content: FORM 10-Q
  
                                    UNITED STATES
                         SECURITIES AND EXCHANGE COMMISSION
                               Washington, D.C. 20549
  
  (Mark One)
  [X]      QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
           SECURITIES EXCHANGE ACT OF 1934
           For the quarterly period ended             APRIL 30, 1997
                                          ------------------------------------
  
                                         OR
  
  [   ]    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
           SECURITIES EXCHANGE ACT OF 1934
           For the transition period from  _________________ to _________________
  
  
  Commission file number       33-1406
  
                               BUCK HILL FALLS COMPANY
               (Exact name of registrant as specified in its charter)
  
           PENNSYLVANIA                                 24-0536840
    (State or other jurisdiction of                   (I.R.S. Employer
    incorporation or organization)                   Identification No.)
  
                     CRESCO ROAD, BUCK HILL FALLS, PENNSYLVANIA
                      (Address of principal executive offices)
                                       18323
                                     (Zip Code)
  
                                   (717) 595-7511
                (Registrant's telephone number, including area code)
  
  
                (Former name, former address and former fiscal year,
                            if changed since last report)
  
       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   [X]       No [  ]
  
       As of April 30, 1997, the registrant had 79,811 shares of Common Stock, no
  par value, and 22,760 shares of Common Stock Class A, no par value, issued and
  outstanding.
  
  
  
  <PAGE>
  
                                      FORM 10-Q
  
                               BUCK HILL FALLS COMPANY
  
                                        INDEX
  
                                                                              Page
  
  Part I:        Financial Information
  
  Item 1.        Financial Statements
  
                 Condensed Consolidated Balance Sheet -
                 April 30, 1997 and October 31, 1996                            1
  
                 Condensed Consolidated Statement of Operations -
                 Six Months and Three Months Ended April 30, 1997
                 and 1996                                                       2
  
                 Condensed Consolidated Statement of Cash Flows -
                 Six Months Ended April 30, 1997 and 1996                       3
  
                 Notes to Condensed Consolidated
                 Financial Statements                                           4
  
  Item 2.        Management's Discussion and Analysis of
                 Financial Condition and Results of Operations                5-8
  
  Part II:       Other Information                                              9
  
                 Signatures                                                    10
  
  
  
  <PAGE>
  
                           PART I - FINANCIAL INFORMATION
                            ITEM 1. FINANCIAL STATEMENTS
                       BUCK HILL FALLS COMPANY AND SUBSIDIARY
  
                        CONDENSED CONSOLIDATED BALANCE SHEET
  <TABLE>
  <CAPTION>
                                                                     APRIL 30, 1997         OCTOBER 31
                                                                       (UNAUDITED)             1996*
  <S>                                                                 <C>                   <C>        
                                       ASSETS
  CURRENT ASSETS:
       Cash                                                           $    94,457           $   106,703
       Accounts receivable, net                                           283,625               253,278
       Prepaid expenses and other current assets                            8,904                43,416
                                                                      -----------           -----------
  
            Total current assets                                          386,986               403,397
  
  RESTRICTED CASH                                                          79,966                68,556
  
  PROPERTY, PLANT AND EQUIPMENT, Net                                    2,613,329             2,692,743
  
  DEFERRED COSTS, Net                                                       4,769                 7,883
                                                                      -----------           -----------
  
                 TOTAL                                                $ 3,085,050           $ 3,172,579
                                                                      ===========           ===========
  
                        LIABILITIES AND STOCKHOLDERS' EQUITY
  
  CURRENT LIABILITIES:
       Note payable, unsecured                                        $    11,300           $    11,300
       Current portion of long-term debt                                  612,596               829,939
       Accounts payable, trade                                             30,215                47,941
       Accrued expenses and other                                          73,170                91,844
       Deferred revenue                                                   202,283                    --
                                                                      -----------           -----------
  
            Total current liabilities                                     929,564               981,024
  
  CUSTOMER DEPOSITS                                                        79,966                68,556
  
  LONG-TERM DEBT                                                          923,741               940,005
  
  6-1/4% SUBORDINATED NOTES                                               140,000               140,000
                                                                      -----------           -----------
  
            Total liabilities                                           2,073,271             2,129,585
                                                                      -----------           -----------
  
  STOCKHOLDERS' EQUITY:
       Common stock                                                     1,697,969             1,518,964
       Contributed capital                                                799,227               799,227
       Deficit                                                         (1,485,417)           (1,275,197)
                                                                      -----------           -----------
  
            Total stockholders' equity                                  1,011,779             1,042,994
                                                                      -----------           -----------
  
                 TOTAL                                                $ 3,085,050           $ 3,172,579
                                                                      ===========           ===========
  </TABLE>
  
  *Condensed from audited financial statements
  
           The accompanying notes are an integral part of these condensed
                         consolidated financial statements.
  
                                        -1-
  <PAGE>
                       BUCK HILL FALLS COMPANY AND SUBSIDIARY
  
                   CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
                                     (UNAUDITED)
  <TABLE>
  <CAPTION>
                                                  SIX MONTHS ENDED            THREE MONTHS ENDED
                                          ...........APRIL 30......................APRIL 30...........
                                               1997           1996           1997           1996
  
  <S>                                       <C>            <C>            <C>            <C>      
  REVENUES                                  $ 665,417      $ 631,603      $ 341,503      $ 339,990
  
  COST OF REVENUES                            672,877        679,610        317,723        355,654
                                            ---------      ---------      ---------      --------- 
  
  GROSS (LOSS) PROFIT FROM
       OPERATIONS                              (7,460)       (48,007)        23,780        (15,664)
  
  GENERAL AND ADMINISTRATIVE
       EXPENSES                               183,763        164,116        102,302        101,501
                                            ---------      ---------      ---------      --------- 
  
  LOSS FROM OPERATIONS                       (191,223)      (212,123)       (78,522)      (117,165)
                                            ---------      ---------      ---------      --------- 
  
  OTHER INCOME (EXPENSE):
       Miscellaneous income                    63,008         39,367         49,059         16,398
       Interest expense                       (82,004)       (88,092)       (32,501)       (38,767)
                                            ---------      ---------      ---------      --------- 
  
            Other income (expense), net       (18,996)       (48,725)        16,558        (22,369)
                                            ---------      ---------      ---------      --------- 
  
  NET LOSS                                  $(210,219)     $(260,848)     $ (61,964)     $(139,534)
                                            =========      =========      =========      ========= 
  
  WEIGHTED AVERAGE NUMBER
       OF SHARES OUTSTANDING                   86,674         73,537         86,674         73,537
  
  NET LOSS PER COMMON
       SHARE                                $   (2.43)     $   (3.55)     $   (0.71)     $   (1.90)
                                            =========      =========      =========      ========= 
  </TABLE>
  
  
           The accompanying notes are an integral part of these condensed
                         consolidated financial statements.
  
                                        -2-
  
  <PAGE>
                       BUCK HILL FALLS COMPANY AND SUBSIDIARY
  
                   CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
                                    (UNAUDITED)
  <TABLE>
  <CAPTION>
                                                                    SIX MONTHS ENDED
                                                             ............APRIL 30...........
                                                                 1997                1996
  <S>                                                         <C>                 <C>       
  CASH PROVIDED BY (USED IN):
       OPERATING ACTIVITIES:
            Net loss                                          $(210,219)          $(260,848)
            Adjustments for noncash charges:
                 Depreciation and amortization                  109,360             107,011
                 Gain on sale of land                           (53,669)                 --
            Changes in assets and liabilities                   173,161             141,333
                                                              ---------           ---------
  
                      Net cash provided by (used in)
                        operating activities                     18,633             (12,504)
                                                              ---------           ---------
  
  INVESTING ACTIVITIES:
       Purchase of property and equipment                       (30,156)            (50,007)
       Proceeds from sale of land                                53,879                  --
                                                              ---------           ---------
  
                      Net cash provided by (used in)
                        investing activities                     23,723             (50,007)
                                                              ---------           ---------
  
  FINANCING ACTIVITIES:
       Proceeds from issuance of debt                           175,000             171,014
       Repayment of debt                                       (408,607)            (75,811)
       Proceeds from issuance of stock                          179,005                  --
                                                              ---------           ---------
  
                      Net cash (used in) provided by
                        financing activities                    (54,602)             95,203
                                                              ---------           ---------
  
  (DECREASE) INCREASE IN CASH                                   (12,246)             32,692
  
  CASH, BEGINNING OF PERIOD                                     106,703              31,460
                                                              ---------           ---------
  
  CASH, END OF PERIOD                                         $  94,457           $  64,152
                                                              =========           =========
  
  CASH PAYMENTS FOR:
       Interest                                               $  79,912           $  92,467
                                                              =========           =========
  </TABLE>
  
  
           The accompanying notes are an integral part of these condensed
                         consolidated financial statements.
  
                                        -3-
  <PAGE>
  
                       BUCK HILL FALLS COMPANY AND SUBSIDIARY
  
                NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                     (UNAUDITED)
  --------------------------------------------------------------------------------
  
  NOTE 1:   BASIS OF PRESENTATION
  
            Although the interim condensed consolidated financial statements of
  Buck Hill Falls Company and Subsidiary (the "Company") are unaudited, it is the
  opinion of the Company's management that all normal recurring adjustments
  necessary for a fair statement of the results for the interim periods presented
  have been reflected therein. The results of operations for any interim period
  are not necessarily indicative of results that may be expected for the entire
  year.
  
            These statements should be read in conjunction with the consolidated
  financial statements and related notes included in the Company's annual report
  on Form 10-K for the year ended October 31, 1996.
  
  
  NOTE 2:   CHANGES IN COMPONENTS OF COMMON STOCK AND COMMON STOCK CLASS A
  
  <TABLE>
  <CAPTION>
                                                            ....COMMON STOCK....                                   STOCK
                                   ...COMMON STOCK...       ........CLASS A.....        STOCK SUBSCRIBED        SUBSCRIPTION
                                   SHARES      AMOUNT       SHARES        AMOUNT       SHARES       AMOUNT       RECEIVABLE
  
  <S>                              <C>        <C>            <C>         <C>            <C>        <C>           <C>       
  Balance,  October 31, 1996       73,537     $1,251,370     18,620      $267,594       9,380      $182,700      $(182,700)
  Common Stock issued               6,274        125,120      4,140        41,579
  Common Stock subscribed                                                              (4,140)      (75,000)        75,000
                                   ------     ----------     ------      --------       -----      --------      --------- 
  Balance, April 30, 1997          79,811     $1,376,490     22,760      $309,173       5,240      $107,700      $(107,700)
                                   ======     ==========     ======      ========       =====      ========      ========= 
  </TABLE>
  
  
                                        -4-
  <PAGE>
  
  FORM 10-Q
  
  BUCK HILL FALLS COMPANY AND SUBSIDIARY
  
  ITEM 2.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION 
            AND RESULTS OF OPERATIONS
  
  GENERAL
  
            The Company's business, insofar as it relates to the provision of
  recreational facilities, is largely seasonal in nature. As a result, the
  Company's revenues and cost of revenues typically increase significantly in its
  third and fourth fiscal quarters.
  
  RESULTS OF OPERATIONS FOR THE SIX MONTHS ENDED
  APRIL 30, 1997
  COMPARED TO THE SIX MONTHS ENDED
  APRIL 30, 1996
  
            Revenues increased $33,814 for the six months ended April 30, 1997, as
  compared to the same period in the prior fiscal year. Dues revenues increased
  $79,500 as a result of an increase in dues from $2,300 to $2,800 in fiscal 1997.
  The increase was offset by a decrease in snow plowing revenues of approximately
  $13,000 as a result of less snowfall amounts in 1997 and a decrease in golf
  revenues of $3,800 due to the golf course being open fewer days in 1997. Golf
  membership fees were not recognized in April 1997 resulting in a decrease in
  revenues of $25,400.
  
            Cost of revenues decreased $6,733 as compared to the same period in
  the previous fiscal year, due primarily to a decrease in snowplowing expense of
  $10,600 and a decrease in road and path repairs of approximately $4,000 due to
  better weather conditions during 1997. The decrease was offset by an increase in
  security costs of $3,000, an increase in depreciation expense of $2,350 and
  increases in water maintenance costs of $1,000. There was also an increase in
  lawn bowling supplies and maintenance costs of approximately $1,500 due to
  preparations for the national competition to be held at Buck Hill Falls.
  
            General and administrative costs increased $19,647 due primarily to an
  increase in professional fees of $11,200 and travel and lodging of $2,800
  related to the search for a new general manager. Other increases in general and
  administrative costs are due to higher salaries for administrative personnel of
  $3,600 and an increase in office supplies and postage of approximately $2,000.
  
                                        -5-
  <PAGE>
  
            Miscellaneous income increased $23,655 during 1997 due primarily to
  the sale of land for $53,700. This increase was offset by a decrease in interest
  income of approximately $20,100 due to a reduction in the finance charge rate
  and management's improved efforts to collect accounts receivable on a timely
  basis. Miscellaneous income also decreased $9,850 in 1997 due to an insurance
  settlement being received during 1996.
  
            Interest expense decreased $6,088 due primarily to management `s
  efforts to reduce outstanding debt.
  
  RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED
  APRIL 30, 1997
  COMPARED TO THE THREE MONTHS ENDED
  APRIL 30, 1996
  
            Revenues increased by $1,513 during the three months ended April 30,
  1997. As stated above the increase in dues resulted in increased revenues of
  $39,750 which was offset by the decrease in snowplowing revenues and the
  decrease in golf membership revenues recognized during 1997.
  
            Cost of revenues decreased $37,900 due primarily to the change in
  interim allocation of depreciation expense. During 1996, less depreciation was
  recognized during the first quarter and more in later quarters. Beginning in
  1997, depreciation is recognized on a pro rata basis throughout the year.
  
            Miscellaneous income increased approximately 200% primarily due to the
  sale of land as stated above.
  
            Interest expense decreased 16% due primarily to a reduction in
  outstanding debt.
  
  LIQUIDITY AND CAPITAL RESOURCES
  
            At April 30, 1997, the Company had a working capital deficiency of
  $542,578. Included in current liabilities is the entire $577,640 outstanding on
  the Company's $1,000,000 line of credit with a bank (described in the following
  paragraph), which is payable on demand. An additional $34,956 in scheduled
  principal payments on long-term debt are due within the next twelve months.
  
                                        -6-
  
  <PAGE>
  
            On July 24, 1992, the Company entered into a loan agreement with a
  bank relating to a secured revolving line of credit in the amount of $1,000,000
  (the "Revolving Credit Facility"). Amounts borrowed under the Revolving Credit
  Facility bear interest at the prime rate (8% at April 30, 1997) plus 1-1/2%.
  Pursuant to the loan agreement, approximately 2,600 acres of land and land
  improvements located in Barrett Township, Monroe County, Pennsylvania, are
  pledged as collateral, along with dues, assessments and fee revenues. The
  Revolving Credit Facility was available through May 31, 1997 and was
  subsequently extended until May 31, 1998, and is contingent upon the Company
  maintaining a satisfactory financial position and subject to annual review of
  the Company's financial statements by the bank. The loan agreement with the bank
  provides that if, in the opinion of the authorized lending officers of the bank,
  the Company's credit worthiness materially declines, the credit line will cease
  to be available for future draws, and any existing balance will be required to
  be fully amortized over a reasonable term.
  
            The Company has been required to make certain improvements in its
  water system. In May 1995, the Company entered into a $900,000 loan agreement
  with a bank to refinance the existing debt and to complete the improvements.
  Principal is payable in monthly installments of $8,985 over a 20-year
  amortization period. Interest is payable at the bank's base rate (8% at April
  30, 1997) plus 1-1/2%. The loan matures in May 2015 and is secured by a first
  mortgage on approximately 2,600 acres of land and land improvements located in
  Barrett Township, Monroe County, Pennsylvania and a collateral assignment of all
  revenues and assessments of the Company's water operations.
  
            The Company expects to meet its current liabilities (other than
  payment of the entire $577,640 under the Revolving Credit Facility, which,
  although not currently due, is classified as a current liability because of the
  Revolving Credit Facility's demand terms) through increased collections as a
  result of the seasonal increase in revenues which typically occurs during the
  Company's third and fourth quarters through the provision of recreational
  services. The Company does not anticipate that the bank will demand payment
  under the Revolving Credit Facility.
  
            Cash decreased $12,246 for the six months ended April 30, 1997. Cash
  provided by borrowings of $175,000 under the Company's revolving line of credit,
  net proceeds from the issuance of Common Stock Class A and common stock of
  $179,005, proceeds from the sale of land of $53,879 and operating activities of
  $18,633 was used for repayment of $388,680 on the Company's revolving line of
  credit, to make scheduled principal payments of $19,927 on long-term debt and
  capital expenditures of $30,156. Such capital expenditures included carpeting
  for $4,831, computer equipment for $3,000, pulse meters for $3,708 and the
  purchase of equipment for $18,517.
  
            At April 31, 1997, the Company had drawn $577,640 on its $1,000,000
  line of credit, leaving $422,360 available.
  
                                        -7-
  
  <PAGE>
  
  
            The Company incurred a loss of $210,219 for the six months ended April
  30, 1997 and at April 30, 1997, the Company has a cumulative deficit of
  $1,485,417 and a working capital deficiency of $542,578. Although the Company's
  line of credit is available through May 28, 1998, the ability to borrow under
  the line is contingent upon certain factors. As a result, continuation of the
  Company in its present form is dependent upon the successful maintenance of its
  debt terms, its ability to obtain additional financing if needed and the
  eventual achievement of sustained profitable operations.
  
            Management believes that revisions in the Company's operating
  requirements, including an increase in dues from $2,300 to $2,800 provides the
  opportunity for the Company to continue as a going concern. However, there is no
  assurance that management's actions will be successful or, if they are not
  successful, that the Company would be able to continue as a going concern.
  
  
                                        -8-
  <PAGE>
  
                             PART II - OTHER INFORMATION
  
  
  Item 1.   Legal Proceedings
  
            None
  
  Item 2.   Changes in Securities
  
            None
  
  Item 3.   Defaults Upon Senior Securities
  
            None
  
  Item 4.   Submission of Matters to a Vote of Security Holders
  
            None
  
  Item 5.   Other Information
  
            None
  
  Item 6.   Exhibits and Reports on Form 8-K
  
            None
  
  
                                        -9-
  <PAGE>
  
  
                                      SIGNATURE
  
  
            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.
  
                                              BUCK HILL FALLS COMPANY
                                                    (Registrant)
  
  
  Date:  June 12, 1997               By:/s/ David B. Ottaway
                                        David B. Ottaway
                                        Chairman and President
  
  
  Date:  June 13, 1997               By:/s/ Anthony C. Bowe
                                        Anthony C. Bowe, Vice-President,
                                        Treasurer and Chief Financial Officer
                                        (Principal Financial and Accounting
                                        Officer)
  
  
                                        -10-
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text: FORM 10-Q
  
                                    UNITED STATES
                         SECURITIES AND EXCHANGE COMMISSION
                               Washington, D.C. 20549
  
  (Mark One)
  [X]      QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
           SECURITIES EXCHANGE ACT OF 1934
           For the quarterly period ended             APRIL 30, 1997
                                          ------------------------------------
  
                                         OR
  
  [   ]    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
           SECURITIES EXCHANGE ACT OF 1934
           For the transition period from  _________________ to _________________
  
  Commission file number       33-1406
  
                               BUCK HILL FALLS COMPANY
               (Exact name of registrant as specified in its charter)
  
           PENNSYLVANIA                                 24-0536840
    (State or other jurisdiction of                   (I.R.S. Employer
    incorporation or organization)                   Identification No.)
  
                     CRESCO ROAD, BUCK HILL FALLS, PENNSYLVANIA
                      (Address of principal executive offices)
                                       18323
                                     (Zip Code)
  
                                   (717) 595-7511
                (Registrant's telephone number, including area code)
  
                (Former name, former address and former fiscal year,
                            if changed since last report)
  
       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   [X]       No [  ]
  
       As of April 30, 1997, the registrant had 79,811 shares of Common Stock, no
  par value, and 22,760 shares of Common Stock Class A, no par value, issued and
  outstanding.
  FORM 10-Q
  
                               BUCK HILL FALLS COMPANY
  
                                        INDEX
  
                                                                              Page
  
  Part I:        Financial Information
  
  Item 1.        Financial Statements
  
                 Condensed Consolidated Balance Sheet -
                 April 30, 1997 and October 31, 1996                            1
  
                 Condensed Consolidated Statement of Operations -
                 Six Months and Three Months Ended April 30, 1997
                 and 1996                                                       2
  
                 Condensed Consolidated Statement of Cash Flows -
                 Six Months Ended April 30, 1997 and 1996                       3
  
                 Notes to Condensed Consolidated
                 Financial Statements                                           4
  
  Item 2.        Management's Discussion and Analysis of
                 Financial Condition and Results of Operations                5-8
  
  Part II:       Other Information                                              9
  
                 Signatures                                                    10
  PART I - FINANCIAL INFORMATION
                            ITEM 1. FINANCIAL STATEMENTS
                       BUCK HILL FALLS COMPANY AND SUBSIDIARY
  
                        CONDENSED CONSOLIDATED BALANCE SHEET
  APRIL 30, 1997         OCTOBER 31
                                                                       (UNAUDITED)             1996*
  ASSETS
  CURRENT ASSETS:
       Cash                                                           $    94,457           $   106,703
       Accounts receivable, net                                           283,625               253,278
       Prepaid expenses and other current assets                            8,904                43,416
                                                                      -----------           -----------
  
            Total current assets                                          386,986               403,397
  
  RESTRICTED CASH                                                          79,966                68,556
  
  PROPERTY, PLANT AND EQUIPMENT, Net                                    2,613,329             2,692,743
  
  DEFERRED COSTS, Net                                                       4,769                 7,883
                                                                      -----------           -----------
  
                 TOTAL                                                $ 3,085,050           $ 3,172,579
                                                                      ===========           ===========
  
                        LIABILITIES AND STOCKHOLDERS' EQUITY
  
  CURRENT LIABILITIES:
       Note payable, unsecured                                        $    11,300           $    11,300
       Current portion of long-term debt                                  612,596               829,939
       Accounts payable, trade                                             30,215                47,941
       Accrued expenses and other                                          73,170                91,844
       Deferred revenue                                                   202,283                    --
                                                                      -----------           -----------
  
            Total current liabilities                                     929,564               981,024
  
  CUSTOMER DEPOSITS                                                        79,966                68,556
  
  LONG-TERM DEBT                                                          923,741               940,005
  
  6-1/4% SUBORDINATED NOTES                                               140,000               140,000
                                                                      -----------           -----------
  
            Total liabilities                                           2,073,271             2,129,585
                                                                      -----------           -----------
  
  STOCKHOLDERS' EQUITY:
       Common stock                                                     1,697,969             1,518,964
       Contributed capital                                                799,227               799,227
       Deficit                                                         (1,485,417)           (1,275,197)
                                                                      -----------           -----------
  
            Total stockholders' equity                                  1,011,779             1,042,994
                                                                      -----------           -----------
  
                 TOTAL                                                $ 3,085,050           $ 3,172,579
                                                                      ===========           ===========
  *Condensed from audited financial statements
  
           The accompanying notes are an integral part of these condensed
                         consolidated financial statements.
  
                                        -1-
  BUCK HILL FALLS COMPANY AND SUBSIDIARY
  
                   CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
                                     (UNAUDITED)
  SIX MONTHS ENDED            THREE MONTHS ENDED
                                          ...........APRIL 30......................APRIL 30...........
                                               1997           1996           1997           1996
  REVENUES                                  $ 665,417      $ 631,603      $ 341,503      $ 339,990
  
  COST OF REVENUES                            672,877        679,610        317,723        355,654
                                            ---------      ---------      ---------      --------- 
  
  GROSS (LOSS) PROFIT FROM
       OPERATIONS                              (7,460)       (48,007)        23,780        (15,664)
  
  GENERAL AND ADMINISTRATIVE
       EXPENSES                               183,763        164,116        102,302        101,501
                                            ---------      ---------      ---------      --------- 
  
  LOSS FROM OPERATIONS                       (191,223)      (212,123)       (78,522)      (117,165)
                                            ---------      ---------      ---------      --------- 
  
  OTHER INCOME (EXPENSE):
       Miscellaneous income                    63,008         39,367         49,059         16,398
       Interest expense                       (82,004)       (88,092)       (32,501)       (38,767)
                                            ---------      ---------      ---------      --------- 
  
            Other income (expense), net       (18,996)       (48,725)        16,558        (22,369)
                                            ---------      ---------      ---------      --------- 
  
  NET LOSS                                  $(210,219)     $(260,848)     $ (61,964)     $(139,534)
                                            =========      =========      =========      ========= 
  
  WEIGHTED AVERAGE NUMBER
       OF SHARES OUTSTANDING                   86,674         73,537         86,674         73,537
  
  NET LOSS PER COMMON
       SHARE                                $   (2.43)     $   (3.55)     $   (0.71)     $   (1.90)
                                            =========      =========      =========      =========
  The accompanying notes are an integral part of these condensed
                         consolidated financial statements.
  
                                        -2-
  BUCK HILL FALLS COMPANY AND SUBSIDIARY
  
                   CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
                                    (UNAUDITED)
  SIX MONTHS ENDED
                                                             ............APRIL 30...........
                                                                 1997                1996
  CASH PROVIDED BY (USED IN):
       OPERATING ACTIVITIES:
            Net loss                                          $(210,219)          $(260,848)
            Adjustments for noncash charges:
                 Depreciation and amortization                  109,360             107,011
                 Gain on sale of land                           (53,669)                 --
            Changes in assets and liabilities                   173,161             141,333
                                                              ---------           ---------
  
                      Net cash provided by (used in)
                        operating activities                     18,633             (12,504)
                                                              ---------           ---------
  
  INVESTING ACTIVITIES:
       Purchase of property and equipment                       (30,156)            (50,007)
       Proceeds from sale of land                                53,879                  --
                                                              ---------           ---------
  
                      Net cash provided by (used in)
                        investing activities                     23,723             (50,007)
                                                              ---------           ---------
  
  FINANCING ACTIVITIES:
       Proceeds from issuance of debt                           175,000             171,014
       Repayment of debt                                       (408,607)            (75,811)
       Proceeds from issuance of stock                          179,005                  --
                                                              ---------           ---------
  
                      Net cash (used in) provided by
                        financing activities                    (54,602)             95,203
                                                              ---------           ---------
  
  (DECREASE) INCREASE IN CASH                                   (12,246)             32,692
  
  CASH, BEGINNING OF PERIOD                                     106,703              31,460
                                                              ---------           ---------
  
  CASH, END OF PERIOD                                         $  94,457           $  64,152
                                                              =========           =========
  
  CASH PAYMENTS FOR:
       Interest                                               $  79,912           $  92,467
                                                              =========           =========
  The accompanying notes are an integral part of these condensed
                         consolidated financial statements.
  
                                        -3-
  BUCK HILL FALLS COMPANY AND SUBSIDIARY
  
                NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                     (UNAUDITED)
  --------------------------------------------------------------------------------
  
  NOTE 1:   BASIS OF PRESENTATION
  
            Although the interim condensed consolidated financial statements of
  Buck Hill Falls Company and Subsidiary (the "Company") are unaudited, it is the
  opinion of the Company's management that all normal recurring adjustments
  necessary for a fair statement of the results for the interim periods presented
  have been reflected therein. The results of operations for any interim period
  are not necessarily indicative of results that may be expected for the entire
  year.
  
            These statements should be read in conjunction with the consolidated
  financial statements and related notes included in the Company's annual report
  on Form 10-K for the year ended October 31, 1996.
  
  NOTE 2:   CHANGES IN COMPONENTS OF COMMON STOCK AND COMMON STOCK CLASS A
  ....COMMON STOCK....                                   STOCK
                                   ...COMMON STOCK...       ........CLASS A.....        STOCK SUBSCRIBED        SUBSCRIPTION
                                   SHARES      AMOUNT       SHARES        AMOUNT       SHARES       AMOUNT       RECEIVABLE
  Balance,  October 31, 1996       73,537     $1,251,370     18,620      $267,594       9,380      $182,700      $(182,700)
  Common Stock issued               6,274        125,120      4,140        41,579
  Common Stock subscribed                                                              (4,140)      (75,000)        75,000
                                   ------     ----------     ------      --------       -----      --------      --------- 
  Balance, April 30, 1997          79,811     $1,376,490     22,760      $309,173       5,240      $107,700      $(107,700)
                                   ======     ==========     ======      ========       =====      ========      =========
  -4-
  FORM 10-Q
  
  BUCK HILL FALLS COMPANY AND SUBSIDIARY
  
  ITEM 2.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION 
            AND RESULTS OF OPERATIONS
  
  GENERAL
  
            The Company's business, insofar as it relates to the provision of
  recreational facilities, is largely seasonal in nature. As a result, the
  Company's revenues and cost of revenues typically increase significantly in its
  third and fourth fiscal quarters.
  
  RESULTS OF OPERATIONS FOR THE SIX MONTHS ENDED
  APRIL 30, 1997
  COMPARED TO THE SIX MONTHS ENDED
  APRIL 30, 1996
  
            Revenues increased $33,814 for the six months ended April 30, 1997, as
  compared to the same period in the prior fiscal year. Dues revenues increased
  $79,500 as a result of an increase in dues from $2,300 to $2,800 in fiscal 1997.
  The increase was offset by a decrease in snow plowing revenues of approximately
  $13,000 as a result of less snowfall amounts in 1997 and a decrease in golf
  revenues of $3,800 due to the golf course being open fewer days in 1997. Golf
  membership fees were not recognized in April 1997 resulting in a decrease in
  revenues of $25,400.
  
            Cost of revenues decreased $6,733 as compared to the same period in
  the previous fiscal year, due primarily to a decrease in snowplowing expense of
  $10,600 and a decrease in road and path repairs of approximately $4,000 due to
  better weather conditions during 1997. The decrease was offset by an increase in
  security costs of $3,000, an increase in depreciation expense of $2,350 and
  increases in water maintenance costs of $1,000. There was also an increase in
  lawn bowling supplies and maintenance costs of approximately $1,500 due to
  preparations for the national competition to be held at Buck Hill Falls.
  
            General and administrative costs increased $19,647 due primarily to an
  increase in professional fees of $11,200 and travel and lodging of $2,800
  related to the search for a new general manager. Other increases in general and
  administrative costs are due to higher salaries for administrative personnel of
  $3,600 and an increase in office supplies and postage of approximately $2,000.
  
                                        -5-
  Miscellaneous income increased $23,655 during 1997 due primarily to
  the sale of land for $53,700. This increase was offset by a decrease in interest
  income of approximately $20,100 due to a reduction in the finance charge rate
  and management's improved efforts to collect accounts receivable on a timely
  basis. Miscellaneous income also decreased $9,850 in 1997 due to an insurance
  settlement being received during 1996.
  
            Interest expense decreased $6,088 due primarily to management `s
  efforts to reduce outstanding debt.
  
  RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED
  APRIL 30, 1997
  COMPARED TO THE THREE MONTHS ENDED
  APRIL 30, 1996
  
            Revenues increased by $1,513 during the three months ended April 30,
  1997. As stated above the increase in dues resulted in increased revenues of
  $39,750 which was offset by the decrease in snowplowing revenues and the
  decrease in golf membership revenues recognized during 1997.
  
            Cost of revenues decreased $37,900 due primarily to the change in
  interim allocation of depreciation expense. During 1996, less depreciation was
  recognized during the first quarter and more in later quarters. Beginning in
  1997, depreciation is recognized on a pro rata basis throughout the year.
  
            Miscellaneous income increased approximately 200% primarily due to the
  sale of land as stated above.
  
            Interest expense decreased 16% due primarily to a reduction in
  outstanding debt.
  
  LIQUIDITY AND CAPITAL RESOURCES
  
            At April 30, 1997, the Company had a working capital deficiency of
  $542,578. Included in current liabilities is the entire $577,640 outstanding on
  the Company's $1,000,000 line of credit with a bank (described in the following
  paragraph), which is payable on demand. An additional $34,956 in scheduled
  principal payments on long-term debt are due within the next twelve months.
  
                                        -6-
  On July 24, 1992, the Company entered into a loan agreement with a
  bank relating to a secured revolving line of credit in the amount of $1,000,000
  (the "Revolving Credit Facility"). Amounts borrowed under the Revolving Credit
  Facility bear interest at the prime rate (8% at April 30, 1997) plus 1-1/2%.
  Pursuant to the loan agreement, approximately 2,600 acres of land and land
  improvements located in Barrett Township, Monroe County, Pennsylvania, are
  pledged as collateral, along with dues, assessments and fee revenues. The
  Revolving Credit Facility was available through May 31, 1997 and was
  subsequently extended until May 31, 1998, and is contingent upon the Company
  maintaining a satisfactory financial position and subject to annual review of
  the Company's financial statements by the bank. The loan agreement with the bank
  provides that if, in the opinion of the authorized lending officers of the bank,
  the Company's credit worthiness materially declines, the credit line will cease
  to be available for future draws, and any existing balance will be required to
  be fully amortized over a reasonable term.
  
            The Company has been required to make certain improvements in its
  water system. In May 1995, the Company entered into a $900,000 loan agreement
  with a bank to refinance the existing debt and to complete the improvements.
  Principal is payable in monthly installments of $8,985 over a 20-year
  amortization period. Interest is payable at the bank's base rate (8% at April
  30, 1997) plus 1-1/2%. The loan matures in May 2015 and is secured by a first
  mortgage on approximately 2,600 acres of land and land improvements located in
  Barrett Township, Monroe County, Pennsylvania and a collateral assignment of all
  revenues and assessments of the Company's water operations.
  
            The Company expects to meet its current liabilities (other than
  payment of the entire $577,640 under the Revolving Credit Facility, which,
  although not currently due, is classified as a current liability because of the
  Revolving Credit Facility's demand terms) through increased collections as a
  result of the seasonal increase in revenues which typically occurs during the
  Company's third and fourth quarters through the provision of recreational
  services. The Company does not anticipate that the bank will demand payment
  under the Revolving Credit Facility.
  
            Cash decreased $12,246 for the six months ended April 30, 1997. Cash
  provided by borrowings of $175,000 under the Company's revolving line of credit,
  net proceeds from the issuance of Common Stock Class A and common stock of
  $179,005, proceeds from the sale of land of $53,879 and operating activities of
  $18,633 was used for repayment of $388,680 on the Company's revolving line of
  credit, to make scheduled principal payments of $19,927 on long-term debt and
  capital expenditures of $30,156. Such capital expenditures included carpeting
  for $4,831, computer equipment for $3,000, pulse meters for $3,708 and the
  purchase of equipment for $18,517.
  
            At April 31, 1997, the Company had drawn $577,640 on its $1,000,000
  line of credit, leaving $422,360 available.
  
                                        -7-
  The Company incurred a loss of $210,219 for the six months ended April
  30, 1997 and at April 30, 1997, the Company has a cumulative deficit of
  $1,485,417 and a working capital deficiency of $542,578. Although the Company's
  line of credit is available through May 28, 1998, the ability to borrow under
  the line is contingent upon certain factors. As a result, continuation of the
  Company in its present form is dependent upon the successful maintenance of its
  debt terms, its ability to obtain additional financing if needed and the
  eventual achievement of sustained profitable operations.
  
            Management believes that revisions in the Company's operating
  requirements, including an increase in dues from $2,300 to $2,800 provides the
  opportunity for the Company to continue as a going concern. However, there is no
  assurance that management's actions will be successful or, if they are not
  successful, that the Company would be able to continue as a going concern.
  
                                        -8-
  PART II - OTHER INFORMATION
  
  Item 1.   Legal Proceedings
  
            None
  
  Item 2.   Changes in Securities
  
            None
  
  Item 3.   Defaults Upon Senior Securities
  
            None
  
  Item 4.   Submission of Matters to a Vote of Security Holders
  
            None
  
  Item 5.   Other Information
  
            None
  
  Item 6.   Exhibits and Reports on Form 8-K
  
            None
  
                                        -9-
  SIGNATURE
  
            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.
  
                                              BUCK HILL FALLS COMPANY
                                                    (Registrant)
  
  Date:  June 12, 1997               By:/s/ David B. Ottaway
                                        David B. Ottaway
                                        Chairman and President
  
  Date:  June 13, 1997               By:/s/ Anthony C. Bowe
                                        Anthony C. Bowe, Vice-President,
                                        Treasurer and Chief Financial Officer
                                        (Principal Financial and Accounting
                                        Officer)
  
                                        -10-