<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 September 30, 1999
[ ]     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 Identification No.)
 incorporation or organization)


            26836 County Road 12A, Esparto, California  95627
-------------------------------------------------------------------------
                  (Address of principal executive offices)


                                (530) 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 October 31, 1999: 6,633,137

Transitional Small Business Disclosure Format:    Yes      No X
                                                      ---    ---

This document consists of 18 pages, excluding exhibits.  The
Exhibit Index is on page 18.
<PAGE> 2

                           R.H. PHILLIPS, INC.

                                  INDEX


Part I.  Financial Information

         Item 1.   Financial Statements ..............................3

         Item 2.   Management's Discussion and Analysis of Financial
                   Condition and Results of Operations ...............9

Part II. Other Information

         Item 1.   Litigation........................................15

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

Signatures ..........................................................17

<PAGE> 3
                          PART I.  FINANCIAL INFORMATION


Item 1.  Financial Statements
<PAGE> 4
<TABLE>
                              R.H. Phillips, Inc.

                                 Balance Sheet

                   (In thousands, except share information)

<CAPTION>
                                                       September
                                                       30, 1999
                                                       ---------
                                                      (Unaudited)
<S>                                                      <C>
Assets
Current assets:
   Cash                                                   $ 1,162
   Accounts receivable                                      4,710
   Inventories                                             17,234
   Prepaid expenses and other current assets                1,120
                                                          -------
    Total current assets                                   24,226

Property, plant and equipment, net                         37,305

Other assets                                                  708
                                                          -------
                                                          $62,239
                                                          =======
Liabilities and shareholders' equity
Current liabilities:
   Current maturities of long-term debt                   $ 2,117
   Accounts payable                                         4,042
   Accrued payroll and related                                533
   Accrued selling expenses                                   804
   Accrued income taxes                                       462
   Other accrued liabilities                                  518
                                                          -------
    Total current liabilities                               8,476

Long-term debt                                             27,541
Subordinated debt                                           2,295
Deferred income taxes                                       2,082
Deferred gain and vineyard development costs                   16

Commitments and contingencies

Redeemable preferred stock, redeemable at $2,500,000        2,295

Shareholders' equity:
   Non-redeemable preferred stock, no par value,
    4,750,000 shares authorized, none issued
    and outstanding                                            --
   Common stock, no par value, 12,500,000 shares
    authorized, 6,633,137 shares issued and outstanding    14,641
   Additional paid-in capital                                 337
   Retained earnings                                        4,556
                                                          -------
Total shareholders' equity                                 19,534
                                                          -------
                                                          $62,239
                                                          =======
</TABLE>
[FN]
See accompanying notes.
<PAGE> 5
<TABLE>
                                R.H. Phillips, Inc.

                               Statements of Income

                    (In thousands, except share information)


<CAPTION>
                                       Nine months ended   Three months ended
                                         September 30,        September 30,
                                       -----------------   ------------------
                                         1999      1998      1999      1998
                                         ----      ----      ----      ----
                                                    (Unaudited)

<S>                                    <C>       <C>       <C>       <C>
Net sales                              $ 17,498  $ 14,810  $  6,594  $  5,156

Cost of sales                             8,117     7,373     3,148     2,432
                                       --------  --------  --------  --------
Gross profit                              9,381     7,437     3,446     2,724

Selling expenses                          4,550     3,423     1,655     1,205

General and administrative expenses         809       735       243       250
                                       --------  --------  --------  --------
                                          4,022     3,279     1,548     1,269

Interest expense                         (1,442)     (901)     (583)     (338)

Other expense, net                          (73)      (29)     (178)     (111)
                                       --------  --------  --------  --------
Income before provision for
 income taxes                             2,507     2,349       787       820

Provision for income taxes               (1,009)     (945)     (317)     (330)
                                       --------  --------  --------  --------
Net income                             $  1,498  $  1,404  $    470  $    490
                                       ========  ========  ========  ========

Net income                             $  1,498  $  1,404  $    470  $    490

Dividends and accretion on
 Redeemable Preferred Stock                 (97)     (256)       (6)      (86)
                                       --------  --------  --------  --------
Net income applicable to Common
 Shareholders                          $  1,401  $  1,148  $    464  $    404
                                       ========  ========  ========  ========
Net income per share -
 basic and diluted                          .21       .17       .07       .06


Shares used in per share calculations:

- Basic                               6,633,137 6,633,137 6,633,137 6,633,137

- Diluted                             6,633,325 6,633,714 6,633,244 6,634,341
</TABLE>
[FN]
See accompanying notes
<PAGE> 6
<TABLE>
                               R.H. Phillips, Inc.

                            Statements of Cash Flows

                                (In thousands)

<CAPTION>
                                           Nine months ended Three months ended
                                              September 30,     September 30,
                                              -------------     -------------
                                               1999    1998     1999     1998
                                               ----    ----     ----     ----
                                                         (Unaudited)

<S>                                           <C>     <C>    <C>     <C>
Cash flows from operating activities:
Net income                                    $ 1,498 $ 1,404 $   470 $   490
Adjustments to reconcile net income to net
 cash provided by (used in) operating
 activities:
 Depreciation and amortization                  2,064   1,570     742     577
 Loss on disposal of property, plant
  and equipment                                   179     136     181     147
 Net changes in assets and liabilities:
  Accounts receivable                          (1,727)   (497) (1,393)   (179)
  Inventories                                  (4,561) (3,018) (2,114) (1,866)
  Prepaid expenses and other current assets        (3)    195     (49)     35
  Other assets                                    (46)    (42)    (29)      7
  Accounts payable                              2,984     621   1,901     235
  Accrued payroll and related                     200      30      (1)   (122)
  Accrued selling expenses                        322     397      32     193
  Accrued income taxes                            462     219     218     (82)
  Other accrued liabilities                       (14)   (160)    (62)   (149)
                                              ------- ------- ------- -------
Net cash provided by (used in) operating
 activities                                     1,358     855    (104)   (714)

Cash flows from investing activities:
Purchase of property, plant and equipment      (6,055) (5,658) (1,939) (2,468)
Proceeds from sale of property,
 plant and equipment                            1,001      14     996      --
                                              ------- ------- ------- -------
Net cash used in investing activities          (5,054) (5,644)   (943) (2,468)

Cash flows from financing activities:
Cash dividends paid                              (150)   (300)     --    (150)
Proceeds from long-term debt and notes payable 12,816  13,868   5,124   6,580
Principal payments on long-term debt and
 notes payable                                 (7,398) (8,237) (2,854) (3,133)
Payment for development of leased vineyards
 and related fees                                (561)   (508)   (365)    (193)
Other financing activities, net                    --      (4)     --      --
                                              ------- ------- ------- -------
Net cash provided by financing activities       4,707   4,819   1,905   3,104
                                              ------- ------- ------- -------
Increase (decrease) in cash                     1,011      30     858     (78)
Cash at beginning of period                       151     109     304     217
                                              ------- ------- ------- -------
Cash at end of period                         $ 1,162 $   139 $ 1,162 $   139
                                              ======= ======= ======= =======

Other cash flow information:
Interest paid (including capitalized
 interest of $217 and $350 in 1999
 and 1998, respectively)                      $ 1,548 $ 1,172 $   689 $   492
Income taxes paid                             $   552 $   726 $    99 $   413
Noncash transactions:
Issuance of notes payable to finance
 property, plant and equipment purchased      $   719 $     4 $   719 $    --
Issuance of stock dividend                    $   300 $   300 $   150 $   150
Accretion of redeemable preferred stock       $    22 $    31 $     6 $    11
Conversion of preferred stock to
 subordinated debt                            $ 2,281 $    -- $    -- $    --

</TABLE>
[FN]
See accompanying notes
<PAGE> 7
                       R.H. Phillips, Inc.

                 Notes to Financial Statements

                      September 30, 1999

1.  Summary of Significant Accounting Policies

The interim financial statements as of September 30, 1999 and for
each of the nine and three month periods ended September 30, 1999
and 1998 have been prepared by R.H. Phillips, Inc. ("R.H. Phillips"),
and are unaudited.  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 nine and three month periods ended September 30,
1999 and 1998 are not necessarily indicative of the results which
might be realized for the full year.  Certain information and footnote
disclosures normally included in annual financial statements prepared
in accordance with generally accepted accounting principles have
been condensed or omitted pursuant to generally accepted
accounting principles applicable for interim periods. These statements
should be read in conjunction with the financial statements and notes
included in R.H. Phillips' Annual Report on Form 10-KSB for the
fiscal year ended December 31, 1998.

The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make
estimates and assumptions that affect the amounts reported in the
financial statements and accompanying notes.  Actual results could
differ from those estimates.

2.  Computation of Net Income per Share

Basic net income per share for the nine and three month periods
ended September 30, 1999 and 1998 was computed using the
weighted average number of common shares outstanding during each
period.  Diluted net income per share was computed using the
weighted average number of common shares and dilutive potential
common shares outstanding during each period.  There were 188 and
107 dilutive potential common shares outstanding for the nine and
three month periods ended September 30, 1999, respectively.
Potential common shares outstanding which could have a dilutive
effect in the future, but were anti-dilutive for the nine and three
month periods ended September 30, 1999, totaled 2,327,962 and
2,328,043, respectively.  Basic and diluted net income per share and
the weighted average number of common shares outstanding for the
nine and three month periods ended September 30, 1998 have been
restated to reflect stock dividends of 50,728 shares issued in March
1999 and 50,578 shares issued in September 1999.

3.  Long-term Debt

R.H. Phillips obtained three long-term loans totaling $876,000 from
General Electric Capital Corporation (General Electric) during the
nine month period ended September 30, 1999.  The first loan bears
interest at annual rate of 7.41%, and principal and interest are due in
84 monthly installments.  The second loan bears interest at annual
rate of 7.23%, and principal and interest are due in 60 monthly
installments.  The third loan bears interest at annual rate of 8.06%,
and principal and interest are due in 84 monthly installments. The
loans are all collateralized by equipment.

R.H. Phillips also obtained five capital leases totaling $2,461,000
from General Electric during the nine month period ended September
30, 1999.  The leased assets consist of recently purchased winery and
vineyard equipment.  Two of the leases are due in 72 monthly
payments, and three of the leases require 96 monthly payments.
<PAGE> 8
4.  Subordinated Debt and Preferred Stock

In March 1999, R.H. Phillips exchanged, at par, 500,000 shares of
Senior Redeemable Preferred Stock for unsecured subordinated debt
with a principal amount of $2,500,000 and 250,000 shares of
Redeemable Exchangeable Preferred Stock ("Exchangeable
Preferred").  The subordinated debt carries an annual interest rate of
14%, payable semiannually.  The Exchangeable Preferred bears a
cumulative annual dividend of $1.20 per share payable semiannually
in shares of Common Stock at a price equal to the lower of the
average daily market price over a period of twenty consecutive
trading days before the dividend payment date or $4.00 per share.
After March 15, 2000, R.H. Phillips has the option to convert the
Exchangeable Preferred to unsecured subordinated debt at an interest
rate to be determined at the time of conversion.  If the Exchangeable
Preferred is not converted at March 15, 2000, the $1.20 per share
dividend will become payable in cash.  The subordinated debt,
including any amount converted from Exchangeable Preferred, can
be paid, at R.H. Phillips' option, after March 15, 2001.  R.H. Phillips
is required to make principal payments (including redemption
payments if the Exchangeable Preferred is not converted to
subordinated debt) of $1,666,666 in 2004, $1,666,667 in 2005 and
$1,666,667 in 2006.

5.  Litigation

Phillips Farms, a partnership operating a winery in Lodi, California,
filed a lawsuit against R.H. Phillips on August 5, 1999 in the
Superior Court of the State of California, County of San Joaquin.
Phillips Farms is suing R.H. Phillips for trademark infringement,
dilution and unfair competition arising out of R.H. Phillips' use of the
name "Phillips" in connection with the sale of wine.  Phillips Farms
also alleges that R.H. Phillips has publicly disparaged the quality of
the wine Phillips Farms sells.  Phillips Farms is seeking damages in an
amount to be determined by the court at trial, but in no event less
than $500,000, and a preliminary and permanent injunction
prohibiting R.H. Phillips' use of any infringing trademarks among
other relief.

R.H. Phillips believes that it has meritorious defenses to the claims of
Phillips Farms and also has legal claims against Phillips Farms.  On
October 4, 1999, R.H. Phillips filed a cross complaint against Phillips
Farms for infringement of R.H. Phillips' trademarks and trade dress,
among other actions.  If Phillips Farms is successful in its suit, R.H.
Phillips could be required to cease use of the "R.H. Phillips"
trademarks, which could have an adverse effect upon the business
and financial condition of R.H. Phillips.

6.  Vineyard Development

   On September 15, 1999, R.H. Phillips purchased 370 acres of land
for $490,000, and immediately began development of 115 acres of the
land into vineyard.  On September 29, 1999, R.H. Phillips sold the
land and improvements to David L. Gemmer and Shirley A. Gemmer ("Gemmer")
for $989,000, and entered into a Vineyard Development and Lease Agreement
(the "Agreement") with Gemmer.  Mr. Gemmer is a shareholder of R.H. Phillips,
attends meetings of the Board of Directors, and serves as an advisor.
Under the terms of the Agreement, R.H. Phillips is required to complete
the development of the 115 acre vineyard.  The development period begins
September 29, 1999 and ends December 31, 2001 (the "Development
Period").  Subject to certain limitations, Gemmer shall reimburse all
costs incurred by R.H. Phillips during the Development Period.  R.H.
Phillips is required to lease and operate the vineyards for the ten year
period ended December 31, 2011, and is entitled to all crop produced
during this period.  Rent payments are due quarterly beginning
January 1, 2002, and are equal to 2.8% of (i) development costs and
(ii) finance costs equal to 11.2% per annum of vineyard development
and land costs.
<PAGE> 9
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 R.H. Phillips, Inc.  The discussion of the results and trends does
not necessarily imply that these results and trends will continue.  For
the following discussion,  a "case" means a 9-liter case of wine.  All
numbers are approximate.

Forward-Looking Statements

   R.H. Phillips provides in this report and elsewhere from time
to time forward-looking statements regarding R.H. Phillips, its
products, the wine business, and general business and economic
conditions.  Examples of forward-looking statements include
projections regarding future expansion, trends in the wine industry,
sources of supply, costs of production, profit margins, and
availability and sources of financing.  The actual results of R.H.
Phillips may vary due to a variety of factors, including the following:

   Availability of Future Financing.  R.H. Phillips may continue
to heavily depend upon its ability to raise additional debt or equity
financing for its working capital and capital expansion needs.  The
ability to raise financing is in turn dependent upon a variety of
factors, some of which are outside the control of R.H. Phillips.
These factors include, but are not limited to, interest rates, the
availability of financing sources, and general economic conditions.
If interest rates increase or other financing becomes unavailable or
more costly to obtain, R.H. Phillips may not be able to raise sufficient
capital to supply its needs.

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

   Costs of Production.  Statements with respect to R.H.
Phillips' cost of production are based on management's assumptions
concerning the likely levels of future sales by R.H. Phillips, projected
yields from R.H. Phillips' vineyards and the cost and availability of
bulk wine and grapes.  For example, if R.H. Phillips' sales increase
at a faster rate than anticipated or R.H. Phillips' grape production is
lower than projected, R.H. Phillips could be forced to make
additional purchases of grapes and wine on the spot market.
Management believes that such events could increase R.H. Phillips'
costs of production.

   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 market conditions change
substantially in the future, the rate at which R.H. Phillips deems it
advisable to expand its vineyard and winery facilities may be
adjusted.

   Other Factors.  A variety of other factors could affect the
actual results of R.H. Phillips.  These include changes in economic
conditions, unexpected adverse weather or growing conditions,
reduction or increases in consumer demand, changes in governmental
regulation concerning the production and sale of wine, and increased
competition from foreign or domestic wine producers.

Seasonality

   R.H. Phillips usually experiences substantial seasonal
fluctuations in revenue 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.  R.H.
Phillips' expenditures fluctuate throughout the year based on
vineyard and winery activities.  Expenditures typically peak during
the summer and early autumn.
<PAGE> 10
Costs of Production

   R.H. Phillips' vineyards produced 9,500 tons of grapes in
1999, compared to 7,700 tons in 1998.  The increase was primarily
due to production from vineyards planted in recent years.  R.H.
Phillips has expanded the size of its vineyards to lessen its
dependence on outside sources of bulk wines and grapes and reduce
its cost of goods.  Management anticipates that the full benefit of the
vineyard expansion should continue to be realized over the next
several years as the vines mature.

   The Dunnigan Hills region experienced an unusual period of
below freezing weather during early April 1999.  The cold weather
damaged some of the fruit producing buds in R.H. Phillips'
Chardonnay vineyards.  The 1999 Chardonnay crop was 19% less
than anticipated, which will negatively impact Chardonnay product
margins in 2000.  Management believes that other varietals were not
significantly affected by the freeze.

Results of Operations

   Net Sales

   Net sales for the nine month period ended September 30,
1999 were $17,498,000, an 18% increase over net sales of
$14,810,000 for the corresponding period of the prior year.  Net
sales included sales of bulk wines and other items totaling $1,404,000
for the nine month period ended September 30, 1999, compared to
$776,000 for the corresponding period in 1998.  The increase in net
sales was primarily due to a greater proportion of higher priced,
super premium wines.  Sales of super premium wines increased from
33,000 cases for the nine month period ended September 30, 1998
to 52,000 cases for the same period in 1999.  This resulted in an
average price per case of $54.77 for the nine month period ended
September 30, 1999, compared to $51.12 for the same period in
1998.  Higher sales volumes also contributed to the increase in net
sales.  R.H. Phillips sold 294,000 cases during the nine month period
ended September 30, 1999, compared to 275,000 in the
corresponding period of the prior year.

   Gross Profit

   Gross profit was $9,381,000 for the nine month period ended
September 30, 1999, a 26% increase over $7,437,000 for the same
period in 1998.  Excluding sales of bulk wines and other items, gross
profit was $9,024,000 in 1999, compared to $7,442,000 in 1998.
Gross margins were 54% for the nine month period ended September
30, 1999, compared to 50% for the same period in 1998.  The
increase in gross margins is primarily attributable to the higher
average selling prices discussed above.  The average cost per case
was substantially the same for both periods at $24.06 for the nine
month period ended September 30, 1999 and $24.01 for the same
period in 1998.

   Selling Expenses

   Selling expenses were $4,550,000, or 26% of net sales, for
the nine month period ended  September 30, 1999, an increase from
$3,423,000, or 23% of net sales, for the same period in 1998.  The
$1,127,000 increase is primarily due to increased sales promotion and
labor costs.

   General and Administrative Expenses

   General and administrative expenses were $809,000, or 5%
of net sales, for the nine month period ended September 30, 1999.
General and administrative expenses were $735,000, or 5% of sales,
for the nine month period ended September 30, 1998.  The $74,000
increase is primarily due to higher maintenance expenses and legal
fees.
<PAGE> 11
   Interest Expense

   Interest expense for the nine month period ended September
30, 1999 was $1,442,000, compared to $901,000 for the same period
in 1998.  R.H. Phillips capitalized $217,000 of additional interest
pertaining to vineyard and winery development during the nine month
period ended September 30, 1999, and $350,000 during the same
period in 1998.  R.H. Phillips had fewer vineyards under development
during the first nine months of 1999 than during the same period in
1998, causing capitalized interest to decrease.  The increase in total
interest cost is primarily due to borrowings to fund capital
improvements, and the conversion of $2,500,000 of preferred stock
to subordinated debt in March 1999.  The interest is attributable to
R.H. Phillips' debt obligations and bank line of credit.

   Provision for Income Taxes

   Provision for income taxes for the nine month period ended
September 30, 1999 was $1,009,000, compared to $945,000 for the
same period in 1998.  The $64,000 increase is due to higher income.

   Net Income Applicable to Common Shareholders

   R.H. Phillips generated net income of $1,498,000 for the nine
month period ended September 30, 1999, compared to $1,404,000
for the same period in 1998.  The $94,000 increase was primarily due
to higher gross profit, which was partially offset by increased selling
expenses and interest expense.

   Net income applicable to common shareholders was
$1,401,000 for the nine month period ended September 30, 1999,
compared to $1,148,000 for the same period in 1998.  The $253,000
increase was primarily due to higher net income.   The March 1999
exchange of 250,000 shares of Senior Redeemable Preferred Stock
for unsecured subordinated debt also contributed to the increase by
decreasing dividends payable to the holder of the Senior Redeemable
Preferred Stock.

Liquidity and Capital Resources

   R.H. Phillips has financed its working capital and capital
expansion needs through internally generated funds, outside credit
facilities, equity financing, and the sale and leaseback of certain
assets.  R.H. Phillips has made substantial capital expenditures to
expand its vineyards and winery facilities, obtain production
efficiencies, and improve wine quality.  R.H. Phillips' cash flows from
operations have not been sufficient to satisfy all of the working
capital and capital expenditure requirements needed to keep pace
with its growth.

   R.H. Phillips had cash totaling $1,162,000 on September 30,
1999, an increase from $151,000 on December 31, 1998.  Sources
of cash during the nine month period ended September 30, 1999
included cash from operations of $1,358,000 and proceeds from
long-term debt of $12,816,000.  Cash used during that period
included $6,055,000 invested in property, plant and equipment and
$7,398,000 to repay debt.

   Current assets increased by $7,302,000 during the nine month
period ended September 30, 1999, primarily due to an increase in
inventories from $12,674,000 on December 31, 1998 to $17,234,000
on September 30, 1999.  The increase is primarily due to the
seasonality of the grape harvest.  Current liabilities increased by
$4,337,000 during the nine month period ended September 30, 1999,
primarily due to the timing
<PAGE> 12
of accounts payable.  These factors
caused net working capital to increase $2,965,000, from $12,785,000
on December 31, 1998 to $15,750,000 on September 30, 1999.

   R.H. Phillips has several long-term loans, the largest of which
was obtained from Metropolitan Life Insurance Company
("Metropolitan").  R.H. Phillips has borrowed $11,000,000 from
Metropolitan, of which $9,800,000 was outstanding at September 30,
1999.  The unpaid principal under the loan accrues interest at an
annual rate of 8.04%.  The interest rate is subject to adjustment by
Metropolitan every three years, beginning on January 1, 2001.  R.H.
Phillips is required to make monthly principal payments of $60,000
plus accrued interest.  The loan matures in January 2013, at which
time R.H. Phillips will be required to make a balloon payment of
$200,000.

   R.H. Phillips has a line of credit of $15,000,000 with U.S.
Bank National Association ("U.S. Bank") to finance its working
capital requirements.  The line of credit is secured by accounts
receivable, inventory, the grape crop, and unencumbered farm
equipment, and matures April 2001.  The annual interest rate on the
line is either U.S. Bank's prime rate or IBOR plus 150 basis points,
at R.H. Phillips' option.  The balance on the line at September 30,
1999 was $12,159,000.

   In addition to loans with Metropolitan and U.S. Bank, R.H.
Phillips has several smaller loans, which are generally secured by
equipment, and capital leases.  The maturity dates range from
December 1999 to August 2007 and, excluding capital leases, the
interest rates range from 7.0% to 10.9%.  The balances due on these
items totaled $7,699,000 at September 30, 1999.

   In May 1997, R.H. Phillips sold 371 acres of land partially
developed into vineyard to John Hancock Mutual Life Insurance
Company ("Hancock").  In connection with the transaction, R.H.
Phillips now manages, operates and leases the land and vineyards
from a subtenant of Hancock, Farmland Management Services, for
a term that expires on December 31, 2012.  R.H. Phillips received
proceeds of $5,384,000 from the sale, and began paying rent of
$161,000 per calendar quarter in January 1999.  The lease is
accounted for as an operating lease.

   On September 15, 1999, R.H. Phillips purchased 370 acres of land
for $490,000, and immediately began development of 115 acres of the
land into vineyard.  On September 29, 1999, R.H. Phillips sold the
land and improvements to David L. Gemmer and Shirley A. Gemmer ("Gemmer")
for $989,000, and entered into a Vineyard Development and Lease Agreement
(the "Agreement") with Gemmer.  Mr. Gemmer is a shareholder of R.H. Phillips,
attends meetings of the Board of Directors, and serves as an advisor.
Under the terms of the Agreement, R.H. Phillips is required to complete
the development of the 115 acre vineyard.  The development period begins
September 29, 1999 and ends December 31, 2001 (the "Development
Period").  Subject to certain limitations, Gemmer shall reimburse all
costs incurred by R.H. Phillips during the Development Period.  R.H.
Phillips is required to lease and operate the vineyards for the ten year
period ended December 31, 2011, and is entitled to all crop produced
during this period.  Rent payments are due quarterly beginning
January 1, 2002, and are equal to 2.8% of (i) development costs and
(ii) finance costs equal to 11.2% per annum of vineyard development
and land costs.

   In March 1996, R.H. Phillips 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 R.H. Phillips derived from the sale of the
Senior Preferred Stock and the warrants, after payment of offering
expenses, were $4,785,000. The Senior Preferred Stock bore a
cumulative annual dividend of $1.20 per share, payable semiannually.
During the first four years after issuance, 50% of the dividend was
payable in cash and 50% of the dividend was payable in shares of
Common Stock at a price equal to the lower of the average daily
market price over a period of twenty consecutive trading days before
the dividend payment date or $4.00 per share.

   In March 1999, R.H. Phillips exchanged, at par, all shares of
the Senior Preferred Stock for unsecured subordinated debt with a
principal amount of $2,500,000 and 250,000 shares of Redeemable
Exchangeable Preferred Stock ("Exchangeable Preferred").  The
subordinated debt carries an annual interest rate of 14%, payable
semiannually.  The Exchangeable Preferred bears a cumulative annual
dividend of $1.20
<PAGE> 13
per share payable semiannually in shares of
Common Stock at a price equal to the lower of the average daily
market price over a period of twenty consecutive trading days before
the dividend payment date or $4.00 per share.  After March 15,
2000, R.H. Phillips has the option to convert the Exchangeable
Preferred to unsecured subordinated debt at an interest rate to be
determined at the time of conversion.  If the Exchangeable Preferred
is not converted at March 15, 2000, the $1.20 per share dividend will
become payable in cash.  The subordinated debt, including any
amount converted from Exchangeable Preferred, can be paid, at R.H.
Phillips' option, after March 15, 2001.  R.H. Phillips is required to
make principal payments (including redemption payments if the
Exchangeable Preferred is not converted to subordinated debt) of
$1,666,666 in 2004, $1,666,667 in 2005 and $1,666,667 in 2006.

   R.H. Phillips has invested in substantial improvements to its
winery facility and vineyards over the past several years, and plans to
continue the expansion.  R.H. Phillips invested $5,400,000 during the
first nine months of 1999 in tanks, barrels, other equipment and
buildings, and plans to invest approximately $200,000 more during
the balance of the year.  Additional winery expansion projects are
planned for the future to handle the increased production from R.H.
Phillips' recently planted vineyards.  R.H. Phillips has invested
$1,100,000 during the first nine months of 1999 in farm equipment
and the continued development of recently planted vineyards, and
plans to invest an additional $300,000 during the remainder of 1999.
R.H. Phillips is funding 1999 capital projects with internally
generated funds, proceeds from the U.S. Bank line of credit increase,
and long-term debt and lease financing.

   Management believes that cash flows generated from
operations, together with borrowing availability, will be adequate to
fund R.H. Phillips' operations, capital expansion efforts and debt
service requirements over the next twelve months.  However, a
significant decline in R.H. Phillips' expected operating performance
could have a material adverse effect on R.H. Phillips' liquidity.  In
such case, R.H. Phillips would adjust its level of capital expenditures
as necessary, obtain additional debt financing or issue equity
securities.  However, there can be no assurance that such financing
will be available and, if available, that it could be obtained in terms
favorable to R.H. Phillips.

   Phylloxera infestation has had a negative impact on R.H.
Phillips' grape production.  Phylloxera is a root louse which feeds on
grape roots, causing reduced production and eventual vine death.
Many of R.H. Phillips' first vineyards contained rootstock which was
susceptible to Phylloxera.  As of October 1999, R.H. Phillips has
removed or replaced all Phylloxera infested or susceptible vines.
Management believes that the replacement rootstocks are resistant to
Phylloxera.

Year 2000

   R.H. Phillips has reviewed its potential exposure to the "Year
2000 Problem", which results from computer programs being written
using two digits rather than four to define the applicable year.  As a
result of this problem, computer programs that are not "Year 2000
compliant" may recognize a date using "00" as the year 1900 rather
than 2000.  The impact of the Year 2000 Problem on R.H. Phillips is
difficult to assess at this time, but the Year 2000 Problem could
result in a system failure or miscalculation causing disruptions of
operations, including a temporary inability to process sales, send
invoices, retain accurate data or engage in normal business activities.
The Year 2000 Problem may also affect the operations of suppliers,
distributors, vendors and others with whom R.H. Phillips does
business, thereby adversely affecting R.H. Phillips as well.

   R.H. Phillips has completed its internal assessment of its own
information technology systems and non-information technology
systems to ascertain whether they are Year 2000 compliant.  R.H.
Phillips has also assessed the potential effect upon its operations of
Year 2000 Problems encountered by its suppliers, customers, bank
and others with whom it does business.  Although R.H. Phillips has
implemented measures to reduce its potential exposure to the Year
2000 Problem, due to the general uncertainty over the Year 2000
readiness of third parties, R.H. Phillips is unable to determine at this
time whether the consequences of Year 2000 failures will have a
material impact.
<PAGE> 14
   R.H. Phillips uses several information technology systems,
some of which may be affected by the Year 2000 Problem.
Management has reviewed its critical computer systems in order to
determine whether any software requires updating or replacement
and determined that its primary financial and operating software was
not Year 2000 compliant.  The software supplier has advised
management that it has updated the software to Year 2000
compliance.  R.H. Phillips was not charged for the reprogramming.
R.H. Phillips also tested the software for Year 2000 compliance.  The
costs associated with the testing were less than $5,000, and were
expensed as incurred.  Management believes that the software is now
materially Year 2000 compliant, and that any problems which may
occur in 2000 will be immaterial and easily correctable.

   R.H. Phillips also reviewed its non-information technology
systems for potential exposure to the Year 2000 Problem, and
invested approximately $10,000 to upgrade certain non-information
technology systems to Year 2000 compliance. These replacement
costs were capitalized.  Although management cannot be certain all
problems have been corrected, management believes that R.H.
Phillips' non-information technology systems are now Year 2000
compliant.

   Outside parties whose exposure to Year 2000 Problems may
have a material impact on R.H. Phillips' operations include its bank,
major customers, and major suppliers.  Management has reviewed the
issue with bank representatives, and believes that the Year 2000
Problem will not materially affect R.H. Phillips' banking operations.
Management believes that one or more of R.H. Phillips' customers
could have their operations interrupted or terminated by Year 2000
problems.  Such an event could result in the delay of payments to
R.H. Phillips.  Management believes that it would be impractical to
attempt to measure the potential risk of such an occurrence, and that
correction of Year 2000 Problems R.H. Phillips' customers
experience is outside of R.H. Phillips' control.  Similarly, R.H.
Phillips' major suppliers may experience Year 2000 Problems,
potentially delaying the shipment of necessary materials.
Management believes that it would be able to find alternate suppliers
should this occur.
<PAGE> 15
                       PART II.  OTHER INFORMATION

Item 1.  Litigation

           Phillips Farms, a partnership operating a winery in Lodi,
California, filed a lawsuit against R.H. Phillips on August 5, 1999 in
the Superior Court of the State of California, County of San Joaquin.
Phillips Farms is suing R.H. Phillips for trademark infringement,
dilution and unfair competition arising out of R.H. Phillips' use of the
name "Phillips" in connection with the sale of wine.  Phillips Farms
also alleges that R.H. Phillips has publicly disparaged the quality of
the wine Phillips Farms sells.  Phillips Farms is seeking damages in an
amount to be determined by the court at trial, but in no event less
than $500,000, and a preliminary and permanent injunction
prohibiting R.H. Phillips' use of any infringing trademarks among
other relief.

   R.H. Phillips believes that it has meritorious defenses to the
claims of Phillips Farms and also has legal claims against Phillips
Farms.  On October 4, 1999, R.H. Phillips filed a cross complaint
against Phillips Farms for infringement of R.H. Phillips' trademarks
and trade dress, among other actions.  If Phillips Farms is successful
in its suit, R.H. Phillips could be required to cease use of the "R.H.
Phillips" trademarks, which could have an adverse effect upon the
business and financial condition of R.H. Phillips.
<PAGE> 16
Item 6.  Exhibits and Reports on Form 8-K

   (a) Exhibits

   Exhibit No.     Description
   -----------     -----------

   10.1            Vineyard Development and Lease Agreement, dated
                   September 29, 1999, between R.H. Phillips and
                   David L. and Shirley A. Gemmer, and related agreements

   27.1            Financial Data Schedule


   (b) Reports on Form 8-K

   None
<PAGE> 17
SIGNATURES

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

                          R.H. PHILLIPS, INC.
                          (Registrant)

                          Date: November 12, 1999




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


                          By//s//Michael J. Motroni
                            -------------------------------
                          Michael J. Motroni, Chief Financial Officer
                          Principal Financial Officer

<PAGE> 18
                             EXHIBIT INDEX

Exhibit No.                     Description
 10.1          Vineyard Development and Lease Agreement, dated
               September 29, 1999, between R.H. Phillips and
               David L. and Shirley A. Gemmer, and related agreements


 27.1          Financial Data Schedules