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         JANUARY 31, 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 18323
                 (Address of principal executive offices)(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 January 31,  1997,  the  registrant  had 73,537  shares of Common
  Stock and  22,760  shares of Common  Stock  Class A, no par  value,  issued  and
  outstanding.
  
                                         -1-
  
  <PAGE>
  
                                      FORM 10-Q
  
                               BUCK HILL FALLS COMPANY
  
                                        INDEX
  
                                                                            Page
  
  Part I:  Financial Information
  
  Item 1.  Financial Statements
  
           Condensed Consolidated Balance Sheet -
           January 31, 1997 and October 31, 1996                              1
  
           Condensed Consolidated Statement of Operations -
           Three Months Ended January 31, 1997 and 1996                       2
  
           Condensed Consolidated Statement of Cash Flows -
           Three Months Ended January 31, 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                    5-7
  
  Part II: Other Information                                                  8
  
           Signatures                                                         9
  
  
                                         -2-
  
  <PAGE>
  
                           PART I - FINANCIAL INFORMATION
                            ITEM 1. FINANCIAL STATEMENTS
  
                       BUCK HILL FALLS COMPANY AND SUBSIDIARY
  
                        CONDENSED CONSOLIDATED BALANCE SHEET
  <TABLE>
  <CAPTION>
  
                                                                  JANUARY 31,
                                                                     1997          OCTOBER 31,
                                                                  (UNAUDITED)          1996*
  
                                       ASSETS
  <S>                                                               <C>              <C>     
  CURRENT ASSETS:
    Cash                                                            $136,534         $106,703
    Accounts receivable, net                                         312,491          253,278
    Prepaid expenses and other current assets                         31,258           43,416
  
    Total current assets                                             480,283          403,397
  
  RESTRICTED CASH                                                     68,520           68,556
  
  PROPERTY, PLANT AND EQUIPMENT, Net                               2,651,287        2,692,743
  
  DEFERRED COSTS, Net                                                  4,700            7,883
                                                                 -----------     ------------
  
            TOTAL                                                 $3,204,790       $3,172,579
                                                                 ===========      ===========
  
                        LIABILITIES AND STOCKHOLDERS' EQUITY
  CURRENT LIABILITIES:
    Note payable, unsecured                                          $11,300          $11,300
    Current portion of long-term debt                                739,939          829,939
    Accounts payable, trade                                           63,804           47,942
    Accrued expenses and other                                       314,383           91,844
  
    Total current liabilities                                      1,129,426          981,025
  
  CUSTOMER DEPOSITS                                                   68,520           68,556
  
  LONG-TERM DEBT                                                     930,526          940,004
  
  6-1/4% SUBORDINATED NOTES                                          140,000          140,000
                                                                     -------          -------
  
    Total liabilities                                              2,268,472        2,129,585
                                                                   ---------        ---------
  
  STOCKHOLDERS' EQUITY:
    Common stock                                                   1,560,543        1,518,964
    Contributed capital                                              799,227          799,227
    Deficit                                                       (1,423,452)      (1,275,197)
                                                                 -----------     ------------
  
        Total stockholders' equity                                   936,318        1,042,994
                                                                   ---------       ----------
  
  TOTAL                                                           $3,204,790       $3,172,579
                                                                 ===========       ==========
  </TABLE>
  
  *Condensed from audited financial statements
  
              See notes to condensed consolidated financial statements.
  
  
                                         -1-
  
  <PAGE>
  
  
  
                       BUCK HILL FALLS COMPANY AND SUBSIDIARY
  
                   CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
                                     (UNAUDITED)
  
                                               THREE MONTHS ENDED
                                                   JANUARY 31,
                                             1997           1996
  
  REVENUES                                 $323,914       $291,613
  
  COST OF REVENUES                          355,154        323,956
                                           --------      ---------
  
  GROSS LOSS FROM OPERATIONS                (31,240)       (32,343)
  
  GENERAL AND ADMINISTRATIVE EXPENSES        81,461         62,615
                                          ---------     ----------
  
  LOSS FROM OPERATIONS                     (112,701)       (94,958)
                                          ---------    -----------
  
  OTHER INCOME (EXPENSE):
  Miscellaneous                              13,949         22,969
  Interest expense                          (49,503)       (49,325)
                                         ----------      ---------
  
  Other expense, net                        (35,554)       (26,356)
                                         ----------     ----------
  
  NET LOSS                                $(148,255)     $(121,314)
                                          =========     ==========
  
  WEIGHTED AVERAGE NUMBER OF SHARES
    OUTSTANDING                              80,093         73,537
                                       ============    ===========
  
  NET LOSS PER COMMON SHARE                  ($1.85)        ($1.65)
                                       ============   ============
  
  
              See notes to condensed consolidated financial statements.
  
                                         -2-
  
  <PAGE>
  
                       BUCK HILL FALLS COMPANY AND SUBSIDIARY
  
                   CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
                                     (UNAUDITED)
  <TABLE>
  <CAPTION>
  
                                                             THREE MONTHS ENDED
                                                                 JANUARY 31,
                                                             1997           1996
  <S>                                                     <C>            <C> 
  CASH PROVIDED BY (USED IN):
      OPERATIONS:
        Net loss                                          ($148,255)     ($121,314)
        Adjustments for noncash charges:
          Depreciation and amortization                      55,209         30,385
        Changes in assets and liabilities                   194,530         83,488
                                                            -------         ------
  
            Net cash provided by (used in) operations       101,484         (7,441)
                                                            -------        -------
  
  INVESTING:
        Purchase of property and equipment                  (13,753)       (34,648)
                                                           --------       --------
  
  FINANCING:
        Proceeds from issuance of debt                      100,000        121,016
        Repayment of debt                                  (199,479)       (67,709)
        Proceeds from issuance of stock                      41,579
                                                           --------       --------
  
           Net cash (used in) provided by financing         (57,900)        53,307
                                                           --------         ------
  
  INCREASE IN CASH                                           28,831         11,218
  
  CASH, BEGINNING OF PERIOD                                 106,703         31,460
                                                            -------         ------
  
  CASH, END OF PERIOD                                      $135,534        $42,678
                                                           ========        =======
  
  CASH PAID FOR,
       Interest                                             $49,503        $49,325
                                                            =======        =======
  
  </TABLE>
  
              See notes to 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 CLASS A
  
  <TABLE>
  <CAPTION>
  
                                                                                            STOCK
                                       COMMON STOCK                STOCK SUBSCRIBED     SUBSCRIPTION
                                   SHARES        AMOUNT          SHARES       AMOUNT      RECEIVABLE
  <S>                             <C>          <C>               <C>        <C>          <C>        
  Balance, October 31, 1996        18,620       $267,594          9,380      $182,700     $(182,700) 
  Common Stock Issued               4,140         41,579
  Common Stock Subscribed                                        (4,140)      (75,000)       75,000
                                   ------       --------          -----      --------     ---------
  Balance, January 31, 1997        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 THREE MONTHS ENDED
  JANUARY 31, 1997
  COMPARED TO THE THREE MONTHS ENDED
  JANUARY 31, 1996
  
            Revenues  increased  $32,301 for the three  months  ended  January 31,
  1997,  as compared to the same period in the prior fiscal year.  The Company had
  an increase  of $39,700 in its dues  revenues 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  $1,800 as a result of less  snowfall
  amounts in 1997, a decrease in golf revenues of $1,600 due to  implementation of
  seasonal  cart  rental fees and a decrease  in sewer  revenues of  approximately
  $4,000 due to some untimely billings in 1996.
  
            Cost of revenues  increased  $31,198 as compared to the same period in
  the previous fiscal year,  primarily due to an increase in depreciation  expense
  of  approximately  $26,000 due to 1996 property and  equipment  additions and an
  adjustment to the allocation of interim depreciation expense. In addition, there
  were increases in water maintenance costs of $5,700, water testing fees of $500,
  insurance of $500 and gasoline  expenses of $700. These increases were offset by
  a decrease in snowplowing expense of $2,500.
  
            General and administrative costs increased $18,846 due primarily to an
  increase  in  professional  fees of $8,400  and  travel  and  lodging  of $1,700
  relating to the search for a new general manager. Other increases in general and
  administrative costs are due to higher salaries for administrative  personnel of
  $2,700,  increases in telephone expense of $1,350,  real estate taxes of $1,000,
  office  supplies of $1,500,  bank charges of $750 and  miscellaneous  expense of
  $1,300 (primarily for Christmas gift certificates).
  
            Other income  decreased  $9,020 during 1997 due primarily to decreased
  finance charges.
  
  
                                        - 5 -
  
  <PAGE>
  
  LIQUIDITY AND CAPITAL RESOURCES
  
            At January  31,1997,  the Company had a working capital  deficiency of
  $649,143.  Included in current liabilities is the entire $701,320 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  $38,619 in  scheduled
  principal payments on long-term debt are due within the next twelve months.
  
            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 January  31,1997) 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 is available through May 31, 1997, 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 January
  31,1997)  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
  revenue and assessments of the Company's water operations.
  
            The  Company  expects  to meet its  current  liabilities  (other  than
  payment of the entire  $701,320  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  increased  $29,831 for the three months ended  January  31,1997.
  Cash provided by borrowings of $100,000  under the Company's  revolving  line of
  credit,  net  proceeds  from the issuance of Common Stock Class A of $41,579 and
  operating  activities  of  $101,484  was used for  repayment  of $190,000 on the
  Company's  revolving  line of credit,  to make scheduled  principal  payments of
  $9,479 on  long-term  debt and capital  expenditures  of $13,753.  Such  capital
  expenditures  included  carpeting  for $4,638 and the purchase of equipment  for
  $9,115.
  
            At January 31, 1997,  the Company had drawn $701,320 on its $1,000,000
  line of credit, leaving $298,680 available.
  
            The Company  incurred a loss of $148,255  for the three  months  ended
  January 31, 1997 and at January 31, 1997,  the Company has a cumulative  deficit
  of $1,423,452 and a working capital deficiency
  
                                        - 6 -
  
  <PAGE>
  
  of $649,143.  Although the Company's line of credit is available through May 31,
  1997, 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.
  
  
                                        - 7 -
  
  <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
  
  
                                        - 8 -
  
  <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:  March 4, 1997                    By:  /s/  David B. Ottaway
                                            David B. Ottaway
                                            Chairman and President
  
  
  
  
  Date:  March 4, 1997                    By:  /s/  Anthony C. Bowe
                                            Anthony C. Bowe, Vice-President,
                                            Treasurer and Chief Financial Officer
                                            (Principal Financial and Accounting
                                                 Officer)
  
  
                                        - 9 -
metadata_documents: [{"type": "10-Q", "sequence": "1", "secsgml_size_bytes": 21581}]
metadata_filer: {"company-data": {"conformed-name": "BUCK HILL FALLS CO /PA/", "cik": "0000783283", "assigned-sic": "6500", "irs-number": "240536840", "state-of-incorporation": "PA", "fiscal-year-end": "1031"}, "filing-values": {"form-type": "10-Q", "act": "34", "file-number": "033-01406-W", "film-number": "97551350"}, "business-address": {"street1": "PO BOX 426", "city": "BUCK HILL FALLS", "state": "PA", "zip": "18323", "phone": "7175957511"}, "mail-address": {"street1": "PO BOX 426", "city": "BUCK HILL FALLS", "state": "PA", "zip": "18323"}}
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         JANUARY 31, 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 18323
                 (Address of principal executive offices)(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 January 31,  1997,  the  registrant  had 73,537  shares of Common
  Stock and  22,760  shares of Common  Stock  Class A, no par  value,  issued  and
  outstanding.
  
                                         -1-
  FORM 10-Q
  
                               BUCK HILL FALLS COMPANY
  
                                        INDEX
  
                                                                            Page
  
  Part I:  Financial Information
  
  Item 1.  Financial Statements
  
           Condensed Consolidated Balance Sheet -
           January 31, 1997 and October 31, 1996                              1
  
           Condensed Consolidated Statement of Operations -
           Three Months Ended January 31, 1997 and 1996                       2
  
           Condensed Consolidated Statement of Cash Flows -
           Three Months Ended January 31, 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                    5-7
  
  Part II: Other Information                                                  8
  
           Signatures                                                         9
  
                                         -2-
  PART I - FINANCIAL INFORMATION
                            ITEM 1. FINANCIAL STATEMENTS
  
                       BUCK HILL FALLS COMPANY AND SUBSIDIARY
  
                        CONDENSED CONSOLIDATED BALANCE SHEET
  JANUARY 31,
                                                                     1997          OCTOBER 31,
                                                                  (UNAUDITED)          1996*
  
                                       ASSETS
  CURRENT ASSETS:
    Cash                                                            $136,534         $106,703
    Accounts receivable, net                                         312,491          253,278
    Prepaid expenses and other current assets                         31,258           43,416
  
    Total current assets                                             480,283          403,397
  
  RESTRICTED CASH                                                     68,520           68,556
  
  PROPERTY, PLANT AND EQUIPMENT, Net                               2,651,287        2,692,743
  
  DEFERRED COSTS, Net                                                  4,700            7,883
                                                                 -----------     ------------
  
            TOTAL                                                 $3,204,790       $3,172,579
                                                                 ===========      ===========
  
                        LIABILITIES AND STOCKHOLDERS' EQUITY
  CURRENT LIABILITIES:
    Note payable, unsecured                                          $11,300          $11,300
    Current portion of long-term debt                                739,939          829,939
    Accounts payable, trade                                           63,804           47,942
    Accrued expenses and other                                       314,383           91,844
  
    Total current liabilities                                      1,129,426          981,025
  
  CUSTOMER DEPOSITS                                                   68,520           68,556
  
  LONG-TERM DEBT                                                     930,526          940,004
  
  6-1/4% SUBORDINATED NOTES                                          140,000          140,000
                                                                     -------          -------
  
    Total liabilities                                              2,268,472        2,129,585
                                                                   ---------        ---------
  
  STOCKHOLDERS' EQUITY:
    Common stock                                                   1,560,543        1,518,964
    Contributed capital                                              799,227          799,227
    Deficit                                                       (1,423,452)      (1,275,197)
                                                                 -----------     ------------
  
        Total stockholders' equity                                   936,318        1,042,994
                                                                   ---------       ----------
  
  TOTAL                                                           $3,204,790       $3,172,579
                                                                 ===========       ==========
  *Condensed from audited financial statements
  
              See notes to condensed consolidated financial statements.
  
                                         -1-
  BUCK HILL FALLS COMPANY AND SUBSIDIARY
  
                   CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
                                     (UNAUDITED)
  
                                               THREE MONTHS ENDED
                                                   JANUARY 31,
                                             1997           1996
  
  REVENUES                                 $323,914       $291,613
  
  COST OF REVENUES                          355,154        323,956
                                           --------      ---------
  
  GROSS LOSS FROM OPERATIONS                (31,240)       (32,343)
  
  GENERAL AND ADMINISTRATIVE EXPENSES        81,461         62,615
                                          ---------     ----------
  
  LOSS FROM OPERATIONS                     (112,701)       (94,958)
                                          ---------    -----------
  
  OTHER INCOME (EXPENSE):
  Miscellaneous                              13,949         22,969
  Interest expense                          (49,503)       (49,325)
                                         ----------      ---------
  
  Other expense, net                        (35,554)       (26,356)
                                         ----------     ----------
  
  NET LOSS                                $(148,255)     $(121,314)
                                          =========     ==========
  
  WEIGHTED AVERAGE NUMBER OF SHARES
    OUTSTANDING                              80,093         73,537
                                       ============    ===========
  
  NET LOSS PER COMMON SHARE                  ($1.85)        ($1.65)
                                       ============   ============
  
              See notes to condensed consolidated financial statements.
  
                                         -2-
  BUCK HILL FALLS COMPANY AND SUBSIDIARY
  
                   CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
                                     (UNAUDITED)
  THREE MONTHS ENDED
                                                                 JANUARY 31,
                                                             1997           1996
  CASH PROVIDED BY (USED IN):
      OPERATIONS:
        Net loss                                          ($148,255)     ($121,314)
        Adjustments for noncash charges:
          Depreciation and amortization                      55,209         30,385
        Changes in assets and liabilities                   194,530         83,488
                                                            -------         ------
  
            Net cash provided by (used in) operations       101,484         (7,441)
                                                            -------        -------
  
  INVESTING:
        Purchase of property and equipment                  (13,753)       (34,648)
                                                           --------       --------
  
  FINANCING:
        Proceeds from issuance of debt                      100,000        121,016
        Repayment of debt                                  (199,479)       (67,709)
        Proceeds from issuance of stock                      41,579
                                                           --------       --------
  
           Net cash (used in) provided by financing         (57,900)        53,307
                                                           --------         ------
  
  INCREASE IN CASH                                           28,831         11,218
  
  CASH, BEGINNING OF PERIOD                                 106,703         31,460
                                                            -------         ------
  
  CASH, END OF PERIOD                                      $135,534        $42,678
                                                           ========        =======
  
  CASH PAID FOR,
       Interest                                             $49,503        $49,325
                                                            =======        =======
  See notes to 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 CLASS A
  STOCK
                                       COMMON STOCK                STOCK SUBSCRIBED     SUBSCRIPTION
                                   SHARES        AMOUNT          SHARES       AMOUNT      RECEIVABLE
  Balance, October 31, 1996        18,620       $267,594          9,380      $182,700     $(182,700) 
  Common Stock Issued               4,140         41,579
  Common Stock Subscribed                                        (4,140)      (75,000)       75,000
                                   ------       --------          -----      --------     ---------
  Balance, January 31, 1997        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 THREE MONTHS ENDED
  JANUARY 31, 1997
  COMPARED TO THE THREE MONTHS ENDED
  JANUARY 31, 1996
  
            Revenues  increased  $32,301 for the three  months  ended  January 31,
  1997,  as compared to the same period in the prior fiscal year.  The Company had
  an increase  of $39,700 in its dues  revenues 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  $1,800 as a result of less  snowfall
  amounts in 1997, a decrease in golf revenues of $1,600 due to  implementation of
  seasonal  cart  rental fees and a decrease  in sewer  revenues of  approximately
  $4,000 due to some untimely billings in 1996.
  
            Cost of revenues  increased  $31,198 as compared to the same period in
  the previous fiscal year,  primarily due to an increase in depreciation  expense
  of  approximately  $26,000 due to 1996 property and  equipment  additions and an
  adjustment to the allocation of interim depreciation expense. In addition, there
  were increases in water maintenance costs of $5,700, water testing fees of $500,
  insurance of $500 and gasoline  expenses of $700. These increases were offset by
  a decrease in snowplowing expense of $2,500.
  
            General and administrative costs increased $18,846 due primarily to an
  increase  in  professional  fees of $8,400  and  travel  and  lodging  of $1,700
  relating to the search for a new general manager. Other increases in general and
  administrative costs are due to higher salaries for administrative  personnel of
  $2,700,  increases in telephone expense of $1,350,  real estate taxes of $1,000,
  office  supplies of $1,500,  bank charges of $750 and  miscellaneous  expense of
  $1,300 (primarily for Christmas gift certificates).
  
            Other income  decreased  $9,020 during 1997 due primarily to decreased
  finance charges.
  
                                        - 5 -
  LIQUIDITY AND CAPITAL RESOURCES
  
            At January  31,1997,  the Company had a working capital  deficiency of
  $649,143.  Included in current liabilities is the entire $701,320 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  $38,619 in  scheduled
  principal payments on long-term debt are due within the next twelve months.
  
            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 January  31,1997) 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 is available through May 31, 1997, 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 January
  31,1997)  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
  revenue and assessments of the Company's water operations.
  
            The  Company  expects  to meet its  current  liabilities  (other  than
  payment of the entire  $701,320  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  increased  $29,831 for the three months ended  January  31,1997.
  Cash provided by borrowings of $100,000  under the Company's  revolving  line of
  credit,  net  proceeds  from the issuance of Common Stock Class A of $41,579 and
  operating  activities  of  $101,484  was used for  repayment  of $190,000 on the
  Company's  revolving  line of credit,  to make scheduled  principal  payments of
  $9,479 on  long-term  debt and capital  expenditures  of $13,753.  Such  capital
  expenditures  included  carpeting  for $4,638 and the purchase of equipment  for
  $9,115.
  
            At January 31, 1997,  the Company had drawn $701,320 on its $1,000,000
  line of credit, leaving $298,680 available.
  
            The Company  incurred a loss of $148,255  for the three  months  ended
  January 31, 1997 and at January 31, 1997,  the Company has a cumulative  deficit
  of $1,423,452 and a working capital deficiency
  
                                        - 6 -
  of $649,143.  Although the Company's line of credit is available through May 31,
  1997, 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.
  
                                        - 7 -
  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
  
                                        - 8 -
  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:  March 4, 1997                    By:  /s/  David B. Ottaway
                                            David B. Ottaway
                                            Chairman and President
  
  Date:  March 4, 1997                    By:  /s/  Anthony C. Bowe
                                            Anthony C. Bowe, Vice-President,
                                            Treasurer and Chief Financial Officer
                                            (Principal Financial and Accounting
                                                 Officer)
  
                                        - 9 -