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         JULY 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 July 31, 1997, the  registrant had 79,811 shares of Common Stock,  no
  par value and 23,320  shares of Class A Common Stock,  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 -
           July 31, 1997 and October 31, 1996                                  1
  
           Condensed Consolidated Statement of Operations -
           Nine Months and Three Months Ended July 31, 1997
           and 1996                                                            2
  
           Condensed Consolidated Statement of Cash Flows -
           Nine Months Ended July 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                     5-8
  
  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>
                                                                       JULY 31,
                                                                         1997            OCTOBER 31,
                                                                     (UNAUDITED)            1996*
  <S>                                                               <C>                 <C>        
                                       ASSETS
  
  CURRENT ASSETS:
       Cash                                                         $   182,804         $   106,703
       Accounts receivable, net                                         486,039             253,278
       Prepaid expenses and other
         current assets                                                  21,176              43,416
                                                                    -----------         -----------
  
            Total current assets                                        690,019             403,397
  
  RESTRICTED CASH                                                        76,146              68,556
  
  PROPERTY, PLANT AND EQUIPMENT, Net                                  2,618,117           2,692,743
  
  DEFERRED COSTS, Net                                                     4,328               7,883
                                                                    -----------         -----------
  
                 TOTAL                                              $ 3,388,610         $ 3,172,579
                                                                    ===========         ===========
  
                        LIABILITIES AND STOCKHOLDERS' EQUITY
  
  CURRENT LIABILITIES:
       Note payable, unsecured                                      $        --         $    11,300
       Current portion of long-term debt                                366,309             829,939
       Accounts payable, trade                                           58,977              47,941
       Deferred revenue                                                 466,632                  --
       Accrued expenses and other                                       125,173              91,844
                                                                    -----------         -----------
  
            Total current liabilities                                 1,017,091             981,024
  
  CUSTOMER DEPOSITS                                                      76,146              68,556
  
  LONG-TERM DEBT                                                        922,280             940,005
  
  6-1/4% SUBORDINATED NOTES                                             140,000             140,000
                                                                    -----------         -----------
  
                 Total liabilities                                    2,155,517           2,129,585
                                                                    -----------         -----------
  
  STOCKHOLDERS' EQUITY:
       Common stock                                                   1,709,170           1,518,964
       Contributed capital                                              799,227             799,227
       Deficit                                                       (1,275,304)         (1,275,197)
                                                                    -----------         -----------
  
                 Total stockholders' equity                           1,233,093           1,042,994
                                                                    -----------         -----------
  
                           TOTAL                                    $ 3,388,610         $ 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>
                                                  NINE MONTHS ENDED                        THREE MONTHS ENDED
                                            ............JULY 31............        .............JULY 31.............
                                                1997                1996                1997                1996
  
  <S>                                       <C>                 <C>                 <C>                 <C>        
  REVENUES                                  $ 1,479,933         $ 1,418,638         $   814,516         $   786,465
  
  COST OF REVENUES                            1,249,260           1,290,619             576,383             610,957
                                            -----------         -----------         -----------         -----------
  
  GROSS PROFIT FROM
    OPERATIONS                                  230,673             128,019             238,133             175,508
  
  GENERAL AND ADMINISTRATIVE
    EXPENSES                                    217,936             251,576              34,173              86,888
                                            -----------         -----------         -----------         -----------
  
  INCOME (LOSS) FROM
    OPERATIONS                                   12,737            (123,557)            203,960              88,620
                                            -----------         -----------         -----------         -----------
  
  OTHER INCOME (EXPENSE):
     Miscellaneous income                       106,602              71,840              43,594              32,474
     Interest expense                          (119,446)           (138,079)            (37,442)            (49,987)
                                            -----------         -----------         -----------         -----------
  
         Other income (expense), net            (12,844)            (66,239)              6,152             (17,513)
                                            -----------         -----------         -----------         -----------
  
  NET INCOME (LOSS)                         $      (107)        $  (189,796)        $   210,112         $    71,107
                                            ===========         ===========         ===========         ===========
  
  WEIGHTED AVERAGE NUMBER
    OF SHARES OUTSTANDING                        98,931              73,537              98,931              73,537
                                            ===========         ===========         ===========         ===========
  
  NET INCOME (LOSS) PER
    COMMON SHARE                            $        --         $     (2.58)               2.12                 .97
                                            ===========         ===========         ===========         ===========
  </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>
                                                                  NINE MONTHS ENDED
                                                          ............JULY 31............
                                                              1997               1996
  <S>                                                      <C>               <C>       
  CASH PROVIDED BY OPERATING
    ACTIVITIES:
       Net loss                                            $    (107)        $(189,795)
       Adjustments for noncash charges:
         Depreciation and amortization                       167,858           164,601
         Gain on sale of property and equipment              (53,669)               --
       Changes in assets and liabilities                     304,031           229,182
                                                           ---------         ---------
  
            Net cash provided by operating
              activities                                     418,113           203,988
                                                           ---------         ---------
  
  INVESTING ACTIVITIES:
       Purchase of property and equipment                    (93,443)          (80,293)
       Proceeds from sale of property and equipment           53,880                --
                                                           ---------         ---------
  
            Net cash used in investing activities            (39,563)          (80,293)
                                                           ---------         ---------
  
  FINANCING ACTIVITIES:
       Proceeds from issuance of debt                        205,042           225,012
       Repayment of debt                                    (697,697)         (305,455)
       Proceeds from issuance of stock                       190,206                --
                                                           ---------         ---------
  
            Net cash used in financing activities           (302,449)          (80,443)
                                                           ---------         ---------
  
  INCREASE IN CASH                                            76,101            43,252
  
  CASH, BEGINNING OF PERIOD                                  106,703            31,824
                                                           ---------         ---------
  
  CASH, END OF PERIOD                                      $ 182,804         $  75,076
                                                           =========         =========
  
  CASH PAID FOR,
       Interest                                            $ 119,446         $ 138,079
                                                           =========         =========
  </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 CLASS A
  
  <TABLE>
  <CAPTION>
                                            ...COMMON STOCK...                                        STOCK
                                                  CLASS A                ...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                       4,700          52,779
  Common Stock Subscribed                                                (4,700)      (86,200)        86,200
                                          -------       ---------       -------      --------      ---------
  
  Balance, July 31, 1997                   23,320        $320,373         4,680      $ 96,500      $ (96,500)
                                          =======       =========       =======      ========      ========= 
  </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 NINE MONTHS ENDED
  JULY 31, 1997
  COMPARED TO THE NINE MONTHS ENDED
  JULY 31, 1996
  
       Revenues  increased  $61,295 for the nine months  ended July 31,  1997,  as
  compared to the same  period in the prior  year.  The Company had an increase of
  $109,570 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  snowplowing
  revenues  of  approximately  $13,000 as a result of less  snowfall in 1997 and a
  decrease  in golf  revenues  of  approximately  $35,000.  The  decrease  in golf
  revenues  for the third  quarter is due mainly to the change in deferral  period
  from April through September to May through October to reflect usage.
  
       Cost of  revenues  decreased  $41,359 as compared to the same period in the
  previous  fiscal  year.  Insurance  costs  decreased  $12,700  and repair  costs
  decreased $12,500 due to management's  efforts to control costs by renegotiating
  contracts and competitive bidding. Snow plowing costs decreased $10,600 and road
  and path maintenance  decreased $13,300 as a result of better weather conditions
  during 1997. Also decreasing  during 1997, were telephone  expense by $2,700 and
  gasoline expense by $1,900. These decreases were offset by increases to security
  expense of $4,000 and trash removal expense of $8,600.
  
       General and administrative costs decreased $33,640 in the first nine months
  of 1997 as  compared to the same period in 1996.  This  decrease is  primarily a
  result of a decrease in professional  fees of approximately  $16,700.  Supplies,
  postage,  telephone and data processing fees decreased approximately $10,900 due
  to efforts by management to control costs.  Payroll taxes  decreased  $5,200 and
  automobile  expense decreased  approximately $700 for the nine months ended July
  1997.
  
                                        -5-
  <PAGE>
       Other income  increased  $51,007.  During 1997, there was a gain on sale of
  land of  $53,700  and an  increase  in  miscellaneous  income  of  approximately
  $10,500.  Increases were offset by a decrease in interest  income of $13,200 due
  primarily  to  management's  improved  efforts to collect  payments  on a timely
  basis.
  
       Interest expense decreased $18,633 due to a reduction in debt.
  
  
  RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED
  JULY 31, 1997
  COMPARED TO THE THREE MONTHS ENDED
  JULY 31, 1996
  
  
       Revenues  increased  3% during  the three  months  ended July  31,1997.  As
  explained above,  the increase in dues resulted in increased  revenue of $39,750
  which was offset by the decrease in golf revenues during 1997.
  
       Cost of revenues  decreased  6% due  primarily to  management's  efforts to
  control costs as explained above.
  
       General and  administrative  expenses  decreased  60% for the three  months
  ended July 31,1997 primarily due to a reduction in professional fees.
  
       Other  income  increased  34% for the three  months ended July 31, 1997 due
  primarily to the Fairway Grille.
  
       Interest expense  decreased $12,545 as compared to the same period in 1996.
  This was due to a decrease in the overall debt of the Company.
  
  LIQUIDITY AND CAPITAL RESOURCES
  
       At July 31,1997,  the Company had a working capital deficiency of $327,072.
  Included  in current  liabilities  is the  entire  $314,940  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  $34,955 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").  The loan agreement which was due to expire in May
  1997 was renewed on May 7, 1997.  Amounts  borrowed  under the Revolving  Credit
  Facility  bear  interest at the prime rate (8.25% at July  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 24, 1998, 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 was 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  (8.25% at July 31,  1997) plus
  1-1/2%.  The loan  matures  in May 2015 and is secured  by a first  mortgage  on
  approximately  2,200  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 $314,940 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  $76,101  for the nine  months  ended  July  31,1997.  Cash
  provided by borrowings of $175,000 under the Company's revolving line of credit,
  $30,042 in additional  long- term debt, net proceeds from the issuance of Common
  Stock  Class A of  $190,206,  proceeds  from  the  sale of land of  $53,880  and
  operating  activities of $418,113 were used to make scheduled principal payments
  of $697,696 on long-term debt and capital expenditures of $93,443.  Such capital
  expenditures   included  a  fairway  mower  for  $34,842,   electrical   service
  replacement for $10,200,  carpeting for $6,970,  computer  equipment for $4,490,
  appliances  for $8,000,  pulse meters for $3,707,  and purchase of equipment for
  $25,234.
  
       At July 31, 1997, the Company had drawn $314,940 on its $1,000,000  line of
  credit, leaving $685,060 available.
  
                                        -7-
  <PAGE>
       The  Company  incurred  a net loss of $107 for the nine  months  ended July
  31,1997 and at July 31,1997,  the Company has a cumulative deficit of $1,275,304
  and a working  capital  deficiency of $327,072.  Although the Company's  line of
  credit is available  through May 31, 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, provide 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
  
            1.        The Annual  Meeting of the  shareholders  of the Company was
                      held on July 20, 1997. At the meeting the following  persons
                      were elected as directors of the Company, each receiving the
                      number of votes indicated next to his or her name::
  
                          David C. Toomey, Esq.              20,073
                          Grace Godshalk                     17,535
                          Clifford Press                     19,475
  
                      The following  additional  persons continued as directors of
                      the Company after the meeting:
  
                          Anthony C. Bowe
                          James T. Sygenda
                          David B. Ottaway
                          Richard C. Unger, Jr.
                          Frank J. Dracos, M.D.
                          George J. Byron
  
  Item 5.   Other Information
  
            At its organizational meeting on July 26, 1996, the Board of Directors
            reelected David B. Ottaway as Chairman of the Board of the Company and
            Anthony C. Bowe as Vice-President and Chief Financial Officer. Richard
            C. Unger Jr. was  elected  President  and David C.  Toomey was elected
            secretary.
  
  Item 6.   Exhibits and Reports on Form 8-K
  
            None
  
                                        -9-
  
  <PAGE>
  
                                     SIGNATURES
  
  
       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: September 4, 1997                  By: /s/ David B. Ottaway
                                               David B. Ottaway, Chairman
  
  
  Date: September 4, 1997                  By: /s/ Anthony C. Bowe
                                               Anthony C. Bowe
                                               Vice President (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         JULY 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 July 31, 1997, the  registrant had 79,811 shares of Common Stock,  no
  par value and 23,320  shares of Class A Common Stock,  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 -
           July 31, 1997 and October 31, 1996                                  1
  
           Condensed Consolidated Statement of Operations -
           Nine Months and Three Months Ended July 31, 1997
           and 1996                                                            2
  
           Condensed Consolidated Statement of Cash Flows -
           Nine Months Ended July 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                     5-8
  
  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
  JULY 31,
                                                                         1997            OCTOBER 31,
                                                                     (UNAUDITED)            1996*
  ASSETS
  
  CURRENT ASSETS:
       Cash                                                         $   182,804         $   106,703
       Accounts receivable, net                                         486,039             253,278
       Prepaid expenses and other
         current assets                                                  21,176              43,416
                                                                    -----------         -----------
  
            Total current assets                                        690,019             403,397
  
  RESTRICTED CASH                                                        76,146              68,556
  
  PROPERTY, PLANT AND EQUIPMENT, Net                                  2,618,117           2,692,743
  
  DEFERRED COSTS, Net                                                     4,328               7,883
                                                                    -----------         -----------
  
                 TOTAL                                              $ 3,388,610         $ 3,172,579
                                                                    ===========         ===========
  
                        LIABILITIES AND STOCKHOLDERS' EQUITY
  
  CURRENT LIABILITIES:
       Note payable, unsecured                                      $        --         $    11,300
       Current portion of long-term debt                                366,309             829,939
       Accounts payable, trade                                           58,977              47,941
       Deferred revenue                                                 466,632                  --
       Accrued expenses and other                                       125,173              91,844
                                                                    -----------         -----------
  
            Total current liabilities                                 1,017,091             981,024
  
  CUSTOMER DEPOSITS                                                      76,146              68,556
  
  LONG-TERM DEBT                                                        922,280             940,005
  
  6-1/4% SUBORDINATED NOTES                                             140,000             140,000
                                                                    -----------         -----------
  
                 Total liabilities                                    2,155,517           2,129,585
                                                                    -----------         -----------
  
  STOCKHOLDERS' EQUITY:
       Common stock                                                   1,709,170           1,518,964
       Contributed capital                                              799,227             799,227
       Deficit                                                       (1,275,304)         (1,275,197)
                                                                    -----------         -----------
  
                 Total stockholders' equity                           1,233,093           1,042,994
                                                                    -----------         -----------
  
                           TOTAL                                    $ 3,388,610         $ 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)
  NINE MONTHS ENDED                        THREE MONTHS ENDED
                                            ............JULY 31............        .............JULY 31.............
                                                1997                1996                1997                1996
  REVENUES                                  $ 1,479,933         $ 1,418,638         $   814,516         $   786,465
  
  COST OF REVENUES                            1,249,260           1,290,619             576,383             610,957
                                            -----------         -----------         -----------         -----------
  
  GROSS PROFIT FROM
    OPERATIONS                                  230,673             128,019             238,133             175,508
  
  GENERAL AND ADMINISTRATIVE
    EXPENSES                                    217,936             251,576              34,173              86,888
                                            -----------         -----------         -----------         -----------
  
  INCOME (LOSS) FROM
    OPERATIONS                                   12,737            (123,557)            203,960              88,620
                                            -----------         -----------         -----------         -----------
  
  OTHER INCOME (EXPENSE):
     Miscellaneous income                       106,602              71,840              43,594              32,474
     Interest expense                          (119,446)           (138,079)            (37,442)            (49,987)
                                            -----------         -----------         -----------         -----------
  
         Other income (expense), net            (12,844)            (66,239)              6,152             (17,513)
                                            -----------         -----------         -----------         -----------
  
  NET INCOME (LOSS)                         $      (107)        $  (189,796)        $   210,112         $    71,107
                                            ===========         ===========         ===========         ===========
  
  WEIGHTED AVERAGE NUMBER
    OF SHARES OUTSTANDING                        98,931              73,537              98,931              73,537
                                            ===========         ===========         ===========         ===========
  
  NET INCOME (LOSS) PER
    COMMON SHARE                            $        --         $     (2.58)               2.12                 .97
                                            ===========         ===========         ===========         ===========
  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)
  NINE MONTHS ENDED
                                                          ............JULY 31............
                                                              1997               1996
  CASH PROVIDED BY OPERATING
    ACTIVITIES:
       Net loss                                            $    (107)        $(189,795)
       Adjustments for noncash charges:
         Depreciation and amortization                       167,858           164,601
         Gain on sale of property and equipment              (53,669)               --
       Changes in assets and liabilities                     304,031           229,182
                                                           ---------         ---------
  
            Net cash provided by operating
              activities                                     418,113           203,988
                                                           ---------         ---------
  
  INVESTING ACTIVITIES:
       Purchase of property and equipment                    (93,443)          (80,293)
       Proceeds from sale of property and equipment           53,880                --
                                                           ---------         ---------
  
            Net cash used in investing activities            (39,563)          (80,293)
                                                           ---------         ---------
  
  FINANCING ACTIVITIES:
       Proceeds from issuance of debt                        205,042           225,012
       Repayment of debt                                    (697,697)         (305,455)
       Proceeds from issuance of stock                       190,206                --
                                                           ---------         ---------
  
            Net cash used in financing activities           (302,449)          (80,443)
                                                           ---------         ---------
  
  INCREASE IN CASH                                            76,101            43,252
  
  CASH, BEGINNING OF PERIOD                                  106,703            31,824
                                                           ---------         ---------
  
  CASH, END OF PERIOD                                      $ 182,804         $  75,076
                                                           =========         =========
  
  CASH PAID FOR,
       Interest                                            $ 119,446         $ 138,079
                                                           =========         =========
  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 CLASS A
  ...COMMON STOCK...                                        STOCK
                                                  CLASS A                ...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                       4,700          52,779
  Common Stock Subscribed                                                (4,700)      (86,200)        86,200
                                          -------       ---------       -------      --------      ---------
  
  Balance, July 31, 1997                   23,320        $320,373         4,680      $ 96,500      $ (96,500)
                                          =======       =========       =======      ========      =========
  -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 NINE MONTHS ENDED
  JULY 31, 1997
  COMPARED TO THE NINE MONTHS ENDED
  JULY 31, 1996
  
       Revenues  increased  $61,295 for the nine months  ended July 31,  1997,  as
  compared to the same  period in the prior  year.  The Company had an increase of
  $109,570 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  snowplowing
  revenues  of  approximately  $13,000 as a result of less  snowfall in 1997 and a
  decrease  in golf  revenues  of  approximately  $35,000.  The  decrease  in golf
  revenues  for the third  quarter is due mainly to the change in deferral  period
  from April through September to May through October to reflect usage.
  
       Cost of  revenues  decreased  $41,359 as compared to the same period in the
  previous  fiscal  year.  Insurance  costs  decreased  $12,700  and repair  costs
  decreased $12,500 due to management's  efforts to control costs by renegotiating
  contracts and competitive bidding. Snow plowing costs decreased $10,600 and road
  and path maintenance  decreased $13,300 as a result of better weather conditions
  during 1997. Also decreasing  during 1997, were telephone  expense by $2,700 and
  gasoline expense by $1,900. These decreases were offset by increases to security
  expense of $4,000 and trash removal expense of $8,600.
  
       General and administrative costs decreased $33,640 in the first nine months
  of 1997 as  compared to the same period in 1996.  This  decrease is  primarily a
  result of a decrease in professional  fees of approximately  $16,700.  Supplies,
  postage,  telephone and data processing fees decreased approximately $10,900 due
  to efforts by management to control costs.  Payroll taxes  decreased  $5,200 and
  automobile  expense decreased  approximately $700 for the nine months ended July
  1997.
  
                                        -5-
  Other income  increased  $51,007.  During 1997, there was a gain on sale of
  land of  $53,700  and an  increase  in  miscellaneous  income  of  approximately
  $10,500.  Increases were offset by a decrease in interest  income of $13,200 due
  primarily  to  management's  improved  efforts to collect  payments  on a timely
  basis.
  
       Interest expense decreased $18,633 due to a reduction in debt.
  
  RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED
  JULY 31, 1997
  COMPARED TO THE THREE MONTHS ENDED
  JULY 31, 1996
  
       Revenues  increased  3% during  the three  months  ended July  31,1997.  As
  explained above,  the increase in dues resulted in increased  revenue of $39,750
  which was offset by the decrease in golf revenues during 1997.
  
       Cost of revenues  decreased  6% due  primarily to  management's  efforts to
  control costs as explained above.
  
       General and  administrative  expenses  decreased  60% for the three  months
  ended July 31,1997 primarily due to a reduction in professional fees.
  
       Other  income  increased  34% for the three  months ended July 31, 1997 due
  primarily to the Fairway Grille.
  
       Interest expense  decreased $12,545 as compared to the same period in 1996.
  This was due to a decrease in the overall debt of the Company.
  
  LIQUIDITY AND CAPITAL RESOURCES
  
       At July 31,1997,  the Company had a working capital deficiency of $327,072.
  Included  in current  liabilities  is the  entire  $314,940  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  $34,955 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").  The loan agreement which was due to expire in May
  1997 was renewed on May 7, 1997.  Amounts  borrowed  under the Revolving  Credit
  Facility  bear  interest at the prime rate (8.25% at July  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 24, 1998, 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 was 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  (8.25% at July 31,  1997) plus
  1-1/2%.  The loan  matures  in May 2015 and is secured  by a first  mortgage  on
  approximately  2,200  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 $314,940 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  $76,101  for the nine  months  ended  July  31,1997.  Cash
  provided by borrowings of $175,000 under the Company's revolving line of credit,
  $30,042 in additional  long- term debt, net proceeds from the issuance of Common
  Stock  Class A of  $190,206,  proceeds  from  the  sale of land of  $53,880  and
  operating  activities of $418,113 were used to make scheduled principal payments
  of $697,696 on long-term debt and capital expenditures of $93,443.  Such capital
  expenditures   included  a  fairway  mower  for  $34,842,   electrical   service
  replacement for $10,200,  carpeting for $6,970,  computer  equipment for $4,490,
  appliances  for $8,000,  pulse meters for $3,707,  and purchase of equipment for
  $25,234.
  
       At July 31, 1997, the Company had drawn $314,940 on its $1,000,000  line of
  credit, leaving $685,060 available.
  
                                        -7-
  The  Company  incurred  a net loss of $107 for the nine  months  ended July
  31,1997 and at July 31,1997,  the Company has a cumulative deficit of $1,275,304
  and a working  capital  deficiency of $327,072.  Although the Company's  line of
  credit is available  through May 31, 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, provide 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
  
            1.        The Annual  Meeting of the  shareholders  of the Company was
                      held on July 20, 1997. At the meeting the following  persons
                      were elected as directors of the Company, each receiving the
                      number of votes indicated next to his or her name::
  
                          David C. Toomey, Esq.              20,073
                          Grace Godshalk                     17,535
                          Clifford Press                     19,475
  
                      The following  additional  persons continued as directors of
                      the Company after the meeting:
  
                          Anthony C. Bowe
                          James T. Sygenda
                          David B. Ottaway
                          Richard C. Unger, Jr.
                          Frank J. Dracos, M.D.
                          George J. Byron
  
  Item 5.   Other Information
  
            At its organizational meeting on July 26, 1996, the Board of Directors
            reelected David B. Ottaway as Chairman of the Board of the Company and
            Anthony C. Bowe as Vice-President and Chief Financial Officer. Richard
            C. Unger Jr. was  elected  President  and David C.  Toomey was elected
            secretary.
  
  Item 6.   Exhibits and Reports on Form 8-K
  
            None
  
                                        -9-
  SIGNATURES
  
       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: September 4, 1997                  By: /s/ David B. Ottaway
                                               David B. Ottaway, Chairman
  
  Date: September 4, 1997                  By: /s/ Anthony C. Bowe
                                               Anthony C. Bowe
                                               Vice President (Principal Financial
                                               and Accounting Officer)
  
                                        -10-