Management's Discussion and Analysis of Financial
Condition and Results of Operations
              
             In reviewing the following management's discussion and analysis,
the reader should refer to the historical financial statements of the
Company.  The discussion of the results and trends does not necessarily
imply that these results and trends will continue.  For the purpose of the
following discussion, a "case" means a nine liter case of wine.

Seasonality

             The Company usually experiences substantial seasonal
fluctuations in revenues and expenditures.  Sales volumes generally
increase during the holiday season, which causes a large percentage of
sales to occur during the last three months of each year.  The Company's
expenditures fluctuate throughout the year based on vineyard and winery
activities.  Expenditures typically peak during the summer and early
autumn, due to harvest and crush activities and expenditures to fund
vineyard and winery expansions.  Consequently, the Company's financial
results during the first three months of the year are not necessarily
indicative of the Company's financial performance for the entire year.

Costs of Production

             During the first three months of 1997, the Company experienced
an increase in its cost of production due to reduced harvests caused by
adverse weather conditions.  Many other California vineyards suffered
similar or greater reductions of their grape crops.  The reduction in the
Company's grape supply has caused the Company to purchase a larger
amount of grapes and bulk wines from outside sources to meet consumer
demand for the Company's wines.  Management believes that the
Company's costs of producing wines from grapes or bulk wines
purchased from outside sources is significantly higher than the costs
associated with producing wines from its own grapes.  In addition, the
market price of bulk wines and grapes has increased substantially during
the past two years due to the overall reduction of the California grape
harvest and the resulting shortage of grapes and bulk wines.  These
factors are likely to increase the Company's cost of production for at least
the near future.

             Management believes that its vineyard and winery expansion
program will serve to reduce the Company's costs of production in future
years.  The recently completed winery expansion has eliminated the
Company's need to rely on outside sources of processing and storage for
its wines, and the Company is in the process of expanding the size of its
vineyards in order to lessen its dependence on outside sources of bulk
wines and grapes.

Liquidity and Capital Resources

             The Company has financed its working capital and capital
expansion needs through internally generated funds, outside credit
facilities and equity financing.  The Company has made substantial
capital  expenditures to expand its vineyards and winery facilities, and
intends to continue these expansions.  The purpose of the expansion is to
increase the Company's production capabilities so that the Company can
obtain production efficiencies through vertical integration.  The
Company's cash flows from operations alone have not been sufficient to
satisfy all of the working capital and capital expenditure requirements
needed to keep pace with its growth.  Consequently, the Company
depends upon debt, equity and lease financing for its working capital and
capital expansion needs.
                                -6-
<PAGE> 7 
             The Company obtained various long-term loans for the purposes
described above.  The largest of these loans was obtained from
Metropolitan Life Insurance Company ("Metropolitan") in January 1995. 
This loan, pursuant to which the Company borrowed $7,500,000, has a
term of 10 years.  Interest and principal on the loan are paid in monthly
installments, with eight percent of the outstanding principal paid per
annum and all remaining principal after such monthly payments to be
paid at the end of the loan's term.  The annual interest rate on the loan is
presently 9.05% as to $4,600,000 of the principal amount, 8.1% as to
$1,500,000 of the principal amount, and 8.55% as to $1,400,000 of the
principal amount.  The interest rate will be subject to adjustment by
Metropolitan on November 30, 1997, 2000 and 2003, at which time the
interest rate will be changed to equal that charged by Metropolitan for
similar agricultural loans at those times.

             In May 1997, the Company raised funds through the sale to John
Hancock Mutual Life Insurance Company ("Hancock") of 371 acres of
land.  In connection with that transaction, the Company now leases and
operates that land for a term that extends to December 31, 2012.  The
Company received proceeds from the sale of approximately $4,209,000,
and Hancock is required to pay the Company approximately $1,175,000
for additional vineyard development on that land.  The lease provides that
the Company will pay rent for the use of the land of approximately
$161,000 per calendar quarter beginning in 1999.  The Company has an
option to repurchase the land at the end of the lease term for a price of
approximately $8,362,000.   

             The Company has a credit facility with U.S. Bank of California
("U.S. Bank") to finance its working capital requirements.  The Company
as of March 31, 1997 could borrow a maximum of $7,000,000 under the
facility, which was then comprised of an operating line of credit of
$5,000,000, a temporary increase on the operating line of $1,000,000, and
a bridge line of $1,000,000.  The operating line of credit matures in April
1999, at which time all principal and unpaid interest will be due and
payable.  The annual interest rate on the operating line is either U.S.
Bank's prime rate or IBOR plus 200 basis points, at the Company's
option.  The operating line is a revolving line of credit, and funds are
advanced to or paid by the Company according to its needs.  As of March
31, 1997, the credit facility was fully utilized with a balance of
$7,000,000. The temporary increase on the operating line expired in April
1997, at which time it was converted into the operating line through an
increase on the operating line from $5,000,000 to $6,000,000.  The
Company repaid the entire amount of the bridge line in May 1997.  The
Company typically obtains each spring a short-term non-revolving line of
credit to finance crop costs for that year.  In 1997, the Company obtained
from U.S. Bank a crop line of credit, under which the maximum the
Company may borrow increases monthly up to $1,400,000.  The crop line
bears interest at U.S. Bank's prime rate plus 100 basis points, is non-
revolving, is secured by the grape crop, and matures in November 1997.

             As of March 31, 1997, the Company carried convertible
promissory notes with an aggregate principal amount of $1,500,000. 
Amounts owing under these notes bore interest at a rate of 6% per annum,
payable annually.   In April 1997, all principal owing under the
convertible promissory notes was converted into 387,077 shares of
Common Stock at a price of $3.875 per share.  All outstanding interest
and fractional shares were paid in cash at the same time.

             In March 1996, the Company sold 500,000 shares of Senior
Redeemable Preferred Stock (the "Senior Preferred Stock") and warrants
to purchase up to 1,346,788 shares of Common Stock to Hancock.  The
net proceeds the Company derived from the sale of the Senior Preferred
Stock and the warrants, after payment of offering expenses, were
approximately $4,798,000. The Senior Preferred Stock bears a
cumulative annual dividend of $1.20 per share, payable semiannually. 
During the first four years after issuance, 50% of the dividend is payable
in cash and 50% of the dividend is payable in shares of Common Stock
at a price equal to the lower of the market price at the dividend payment
date or $4.00 per share.  The Company will be required to redeem one-
third of the Senior Preferred Stock eight years after issuance, and one-
third in each of the succeeding years at a price of $10.00 per share.

             In 1995 and 1996, the Company also raised capital through the
sale of Common Stock in two public offerings.  The Company completed
a sale of Common Stock and warrants to purchase Common Stock in its
initial public offering during 1995 and completed a second public
offering of Common Stock

                               -7-
<PAGE> 8
in 1996.  The Company received net proceeds
from these offerings, after payment of commissions and expenses, of
approximately $2,873,000 from the initial public offering and
approximately $4,484,000 from the second public offering.  The warrants
which the Company issued in its initial public offering are exercisable
through October 1, 1998 at a price of $3.875 per share.  As of March 31,
1997, warrants to purchase 19,065 shares of Common Stock had been
exercised, with net proceeds to the Company totaling approximately
$74,000.  If the warrants are exercised in full, management estimates that
it will receive additional proceeds of approximately $1,839,000.

             The Company's net working capital as of March 31, 1997 was
approximately $6,294,000, as compared to approximately $4,934,000 as
of March 31, 1996.  The primary reason for the increase was an increase
in inventories, from approximately $6,594,000 at March 31, 1996 to
approximately $7,799,000 at March 31, 1997.  This increase in the stated
value of inventories is indicative of the higher costs the Company
incurred in purchasing grapes and bulk wines during 1996 for wines that
constituted inventory as of March 31, 1997.

  Net cash provided by operating activities for the three month
period ended March 31, 1997 was approximately $666,000, compared to
approximately $1,636,000 for the same period in 1996.  The primary
reason for the change was a difference in net cash provided or used by
accounts payable, from cash provided of approximately $427,000 during
the first three months of 1996 to cash used of approximately $1,035,000
during the corresponding period in 1997.  The primary reason for the
change was that accounts payable payments which would normally be
made in the first quarter of 1996 were temporarily delayed until after the
sale of the Senior Preferred Stock, which took place near the end of that
quarter.  

  Net cash used in investing activities for the first three months of
1997 was approximately $1,561,000, substantially the same as the
approximately $1,499,000 during the corresponding period in 1996.  Cash
investments during the first three months of 1997 included approximately
$1,340,000 invested in vineyard development, approximately $39,000 in
buildings, and approximately $190,000 in equipment.  These investments
were offset somewhat by the sale of certain equipment.  

             Net cash provided by financing activities totaled approximately
$805,000 for the three month period ended March 31, 1997, compared to
net cash used in financing activities of approximately $445,000 for the
same period in 1996.  The primary reason for the change relates to the
change in accounts payable timing discussed above, which reduced short
term borrowings by the Company in 1996.  Net cash provided by
financing activities for the three months ended March 31, 1997 consists
primarily of approximately $4,446,000 borrowed from U.S. Bank. These
cash inflows were partially offset by principal payments made to U.S.
Bank totaling approximately $2,918,000, to Metropolitan  totaling
$150,000, and to various lenders totaling approximately $426,000.  Other
factors affecting net cash provided by financing activities included
payment of a cash dividend on the Senior Preferred Stock, the issuance
of Common Stock to holders of warrants to purchase Common Stock,
payment of loan origination fees, and payments to shareholders.  

             As a result of the factors described above, cash decreased by
approximately $90,000 during the three month period ended March 31,
1997, compared to a decrease of approximately $308,000 for the three
month period ended March 31, 1996.

             The Company plans to continue its winery expansion in 1997. 
Current plans call for an addition to the existing case goods warehouse of
approximately 12,000 square feet, and the construction of a new tasting
room.  The Company also plans to purchase 24 stainless steel wine tanks
and construct tank pads for them, and to purchase barrels and other
equipment.  Management estimates that the cost of this project will be
approximately $2,300,000. 
               
             The Company currently intends to plant approximately 350 acres
of new vineyard  in 1997, approximately 175 acres in 1998, and
approximately 50 acres each in 1999 and 2000.  By the year 2000, the
Company plans to have approximately 1,700 acres of vineyard under
cultivation on approximately 2,700 acres of land either owned or leased
by the Company.  However, there can be no assurance that

                                 -8-
<PAGE> 9
the Company
will be able to acquire additional land or expand the vineyards at that rate. 
Management estimates that the cost of the 1997  vineyard expansion will
be approximately $3,400,000.

             The Company intends to finance the 1997 winery and vineyard
expansions with the recently completed sale and leaseback of a portion
of its land, as discussed above, internally generated funds,  and
borrowings on working capital lines of credit.  Management believes that
additional long-term debt, equity of lease financing may be necessary for
the Company to continue its planned expansion.
               
             Phylloxera infestation may have a negative impact on the
Company's future grape production.  Phylloxera is a root louse which
feeds on the roots of grapes, causing reduced production and eventual
vine death.  Of the Company's 1,201 acres of vineyard, 289 acres have
root stock which is susceptible to Phylloxera.  Management estimates that
the commercially productive life of these vineyards is ten years from
January 1, 1994, as compared with the twenty-five year life generally
estimated for vineyards, and that the reduction in the useful life of these
vineyards will result in an increase in depreciation of approximately
$65,000 per year.  The Company is chemically treating all vineyards
believed to be currently at risk for Phylloxera, and estimates that these
treatments cost approximately $45,000 per year.  Both the increased
depreciation charges and the cost of treatment are added to the cost of
grapes harvested, thus increasing cost of sales.  The Company plans to
remove and replace all Phylloxera-infested or susceptible vines with
rootstock believed to be resistant to Phylloxera.  Methods of replacement
include removing and replacing the vines, the use of grafting methods
whereby existing vines are grafted onto resistant rootstock, and the use
of interplanting, in which vines on resistant rootstock are planted between
the susceptible vines, which are then allowed to deteriorate.  The
Company removed 68 acres in 1995, and 80 acres were removed in 1996. 
Thirty-three acres have been replanted.  The Company plans to continue
the removal and replanting of these vines at a rate of approximately 30
acres per year.

             The above discussion concerning future financing needs, vineyard
and winery expansion, the impact of Phylloxera and factors affecting
liquidity are forward looking statements.  Although management believes
that these statements are reasonable in view of the facts available to it, the
Company's past experience, and trends in the wine industry, there can be
no assurance that any of these statements will prove to be true.  There are
many factors which could have a material impact upon whether these
projections will be realized or whether these trends will continue. 
Among these factors are the following:

             Availability of Future Financing.  The rate at which the Company
is able to expand its facilities may become heavily dependent upon its
ability to raise additional debt or equity financing.  The ability to raise
financing is in turn dependent upon a variety of factors, some of which
are outside the control of the Company.  These factors include, but are not
limited to, interest rates, the availability of sources of financing and the
exercise of warrants issued in the Company's initial public offering.  If
all of the warrants are not exercised, interest rates increase, or other
financing becomes unavailable or more costly to obtain, the Company
may need to reduce its rate of expansion.

             Costs of Expansion.  Management has based its assumptions
concerning the costs of expansion on estimates which it believes are
reasonable.  However, there can be no assurance that the Company's
estimates as to the costs of expansion will prove to be correct.  If these
costs are higher than anticipated, the Company may be required to raise
an even greater amount of financing or reduce the rate of expansion of its
facilities.

             Costs of Production.  Statements with respect to the general
decline in the Company's cost of production are based on management's
assumptions concerning the likely levels of future sales by the Company,
projected yields from the Company's vineyards and the cost and
availability of bulk wine and grapes from the spot market.  For example,
if the Company's sales increase at a faster rate than anticipated or the
Company's grape production is lower than projected, the Company could
be forced to make additional purchases of grapes and wine on the spot
market.  In view of current prices and lack of availability of good quality
California bulk wines and grapes, management believes that such events
could increase the Company's costs of production.

                                -9-
<PAGE> 10
             Market Conditions.  Assumptions as to the desirability of
expansion are based to a great extent on management's beliefs concerning
the current status of and trends within the wine industry.  Market
conditions in the wine industry have changed substantially from time to
time.  To the extent that market conditions change substantially in the
future, the rate at which the Company deems it advisable to expand its
vineyard and winery facilities may be adjusted.

Results of Operations

             Net Sales

             Net sales for the three month period ended March 31, 1997 were
approximately $3,486,000, an increase of approximately 9% over net
sales of approximately $3,186,000 during the same period in 1996.  Net
sales during both periods included the sale of bulk wines and other items. 
Excluding these sales, net sales of case wines were approximately
$3,305,000 for the three month period ended March 31, 1997, an increase
of approximately 9% over case sales totaling approximately $3,036,000
the corresponding period  in 1996.  The average selling price per case
increased from approximately $36.47 during the three month period
ended March 31, 1996 to approximately $41.29 for the corresponding
period in 1997.  The increase in the average selling price resulted
primarily from price increases on the Company's Chardonnay and
Cabernet Sauvignon.  The number of cases sold during the first three
months of 1997 was approximately 81,000, a decrease of approximately
3% from approximately 83,000 cases sold during the same period in
1996.  Management expects the trend toward reduced case sales to
continue throughout 1997.

             Gross Profit
             
             Gross profit decreased from approximately 40% of sales for the
three month period ended March 31, 1996 to approximately 39% of sales
for the three month period ended March 31, 1997.  Excluding the sales of
products other than case wines, the gross margins were approximately
42% for the first three months in 1996 and 40% for the corresponding
period in 1997.  The average cost per case sold in the first three months
of 1997 increased by approximately 17% over that sold in the same
period in 1996, from approximately $21.20 per case to approximately
$24.78 per case.  The decrease in gross margins and increase in cost per
case are attributable primarily to the higher prices of bulk wines and
grapes purchased from outside parties and to the below average harvest
experienced by the Company in 1996, as discussed above in Costs of
Production.  These cost increases have been offset somewhat by the
efficiencies derived from recently planted vineyards and expanded winery
production facilities.  The Company also implemented  price increases,
some of which did not go into effect until April 1997, as a compensatory
measure.  Management believes that the price increases will be sufficient
to offset the increase in costs.

             Operating Expenses

             Selling, general and administrative expenses were approximately
$951,000, or approximately 27% of sales, for the three month period
ended March 31, 1997, an increase from approximately $801,000, or
approximately 25% of sales, for the same period in 1996.  Selling
expenses increased from approximately $571,000 in the first three months
of 1996 to approximately $728,000 in the corresponding period in 1997,
primarily due to higher sales program expenses.  General and
administrative expenses remained substantially the same, totaling
approximately $204,000 for the three month period ended March 31,
1997, compared to approximately $210,000 in the corresponding period
in 1996.

                                 -10-
<PAGE> 11
             Interest Expense

             Total interest expense for the three month period ended March 31,
1997 was approximately $224,000, or approximately 6% of sales,
compared to approximately $307,000, or approximately 10% of sales, for
the same period in 1996.  The Company capitalized approximately
$179,000 of additional interest pertaining to vineyard and winery
development in the three month period ended March 31, 1997, and
approximately $100,000 in the corresponding period in 1996.  Total
interest cost was substantially the same during both periods.  The increase
in capitalized interest in the three month period ended March 31, 1997 as
compared to the same period in 1996, reflects the increase in vineyards
under development during 1997.

             Other Income (Expense)

             Other income (expense) for the three month period ended March
31, 1997 was income of approximately $40,000, compared to 
approximately $13,000 for the three month period ended March 31, 1996.
The primary reason for the increase was the expansion of vineyards
owned by another winery and farmed by the Company for a management
fee on a per acre basis.

             Net Income

             The Company recorded net income of approximately $154,000 for
the three month period ended March 31, 1997, compared with net income
of approximately $115,000 for the three month period ended March 31,
1996.  This increase was due to the factors discussed above, primarily the
increases in sales revenue and in capitalized interest, offset by the
increases in cost of sales and selling costs.

                                -11-
<PAGE> 12

                     PART II


Item 6.  Exhibits and Reports on Form 8-K

             (a) Exhibits
             


Exhibit No.     Description

10.1            Loan Agreement and Related Agreements between
                the Company and U.S. Bank, dated April 1, 1997

10.2            Real Estate Purchase Contract, Agricultural
                Sublease and Related Agreements between the
                Company and Farmland Management Services,
                dated January 24, 1997

10.3            Real Estate Option Agreement, dated January 24,
                1997 and Related Agreements between the
                Company and John Hancock Mutual Life Insurance
                Company


27.1            Financial Data Schedules

                               -12-
<PAGE> 13
SIGNATURES

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



R.H. PHILLIPS, INC.
(Registrant)

Date: May 13, 1997

//s// John E. Giguiere
John E. Giguiere, Co-President
Co-Chief Executive Officer





//s// Robert T. Moore
Robert T. Moore, Chief Financial Officer
Principal Financial Officer


                                    -13-
<PAGE> 14

                  EXHIBIT INDEX


Exhibit No.       Description                                              
Page No.

10.1      Loan Agreement and Related Agreements
          between the Company and U.S. Bank, dated April 1, 1997

10.2      Real Estate Purchase Contract, Agricultural Sublease and
          Related Agreements between the Company and Farmland
          Management Services, dated January 24, 1997.

10.3      Real Estate Option Agreement, dated January 24, 1997
          and Related Agreements between the Company and John
          Hancock Mutual Life Insurance Company

27.1      Financial Data Schedules

                                  -14-