Last summer the club was taken over by a consortium of local businessmen led by Phillips after millionaire owner Thea Bristow left Plainmoor.
That takeover led to budget cuts that have seen the Gulls struggle near the bottom of the National League.
"We're talking to people and it's at a reasonably advanced stage, and that's all I can say," Phillips said.
"I cannot go in public and say who they are, or what they're doing, I just cannot do that.
"When it's all gone through then the fans will be the first to know," he added to BBC Radio Devon.
Torquay's financial problems have been well-documented this season, with the club closing its youth academy, manager Kevin Nicholson claiming that some of his players were contracts that were worth "less than the minimum wage" and the Gulls boss having to double-up as the team's bus driver.
"It's at a very delicate stage," added Phillips. "I would love all the fans to know exactly what was going on, but that's just impossible."
Torquay United are in "advanced" talks about a possible takeover, according to chairman David Phillips.