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As filed with the Securities and Exchange Commission on January 5, 2005

Registration Statement No. 333-

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM S-1

REGISTRATION STATEMENT
Under
The Securities Act of 1933

BLUE RIDGE REAL ESTATE COMPANY
BIG BOULDER CORPORATION

(Exact name of registrant as specified in its charter)

Pennsylvania
(State or other jurisdiction of
incorporation or organization)

7790
(Primary Standard Industrial
Classification Code Number)

24-0854342 (Blue Ridge)
24-0822326 (Big Boulder)
(IRS Employer
Identification Number)

Blakeslee, Pennsylvania 18610
(570) 443-8433
(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)

Patrick M. Flynn
Chief Executive Officer and President
P. O. Box 707
Blakeslee, Pennsylvania 18610-0707
(570) 443-8433
(Name, address, including zip code, and telephone number, including area code, of agent for service)
Copies to:
Joanne R. Soslow, Esq.
Morgan, Lewis & Bockius LLP
1701 Market St.
Philadelphia, Pennsylvania 19103
(215) 963-5262

Approximate date of commencement of proposed sale to the public: As soon as practicable after the effective date of this Registration Statement.

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box. ¨

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o

If delivery of the Prospectus is expected to be made pursuant to Rule 434, check the following box. o

CALCULATION OF REGISTRATION FEE



	Proposed Maximum Aggregate
Title Of Each Class of Securities To Be Registered	Offering Price			Amount Of Registration Fee
Common Stock, without par value, stated value $.30 per combined share*	$	15,500,000	(1)	$	1,825
Subscription Rights to Purchase Common Stock		—			—	(2)

(1) Estimated solely for purposes of calculating the registration fee in accordance with Rule 457(o) under the Securities Act of 1933, as amended.

(2) Pursuant to Rule 457(g), no separate registration fee is required for the subscription rights since they are being registered in the same registration statement as the common stock underlying the subscription rights.

* Under a Security Combination Agreement between Blue Ridge Real Estate Company (“Blue Ridge”) and Big Boulder Corporation (“Big Boulder”) (collectively, the “Registrant”) and under the bylaws of Blue Ridge and Big Boulder, shares of Blue Ridge and Big Boulder are issued in combined common stock certificates, each certificate representing the same number of shares of each of Blue Ridge and Big Boulder. Shares of each corporation may be transferred only together with an equal number of shares in the other corporation. For this reason, a combined Blue Ridge/Big Boulder Form S-1 is being filed. Except as otherwise indicated, all information applies to both corporations.

The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, as amended, or until this Registration Statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.

The information in this prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and we are not soliciting offers to buy or sell these securities in any state where the offer is not permitted.

PROSPECTUS (Subject to Completion)

Dated January 5, 2005

BLUE RIDGE REAL ESTATE COMPANY
BIG BOULDER CORPORATION

Common Stock

Rights to Purchase up to _______ shares
of Common Stock at $ _______ per share

We are distributing at no charge to holders of our common stock non-transferable subscription rights to purchase ___shares of our common stock, each representing one share of common stock, no par value, of Blue Ridge Real Estate Company, Blue Ridge, and one share of common stock, no par value, of Big Boulder Corporation, Big Boulder, at a cash subscription price of $______ per share. Shares of Blue Ridge and Big Boulder are issued in combined common stock certificates, each certificate representing the same number of shares of each of Blue Ridge and Big Boulder. Shares of each corporation may be transferred only together with an equal number of shares in the other corporation.

Each person who was a record holder of our common stock at 5:00 p.m., New York City time, on ___, 2005, the record date, will receive one (1) subscription right for every ___ shares of our common stock held at that date.

There is no minimum number of shares you must purchase, but you may not purchase fractional shares. When determining the number of subscription rights you will receive, divide the number of shares of our common stock you own by ___and round down to the next whole number. For example, if you own 100 shares of our common stock, you will receive ___ subscription rights (100 shares divided by ___= ___, rounded down to ___subscription rights, the next whole number), which will entitle you to subscribe for up to ___ shares of our common stock under your basic subscription privilege.

If other shareholders do not fully exercise their subscription rights, you may also have the opportunity to purchase additional shares, subject to certain limitations, at the same purchase price. This is your over-subscription privilege.

Kimco Realty Services, Inc., a wholly-owned subsidiary of Kimco Realty Corporation, Kimco, which as of December 1, 2004 was the owner of approximately 52.84% of our common stock and our controlling shareholder, has agreed to act as a standby purchaser in the offering, and, in addition to the subscription rights it will receive as a shareholder, will purchase any and all shares not subscribed for by our shareholders.

The subscription rights are exercisable beginning on the date of this prospectus and continuing until 5:00 p.m., New York City time, on ___, 2005. We have the option of extending the expiration date. We may cancel or terminate the rights offering at any time prior to the expiration date. If we terminate or cancel this offering, we will return your subscription price, but without any payment of interest.

The subscription rights may not be sold, transferred or assigned, and will not be listed for trading on any stock exchange or on the Over-the-Counter Bulletin Board, the OTC Bulletin Board.

The shares are being offered directly by us without the services of an underwriter or selling agent.

Shares of our common stock are currently listed for quotation on the OTC Bulletin Board under the symbol “BLRGZ” On January 3, 2005, the closing price of a share of our common stock on the OTC Bulletin Board was $30.25.

Investing in our common stock involves risks. See “Risk Factors” beginning on page 6.

PRICE $ ____ PER SHARE

Proceeds to

Subscription

Discounts and

Blue Ridge/Big Boulder

Price

Commissions

Before Expenses

Per share

____

NONE

____

Total

____

NONE

____

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense. The Attorney General of the State of New York has not passed on or endorsed the merits of this offering. Any representation to the contrary is unlawful.

The date of this prospectus is__________________ , 2005

QUESTIONS AND ANSWERS ABOUT THE RIGHTS OFFERING

Q: What is the rights offering?

A: This rights offering is an opportunity for you to purchase shares of our common stock, each representing one share of common stock, no par value, of Blue Ridge and one share of common stock, no par value, of Big Boulder Corporation, at a fixed price and in an amount approximately proportional to your existing ownership interest in us. Under a Security Combination Agreement between Blue Ridge and Big Boulder and under the bylaws of Blue Ridge and Big Boulder, shares of Blue Ridge and Big Boulder are issued in combined common stock certificates, each certificate representing the same number of shares of each of Blue Ridge and Big Boulder. Shares of each corporation may be transferred only together with an equal number of shares in the other corporation.

Q: What is a subscription right?

A: We are distributing to you, at no charge, one subscription right for every ___ shares of our common stock that you owned at 5:00 p.m., New York City time, on ___, 2005, either as a holder of record or, in the case of shares held of record by brokers, banks or other nominees, on your behalf, as a beneficial owner of such shares. We will not distribute any fractional subscription rights, but will round the number of subscription rights you receive down to the nearest whole number. Each subscription right entitles you to purchase one share of common stock, each representing one share of common stock of Blue Ridge and one share of common stock of Big Boulder, pursuant to the basic subscription privilege and potentially one additional share pursuant to the over-subscription privilege. You may exercise any whole number of your subscription rights, or you may choose not to exercise any subscription rights. You cannot give, transfer or sell your subscription rights to anyone else – only you can exercise them. See “The Rights Offering — The Subscription Rights.”

Q: What is the basic subscription privilege?

A: The basic subscription privilege of each subscription right entitles you to purchase, for every ___shares of our common stock you owned at 5:00 p.m., New York City time, on ___, 2005, one share of common stock upon payment of $______ per share. See “The Rights Offering — Basic Subscription Privilege.”

Q: What is the over-subscription privilege?

A: The over-subscription privilege gives you the right to purchase additional shares in the event that our other shareholders do not exercise all of their basic subscription privileges. We offer this privilege because there is a possibility that less than all of our shareholders will exercise all of their subscription rights. The over-subscription privilege of your subscription rights entitles you to subscribe for additional shares at a subscription price of $______ per share, not to exceed the number of shares available for you to purchase under the basic subscription privilege of your subscription rights, subject to proration, as discussed below. Your over-subscription privilege, however, will only be available to you if (1) our other shareholders do not fully exercise their basic subscription privileges and (2) you fully exercise your rights pursuant to your basic subscription privilege. Although you are guaranteed the right, pursuant to your basic subscription privilege, to purchase that number of shares equal to the number of rights you receive in the offering, you may not be able to purchase any of the shares that you seek to purchase pursuant to your over-subscription privilege. The actual number of shares available for purchase pursuant to your over-subscription privilege will depend upon whether you fully exercise your basic subscription privilege and the number of shares purchased by our other shareholders pursuant to their basic subscription privileges, but in no event will that number exceed the number of shares available for purchase under your basic subscription privilege. See “The Rights Offering —Over-Subscription Privilege.”

Q: What are the limitations on the over-subscription privilege?

A: If sufficient shares of our common stock are available, we will honor all shareholders’ over-subscription requests in full, up to the number of shares available under their respective basic subscription privileges, so long as such shareholders have fully exercised their basic subscription privileges. If shareholders’ over-subscription requests exceed the number of shares available, we will allocate the available shares of our common stock among shareholders on a pro-rata basis (subject to elimination of fractional shares), based on the ratio that the number of

available shares bears to the total number of shares that are the subject of over-subscription requests. See “The Rights Offering — Over-Subscription Privilege.” In addition to any exercise of its basic subscription and over-subscription privileges as a shareholder, Kimco has agreed, pursuant to its standby purchase commitment, to purchase any and all shares not subscribed for by our shareholders.

You should exercise your basic subscription and over-subscription privileges in full if you wish to minimize the dilution of your percentage ownership of our common stock and/or maximize the number of shares that you will receive in this rights offering.

Q: What is the role of the Kimco in this offering?

A: Kimco, which as of December 1, 2004 was the owner of approximately 52.84% of our common stock and our controlling shareholder, has agreed, as a standby purchaser, to purchase 100% of the shares of our common stock that are not subscribed for in the rights offering by our shareholders at $___ per share on a standby purchase commitment basis. For a more complete description of the role of Kimco in this offering, see “The Rights Offering — Purchase Commitment of Kimco.”

On January 4, 2005, we entered into a Standby Securities Purchase Agreement with Kimco, which provides further detail regarding Kimco’s standby purchase commitment.

Q: Why are we engaging in a rights offering?

A: We are offering the rights to raise equity capital. We have determined that, given current market conditions, this rights offering is the most appropriate means of raising equity capital because it affords our existing shareholders a preferential opportunity to subscribe for the new shares of our common stock and to maintain their proportionate interest in us.

Q: How much money will we receive from the rights offering?

A: We will receive gross proceeds of $15,500,000 from the rights offering. We are offering shares of our common stock in the rights offering with no minimum purchase requirement. However, Kimco has agreed to purchase all of the shares that are not subscribed for in the rights offering by our shareholders. Accordingly, even if Kimco is the only shareholder who participates in the rights offering, we would receive gross proceeds of $15,500,000.

We will use the net proceeds of this offering to develop a golf course at Jack Frost Mountain and to develop residential communities at Jack Frost Mountain and Big Boulder Ski Area.

Q: How did we arrive at the $_____ per share subscription price?

A: Our board of directors set all of the terms and conditions of the rights offering, including the subscription price. The $_____ per share subscription price was determined based upon the consideration of the factors more fully described in “Determination of the Subscription Price” at page 25.

Q: Has the board of directors made a recommendation regarding the rights offering?

A: Our board of directors makes no recommendation to you about whether you should exercise any rights. You are urged to make your decision based on your own assessment of our business and the rights offering.

Q: How do I exercise my subscription rights?

A: You must properly complete the attached rights subscription certificate and deliver it to the Subscription Agent before 5:00 p.m., New York City time, on ___, 2005. The address for the Subscription Agent is HSBC Bank USA, National Association, One Hanson Place, Lower Level, Brooklyn, NY 11243.

iii

Q: How do I pay for my shares?

A: Your rights subscription certificate must be accompanied by proper payment for each share of common stock that you wish to purchase pursuant to both your basic subscription and over-subscription privileges. See “The Rights Offering — Exercise of Subscription Rights” and “The Rights Offering — Method of Payment.”

Q: How long will the rights offering last?

A: You will be able to exercise your subscription rights only during a limited period. If you do not exercise your subscription rights before 5:00 p.m., New York City time, on ___, 2005, the subscription rights will expire. We may, in our discretion, decide to extend the rights offering. In addition, if the commencement of the rights offering is delayed, the expiration date will similarly be extended. See “The Rights Offering — Expiration Date.”

Q: May I transfer my rights?

A: No. The rights may be exercised only by the person to whom they are granted. You cannot give, sell or otherwise transfer your subscription rights to anyone else. The subscription rights will not be listed for trading on any stock exchange or on the OTC Bulletin Board.

Q: Am I required to subscribe in the rights offering?

A: No. You are not required to exercise any subscription rights, purchase any shares, or otherwise take any action in response to this rights offering.

Q: Can I subscribe for any number of shares less than all of my subscription rights?

A: Yes. You can subscribe for any whole number of shares exercising less than all of your subscription rights. Those subscription rights you do not exercise will be counted towards the over-subscription privilege.

Q: What happens if I choose not to exercise my subscription rights?

A: You are not required to exercise any subscription rights, purchase any shares or otherwise take any action in response to this rights offering. If you do not exercise any subscription rights under this rights offering, you will retain your current number of shares of our common stock. However, if you do not exercise your subscription rights, the percentage of our common stock that you own will diminish, and your voting and other rights will be diluted.

Q: After I exercise my subscription rights, can I change my mind and cancel my purchase?

A: No. Once you send in your rights subscription certificate and payment, you cannot revoke the exercise of your subscription rights, even if you later learn information about us that you consider to be unfavorable and even if the market price of our common stock is below the $_____ per share purchase price for the underlying common stock. You should not exercise your subscription rights unless you are certain that you wish to purchase shares of our common stock at a price of $_____ per share. See “The Rights Offering — No Revocation.”

Q: Is exercising my subscription rights risky?

A: The exercise of your subscription rights involves risks. Exercising your subscription rights means buying shares of our common stock, each representing one share of common stock of Blue Ridge and one share of common stock of Big Boulder, and should be considered as carefully as you would consider any other equity investment. Among other things, you should carefully consider the risks described under the heading “Risk Factors,” beginning on page 6.

Q: What should I do if I want to participate in the rights offering, but my shares are held in the name of my broker, dealer or other nominee?

A: If you hold shares of our common stock through a broker, dealer or other nominee (for example, through a custodian bank), then your broker, dealer or other nominee is the record holder of the shares you own. This record holder must exercise the rights on your behalf for the shares you wish to purchase. If you wish to purchase shares in the rights offering, please promptly contact the record holder of your shares. To indicate your decision with respect to your rights, you should complete and return to your record holder the form entitled “Beneficial Owner Election Form.” You should receive this form from your record holder with the other rights offering materials. See “The Rights Offering – Beneficial Owners.”

Q: What are the federal income tax consequences of exercising my rights?

A: The receipt and exercise of your subscription rights generally will not be taxable events for U.S. federal income tax purposes. You should consult your personal tax advisor concerning the particular tax consequences to you of the receipt and exercise of the subscription rights. For more information, see “Certain U.S. Federal Income Tax Considerations.”

Q: When will I receive my new shares?

A: If you purchase shares of our common stock through the rights offering, you will receive a certificate representing the shares as soon as practicable after the expiration date of the rights offering.

Q: If I decide to sell the shares I purchase in the rights offering in the future, must I sell the shares of common stock of both Blue Ridge Real Estate Company and Big Boulder Corporation at the same time?

A: Yes. Under a Security Combination Agreement between Blue Ridge and Big Boulder and under the bylaws of Blue Ridge and Big Boulder, shares of Blue Ridge and Big Boulder are issued in combined common stock certificates, each certificate representing the same number of shares of each of Blue Ridge and Big Boulder. Shares of each corporation may be transferred only together with an equal number of shares in the other corporation.

Q: Can the board of directors cancel the rights offering?

A: Yes. The board of directors may decide to cancel the rights offering at any time on or before the expiration date of the rights offering for any reason. If we cancel the rights offering, any money received from subscribing shareholders will be refunded promptly, but without any payment of interest. See “The Rights Offering — Cancellation, Withdrawal and Amendment.”

Q: How many shares will be outstanding after the rights offering?

A: The number of shares of our common stock that will be outstanding after the rights offering will be ___, including ___ new shares of our common stock.

Q: What fees or charges apply if I purchase shares?

A: We are not charging any fee or sales commission to issue the subscription rights to you or to issue shares of our common stock to you if you exercise your subscription rights. If you exercise rights through a record holder of your shares, you are responsible for paying any fees which that person may charge.

Q: What if I have more questions?

A: If you have more questions about the rights offering, please contact Christine A. Liebold, our Secretary, at (570) 443-8433, extension 1028.

PROSPECTUS SUMMARY

This summary does not contain all of the information you should consider before investing in our common stock. You should read the entire prospectus carefully, especially the “Risk Factors” section and our consolidated financial statements and the related notes appearing at the end of this prospectus, before deciding to invest in shares of our common stock. For convenience, references in this prospectus to “we,” “us,” “our,” and the “Company” mean or relate to Blue Ridge Real Estate Company, Big Boulder Corporation and their subsidiaries.

OUR COMPANY

Blue Ridge Real Estate Company, incorporated in Pennsylvania in 1911, is believed to be one of the largest owners of investment property in Northeastern Pennsylvania. We own 18,690 acres of land which are predominately located in the Pocono Mountains. Of this acreage, 13,952 acres are held for investment and 4,738 are held for development. Income is derived from these lands through leases, selective timbering by others, condemnation, sales, and other dispositions. Blue Ridge also owns the Jack Frost Mountain Ski Area, which is leased to Jack Frost Mountain Company, a retail store leased to Wal-Mart, two shopping centers and 11 residential investment properties.

Big Boulder Corporation was incorporated in Pennsylvania in 1949. Our major assets are 925 acres of land, which includes a 175-acre lake, the Big Boulder Ski Area, and the Mountain’s Edge Restaurant. Of the 925 acres, 539 acres are held for investment and 386 acres are held for development. The principal source of revenue for Big Boulder is derived from the Big Boulder Ski Area which is leased to Lake Mountain Company.

We operate in four business segments, which consist of the Ski Operations, Real Estate Management/Rental Operations, Summer Recreational Operations and Land Resource Management segments:

•   Ski Operations consist of two ski areas located in the Pocono Mountains of Northeastern Pennsylvania.

•   Real Estate Management/Rental Operations consists of: investment properties leased to others located in Eastern Pennsylvania, South Carolina, Virginia and Louisiana; fees from managing investor-owned properties, principally resort homes; recreational club activities and services to the trusts that operate resort communities; sales of investment properties; and rental of land and land improvements.

•   Summer Recreation Operations consist of seasonal recreational operating centers located in the Pocono Mountains of Northeastern Pennsylvania, which include the following: Splatter Paintball; Lake Mountain Sports Club; and Summer Music Festivals.

•   Land Resource Management consists of land sales, land purchases, timbering operations and a construction division. Timbering operations consist of selective timbering on our land holdings. Contracts are entered into for parcels which have had the timber selectively marked. The construction division is responsible for the residential land development activities which include overseeing the construction of single and multi-family homes and development of infrastructure.

Our principal executive offices are located at Route 940 and Mosey Wood Road, Blakeslee, Pennsylvania 18610, and our telephone number is (570) 443-8433.

SUMMARY CONSOLIDATED FINANCIAL DATA

The following tables summarize the consolidated financial data of Blue Ridge, Big Boulder and their subsidiaries. You should read the summary consolidated financial data together with our consolidated financial statements and the related notes appearing at the end of this prospectus, and the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” section and other financial information included in this prospectus.


	Year Ended		Year Ended			Nine Months Ended			Nine Months Ended
	October 31,		October 31,			July 31,			July 31,
	2002		2003			2003			2004
Revenues	$	18,635,911	$	19,861,618		$	17,120,725		$	15,839,759

Net (loss) income		686,758		(879,137	)		(751,584	)		6,898,868

Net (loss) income per combined share	$	0.36	($	0.45	)	($	0.39	)		3.60

Cash dividends per combined share		0		0			0			0

Weighted average number of combined shares outstanding		1,916,431		1,916,130			1,916,130			1,916,130

Total assets		24,645,828		27,960,410			26,026,758			43,909,843

Long-term debt and capital lease obligations		8,049,805		10,990,756			10,695,653			15,564,683

Shareholders’ equity		10,202,521		9,523,759			9,651,312			16,422,627

THE OFFERING

Further details concerning this part of the summary are set forth under “The Rights Offering” beginning on page 17. Only holders of record of our common stock at the close of business on the record date stated below may exercise rights.

Summary


Securities Offered		We are distributing to you, at no charge, one non-transferable subscription right for every ___ shares of our common stock that you owned at 5:00 p.m., New York City time, on ___, 2005, either as a holder of record or, in the case of shares held of record by brokers, banks or other nominees, on your behalf, as a beneficial owner of such shares. We will not distribute any fractional subscription rights but will round the number of subscription rights you receive down to the nearest whole number. Each subscription right entitles you to purchase one share of common stock, each representing one share of common stock of Blue Ridge and one share of common stock of Big Boulder, pursuant to the basic subscription privilege, and potentially one additional share pursuant to the over-subscription privilege. Under a Security Combination Agreement between Blue Ridge and Big Boulder and under the bylaws of Blue Ridge and Big Boulder, shares of Blue Ridge and Big Boulder are issued in combined common stock certificates, each certificate representing the same number of shares of each of Blue Ridge and Big Boulder. Shares of each corporation may be transferred only together with an equal number of shares in the other corporation.

Basic Subscription Privilege		The basic subscription privilege of each subscription right entitles you to purchase, for every ___shares of our common stock you owned at 5:00 p.m., New York City time, on ___, 2005, one share of common stock upon payment of $_____ per share.

Record Date		___, 2005 at 5:00 p.m., New York City time. Only our shareholders as of the record date will receive rights to subscribe for shares in the rights offering.

Expiration Date		The rights expire on ___, 2005 at 5:00 p.m., New York City time. Rights not exercised by the expiration date will be null and void. We have the option of extending the expiration date for any reason.

Subscription Price		$_____ per share, payable in cash. All payments must be cleared on or before the expiration date.

Over-subscription Privilege		If you fully exercise the basic subscription privilege, you may also purchase additional shares of our common stock, not to exceed the number of shares available for you to purchase under your basic subscription privilege, which are not purchased by other shareholders. If there are not enough shares available to fill all subscriptions for additional shares, the available shares will be allocated pro rata based on the ratio that the number of available shares bears to the total number of shares that are the subject of over-subscription requests.

Use of Proceeds		We will use the net proceeds of this offering to develop a golf course at Jack Frost Mountain and to develop residential communities at Jack Frost Mountain and Big Boulder Ski Area.


Non-Transferability of Rights		The subscription rights may not be sold, transferred or assigned, and will not be listed for trading on any stock exchange or on the OTC Bulletin Board.

No Board Recommendation		Our board of directors makes no recommendation to you about whether you should exercise any rights. You are urged to make your decision based on your own assessment of our business and the rights offering. For more information regarding some of the risks inherent in this rights offering, please see “Risk Factors” beginning on page 6.

Subscription Commitment of Our Controlling Shareholder		Kimco, which as of December 1, 2004 was the owner of approximately 52.84% of our common stock and our controlling shareholder, has agreed to act as a standby purchaser in the offering, and, in addition to the subscription rights it will receive as a shareholder, will purchase any and all shares not subscribed for by our shareholders. In the event no shareholders exercise their basic subscription privilege and Kimco were to acquire all of the shares offered in the rights offering, Kimco’s proportionate ownership of our stock will increase to ___% in relation to those non-exercising shareholders and Kimco will be able to control all matters submitted to a vote of our shareholders and be able to direct our management and policies.

No Revocation		If you exercise any rights, you are not allowed to revoke or change the exercise or request a refund of monies paid.

Certain U.S. Federal Income Tax Considerations		For U.S. federal income tax purposes, your receipt and exercise of the subscription rights generally will not be taxable events. You should consult your personal tax advisor concerning the particular tax consequences to you of the receipt and exercise of the subscription rights. For more information, see “Certain U.S. Federal Income Tax Considerations” beginning on page 58.

Extension, Withdrawal, Cancellation and Amendment		We have the option of extending the rights offering and the period for exercising your subscription rights, although we do not presently intend to do so. Our board of directors may cancel the rights offering in its sole discretion at any time prior to or on ___, 2005 for any reason (including, without limitation, a change in the market price of our common stock). We also reserve the right to withdraw or terminate this rights offering at any time for any reason. In the event that this offering is cancelled, withdrawn or terminated, all funds received from subscriptions by shareholders will be returned. Interest will not be payable on any returned funds. We also reserve the right to amend the terms of this rights offering.

Procedure for Exercising Rights		To exercise rights, you must complete the rights subscription certificate and deliver it to the Subscription Agent, HSBC Bank USA, National Association, together with full payment for all the subscription rights you elect to exercise. HSBC Bank USA, National Association must receive the proper forms and payments on or before the expiration date. You may deliver the documents and payments by mail or commercial courier. If regular mail is used for this purpose, we recommend using registered mail, properly insured, with return receipt requested. You may use an alternative “Guaranteed Delivery Procedure” if you are unable to deliver the rights subscription certificate before the expiration date, subject to the requirements of this procedure described under “The Rights Offering—Guaranteed Delivery Procedures” on page 21.

RISK FACTORS

An investment in our common stock involves a high degree of risk. You should carefully consider the following factors and other information in this prospectus before deciding to invest in shares of our common stock.

Risks Related to Our Business and Our Industry

Our business is highly seasonal and unfavorable weather conditions can adversely affect our business.

Ski resort operations are highly seasonal. A majority of our revenues are realized during the ski season from late November through the end of March. A significant portion of our ski operations segment revenues and approximately 34% of annual skier visits were generated during the Christmas and Presidents’ Day vacation weeks in the fiscal year ended October 31, 2003.

A high degree of seasonality in our revenues increases the impact of certain events on our operating results. Adverse weather conditions, access route closures, equipment failures, and other developments of even moderate or limited duration occurring during our peak business periods could reduce our revenues. Adverse weather conditions can also increase power and other operating costs associated with snowmaking or could render snowmaking wholly or partially ineffective in maintaining quality skiing conditions. Furthermore, unfavorable weather conditions, regardless of actual skiing conditions, can result in decreased skier visits and the early ski season snow conditions and skier perception of early ski season snow conditions influence the momentum and success of the overall ski season. There is no way for us to predict future weather patterns or the impact that weather patterns may have on the results of operations or visitation.

We depend on a seasonal workforce.

Our mountain and lodging operations are largely dependent on a seasonal workforce. We recruit to fill staffing needs each season. In addition, we manage seasonal wages and the timing of the hiring process to ensure the appropriate workforce is in place. While we do not currently foresee the need to increase seasonal wages to attract employees, we cannot guarantee that such an increase will not be necessary in the future. Increased seasonal wages or an inadequate workforce could have an adverse impact on our results of operations; however, we are unable to predict with any certainty whether such situations will arise or the potential impact on results of operations.

Changes in regional and national economic conditions could adversely affect our results of operations.

The skiing and real estate development industries are cyclical in nature and are particularly vulnerable to shifts in regional and national economic conditions. Skiing and vacation unit rental and ownership are discretionary recreational activities entailing relatively high costs of participation, and any decline in the regional or national economies where we operate could adversely impact our skier visits, real estate sales and revenues. Accordingly, our financial condition, particularly in light of our highly leveraged condition, could be adversely affected by any weakening in the regional or national economy.

We operate in a highly competitive industry which makes maintaining our customer base a difficult task.

The skiing industry is highly competitive and capital intensive. Our competitors include major ski resorts throughout the United States, Canada and Europe as well as other worldwide recreation resorts, including warm weather resorts and various alternative leisure activities. Our competitive position depends on a number of factors, such as our proximity to population centers, the availability and cost of transportation to and within a resort, natural snowfall, the quality and coverage of snowmaking operations, resort size, the attractiveness of terrain, lift ticket prices, prevailing weather conditions, the appeal of related services, the quality and the availability of lodging facilities, and resort reputation. In addition, some of our competitors have greater competitive positions and relative ability to withstand adverse developments. There can be no assurance that our competitors will not be successful in capturing a portion of our present or potential customer base.

We are subject to litigation in the ordinary course of business.

We are, from time to time, subject to various legal proceedings and claims, either asserted or unasserted. Any such claims, whether with or without merit, could be time-consuming and expensive to defend and could divert management’s attention and resources. While management believes we have adequate insurance coverage and accrued loss contingencies for all known matters, we cannot assure that the outcome of all current or future litigation will not have a material adverse effect on us.

Our business is subject to heavy environmental and land use regulation.

We are subject to a wide variety of federal, state and local laws and regulations relating to land use and development and to environmental compliance and permitting obligations, including those related to the use, storage, discharge, emission and disposal of hazardous materials. Any failure to comply with these laws could result in capital or operating expenditures or the imposition of severe penalties or restrictions on our operations that could adversely affect our present and future resort operations and real estate development. In addition, these laws and regulations could change in a manner that materially and adversely affects our ability to conduct our business or to implement desired expansions and improvements to our facilities.

Implementation of existing and future legislation, rulings, standards and interpretations from the FASB or other regulatory bodies could affect the presentation of our financial statements and related disclosures.

Future regulatory requirements could significantly change our current accounting practices and disclosures. Such changes in the presentation of our financial statements and related disclosures could change your interpretation or perception of our financial position and results of operations.

A disruption in our water supply would impact our snowmaking capabilities and impact our operations.

Our operations are heavily dependent upon our ability, under applicable federal, state and local laws, regulations, permits, and licenses or contractual arrangements, to have access to adequate supplies of water with which to make snow and otherwise conduct our operations. There can be no assurance that applicable laws and regulations will not change in a manner that could have an adverse effect on our operations, or that important permits, licenses or agreements will not be cancelled or will be renewed on terms as favorable as the current terms. Any failure to have access to adequate water supplies to support our current operations and anticipated expansion would have a material adverse effect on our financial condition and result of operations.

Terrorist acts upon the United States and acts of war (actual or threatened) could have a material adverse effect on us.

The terrorist acts carried out against the United States on September 11, 2001 have had an adverse effect on the global travel and leisure industry. The war with Iraq and its aftermath also had materially adverse effects. Additional terrorist acts against the United States and the threat of or the actual act of war by or upon the United States could result in further degradation of discretionary travel, upon which our operations are highly dependent. Such degradation could have a material adverse impact on our results of operations.

If we are unable to retain our key executive personnel and hire additional personnel as required, our business and prospects for growth could suffer.

We believe that our operations and future development are dependent upon the continued services of our key executive personnel. Moreover, we believe our future success will depend in large part upon our ability to attract, retain and motivate highly skilled management employees. If one or more members of our management team or other key personnel become unable or unwilling to continue in their present positions and if additional key personnel cannot be hired as needed, our business and prospects for growth could be materially adversely affected.

Competition and market conditions relating to our real estate management operations could adversely affect our operating results.

We face competition from similar retail centers that are near our retail properties with respect to the renewal of leases and re-letting of space as leases expire. Any new competitive properties that are developed close to our existing properties also may impact our ability to lease space to creditworthy tenants. Increased competition for tenants may require us to make capital improvements to properties that we would not have otherwise planned to make. Any unbudgeted capital improvements could adversely affect our results of operations. Also, to the extent we are unable to renew leases or re-let space as leases expire, it would result in decreased cash flow from tenants and adversely affect our results of operations.

Our retail properties are subject to adverse market conditions such as population trends and changing demographics, income, sales and property tax laws, availability and costs of financing, construction costs and weather conditions that may increase energy costs, any of which could adversely affect our results of operations. If the sales of stores operating at our properties were to decline significantly due to economic conditions, the risk that our tenants will be unable to fulfill the terms of their leases or will enter into bankruptcy may increase. Economic and market conditions have a substantial impact on the performance of our anchor and other tenants and may impact the ability of our tenants to make lease payments and to renew their leases. If, as a result of such tenant difficulties, our properties do not generate sufficient income to meet our operating expenses, including debt service, our results of operations would be adversely affected.

The cyclical nature of the forest products industry could adversely affect our timbering operations.

Our results of operations are affected by the cyclical nature of the forest products industry. Historical prices for logs and wood products have been volatile, and we, like other participants in the forest products industry, have limited direct influence over the time and extent of price changes for logs and wood products. The demand for logs and wood products is affected primarily by the level of new residential construction activity and, to a lesser extent, repair and remodeling activity and other industrial uses. The demand for logs is also affected by the demand for wood chips in the pulp and paper markets. These activities are, in turn, subject to fluctuations due to, among other factors:

•   changes in domestic and international economic conditions;

•   interest rates;

•   population growth and changing demographics; and

•   seasonal weather cycles (e.g., dry summers, wet winters).

Decreases in the level of residential construction activity generally reduce demand for logs and wood products. This results in lower revenues, profits and cash flows in our timbering operations segment. In addition, industry-wide increases in the supply of logs and wood products during favorable price environments can also lead to downward pressure on prices. Timber owners generally increase production volumes for logs and wood products during favorable price environments. Such increased production, however, when coupled with even modest declines in demand for these products in general, could lead to oversupply and lower prices.

Our summer recreation operations are subject to adverse weather conditions and other factors that can adversely affect our business.

Our summer recreation operations involve outdoor activities such as paintball, festivals, boating, swimming and tennis. Because most of our summer attractions involve outdoor activities, attendance is adversely affected by bad weather. Bad weather and forecasts of bad or mixed weather conditions can reduce the number of people who come to visit our summer recreation centers, which negatively affects our revenues. Our summer operation centers compete with water parks and amusement parks and with other types of recreational facilities and forms of entertainment, including movies, sports attractions and vacation travel. Our summer recreation operations are also subject to factors that affect the recreation and leisure industries generally, such as general economic conditions and changes in consumer spending habits.

Our future growth and real estate development requires additional capital whose availability is not assured.

We intend to make significant investments in our resorts to maintain our competitive position. We spent approximately $18,176,544 for the nine months ended July 31, 2004, $3,580,373 and $3,149,214 for the fiscal years ended October 31, 2003 and 2002. The capital expenditures for the nine months ended July 31, 2004 were primary attributed to the section 1031 tax deferred exchange of the Dreshertown Shopping Center and the subsequent purchase of the Oxbridge Square and Coursey Commons shopping centers. The capital expenditures for the fiscal years ended October 31, 2003 and 2002 were primarily related to our ski operations. We expect to continue making substantial resort capital expenditures and investments in real estate development. We have not yet finalized a budget for the fiscal year 2005; however, at this time, we anticipate capital expenditures will be approximately $1,000,000 for our ski operations and in excess of $5,000,000 for real estate development. Based on the status of several specific real estate projects, we will continue to invest significant amounts in real estate over the next several years. We could finance future expenditures from any of the following sources:

•   cash flow from operations;

•   bank borrowings;

•   public offerings of debt or equity;

•   private placements of debt or equity;

•   non-recourse, sale leaseback or other financing; or

•   some combination of the above.

We might not be able to obtain financing for future expenditures on favorable terms or at all.

Future changes in the real estate market could affect the value of our investments.

We have extensive real estate holdings near our mountain resorts and elsewhere in the United States. The value of our real property and the revenue from related development activities may be adversely affected by a number of factors, including:

•   national and local economic climate;

•   local real estate conditions (such as an oversupply of space or a reduction in demand for real estate in an area);

•   attractiveness of the properties to prospective purchasers and tenants;

•   competition from other available property or space;

•   our ability to obtain adequate insurance;

•   unexpected construction costs or delays;

•   government regulations and changes in real estate, zoning, land use, environmental or tax laws;

•   interest rate levels and the availability of financing; and

•   potential liabilities under environmental and other laws.

Risks Related to the Rights Offering

If you do not exercise all of your subscription rights, you may suffer significant dilution of your percentage ownership of our common stock.

This rights offering is designed to enable us to raise equity capital, while allowing all of our shareholders, as of the rights offering record date, to maintain their approximate relative proportionate voting and economic interests in us. Kimco has agreed, as standby purchaser, to purchase for a purchase price of $_____ per share any and all shares not subscribed for by our shareholders.

To the extent that you do not exercise your subscription rights, your proportionate voting interest in us will be reduced, and the percentage that your shares represent of our expanded equity after exercise of the subscription rights will be disproportionately diluted. For example, if you own 100,000 shares of our common stock before the rights offering, or 5.0% of our equity, and you exercise none of your subscription rights, your percentage ownership will be reduced to ___% after the rights offering.

If no shareholders exercise their subscription rights, Kimco will purchase all of the shares pursuant to its standby purchase commitment. In that case, Kimco’s ownership interest would increase to approximately ___% from approximately 52.8%, and the ownership interest of all of our other shareholders, who currently own, in the aggregate, approximately 47.2% of our common stock, will decrease to approximately ___%.

You may not revoke the exercise of your subscription rights and could be committed to buying shares above the prevailing market value of our common stock.

Once you exercise your subscription rights, you may not revoke the exercise and cancel the purchase of the shares in the rights offering. The public trading market price of our common stock may decline before the subscription rights expire. If you exercise your subscription rights and, afterwards, the public trading market price of our common stock decreases below the subscription price, you will have committed to buying shares of our common stock at a price above the prevailing market value of our common stock. Moreover, you may be unable to sell your shares of our common stock at a price equal to or greater than the subscription price you paid for such shares.

If we cancel this rights offering, we will not have any obligation to you except to return your subscription payments.

If we elect to terminate this rights offering, we do not have any obligation with respect to the subscription rights except to return, without interest or deduction, any subscription payments we received from you. The Subscription Agent estimates it will take approximately ___ business days following the termination of the rights offering and clearance of subscription payments in the Subscription Agent’s account (which may take up to ten business days) to return the subscription payments. Accordingly, if we terminate this rights offering, you will have lost the opportunity to invest your subscription payment in an alternative, and possibly profitable, investment during the time your subscription payment was held by the Subscription Agent.

If you do not act promptly or fail to follow subscription instructions, we may reject your exercise of subscription rights.

Shareholders who desire to purchase shares in this rights offering must act promptly to ensure that all required forms and payments are actually received by the Subscription Agent prior to 5:00 p.m., New York City time, on ___, 2005, the expiration time of this rights offering. If you are a beneficial owner of shares, you must act promptly to ensure that your broker, custodian bank or other nominee acts for you and that all required forms and payments are actually received by the Subscription Agent prior to ___, 2005. We shall not be responsible if your broker, custodian or nominee fails to ensure that all required forms and payments are actually received by the Subscription Agent prior to 5:00 p.m. on ___, ___, 2005, the expiration time of this rights offering. If you fail to complete and sign the required subscription forms, send an incorrect payment amount, or otherwise fail to follow the subscription procedures that apply to your exercise in this rights offering, we may, depending on the circumstances, reject your subscription or accept it only to the extent of the payment received. We do not undertake to contact you concerning an incomplete or incorrect subscription form or payment, nor are we under any obligation to correct such forms or payment. We have the sole discretion to determine whether a subscription exercise properly follows the subscription procedures.

If you make payment of the subscription price by personal check, your check must clear before the expiration time or we will reject your exercise of subscription rights.

Any personal check used to pay for shares to be issued in this rights offering must clear prior to the expiration time of this rights offering, and the clearing process may require five or more business days. If you choose to exercise your subscription rights, in whole or in part, and pay for shares by personal check and your check has not cleared prior to the expiration time of this rights offering, you will not have satisfied the conditions to exercise your subscription rights and will not receive the shares you attempted to purchase and you will lose the value of your subscription rights.

You may have to wait to resell the shares you purchase in this offering until stock certificates are delivered to you.

Until stock certificates are delivered, you may not be able to sell the shares of our common stock that you have purchased in this offering. That means that you may have to wait until you or your broker or other nominee has received a stock certificate. We will endeavor to prepare and issue the appropriate certificates as soon as practicable after the expiration of this offering. We cannot assure you, however, that the market price of the common stock purchased pursuant to the exercise of rights will not decline below the subscription price you paid before we are able to deliver your certificates. For shares purchased pursuant to the over-subscription privilege, delivery of certificates will occur as soon as practicable after all prorations and adjustments contemplated by the terms of this offering have been effected.

The subscription price is not a reflection of our value.

The subscription price of $_______ per share was determined by our board of directors and represents a discount to the market price of our common stock on the date the subscription price was determined. Our board of directors set the $_______ per share subscription price after considering a variety of factors discussed at page 27, “Determination of the Subscription Price.” The price, however, does not necessarily bear any relationship to the book value of our assets or our past operations, cash flows, earnings or financial condition or any other established criteria for value. Our common stock may trade at prices below the subscription price after the completion of this offering, and we cannot assure you that you will be able to sell shares purchased during this offering at a price equal to or greater than the $_______ per share price.

Because we have discretion on how the net proceeds from this offering will be applied, you will be relying on the judgment of our management regarding the application of the proceeds.

We expect to use the net proceeds from this offering to develop a golf course at Jack Frost Mountain and to develop residential communities at Jack Frost Mountain and Big Boulder Ski Area. We are currently undergoing contract negotiations with nationally-recognized golf course developers in connection with the proposed development of the golf course at Jack Frost Mountain. However, if we do not develop a golf course at Jack Frost Mountain, either because of the costs associated with such development or for other non-financial reasons, we intend to use the net proceeds of this offering to develop residential communities at Jack Frost Mountain and Big Boulder Ski Area, and for working capital purposes. Accordingly, our management will have broad discretion with respect to the expenditure of the proceeds. You will be relying on the judgment of our management regarding the application of the proceeds. Our management will have the ability to change the application of the proceeds of this offering without shareholder approval.

We are subject to risks with respect to the development of a golf course at Jack Frost Mountain prior to having firm contracts from builders to purchase any of the residential lots in the surrounding golf course community.

We have completed the design of a golf course and plan to enter into a firm contact for the construction of a golf course at Jack Frost Mountain. While we currently have interest from two nationally-recognized home builders for the development of a surrounding community, we do not have any firm offers from any of the interested builders. If, at the completion of the golf course, we do not have firm contracts with home builders, we may consider developing a portion of the residential community on our own, and possibly in conjunction with the sale of some lots to other builders. There are risks associated with developing a residential community, including potential changes in the real estate market, delays in construction due to adverse weather conditions, changes in the economy and changes in interest rates, which we may be subject to if we develop the golf course prior to having firm contracts with home builders and which could have a material adverse effect on us and our results of operations.

The issuance by us of up to ___shares in this offering at a discount to the current market price of our stock may cause the market price of our stock to decline.

Although our common stock is quoted on the OTC Bulletin Board, it does not have a high trading volume. The closing price of our common stock on the OTC Bulletin Board on January 3, 2005 was $30.25 per share. The subscription price of $_______ per share represents a discount to the current market price of our common stock, and the ___shares that we are offering through this prospectus are equal to ___% of our ___outstanding shares of our common stock as of ___, 2005. After the completion of this offering, the market price of our common stock may decline in response to the introduction into a thinly traded public market for our common stock of a substantial number of additional shares that are being issued by us at a discount to the current market price of our stock.

Risks Related to Our Common Stock

The exercise of outstanding options may dilute your ownership of our common stock.

As of December 1, 2004, options to acquire 96,000 shares of our common stock were outstanding, exercisable at per share prices ranging from $6.75 to $17.75, with a weighted average exercise price of $11.20 and a weighted average remaining contractual life of 3.3 years.

We do not expect to pay dividends on our common stock.

Although we have previously declared and paid dividends on our common stock in the past, we do not anticipate declaring or paying any dividends in the foreseeable future. We plan to retain any future earnings to finance the continued expansion and development of our business. As a result, our dividend policy could depress the market price for our common stock.

We are effectively controlled by Kimco, and other shareholders have little ability to influence our business.

As of December 1, 2004, Kimco owned at least 1,012,579 shares, or 52.8% of our outstanding voting stock. Because of Kimco’s purchase commitment to backstop our sale of the shares offered by this prospectus, the rights offering could, and is likely to, result in Kimco owning an increased percentage of our outstanding common stock (up to at least ___% if Kimco purchases all of the shares being offered and no other shareholders participate in the rights offering). In any event, Kimco will be able to exercise significant control over all matters requiring shareholder approval, including the election of directors and approvals of significant corporate action such as mergers and other business combination transactions. This concentration of ownership may also have the effect of delaying or preventing a change in control over us unless it is supported by Kimco. Accordingly, your ability to influence us through voting your shares is very limited.

Michael J. Flynn, the Chairman of our board of directors, is also President, Chief Operating Officer and Vice Chairman of the board of directors of Kimco Realty Corporation. In addition, Patrick M. Flynn, who serves as one of our directors and is our President and Chief Executive Officer, is the Director of Real Estate at Kimco Realty Corporation. Finally, Milton Cooper, who serves as one of our directors, also serves as Chief Executive Officer and Chairman of the board of directors of Kimco Realty Corporation.

Our common stock is thinly traded. Our stock price may fluctuate more than the stock market as a whole.

As a result of the thin trading market for our stock, its market price may fluctuate significantly more than the stock market as a whole or the stock prices of similar companies. Of the 1,916,130 shares of our currently outstanding common stock, approximately 47.2% are beneficially owned by persons other than Kimco, our controlling shareholder. Without a larger float, our common stock will be less liquid than the stock of companies with broader public ownership, and, as a result, the trading prices for our common stock may be more volatile. Among other things, trading of a relatively small volume of our common stock may have a greater impact on the trading price for our stock than would be the case if our public float were larger.

In addition, we granted Kimco registration rights with respect to the shares that Kimco purchases that are not otherwise subscribed for by our shareholders in this rights offering. As a result, Kimco can cause us to register the shares it purchases pursuant to its standby purchase commitment and such shares would be eligible for resale in the public market without restriction. Sales of a substantial amount of common stock in the public market, or the perception that these sales may occur, could adversely affect the market price of our common stock. Possible or actual sale of any of these shares, particularly by Kimco, may decrease the market price of our common stock.

We will continue to incur increased costs as a result of being a public company subject to the Sarbanes-Oxley Act of 2002 and our new management faces challenges in implementing those requirements.

As a public company, we incur significant legal, accounting and other expenses. In addition, the Sarbanes-Oxley Act of 2002, as well as new rules subsequently implemented by the Securities and Exchange Commission, the Commission, has required changes in corporate governance practices of public companies. We expect these new rules and regulations to increase our legal and financial compliance costs and to make some activities more time-consuming and costly. For example, as a result of the Sarbanes-Oxley Act and related rules adopted by the Commission, we have created additional board committees and are adopting comprehensive new policies regarding internal controls and disclosure controls and procedures. We are currently evaluating and monitoring developments with respect to these new rules, and we cannot predict or estimate the amount of additional costs we may incur, particularly those relating to implementation of new requirements relating to assessment of internal controls, or the timing of such costs.

Our shareholders may perceive a conflict of interest because we do not currently maintain independent audit committee.

Our audit committee is made up of three individuals: Eldon D. Dietterick, Patrick M. Flynn and Michael J. Flynn. Mr. Dietterick is our Executive Vice-President and Treasurer. Messrs. Patrick Flynn and Michael Flynn serve as members of our board of directors and are also employed by Kimco Realty Corporation, the parent company of Kimco. Although we are exempt from regulations mandating an independent audit committee, our shareholders may perceive a conflict of interest because of our lack of an independent audit committee.

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

Some of the statements under “Prospectus Summary,” “Risk Factors,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” “Business” and elsewhere in this prospectus constitute forward-looking statements.

These statements involve known and unknown risks, uncertainties and other factors that may cause our or our industry’s actual results, levels of activity, performance or achievements to be materially different from the information expressed or implied by these forward-looking statements. While we believe that we have a reasonable basis for each forward-looking statement contained in this prospectus, we caution you that these statements are based on a combination of facts and factors currently known by us and projections of the future, about which we cannot be certain or even relatively certain. Many factors affect our ability to achieve our objectives and to successfully develop and commercialize our product candidates including:

•   Our ability to successfully complete this rights offering;

•   Borrowing costs, and our ability to generate cash flow to pay interest and scheduled amortization payments as well as our ability to refinance such indebtedness or to sell assets when it comes due;

•   Our ability to continue to generate sufficient working capital to meet our operating requirements;

•   Our ability to maintain a good working relationship with our vendors and customers;

•   The ability of vendors to continue to supply our needs;

•   Our ability to provide competitive pricing to sell homes;

•   Actions by our competitors;

•   Fluctuations in the price of building materials;

•   Our ability to achieve gross profit margins at which we can be profitable, including margins on services we perform on a fixed price basis;

•   Our ability to attract and retain qualified personnel in our business;

•   Our ability to effectively manage our business;

•   Our ability to obtain and maintain approvals from local, state and federal authorities on regulatory issues;

•   Our relations with our controlling shareholder, including its continuing willingness to provide financing and other resources;

•   Pending or new litigation; and

•   Changes in market demand, weather and/or economic conditions within our local region and nationally.

In addition, you should refer to the “Risk Factors” section of this prospectus for a discussion of other factors that may cause our actual results to differ materially from those implied by our forward-looking statements. As a result of these factors, we cannot assure you that the forward-looking statements in this prospectus will prove to be accurate. Furthermore, if our forward-looking statements prove to be inaccurate, the inaccuracy may be material. In light of the significant uncertainties in these forward-looking statements, you should not regard these statements as a representation or warranty by us or any other person that we will achieve our objectives and plans in any specified time frame, if at all.

You should read this prospectus completely. In some cases, you can identify forward-looking statements by the following words: “may,” “will,” “should,” “expect,” “intend,” “plan,” “anticipate,” “believe,” “estimate,” “predict,” “potential,” “continue” or the negative of these terms or other comparable terminology. We may not update these forward-looking statements, even though our situation may change in the future.

We qualify all the forward-looking statements contained in this prospectus by the foregoing cautionary statements.

USE OF PROCEEDS

We estimate that the net proceeds from our sale of the shares will be $15,000,000, after payment of $500,000 in expenses related to this offering.

We intend to use the net proceeds of this offering approximately as follows:

•   65% to develop a golf course at Jack Frost Mountain;

•   25% to develop residential communities at Jack Frost Mountain; and

•   10% to develop residential communities at Big Boulder Ski Area.

We are currently undergoing contract negotiations with nationally-recognized golf course developers in connection with the proposed development of a golf course at Jack Frost Mountain. If we do not develop a golf course at Jack Frost Mountain, either because of the costs associated with such development or for other non-financial reasons, we intend to use the net proceeds of this offering to develop residential communities at Jack Frost Mountain and Big Boulder Ski Area, and for working capital purposes.

Pending the uses described above, we intend to invest the proceeds of this offering in short-term investment grade, interest-bearing securities.

MARKET PRICE AND DIVIDEND POLICY

Market Price of Common Stock

Our common stock is quoted on the OTC Bulletin Board under the symbol “BLRGZ.” There has been a limited and sporadic trading market for our common stock. However, our management does not believe such limited activity constitutes an established public trading market. As of January 3, 2005, the last reported trade of our common stock was on the OTC Bulletin Board at $30.25 per share on December 9, 2004. As of January 3, 2005, we had 595 holders of record of our common stock.

The following sets forth the high asked and low bid price quotations as reported on the monthly statistical reports of the National Association of Securities Dealers, Inc. for the periods set forth below. No dividends were paid on common stock in any of the periods.


	HIGH	LOW
Fiscal Year 2004	ASKED	BID
First Quarter	16.750	13.250
Second Quarter	21.000	13.900
Third Quarter	27.250	20.750
Fourth Quarter	29.000	27.000


	HIGH	LOW
Fiscal Year 2003	ASKED	BID
First Quarter	12.750	10.500
Second Quarter	12.250	11.000
Third Quarter	14.000	11.750
Fourth Quarter	15.000	12.150


	HIGH	LOW
Fiscal Year 2002	ASKED	BID
First Quarter	12.000	9.500
Second Quarter	12.000	9.550
Third Quarter	12.000	11.000
Fourth Quarter	11.500	10.600

Dividend Policy

We do not anticipate paying any cash dividends in the foreseeable future. We currently intend to retain future earnings, if any, to finance our operations and expand our business. Any future determination to pay cash dividends will be at the discretion of the board of directors and will be dependent upon our financial condition, operating results, capital requirements, and other factors the board of directors deems relevant.

THE RIGHTS OFFERING

Before exercising any subscription rights, you should read carefully the information set forth under “Risk Factors” beginning on page 6 of this prospectus.

The Subscription Rights

We are granting each person who was a record holder of our common stock at 5:00 p.m., New York City time, on ___, 2005, the record date, one non-transferable subscription right for every ___ shares of our common stock held at that date either as a holder of record or, in the case of shares held of record by brokers, banks or other nominees, on your behalf, as a beneficial owner of such shares. To exercise your subscription rights, you must deliver one subscription right for each share for which you subscribe pursuant to your basic subscription privilege. There is no minimum number of shares you must purchase, but you may not purchase fractional shares. When determining the number of subscription rights you will receive, divide the number of shares of our common stock you own by ___ and round down to the next whole number. For example, if you own 100 shares of our common stock, you will receive ___ subscription rights (100 shares divided by ___ = ___, rounded down to ___ subscription rights, the next whole number) which will entitle you to subscribe for up to ___ shares under your subscription right. Each right will entitle you to purchase one share at a purchase price of $___ per share. This is your basic subscription privilege. If other shareholders do not fully exercise their subscription rights, you may also have the opportunity to purchase additional shares, subject to certain limitations, at the same purchase price.

Each subscription right entitles you to purchase one share of common stock, representing one share of common stock of Blue Ridge and one share of common stock of Big Boulder, pursuant to the basic subscription privilege and potentially an additional share pursuant to the over-subscription privilege. Under a Security Combination Agreement between Blue Ridge and Big Boulder and under the bylaws of Blue Ridge and Big Boulder, shares of Blue Ridge and Big Boulder are issued in combined common stock certificates, each certificate representing the same number of shares of each of Blue Ridge and Big Boulder. Shares of each corporation may be transferred only together with an equal number of shares in the other corporation.

If you wish to exercise your subscription rights, you must do so before 5:00 p.m., New York City time, on ___, 2005. After that date, the subscription rights will expire and will no longer be exercisable.

Subscription Price

The subscription price for this rights offering is $___ per share, payable in cash. All cash payments must be cleared on or before the expiration date of this rights offering.

Basic Subscription Privilege

Each subscription right entitles you to purchase one share of our common stock upon payment of $___ per share. You will receive a certificate representing the shares of our common stock that you purchase pursuant to your basic subscription privilege as soon as practicable after ___ 2005, whether you exercise your subscription rights immediately prior to that date or earlier.

Over-Subscription Privilege

Subject to the allocation rules described below, the subscription rights also grant each shareholder an over-subscription privilege to purchase additional shares in an amount not to exceed the number of shares available for purchase by such shareholder under its basic subscription privilege, to the extent available and subject to proration, that are not purchased by other shareholders pursuant to their basic subscription privileges. Shareholders who desire to exercise their over-subscription privileges must fully exercise their rights pursuant to their basic subscription privileges. If you wish to exercise your over-subscription privilege, you should indicate the number of additional shares that you would like to purchase in the space provided on your subscription certificate (not to exceed the number of shares you may purchase under your basic subscription privilege). When you send in your rights subscription certificate, you must also send the full purchase price for the number of additional shares that you have requested to purchase (in addition to the payment due for shares purchased through your basic subscription privilege).

If the number of shares remaining after the exercise of all basic subscription privileges is not sufficient to satisfy all over-subscription requests, such shares will be allocated among over-subscription requests on a pro-rata

basis (subject to elimination of fractional shares), based on the ratio that the number of available shares bears to the total number of shares that are the subject of over-subscription requests.

As a result of this allocation procedure, you should exercise your basic subscription and over-subscription privileges in full if you wish to minimize dilution of your percentage ownership of our common stock and/or maximize the number of shares that you will receive in this rights offering.

As soon as practicable after ___, 2005, HSBC Bank USA, National Association, acting as our “Subscription Agent,” will determine the number of shares that you may purchase pursuant to the over-subscription privilege. You will receive a certificate representing the shares of our common stock you have purchased as soon as practicable thereafter. Subject to state securities laws and regulations, we have the discretion to delay allocation and distribution of any and all shares to shareholders who are affected by such regulations and elect to participate in the rights offering, including shares that we issue with respect to your basic or over-subscription privilege, in order to comply with state securities laws. If you request and pay for more shares than are allocated to you, that overpayment will be held by the Subscription Agent pending the completion of this rights offering and will be refunded to you, without interest, promptly thereafter.

In connection with the exercise of the over-subscription privilege, banks, brokers and other nominee holders of subscription rights who act on behalf of beneficial owners will be required to certify to the Subscription Agent and to us as to, among other things, the aggregate number of subscription rights that have been exercised and the number of shares that are being requested through the over-subscription privilege by each beneficial owner on whose behalf such nominee holder is acting.

Purchase Commitment of Kimco

Kimco has agreed, as standby purchaser, to purchase for a purchase price of $___ per share any and all shares not subscribed for by our shareholders. As a result of Kimco’s commitment to act as standby purchaser, the total number of shares to be purchased by Kimco as standby purchaser will be equal to the difference between ___ and the number of shares purchased by our shareholders pursuant to this rights offering. We granted Kimco registration rights with respect to the shares that Kimco purchases that are not otherwise subscribed for by our shareholders in this rights offering. As a result, Kimco can cause us to register the shares it purchases pursuant to its standby purchase commitment and such shares would be eligible for resale in the public market without restriction.

On January 4, 2005, we entered into a Standby Securities Purchase Agreement with Kimco which provides further detail regarding Kimco’s standby purchase commitment.

As of December 1, 2004, Kimco was the owner of 1,012,579 shares of our common stock and is our controlling shareholder. Kimco Realty Corporation, the parent company of Kimco, is presently providing consulting and management services to us. The consulting services focus on land development, acquisitions and disposals. The consulting fees are accrued monthly and are capitalized as part of land development. For the fiscal year ended October 31, 2004, the amount was $285,000. Kimco Realty Corporation served as the management company for the Dreshertown Plaza Shopping Center from June 2003 to March 2004, at which point the shopping center was sold. During its management term, Kimco Realty Corporation was paid $50,977 in management fees.

The table below sets forth the ownership of our stock by Kimco as of December 1, 2004 and following the completion of this rights offering, assuming full exercise of the basic subscription privilege and the over-subscription privileges by Kimco and no purchase of any shares in the rights offering by any other shareholders.

Ownership Upon

Current

Completion of

Ownership

Rights Offering

Shares

Percent

Shares

Percent

Kimco

1,012,579

52.84

Kimco has advised us that it intends to retain any shares purchased in this offering or pursuant to the standby purchase commitment for investment purposes.

Reasons For The Rights Offering

We are offering the rights to raise equity capital. We intend to use the net proceeds of this offering to develop a golf course at Jack Frost Mountain and to develop residential communities at Jack Frost Mountain and Big Boulder Ski Area.

We have determined that, given current market conditions, this rights offering is the most appropriate means of raising equity capital because it affords our existing shareholders the preferential opportunity to subscribe for the shares and to maintain their proportionate interest in us. Some of the factors considered by our board of directors in approving the rights offering include:

•   our need for capital;

•   the alternative methods available to us for raising capital;

•   the pro rata nature of a rights offering to our shareholders;

•   the willingness of Kimco, our controlling shareholder, to subscribe for the shares and to purchase any and all shares offered in this rights offering but not subscribed for by our other shareholders;

•   the market price of our common stock; and

•   general conditions of the securities markets.

No Board Recommendation

Our board of directors is not making any recommendation as to whether you should exercise your subscription rights. In making the decision to exercise or not exercise your subscription rights, you must consider your own best interests. If you choose not to exercise your subscription rights in full, your relative ownership interest will be substantially diluted. The exercise of your subscription rights involves risks, and there is no guarantee that the market price of our common stock will exceed $___ per share after the completion of this offering. You are urged to make your decision based on your own assessment of our business and the rights offering. Among other things, you should carefully consider the risks that are described under the heading “Risk Factors” beginning on page 6 of this prospectus.

Description of Common Stock

Shares of our common stock purchased in this rights offering will have the identical rights, restrictions and other characteristics of all other shares of our outstanding common stock. For a complete description of our common stock, see “Description of our Capital Stock.”

Expiration Date

The rights will expire at 5:00 p.m., New York City time, on ___, 2005, unless we decide to extend the rights offering. If the commencement of the rights offering is delayed, the expiration date will be similarly extended. If you do not exercise your basic subscription privilege and your over-subscription privilege prior to that time, your subscription rights will expire and be null and void.

We will not be required to issue shares of our common stock to you if the Subscription Agent receives your rights subscription certificate or your payment after that time, regardless of when you sent the rights subscription certificate and payment, unless you send the documents in compliance with the guaranteed delivery procedures described below.

No Revocation

Once you have exercised your basic subscription privilege and your over-subscription privilege, you may not revoke that exercise even if the subscription period has not yet ended. You should not exercise your subscription rights unless you are certain that you wish to purchase shares at the subscription price of $___ per share.

Non-Transferability of Subscription Rights

Only you may exercise your basic subscription privilege and your over-subscription privilege. You may not sell, give away or otherwise transfer your subscription rights. The subscription rights will not be listed for trading on any stock exchange or on the OTC Bulletin Board.

Cancellation, Withdrawal and Amendment

Our board of directors may cancel the rights offering in its sole discretion at any time prior to or on ___, 2005 for any reason (including, without limitation, a change in the market price of our common stock). We also reserve the right to withdraw or terminate this rights offering at any time for any reason. In the event that this offering is cancelled, withdrawn or terminated, all funds received from subscriptions by shareholders will be returned. Interest will not be payable on any returned funds.

We also reserve the right to amend the terms of this rights offering. If we make an amendment that we, in our sole discretion, consider significant, we will:

•   mail notice of the amendment to all shareholders of record as of the record date;

•   extend the expiration date by at least ten days; and

•   offer all subscribers no less than ten days to revoke any subscription already submitted.

The extension of the expiration date will not, in and of itself, be treated as a significant amendment for these purposes.

Exercise of Subscription Rights

You may exercise your subscription rights by delivering to the Subscription Agent at or prior to 5:00 p.m., New York City time, on ___, 2005, the date on which the subscription rights expire:

•   A properly completed and duly executed rights subscription certificate;

•   Any required signature guarantees; and

•   Payment in full of $___ per share to be purchased through your basic subscription and over-subscription privileges.

You should deliver your rights subscription certificate and payment to the Subscription Agent at the address shown below under the heading “Subscription Agent.” Funds delivered to the Subscription Agent will be held by the Subscription Agent pending the expiration of the rights offering. We will not pay you interest on funds delivered to the Subscription Agent pursuant to the exercise of rights. To the extent your payment includes payment in excess of the amount due for the shares subscribed for by you and issued to you, including payment for shares subscribed for pursuant to your over-subscription privilege which are not available, the Subscription Excess, you will receive a refund, without interest, of the Subscription Excess as soon as practicable after the expiration of the rights offering.

Method of Payment

Payment for the shares must be made in U.S. dollars by check or bank draft (cashier’s check) drawn upon a U.S. bank or a money order payable to “HSBC Bank USA, National Association, as Subscription Agent” or by wire transfer of immediately available funds to the account maintained by the Subscription Agent at HSBC Bank USA,

National Association, ABA #021001088, Account No. 002-60006-4. Any wire transfer of funds should clearly indicate the identity of the subscriber who is paying the subscription price by the wire transfer.

Payment will be deemed to have been received by the Subscription Agent only upon:

•   receipt and clearance of any uncertified check;

•   receipt by the Subscription Agent of any certified check or bank draft drawn upon a U.S. bank, any money order, or any funds transferred by wire transfers; or

•   receipt of good funds in the Subscription Agent’s account designated above.

Please note that funds paid by uncertified personal check may take at least five business days to clear. Accordingly, if you wish to pay by means of an uncertified personal check, we urge you to make payment sufficiently in advance of ___, 2005, to ensure that the Subscription Agent receives cleared funds before that date. We also urge you to consider payment by means of a certified or cashier’s check or money order.

Instructions for Completing Your Rights Subscription Certificate

You should read and follow the instructions accompanying the rights subscription certificate(s) carefully. If you want to exercise your subscription rights, you should send your rights subscription certificate(s) with your subscription price payment to the Subscription Agent. Do not send your rights subscription certificate(s) and subscription price payment to us.

You are responsible for the method of delivery of your rights subscription certificate(s) with your subscription price payment to the Subscription Agent. If you send your rights subscription certificate(s) and subscription price payment by mail, we recommend that you send them by registered mail, properly insured, with return receipt requested. You should allow a sufficient number of days to ensure delivery to the Subscription Agent prior to the time the rights offering expires. Because uncertified personal checks may take at least five business days to clear, you are strongly urged to pay, or arrange for payment, by means of a certified or cashier’s check or money order.

Guaranteed Delivery Procedures

If you want to exercise your subscription rights, but time will not permit your rights subscription certificate to reach the Subscription Agent on or prior to ___, 2005, you may exercise your subscription rights if you satisfy the following guaranteed delivery procedures:

(1) You send, and the Subscription Agent receives, payment in full for each share being subscribed for through the subscription rights, on or prior to ___, 2005;

(2) You send, and the Subscription Agent receives, on or prior to ___, 2005, a notice of guaranteed delivery, substantially in the form provided with the attached instructions, from a member firm of a registered national securities exchange or a member of the National Association of Securities Dealers, Inc., or a commercial bank or trust company having an office or correspondent in the United States. The notice of guaranteed delivery must state your name, the number of subscription rights that you hold, and the number of shares that you wish to purchase pursuant to your basic subscription privilege and the number of shares, if any (not to exceed the number of shares you may purchase under your basic subscription privilege), you wish to purchase pursuant to your over-subscription privilege. The notice of guaranteed delivery must guarantee the delivery of your rights subscription certificate to the Subscription Agent within three New York Stock Exchange trading days following the date that you executed the notice of guaranteed delivery; and

(3) You send, and the Subscription Agent receives, your properly completed and duly executed rights subscription certificate, including any required signature guarantees, within three New York Stock Exchange trading days following the date that you executed the notice of guaranteed delivery.

The notice of guaranteed delivery may be delivered to the Subscription Agent in the same manner as your rights subscription certificate at the address set forth below under “— Subscription Agent,” or may be transmitted to the Subscription Agent by facsimile transmission, to facsimile number (718) 488-4488. You can obtain additional copies of the form of notice of guaranteed delivery by requesting them from the Subscription Agent at the address or phone number set forth below under “— Subscription Agent.”

Signature Guarantees

Unless a rights subscription certificate either provides that the shares to be issued pursuant to the exercise of the rights represented thereby are to be issued to the holder of such rights or is submitted for the account of an Eligible Guarantor Institution, signatures on the rights subscription certificate must be guaranteed by an Eligible Guarantor Institution, as defined in Rule 17Ad-15 of the Securities Exchange Act of 1934, as amended, subject to the standards and procedures adopted by the Subscription Agent. Eligible Guarantor Institutions include banks, brokers, dealers, credit unions, national securities exchanges and savings associations.

Notice to Record Holders Holding on Behalf of Beneficial Owners

If you are a broker, a trustee or a depository for securities, or you otherwise hold shares of our common stock for the account of others as a nominee holder, you should notify the beneficial owner of such shares as soon as possible to obtain instructions with respect to their subscription rights, as set forth in the instructions we have provided to you for your distribution to beneficial owners. If the beneficial owner so instructs, you should complete the appropriate rights subscription certificate and, in the case of the over-subscription privilege, the related nominee holder certification, and submit them to the Subscription Agent with the proper payment. If you hold shares of our common stock for the account(s) of more than one beneficial owner, you may exercise the number of subscription rights to which all such beneficial owners in the aggregate otherwise would have been entitled had they been direct record holders of our common stock on the record date for the rights offering, provided that, you, as a nominee record holder, make a proper showing to the Subscription Agent by submitting the form entitled “Nominee Holder Certification” which we will provide to you with your rights offering materials. If you did not receive this form, you should contact our subscription agent at (800) 662-9844 to request a copy.

Beneficial Owners

If you are a beneficial owner of shares of our common stock or will receive your subscription rights through a broker, custodian bank or other nominee, we will ask your broker, custodian bank or other nominee to notify you of this rights offering. If you wish to exercise your subscription rights, only your broker, custodian bank or other nominee can act for you. If you hold certificates of our common stock directly and would prefer to have your broker, custodian bank or other nominee exercise your subscription rights, you should contact your nominee and request it to effect the transaction for you. To indicate your decision with respect to your subscription rights, you should complete and return to your broker, custodian bank or other nominee the form entitled “Beneficial Owner Election Form.” You should receive this form from your broker, custodian bank or other nominee with the other rights offering materials. If you wish to obtain a separate rights subscription certificate, you should contact the nominee as soon as possible and request that a separate rights subscription certificate be issued to you. You should contact your broker, custodian bank or other nominee if you do not receive this form, but believe that you are entitled to participate in the rights offering. We are not responsible if you do not receive the form from your broker, custodian bank or nominee or if you receive it without sufficient time to respond.

Procedures for DTC Participants

We expect that your exercise of your subscription rights may be made through the facilities of The Depository Trust Company. If your subscription rights are held of record through DTC, you may exercise your basic subscription privilege and your over-subscription privilege by instructing DTC to transfer your subscription rights from your account to the account of the Subscription Agent, together with certification as to the aggregate number of subscription rights you are exercising and the number of shares you are subscribing for, and your subscription price payment for each share you subscribed for.

Ambiguities in Exercise of Rights

If you do not specify the number of shares being subscribed for on your rights subscription certificate, or if your payment is not sufficient to pay the total purchase price for all of the shares that you indicated you wished to purchase, you will be deemed to have subscribed for the maximum number of whole shares that could be subscribed for with the payment that the Subscription Agent receives from you. If your payment exceeds the total purchase price for all of the shares shown on your rights subscription certificate, your payment will be applied, until depleted, to subscribe for shares in the following order:

(1) to subscribe for the number of shares, if any, that you indicated on the rights subscription certificate that you wished to purchase through your basic subscription privilege;

(2) to subscribe for shares until your basic subscription privilege has been fully exercised; and

(3) to subscribe for additional shares pursuant to the over-subscription privilege (subject to certain limitations).

Any excess payment remaining after the foregoing allocation will be returned to you by the Subscription Agent as soon as practicable by mail, without interest or deduction.

Right to Block Exercise Due to Regulatory Issue

We reserve the right to refuse the exercise of all of the rights, or some of the rights, by any holder of rights where, in our opinion, we or the holder would be required to obtain prior clearance or approval from any state, federal or foreign regulatory authorities or from our shareholders for the exercise of rights or ownership of the shares based on any state, federal or foreign laws, rules or regulations if, at the expiration time, this clearance or approval has not been obtained. We will exercise this right if we become aware that any such exercise, or partial exercise, may violate any regulation to which we are, or may become, subject. We are not undertaking to advise you of any such required clearance or approval, to obtain any clearance or approval or pay for any expenses incurred in seeking that clearance or approval.

We are not making this rights offering in any state or other jurisdiction in which it is unlawful to do so, nor are we selling or accepting any offers to purchase any shares from rights holders who are residents of those states or other jurisdictions. We may delay the commencement of the rights offering in those states or other jurisdictions, or change the terms of the rights offering, in order to comply with the securities law requirements of those states or other jurisdictions. We may decline to make modifications to the terms of the rights offering requested by those states or other jurisdictions, in which case, if you are a resident in those states or jurisdictions or, if you are otherwise prohibited by federal or state laws or regulations from accepting or exercising the subscription rights, you will not be eligible to participate in the rights offering.

Our Decision Binding

All questions concerning the timeliness, validity, form and eligibility of any exercise of subscription rights will be determined by us, and our determinations will be final and binding. In our sole discretion, we may waive any defect or irregularity, or permit a defect or irregularity to be corrected within such time as we may determine, or reject the purported exercise of any subscription right by reason of any defect or irregularity in such exercise. Subscriptions will not be deemed to have been received or accepted until all irregularities have been waived or cured within such time as we determine in our sole discretion. Neither we nor the Subscription Agent will be under any duty to notify you of any defect or irregularity in connection with the submission of a rights subscription certificate or incur any liability for failure to give such notification.

Shares of Common Stock Outstanding After the Rights Offering

After we issue all of the shares offered in the rights offering, ___ shares of our common stock will be issued and outstanding. This would represent a ___% increase in the number of outstanding shares of our common stock. If you do not fully exercise your basic subscription privilege, the percentage of common stock that you hold will decrease. However, even if you do fully exercise your basic subscription privilege, your ownership of common stock may be slightly diluted because you may not purchase fractional shares.

Fees and Expenses

We will pay all fees charged by the Subscription Agent. You are responsible for paying any other commissions, fees, taxes or other expenses incurred in connection with the exercise of the subscription rights. Neither we nor the Subscription Agent will pay such expenses.

Foreign or Unknown Addresses

We are not mailing rights subscription certificates to shareholders whose addresses are outside the United States or who have an Army Post Office or Fleet Post Office address. In those cases, the rights subscription certificates will be held by HSBC Bank USA, National Association for those shareholders. To exercise their rights, these shareholders must notify HSBC Bank USA, National Association, attention: Subscription Agent at telephone number (800) 662-9844, prior to 11:00 a.m., New York City time, on the third business day prior to the expiration date of this rights offering.

Issuance of Stock Certificates

Stock certificates for the underlying shares of our common stock purchased in this rights offering will be issued as soon as practicable after the expiration date. Our Subscription Agent, HSBC Bank USA, National Association, will deliver subscription payments to us only after consummation of this rights offering and the issuance of stock certificates to our shareholders that exercised rights. Unless you instruct otherwise in your rights subscription certificate form, shares purchased by the exercise of rights will be registered in the name of the person exercising the rights.

Subscription Agent

We have appointed HSBC Bank USA, National Association as Subscription Agent for the rights offering. The Subscription Agent’s address for packages sent by mail or overnight delivery is:

HSBC Bank USA, National Association
One Hanson Place, Lower Level
Brooklyn, NY 11243

The Subscription Agent’s telephone number is (800) 662-9844, and its facsimile number is (718) 488-4488. You should deliver your rights subscription certificate, payment of the subscription price and notice of guaranteed delivery (if any) to the Subscription Agent. We will pay the fees and certain expenses of HSBC Bank USA, National Association, as the Subscription Agent, which we estimate will total approximately $35,000. Under certain circumstances, we may indemnify HSBC Bank USA, National Association from certain liabilities that may arise in connection with the rights offering.

If You Have Questions

If you have questions or need assistance concerning the procedure for exercising subscription rights, or if you would like additional copies of this prospectus, the Instructions for Use of Blue Ridge and Big Boulder Rights Subscription Certificates, or the Notice of Guaranteed Delivery, you should contact HSBC Bank USA, National Association at the address and telephone number set forth above. All other questions should be directed to Christine A. Liebold, our Secretary, at (570) 443-8433, extension 1028.

Important

Please carefully read the instructions accompanying the rights subscription certificate and follow those instructions in detail. Do not send rights subscription certificates directly to us. You are responsible for choosing the payment and delivery method for your rights subscription certificate, and you bear the risks associated with such delivery. If you choose to deliver your rights subscription certificate and payment by mail, we recommend that you use registered mail, properly insured, with return receipt requested. We also recommend that you allow a sufficient number of days to ensure delivery to the Subscription Agent and clearance of payment prior to ___, 2005. Because uncertified personal checks may take at least five business days to clear, we strongly urge you to pay, or arrange for payment, by means of certified or cashier’s check or money order.

DETERMINATION OF THE SUBSCRIPTION PRICE

Our board of directors set all of the terms and conditions of this rights offering, including the $___ per share subscription price. The board of directors makes no recommendation to you about whether you should exercise any of your subscription rights. The board of directors considered the following factors in establishing the subscription price: the strategic alternatives available to us for raising capital, the recent trading price history of our common stock, our business prospects and general conditions in the securities markets. The $___ per share subscription price, however, does not necessarily bear any relationship to our past or expected future results of operations, cash flows, current financial condition, or any other established criteria for value.

You should not consider the $___ per share subscription price as an indication of the value of Blue Ridge or Big Boulder, or our common stock. We cannot assure you that you will be able to sell shares purchased during this offering at a price equal to or greater than the $___ per share subscription price. On January 3, 2005, the closing price of a share of our common stock on the OTC Bulletin Board was $30.25.

SELECTED FINANCIAL DATA

You should read the following selected financial data together with our consolidated financial statements and the related notes appearing at the end of this prospectus and the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” section and other financial data included in this prospectus.


							Seven Months									Nine Months			Nine Months
	Year Ended			Year Ended			Ended			Year Ended			Year Ended			Ended			Ended
	March 31,			March 31,			October 31,			October 31,			October 31,			July 31,			July 31,
	2000			2001			2001 (1)			2002			2003			2003			2004
Consolidated Statement of Operations Data:
Revenues:
Ski operations		11,565,643		$	11,267,371		$	0		$	10,015,075		$	10,269,984			10,269,983		$	9,657,793
Real estate management		2,901,700			3,109,799			1,562,649			3,029,396			3,129,394			2,446,903			2,707,995
Summer recreation operations		2,516,262			2,651,591			2,099,387			2,439,963			1,876,724			920,205			1,303,747
Land resource management		0			0			0			1,280,021			2,620,907			1,974,232			923,341
Rental income		1,903,314			1,867,690			1,100,031			1,871,456			1,964,609			1,509,402			1,246,883

Total Revenues		18,886,919			18,896,451			4,762,067			18,635,911			19,861,618			17,120,725			15,839,759


Costs and Expenses:
Ski operations		11,135,115			11,246,003			1,100,477			10,108,567			10,669,427			10,109,600			10,809,136
Real estate management		2,727,460			2,676,191			1,419,318			2,585,552			2,750,152			2,080,574			2,261,090
Summer recreation operations		2,071,187			2,292,473			1,935,710			2,250,002			1,738,786			1,016,099			1,254,164
Land resource management		0			0			0			523,542			585,137			800,701			425,257
Rental income		936,870			950,258			576,287			968,084			3,256,216			3,019,019			616,528
General and administration		1,084,649			1,768,375			650,425			703,976			1,055,746			839,921			666,970
Asset impairment loss		––			––			––			––			––			––			1,021,034

Total Costs and Expenses		17,955,281			18,933,300			5,682,217			17,139,723			20,055,464			17,865,914			17,054,179


Income (loss) from operations		931,638			(36,849	)		(920,150	)		1,496,188			(193,846	)		(745,189	)		(1,214,420	)


Other Income:
Interest and other Income		620,203			866,127			55,642			18,066			22,475			4,077			13,116,312
Interest Expense		(732,201	)		(736,865	)		(296,041	)		(374,905	)		(424,766	)		(320,472	)		(414,424	)

Other Income (loss), net		(111,998	)		129,262			(240,399	)		(356,839	)		(402,291	)		(316,395	)		12,701,888


Income (loss) before Income taxes		819,640			92,413			(1,160,549	)		1,139,349			(596,137	)		(1,061,584	)		11,487,468


Income Taxes:
Provision (benefit) for Income taxes		––			––			––			––			––			––			––
Current		382,000			259,417			(46,453	)		14,000			(14,000	)		––			––
Deferred		(43,000	)		(419,536	)		(309,674	)		438,591			297,000			(310,000	)		4,588,600

		339,000			(160,119	)		(356,127	)		452,591			283,000			310,000			4,588,600

Net Income (loss)		480,640			252,532			(804,422	)		686,758			(879,137	)		(751,584	)		6,898,868

Earnings retained in business:
Beginning of year		9,550,703			10,031,343			10,283,875			9,479,453			10,166,211			––			––

End of year	$	10,031,343		$	10,283,875		$	9,479,453		$	10,166,211		$	9,287,074		$	––		$	––


Basic Earnings per weighted average combined share	$	0.24		$	0.13		($	0.42	)	$	0.36		($	0.45	)	($	0.39	)		3.60
Diluted earnings per weighted average combined share	$	0.24		$	0.13		($	0.42	)	$	0.36		($	0.45	)	($	0.39	)		3.53

(1) On August 28, 2001, the board of directors resolved that Blue Ridge and Big Boulder’s fiscal year end be changed from March 31 to October 31. This change became effective for each of Blue Ridge and Big Boulder on October 31, 2001, resulting in a 7 month transition period which does not include any ski area revenue.


	As of			As of			As of
	October 31, 2002			October 31, 2003			July 31, 2004
							(Unaudited)
Combined Condensed Balance Sheet Data:
Cash, cash equivalents and marketable securities	$	261,311		$	178,315		$	94,274
Working capital		(5,914,606	)		(8,136,487	)		(12,182,120	)
Total assets		24,645,828			27,960,410			43,909,843
Total stockholders’ (deficit) equity		10,202,521			9,523,759			16,422,627

MANAGEMENT’S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

You should read the following discussion and analysis of our financial condition and results of operations together with our consolidated financial statements and the related notes appearing at the end of this prospectus. Some of the information contained in this discussion and analysis or set forth elsewhere in this prospectus, including information with respect to our plans and strategy for our business and related financing, includes forward-looking statements that involve risks and uncertainties. You should review the “Risk Factors” section of this prospectus for a discussion of important factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis.

Overview

Our principal business is the development, marketing and operation of “drive-to” and “destination” resorts at our two ski areas, Jack Frost Mountain and Big Boulder. Also significant to our operations is the management and development of our real estate and rental properties.

During the first nine months of Fiscal 2004, we realized significant growth in the earnings per weighted average combined share of common stock, primarily as a result of the section 1031 tax deferred exchange sale of the Dreshertown Plaza Shopping Center. This sale enabled us to purchase two additional shopping centers with a combined asset value of approximately $20 million.

Since completion of our last real estate development projects in the late 1980’s, management has been focused on the promotion and maintenance of our two ski areas, our summer operations and our four resort communities. The homes within the four resort communities are privately owned and approximately 25% are enrolled in our rental program. These privately owned homes are designed to appeal to vacationers seeking comfortable and affordable rental accommodations and to facilitate more frequent short-stay getaways. Over the past three years, management has determined, based on market trends and historically lower interest rates, to refocus our attention on the development of our real estate holdings. Management believes it will be securing sufficient capital through this rights offering, existing cash flows and other borrowings for this purpose. During Fiscal 2005, we expect to invest approximately $1 million in our ski operations, which funds will be derived from our ski operations’ cash flow. We also expect to invest in excess of $5 million in real estate development during Fiscal 2005 from the proceeds generated by this rights offering. We believe that the addition of new homes to our existing resort communities will enable our ski operations to remain competitive in a tight recreational market due to the existing weak economy.

We also made the decision this past summer to close two of our summer recreational centers, which resulted in the recognition of impairment losses in Fiscal 2004. The Fern Ridge Campground was closed in October 2004 due to Tobyhanna Township’s non-renewal of our sewage permit. The Traxx Motorcross Park closed in November 2004. This site will be used for an additional housing community.

Critical Accounting Policies and Significant Judgments and Estimates

We have identified the most critical accounting policies upon which our financial status depends. The critical policies and estimates were determined by considering accounting policies that involve the most complex or subjective decisions or assessments. The most critical accounting policies identified relate to revenue recognition, deferred operating costs, net deferred tax assets and liabilities, land and land development costs, the valuation of long-lived assets and recognition of deferred revenues.

Timbering revenues from stumpage contracts are recognized in accordance with Staff Accounting Bulleting No. 104 – Revenue Recognition, SAB 104. At the time a stumpage contract is signed, the risk of ownership has been passed to the buyer at a fixed, determinable cost. Reasonable assurance of collectibility has been determined by the date of signing, and our few obligations have already been met. Therefore, full accrual recognition at the time of contract execution is appropriate under SAB 104 guidance.

Prior to Fiscal 2004, our estimate of deferred operating costs was primarily based on deferring costs directly related to ski operations in order to match those costs to the period in which ski operating revenues were

recognized. Ski operating revenues were recognized principally over the months of December through March. The deferred costs consisted principally of depreciation, insurance, real estate taxes, advertising, repairs, maintenance and supplies. Effective April 1, 2004, we elected to change this significant accounting procedure relative to deferring certain ski operating costs incurred during the non-ski season. Upon investigation of competitors’ practices, management has determined that a change in accounting principle should be made in order to report ski operations in accordance with the predominant industry practice used by similar operating companies. Additionally, we believe the new method better enables users of the financial statements, including management, to benchmark our ski operations segment results against our competitors by removing the timing difference associated with matching certain ski operating costs incurred in a prior fiscal year against current fiscal year ski operating revenues.

We capitalize as land and land development costs the original acquisition cost, direct construction and development costs, property taxes, interest incurred on costs related to land under development and other related costs (engineering, surveying, landscaping, etc.) until the property reaches its intended use. The cost of sales for individual parcels of real estate or condominium units within a project is determined using the relative sales value method. Selling expenses are charged against income in the period incurred.

Our estimate of deferred tax assets and liabilities is primarily based on the difference between the tax basis and financial reporting basis of depreciable assets, like-kind exchanges of assets, accruals and deferred revenues.

Our valuation of long-lived assets, namely properties, is based on historical cost. Depreciation and amortization is provided principally using the straight-line method over the estimated useful life of the class of property. Upon sale or retirement of depreciable property, the cost and related accumulated depreciation are removed from the related accounts, and resulting gains or losses are reflected in income.

Interest, real estate taxes, and insurance costs, including those costs associated with holding unimproved land, are normally charged to expense as they are incurred. Costs of land development, such as surveyor and consultant fees, are capitalized as land costs. Interest cost incurred during the construction of facilities is capitalized as part of the cost of such facilities. Maintenance and repairs are charged to expense, and major renewals and betterments are added to property accounts.

Impairment losses are recognized in operating income, as they are determined. We review our long-lived assets whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. In that event, we calculate the expected future net cash flows to be generated by the asset. If those net future cash flows are less than the carrying value of the asset, an impairment loss is recognized in operating income. The impairment loss is the difference between the carrying value and the fair value of the asset. Two such losses were recognized as of July 31, 2004.

Deferred revenue consists of revenue billed in advance for services and dues that are not yet earned. Revenue billed in advance for services consists of season lift tickets and advance ticket sales and gift certificates for the ski resorts. We recognize revenue billed in advance ratably over the principal months of the ski season, December through March. Dues that are not yet earned consist of rents related to our commercial properties that have been paid in advance, and dues related to memberships in our hunting and fishing clubs paid in advance. We recognize revenue related to the hunting and fishing clubs over the one-year period that the dues cover.

Results of Operations

Nine Months Ended July 31, 2004 Versus Nine Months Ended July 31, 2003

Operations for the three and nine months ended July 31, 2004 resulted in a net (loss) income of $(0.41) and $3.60 per combined share compared to a net loss of $(0.77) and $(0.39) per combined share for the three and nine months ended July 31, 2003.

Combined revenue of $2,628,174 and $15,839,759 represents an increase of $250,226 and a decrease of $1,280,966 as compared to the three and nine months ended July 31, 2003. Ski operations revenue increased $39,385 and decreased $612,190 for the three and nine months ended July 31, 2004 as compared to the three and nine months ended July 31, 2003. Real Estate Management revenue increased $136,790 and $261,092 for the three and nine months ended July 31, 2004 as compared to the three and nine months ended July 31, 2003. Summer recreation operations revenue increased $392,988 and $383,542 for the three and nine months ended July 31, 2004 as compared to the three and nine months ended July 31, 2003. Land resource management revenue decreased $172,763 and $1,050,891 for the three and nine months ended July 31, 2004 as compared to the three and nine

months ended July 31, 2003. Rental income revenue decreased $146,174 and $262,519 for the three and nine months ended July 31, 2004 as compared to the three and nine months ended July 31, 2003.

Ski operations revenue decrease of $612,190 for the nine months ended July 31, 2004 as compared to the nine months ended July 31, 2003 was due to a decrease in tubing revenue (34%), rental shop revenue (24%), ski school revenue (25%), food revenue (5%) and retail revenue (11%). Warm temperatures and rainy weather in December, followed by bitterly cold weather in January, resulted in lower than expected skier and tuber visits to both ski areas.

Real Estate Management revenue increased $261,092 for the nine months ended July 31, 2004 as compared to the nine months ended July 31, 2003. This increase in revenue is attributable to property management of homes in our resort communities (39%), property sales within our resort communities (21%), an increase in tower rent (9%), and an increase in hunting land leases and Stretch fishing memberships (5%).

Summer recreation operations revenue increased $383,542 for nine months ended July 31, 2004 as compared to the nine months ended July 31, 2003. This increase was the result of a timing difference between the 2004 Blues Summer Festival (68%) and the 2003 Blues Summer Festival. The 2004 Blues Festival was held in July (3rd quarter of fiscal year 2004) and the 2003 Blues Summer Festival was held in August (the 4th quarter of fiscal year 2003). Campground revenue increased by 36%, which is the result of recognition of previously deferred campground revenue.

Land resource management revenue decreased $1,050,891 for the nine months ended July 31, 2004 as compared to the nine months ended July 31, 2003. This decrease is attributable to land sale revenue decreasing by $481,854 (46%) and timbering revenue decreasing $569,037 (54%). Land sales and timbering revenues are subject to fluctuating market conditions, interest rates and selective harvesting of inventory. They do not follow any predictable selling pattern.

Rental operations revenue decreased $262,519 for the nine months ended July 31, 2004 as compared to the nine months ended July 31, 2003. This decrease is attributable to a reduction of rental income from the Dreshertown Shopping Plaza. This shopping plaza was sold on March 10, 2004. We replaced Dreshertown with two new shopping centers, which were acquired in June 2004.

Combined operating costs decreased $1,659,818 during the first nine months of the fiscal year ending October 31, 2004 as compared to the nine months ended July 31, 2003. Ski operating expenses increased $699,536. This increase was primarily attributable to management’s decision to adopt an accounting principle change, whereby costs for the ski areas are no longer being deferred. Previously certain ski area costs from April through October were deferred until the following fiscal year beginning in November. For the fiscal year ended October 31, 2004 ski area costs for the period April through October, will be recognized in the month incurred.

Real Estate Management operating expenses increased $180,516 for the first nine months of Fiscal 2004 as compared to the nine months ended July 31, 2003. This increase is attributable to an increase in expenses for property management in our resort communities (50%), commissions and broker fees relating to property sales in our resort communities (38%), and an increase in real estate property taxes on the tower rentals, land hunting leases and the Stretch fishing stream (12%).

Summer recreational operations expenses increased $238,065 for the first nine months of Fiscal 2004 as compared to the nine months ended July 31, 2003. This increase was the result of a timing difference. The Blues Summer Festival was held in July 2004 (3rd fiscal quarter 2004) and the 2003 Blues Summer Festival was held in August (4th fiscal quarter 2003).

Land Resource Management operation expenses decreased $375,444 for the first nine months of Fiscal 2004 as compared to the nine months ended July 31, 2003. This decrease was the result of a decrease in the cost of land sold of $96,508 (26%) and capitalizing salaries and wages (34%) and consultant fees (37%) as part of land development costs in Fiscal 2004.

Rental income operation expenses decreased $2,402,491 for the nine months ended July 31, 2004 as compared to the nine months ended July 31, 2003. This decrease was due primarily to incurring approximately $2,000,000 of expense in buying out the management company of the Dreshertown Shopping Plaza in the prior year.

General and Administrative expenses decreased $172,951 for the first nine months of Fiscal 2004 as compared to the nine months ended July 31, 2003. This decrease was due primarily to the fact that no compensation

costs were recognized pertaining to the employee stock options in fiscal 2004 as compared to Fiscal 2003 when there was compensation costs recognized as a result of employee stock option reloads.

Asset impairment losses were recorded in July 2004 for two summer recreational operating centers: the Fern Ridge Campground and Traxx Motorcross. This will be the final year of operation for both centers. The impairment loss for the Fern Ridge Campground was $452,325 and the loss for Traxx Motorcross was $568,709. No such losses were recorded in 2003.

Interest and other income increased $13,112,235 for the nine months ended July 31, 2004 as compared to the nine months ended July 31, 2003. This increase was the result of recognizing a gain on the sale of the Dreshertown Shopping Plaza for approximately $12,027,000 on March 10, 2004, which was treated for tax purposes, as a section 1031 tax deferred exchange, and a gain on the sale of the communication towers on July 1, 2004 for approximately $1,084,000.

Interest expense increased $93,952 for the first nine months of Fiscal 2004 as compared to the nine months ended July 31, 2003. This increase is attributable to an additional line of credit for land resource management purposes (3%), the interest on the capital leases (19%) for the groomers and compressors at both ski areas, the additional mortgages taken on investment properties (47%) and the Oxbridge Square Shopping Center and the Coursey Commons Shopping Center (31%) which were acquired to complete the section 1031 tax deferred exchange from the sale of the Dreshertown Shopping Center. These increases were offset by repayment on existing debt.

Fiscal 2003 Versus Fiscal 2002

For fiscal year ended October 31, 2003, we reported a net loss of $(879,137) or $(.45) per combined share as compared with net income of $686,758 or $.36 per combined share for fiscal year ended October 31, 2002.

Combined revenue of $19,861,618 represents an increase of $ 1,225,707 or 6% when compared to Fiscal 2002. Ski Operations increased $254,909 or 2%, and Real Estate Management Operations/Rental Operations increased $193,151 or 4% when compared to Fiscal 2002.

The Ski Operations in Fiscal 2003 had approximately 236,000 skier visits to our slopes compared to 223,000 skier visits for Fiscal 2002. Revenue per skier was $30 compared to $32 for Fiscal 2002 for a decrease of $2 or 7 %. Tubing operations had approximately 63,000 tuber visits for both Fiscal 2003 and Fiscal 2002. Revenue per tuber was $15 compared to $16 last season for a decrease of $1 or 7%. The ski areas operated for a combined total of 184 days compared to 160 days for Fiscal 2002. The food and beverage operations at the ski areas contributed revenue of $7.30 per skier visit compared to $6.94 for Fiscal 2002 for an increase of $.36 or 5%. The retail shop operations at the ski areas contributed revenue of $2.08 per skier visit compared to $1.79 for Fiscal 2002 for an increase of $.29 or 14%.

The Real Estate Management Operations/Rental Operations increase is attributed to an increase in the rent of investment properties. The Dreshertown Plaza shopping center’s revenue for Fiscal 2003 was $1,644,100 as compared to $1,538,013 for Fiscal 2002 for an increase of $106,087 or 7%.

In Fiscal 2003, Summer Recreation Operations had revenue of $1,876,724 as compared to $2,439,963 for Fiscal 2002 which represents a decrease of $563,239 or 23%. This decrease is mainly attributed to having only one major summer music festival in Fiscal 2003. In Fiscal 2002 there were three major music festivals. In Fiscal 2003, Festival revenue was $468,746 as compared to $810,757 in Fiscal 2002, which represents a decrease of $342,011 or 73%. Campground revenue was also affected by the reduction of music festivals. In Fiscal 2003, Campground revenue was $324,716 as compared to $396,406 in Fiscal 2002, which represents a decrease of $71,690 or 22%. In Fiscal 2003, Splatter (Paintball) revenue was $457,449 as compared to $485,901 in Fiscal 2002, which represents a decrease of $28,452 or 6%. In Fiscal 2003, Traxx (Motorcross Park) was $425,777 as compared to $550,673 in Fiscal 2002, which represents a decrease of $124,896 or 29%. These decreases in Summer Recreation Operations revenues were also the result of a weak economy and rainy weather conditions throughout the spring and summer of 2003.

In Fiscal 2003, Land Resource Management had revenue of $2,620,907 as compared to $1,280,021 for Fiscal 2002. In Fiscal 2003, 134 acres of land was sold generating $1,398,487 with a basis of $9,831 as compared to Fiscal 2002 in which 27 acres of land were sold generating revenue of $106,756 with a basis of $1,153. This results in an increase of $1,291,731 or 92% for Fiscal 2003 as compared to Fiscal 2002. To date approximately 5% of our 19,528 acres have been marked for timbering. A forester has been hired to generate a long-term plan of managed

timbering which pays specific attention to protecting the environment and retaining the value of the land. In Fiscal 2003, timber sales were $1,222,420 as compared to Fiscal 2002, which generated $1,173,265 of revenue for an increase of $49,155 or 4%.

Operating costs associated with Ski Operations for Fiscal 2003 were $10,669,427 as compared to $10,108,567 for Fiscal 2002, which represents an increase of $560,860 or 5%. This increase was due to higher insurance rates (40%) and depreciation expenses (52%).

Operating costs associated with Real Estate Management Operations/Rental Operations for Fiscal 2003 were $6,006,368 as compared to $3,553,636 for Fiscal 2002, which represents an increase of $2,452,732 or 41%. The increase was mainly attributable to the $1,972,090 (80%), buyout of Dreshertown Plaza shopping center’s management company agreement and $150,000 contingency accrual (6%) for an environmental cleanup at the shopping center.

Operating costs associated with Summer Recreation Operations for Fiscal 2003 were $1,738,786 as compared with $2,250,002 for Fiscal 2002, which represents a decrease of $511,216 or 23%. This decrease was mainly attributable to having only one major summer music festival in Fiscal 2003 as compared to three in Fiscal 2002.

Operating costs associated with Land Resource Management for Fiscal 2003 were $585,137 as compared with $523,542 for Fiscal 2002, which represents an increase of $61,595 or 11%. This increase is attributable to an increase in cost of goods for the construction and excavation division.

General and Administration costs for Fiscal 2003 were $1,055,746 as compared with $703,976 for Fiscal 2002 which represents an increase of $351,770 or 50%. This increase is attributable to the reclassifying of salaries from the ski areas (30%) and recognition of compensation cost related to extending the term of certain stock options (70%).

Interest and Other Income increased by $4,409 in Fiscal 2003 as compared to Fiscal 2002. Interest expense for Fiscal 2003 was $424,766 as compared to $374,905 for Fiscal 2002, which represents an increase of $49,861. This increase is attributable to the mortgages acquired for the residential investment properties, and approximately $2,100,000 of new debt related to ski resort equipment.

The effective Tax Rate for Fiscal 2003 and Fiscal 2002 was 40%.

Fiscal 2002 Versus the Seven Months Ended October 31, 2001

For Fiscal Year ended October 31, 2002, we reported net income of $686,758 or $.36 per combined share as compared with a net loss of ($804,422) or ($.42) per combined share for the seven months ended October 31, 2001.

Combined revenue of $ 18,635,911 represents an increase of $ 13,873,844 or 74% when compared to the seven months ended October 31, 2001. Ski Operations increased $10,015,075 or 100%, and Real Estate Management Operations / Rental Operations increased $2,238,172 or 84% when compared to the seven months ended October 31, 2001.

The Ski Operations had approximately 223,000 skier visits to our slopes compared to no skier visits for the seven months ended October 31, 2001. Revenue per skier was $32 compared to $0 for the seven months ended October 31, 2001 for an increase of $32 or 100 %. Tubing operations had approximately 63,000 tuber visits compared to no tuber visits for the seven months ended October 31, 2001. The increase of 63,000 tuber visits represents a 100% increase. Revenue per tuber was $16 compared to $0.00 last season for an increase of $16 or 100%. The ski areas operated for a combined total of 160 days compared to 0 days for the seven months ended October 31, 2001. The food and beverage operations at the ski areas contributed revenue of $6.94 per skier visit. The retail shop operations at the ski areas contributed revenue of $1.79 per skier visit compared to $0 for the seven months ended October 31, 2001.

The Real Estate Management Operations increase is attributed to the short year comparison as noted above. Disposition of properties occur sporadically and do not follow any pattern during the fiscal year.

In Fiscal 2002, the new business segment – Land Resource Management – generated $1,280,021 in revenue. 27 acres of land were sold generating revenue of $106,756 with a basis of $1,153. No land sales occurred

in the seven months ended October 31, 2001. To date approximately 5% of our 19,714 acres have been marked for timbering. A forester has been hired to generate a long-term plan of managed timbering which pays specific attention to protecting the environment and retaining the value of the land. In Fiscal 2002, timber sales have generated $1,173,265 of revenue.

Operating costs associated with Ski Operations increased by $9,008,090 when compared to the seven months ended October 31, 2001. This increase is attributed to the short year comparison as noted above.

Operating costs associated with Real Estate Management Operations/Rental Operations increased by $1,558,031 when compared to the seven months ended October 31, 2001. The increase is due to the comparison to the short period.

General and Administration expenses increased by $53,551 when compared to the seven months ended October 31, 2001. The increase is due to the comparison to the short period as noted above.

Interest and Other Income decreased by $37,576 when compared to the seven months ended October 31, 2001. This decrease is attributable to decreased interest income in Fiscal 2002 (54%) and a prior period tax refund recorded in the seven months ended October 31, 2001 (46%). Interest expense increased by $78,864 when compared to seven months ended October 31, 2001. This increase is attributed to the comparison to the short period as noted above.

The effective Tax Rate for Fiscal 2002 and the seven months ended October 31, 2001 was 40% and 34% respectively.

Seven Months Ended October 31, 2001 Versus Fiscal 2001

At an executive session held on August 28, 2001, the board of directors resolved that our fiscal year end be changed from March 31st to October 31st. This change is effective for each of Blue Ridge and Big Boulder as of October 31, 2001. The purpose of the change is to allow for a more natural business year and to conform our reporting period to that of the majority stockholder’s financial statements. Because of the change in fiscal year end, our report date of October 31, 2001 represents a seven-month period as compared to prior fiscal year end March 31, 2001, a twelve-month period. Therefore, the major reason for decreases in various operating revenues and expenses is the short reporting period.

Another significant variance in comparing the seven months ended October 31, 2001 to year end March 31, 2001 is that the seven-month short period does not include any revenues and much decreased expenditures related to the two ski facilities, as the majority of ski operation revenue and expense is generated during the months of December through March. Revenues generated from advance ticket sales are recorded as deferred revenue, and likewise various operating costs directly related to the two ski facilities are recorded as deferred operating costs.

For the seven months ended October 31, 2001, we report a net loss of ($804,422) or ($0.42) per combined share as compared with a net income of $252,532 or $0.13 per combined share for fiscal year end March 31, 2001.

Combined revenue of $ 4,762,067 represents a decrease of $ 14,134,384 or a 75% decrease when compared to Fiscal 2001. Ski Operations decreased $11,267,371 or 100%, Summer Recreational Operations decreased $552,204 or 20% and Real Estate Management Operations decreased $2,314,809 or 47% when compared to Fiscal 2001.

The Ski Operations had no skiers visit our slopes during the seven months ended October 31, 2001, as explained above, compared to 247,000 skier visits last season. Tubing also had no tuber visits at October 31, 2001 as compared to 83,000 tuber visits at March 31, 2001. Likewise, food and beverage operations and retail ski shop operations recognized no revenues during the short period ended October 31, 2001. For Fiscal year end 2002, expectations are that the number of skiers and tubers visiting our slopes, as well as revenues generated from skiing and tubing operations, food and beverage and retail ski shop sales will compare to ski seasons reported in previous March 31st fiscal year ends.

The Summer Recreation Operations decrease is attributed to the summer music festivals not drawing as many consumers as in the past (39%), mainly due to inclement weather. The remaining decrease is the result of shorter operating periods for Splatter and TRAXX due to the new fiscal period.

The Real Estate Management Operations decrease is attributed to commissions for resale of homes in our resort communities (20%), fees for contract services provided to the homeowners of the resort communities (10%) and reduced rental revenue from the resort community homes (70%). The ski season generates a substantial volume of the home rental income, which, due to the seven month period, we did not recognize. The decreases were offset by an increase in Rents, Royalties and Other due to timbering revenues in the seven month period ended October 31, 2001.

No land sales occurred in the seven months ended October 31, 2001. In Fiscal 2001, 132 acres of land were sold for $521,607 with a basis of $1,204.

Operating costs associated with Ski Operations decreased by $10,145,526 when compared to Fiscal 2001. This decrease is attributed to the absence of ski operations recognized during the short period, as stated above.

Operating costs associated with Summer Recreation Operations decreased $356,763 when compared to Fiscal 2001. This decrease is attributed to the short period as noted above.

Operating costs associated with Real Estate Management Operations decreased by $1,630,844 when compared to Fiscal 2001. This decrease is attributed to the seven month versus twelve month period comparison described above.

General and Administration expenses decreased by $1,117,950 when compared to Fiscal 2001. This decrease is attributed to the seven month versus twelve month period comparison. Also, general and administration expenses in Fiscal 2001 had increased by $466,922 due to recognizing severance expense relating to changes in management.

Interest and Other Income decreased by $810,485 when compared to Fiscal 2001. This decrease is mainly attributable to the sale of 132 acres of land during fiscal year ended March 31, 2001. The remaining decrease is attributed to the seven month period versus twelve month comparison described above. Interest expense decreased by $440,824 when compared to Fiscal 2001. This decrease is primarily attributed to a reduction in the principal on the Dreshertown Plaza note, favorable decreases in the prime rate and LIBOR rate of interest approximating 2.0% and 2.5%, respectively, during the seven months ended October 31, 2001, and the comparison of a seven month period to a twelve month period as described above.

The effective Tax Rate for seven months ended October 31, 2001 and Fiscal 2001 was 41%.

Liquidity and Capital Resources

The Combined Statement of Cash Flows reflects net cash provided by operating activities of $1,178,932 for the nine months ended July 31, 2004 as compared to net cash provided by operating activities of $1,129,373 for the nine months ended July 31, 2003.

We have a positive cash flow from operations. This cash flow is sufficient for our current operations, however, will be insufficient to meet our capital resource and liquidity needs for our planned land development. In addition to the net proceeds from this rights offering, we will need to raise additional funds to implement this land development strategy.

Material non-recurring cash items during the past three years include the buyout of the management company for the Dreshertown Plaza Shopping Center of $1,900,000, the sale of the communication towers for $1,469,000 and the exchange of the Dreshertown Plaza Shopping Center for the Oxbridge Square and the Coursey Commons shopping centers.

We currently anticipate that the funds needed for future operations and to implement our land development strategy will be satisfied through operating cash, borrowed funds and reinvested profits from completed and sold units or lots. We expect that with respect to land development, future construction will be conducted in phases, with the profits from each phase used to fund additional future construction. Construction is being implemented in phases in order to reduce any market risk associated with changing economic conditions.

Mortgages

We have mortgaged eleven investment properties totaling $1,147,610 with Manufacturers Traders Trust Company, repayable over 5 years. Effective May 27, 2004, the interest rates of seven mortgages were adjusted from 3.439% to 4.330%. Four mortgages, with an anniversary date of September 15, 2004, bear interest at a rate of 3.57% fixed for one year, after which the rates will be adjusted. The funds being utilized for real estate development and debt service will be funded by the rental income from the properties. A summary of our mortgages obligations as of July 31, 2004 is as follows:

BLUE RIDGE REAL ESTATE COMPANY
COMBINED MORTGAGE SCHEDULE
as of July 31, 2004


	Maturity Date		Interest Rate			Total` Debt
BLUE RIDGE REAL ESTATE COMPANY
Buildings
NorthMarq Capital, Wal-Mart, 1990		2014		10.5	%		1,098,845
Laureate Realty Services, Oxbridge Shopping Ctr.,2004		2023		7.4	%		4,045,022
Kimco Capital Corp., Coursey Commons, 2004		2004		6.00	%		7,374,095

							12,517,962


Jack Frost Ski Area
PNC Bank, IDA 1985		2005		80	%P		100,572
				Lessor of Libor +
M & T Bank, D Lift, 2002		2009		2.00% or SWAP			746,428

							847,000


Jack Frost Sewage Facility
PNC Bank, IDA 1985		2005		80	%P		25,143


Blue Ridge – Other
M&T Bank – Mortgage on ML 240		2013		4.33	%		103,852
M&T Bank – Mortgage on ML 177		2013		4.33	%		103,852
M&T Bank – Mortgage on ML 222		2013		4.33	%		111,064
M&T Bank – Mortgage on LW 366		2013		4.33	%		100,966
M&T Bank – Mortgage on LW 373		2013		4.33	%		100,966
M&T Bank – Mortgage on LW 374		2013		4.33	%		97,361
M&T Bank – Mortgage on SR 104		2013		3.57	%		65,478
M&T Bank – Mortgage on SR 128		2013		3.57	%		65,478
M&T Bank – Mortgage on BH 28		2013		3.57	%		98,960

							847,977


Northeast Land Co. – Other
NEL - Mortgage on ML 187		2013		4.33	%		147,844
NEL - Mortgage on SR 251		2013		3.57	%		151,791

							299,635


BIG BOULDER CORPORATION
Big Boulder Ski Area
PNC Bank, IDA 1985		2005	80% Prime				122,668


Big Boulder Sewage Facility
PNC Bank, IDA 1985		2005	80% Prime				66,053


TOTAL MORTGAGES ALL COMPANIES						$	14,726,438

Lines of Credit and Letters of Credit

Also effective May 27, 2004, we temporarily increased a $2.1 million general line of credit with M & T Bank to $2.6 million, initially until July 30, 2004, then later extended until September 30, 2004. The $500,000 temporary increase had been paid in full as of September 30, 2004. Its purpose was to fund general operations. The $2.1 million general line of credit has a letter of credit against it that reduces the available balance. The letter of credit is for $50,000 in favor of Tobyhanna Township pursuant to a sewage holding tank agreement for Fern Ridge Campground. The term of the line of credit is a monthly interest payment at prime less .50% (3.5% at July 31, 2004). The line is due on demand with no expiration date.

A fixed line of credit for $864,820 was obtained from M & T Bank on August 20, 2004 for the infrastructure of the 23 single Laurelwoods homes. A letter of credit for $864,820 has been applied against this line

of credit in favor of Kidder Township guaranteeing the completion of the Laurelwoods infrastructure development. As of October 31, 2004, the letter of credit has been reduced by $334,076 as a result of the township’s approval of work already performed on the Laurelwoods infrastructure. The fixed line of credit loan will be paid down as homes are sold. On August 20, 2004 we obtained a $4.1 million revolving line of credit with M & T Bank. This line of credit will be used to pay for construction of new homes in the Laurelwoods development. The interest will be capitalized. Both the fixed line of credit and the revolving line of credit have an interest rate of prime. Currently, 89 Laurelwoods homes have been approved for construction by the township. Phase I will encompass the construction of 23 single family homes and several duplex units. An additional line of credit for $1 million, secured for funding real estate transactions, remains in place.

Loans

On September 14, 2004, we entered into a $2.5 million loan with M & T Bank to provide working capital until the company completes the rights offering. The term of this loan has a maturity date of nine months and an interest rate of prime.

During June 2004, two commercial rental real estate properties were acquired: the Oxbridge Square Shopping Center, Richmond, Virginia and the Coursey Commons Shopping Center, Baton Rouge, Louisiana. These properties were acquired as replacement properties in our Real Estate Management/Rental Operations segment. Together, the properties approximated $20,000,000 of acquired value. The purchase was financed by $8,044,000 of cash held in escrow from the sale of Dreshertown Plaza as part of a section 1031 tax deferred exchange, plus by assuming a long-term note approximating $4,050,000 and obtaining a $7,375,000 short-term bridge loan from Kimco Capital Corp., a wholly-owned subsidiary of Kimco Realty Corporation. The term of this bridge loan was six months with monthly payments of interest only at a rate of 6%. As of September 3, 2004, the short-term bridge loan from Kimco Capital Corp. was paid in full and we entered into long-term financing with JP Morgan Chase Bank in the amount of $7.7 million. The JP Morgan Chase Bank loan matures in October 2014 and has a fixed interest rate of 5.59%.

Capital Investments as of July 31, 2004

The total capital investment in the Jack Frost Mountain ski area is $23,270,032, with outstanding debt of $1,069,981. The total capital investment in the Big Boulder ski area was $14,618,785 with outstanding debt of $322,314. The major portion of our investment represents the cost of the slopes and trails, chairlifts, snowmaking equipment, water supply, roads and parking areas, and buildings. The remaining portion is for furnishings and equipment for the ski lodges, trucks, maintenance equipment and miscellaneous outside equipment.

Blue Ridge has invested $1,151,135 in real estate and residential investment properties located in and around our resort communities. The debt outstanding was $74,012 . Blue Ridge also owns the Mountain’s Edge Restaurant. The capital investment in the facility is $1,597,454.

Northeast Land Company has invested $430,699 in residential investment properties located in our resort communities with outstanding debt of $299,635.

The total capital investment in the Jack Frost sewage treatment facility is $1,242,089, with outstanding debt of $25,143. The total capital investment in the Big Boulder sewage treatment facility is $1,526,887, with an outstanding debt of $111,782.

Acquisition and Disposition of Income Producing Properties

The retail store leased to Wal-Mart Real Estate Business Trust, Wal-Mart, located in Laurens, South Carolina, was acquired in September 1990 for cash consideration of $2,190,470, which was the total capital investment as of July 31, 2004. The building consists of 70,000 square feet located on 10.217 acres of land and is leased to Wal-Mart on a triple net basis through January 31, 2039. At July 31, 2004, a mortgage totaling $1,098,845 was outstanding on this property.

The Dreshertown Plaza Shopping Center, Dresher, Montgomery County, Pennsylvania, was acquired in July 1986 for consideration of $4,592,579. On March 10, 2004, we sold the Dreshertown Shopping Plaza to Dreshertown Plaza. The sale price of the disposed asset was $14,950,000. Net proceeds of the sale were $14,575,000. The book value of the property was approximately $2,400,000, with a pre-tax net gain of approximately $12,173,000.

During June 2004, two commercial rental real estate properties were acquired as part of a section 1031 tax deferred exchange: the Oxbridge Square Shopping Center, Richmond, Virginia and the Coursey Commons Shopping Center, Baton Rouge, Louisiana. Together, the properties represented an acquired valued of approximately $20,000,000. The purchase was financed by the payment of approximately $8,044,000 of cash held in escrow from the sale of Dreshertown Plaza, by the assumption of a long-term note approximating $4,050,000 and by a short-term bridge loan, valued at approximately $7,375,000 with interest payable at 6% per annum, from Kimco Capital Corp., a wholly-owned subsidiary of Kimco Realty Corporation. As of September 3, 2004, the short-term bridge loan from Kimco Capital Corp. was paid in full and we entered into long-term financing with JP Morgan Chase Bank in the amount of $7,700,000.

Contractual Obligations

As part of our ongoing operations, we enter into arrangements that obligate us to make future payments under contracts, such as lease agreements and debt agreements. Debt obligations, which total $17,238,863, are currently recognized as liabilities on our combined balance sheet. Our current long-term debt obligations on the Oxbridge Square and Coursey Commons shopping centers are $4,045,022 and $7,374,095, respectively. Significant leases for the two centers include anchor tenants Ukrops Supermarkets, Inc. and Wal-Mart. Purchase obligations for 23 single-family homes exist for the infrastructure improvements in the Laurelwoods development. A summary of our contractual obligations at the nine months ended July 31, 2004 is as follows:


			Less than
Contractual Obligations:	Total		1 year		1-3 years		3-5 years		More than
									5 years
Lines of Credit	$	1,674,180	$	1,674,180	$	0	$	0	$	0
Long-Term Debt		14,726,437		8,102,907		1,467,904		1,319,239		3,836,387
Capital Leases		838,246		244,686		593,560		0		0
Purchase Obligations		862,617		862,617		0		0		0
Other Long-Term Obligations		0		0		0		0		0


Total Contractual Cash Obligations	$	18,101,480	$	10,884,390	$	2,061,464	$	1,319,239	$	3,836,387

Off Balance Sheet Arrangements

We have no commitments that are not reflected in our balance sheets except for a purchase obligation, which is included in the above table and secured by a letter of credit related to Laurelwoods’ infrastructure. The purchase obligation will be reduced proportionately upon the sale of each unit in the Laurelwoods development.

New Accounting Pronouncements

In November 2002, the Financial Accounting Standards Board, FASB, issued Financial Interpretation No. 45, FIN 45, “Guarantor’s Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others.” This interpretation elaborates on the disclosures to be made by a guarantor in its interim and annual financial statements about its obligations under certain guarantees that it has issued. It also clarifies that a guarantor is required to recognize, at inception of a guarantee, a liability for the fair value of the obligation undertaken in issuing the guarantee. The initial recognition and initial measurement provisions of FIN 45 are applicable on a prospective basis to guarantees issued or modified after December 31, 2002. The disclosure requirements in the interpretation are effective for financial statements of interim or annual periods ending after December 15, 2002. We adopted the provisions of FIN 45 as of January 1, 2003, which did not have a significant impact on our financial position or result of operations.

In May 2003, the FASB issued SFAS No. 150, “Accounting for Certain Financial Instruments with Characteristics of Both Liabilities and Equity.” SFAS No. 150 establishes standards for how an issuer classifies and measures certain financial instruments with characteristics of both liabilities and equity, and requires that financial instruments within its scope, many of which currently are classified as equity, be classified as liabilities in some circumstances. SFAS No. 150 is effective for financial instruments entered into or modified after May 31, 2003, and otherwise is effective at the first interim period beginning after June 15, 2003. The FASB issued FASB Staff Position, FSP, 150-3 on November 7, 2003 to defer the effective date for applying the provisions of SFAS No. 150 for certain mandatory redeemable noncontrolling interest. We do not expect the implementation of SFAS No. 150 will have a significant impact on our financial position or result of operations.

In January 2003, the FASB issued FIN No. 46, “Consolidation of Variable Interest Entities”, FIN No. 46, which addresses whether certain types of entities, referred to as variable interest entities, VIE’s, should be consolidated in a company’s financial statements. A VIE is an entity that either: (1) has equity investors that lack certain essential characteristics of a controlling financial interest, including the ability to control the entity, the obligation to absorb the entity’s expected losses and the right to receive the entity’s expected residual returns, or (2) lacks sufficient equity to finance its own activities without financial support provided by the other entities, which in turn would be expected to absorb at least some of the expected losses of the VIE. An entity should consolidate a VIE if it stands to absorb a majority of the VIE’s expected losses or to receive a majority of the VIE’s expected residual returns. FIN No. 46 is effective now for new VIE’s formed after December 31, 2003. Application of FIN No. 46 for VIE’s created prior to January 1, 2004 is required for the first annual period beginning after December 15, 2004. We have not yet evaluated the impact of the adoption of FIN No. 46 on our financial statements.

BUSINESS

Overview

Blue Ridge Real Estate Company

Blue Ridge Real Estate Company, Blue Ridge, which was incorporated in Pennsylvania in 1911, is believed to be one of the largest owners of investment property in Northeastern Pennsylvania. It owns 18,690 acres of land which are predominately located in the Pocono Mountains. Of this acreage, 13,952 acres are held for investment and 4,738 are held for development. Income is derived from these lands through leases, selective timbering by third parties, condemnation, sales, and other dispositions. Blue Ridge also owns the Jack Frost Mountain Ski Area, which is leased to Jack Frost Mountain Company, a retail store leased to Wal-Mart, two shopping centers and 11 residential investment properties.

Jack Frost Mountain Company, a wholly-owned subsidiary of Blue Ridge was incorporated in Pennsylvania in 1980 and commenced operations on June 1, 1981. It was created to lease and operate the Jack Frost Mountain Ski Area and to provide certain services to other facilities, such as the Snow Ridge resort community, and to operate recreational facilities located within the Jack Frost Mountain tract.

Northeast Land Company, a wholly-owned subsidiary of Blue Ridge, was incorporated in Pennsylvania in 1967. The major assets of the company consist of 101 acres of land in Northeast Pennsylvania. Revenue for Northeast Land Company is derived from managing the rental homes at Snow Ridge, Blue Heron, Laurelwoods and Midlake as resort accommodations, from real estate commissions for the sale of homes at these resort communities, and from Trust and Condo fees for Services to these resort communities. Northeast Land Company also receives revenue from a land lease to a Burger King franchise and from leased space on a 196-foot communication tower.

BRRE Holdings, Inc., a wholly-owned subsidiary of Blue Ridge, was incorporated in Delaware in 1986. It was established for investment purposes.

Boulder Creek Resort Company, a wholly-owned subsidiary of Blue Ridge, was incorporated in Pennsylvania in May of 2003 and commenced operations in November 2003. It is primarily focused on focused on facilitating land development, expanding out sales division, and marketing our ski resorts, with the ultimate goal of consolidating our branding and marketing us as one resort destination.

Oxbridge Square Shopping Center, LLC and Coursey Commons Shopping Center, LLC are wholly-owned subsidiaries of Blue Ridge and were organized in May, 2004. They have no employees and are managed by Kimco Realty Corporation.

Blue Ridge employs 23 full-time employees. Jack Frost Mountain Company, which operates the Jack Frost Mountain Ski Area, has 32 full-time employees and during the skiing season there are approximately 500 additional employees. Northeast Land Company has 13 full-time employees. Boulder Creek Resort Company has four full-time employees.

Big Boulder Corporation

Big Boulder Corporation, Big Boulder, was incorporated in Pennsylvania in 1949. Big Boulder’s major assets are 925 acres of land, which includes a 175-acre lake, the Big Boulder Ski Area, and the Mountain’s Edge Restaurant. Of the 925 acres, 539 acres are held for investment and 386 acres are held for development. The principal source of revenue for Big Boulder is derived from the Big Boulder Ski Area which is leased to Lake Mountain Company.

Lake Mountain Company, a wholly-owned subsidiary of Big Boulder, was incorporated in Pennsylvania in 1983 and commenced operations on June 1, 1983. It was created to lease and operate the Big Boulder Ski Area, and operate the recreational facilities as they are located within the Big Boulder Lake tract.

BBC Holdings, Inc., a wholly-owned subsidiary of Big Boulder, was incorporated in Delaware in 1986. It was established for investment purposes.

Big Boulder has no employees. Lake Mountain Company, which operates the Big Boulder Ski Area, no longer has any employees. The Lake Mountain Company’s former employees were merged with the payroll of Jack Frost Mountain Company. During the skiing season, there are approximately 525 additional employees.

Strategy

Since the early 1980’s, we have developed four residential communities in close proximity to our ski area resorts. Our resorts are located in the Pocono Mountains of Pennsylvania, an area which offers year-round regional tourist appeal and a quiet, relaxing vacation environment.

We believe the current and future real estate market in the Pocono Mountains is experiencing, and in the near future will continue to experience, an increase in buyer interest. This interest is partially attributable to current low mortgage interest rates and an uncertain economy that may be facilitating more regional tourist destinations. We expect that the construction of more homes closer to our resorts will result in an increase in skier visits.

We own 19,740 acres of land in Northeastern Pennsylvania. Of our core land holdings, we have designated 5,124 acres as held for development and are moving forward with municipal approvals. Based on independent market studies, we believe that our primary focus should be on single and multi-family dwellings in proximity to our ski area. Additionally, a proposed 18-hole golf course with surrounding resort community is planned for the Jack Frost Mountain ski area. The golf course community will consist of approximately 40% single family homes and 60% multi-family units, as well as golf club amenities and the necessary infrastructure. It is expected that all of the planned developments will result in approximately 3,700 lots or units. We anticipate that some lots will be subdivided and sold as parcels of land, while others will be developed into single and multi-family housing. We also expect that certain subdivisions may be sold outright in phases to nationally-recognized land developers in order to facilitate the market for housing and to reduce the inherent risk associated with any land development.

Industry Segment Information

We operate in four business segments, which consist of the Ski Operations, Real Estate Management/Rental Operations, Summer Recreational Operations and Land Resource Management segments. Our business segments were determined from our internal organization and management reporting, which are based primarily on differences in services. Financial information about our segments can be found in note 13 to our audited consolidated financial statements.

Ski Operations

Ski Operations consist of two ski areas located in the Pocono Mountains of Northeastern Pennsylvania.

Real Estate Management/Rental Operations

Real Estate Management/Rental Operations consists of: investment properties leased to others located in Eastern Pennsylvania, South Carolina, Virginia and Louisiana; revenues derived from the management of investor-owned properties, principally resort homes; recreational club activities and services to the trusts that operate resort residential communities; sales of investment properties; and rental of land and land improvements.

Summer Recreation Operations

Summer Recreation Operations consist of seasonal recreational operating centers located in the Pocono Mountains of Northeastern Pennsylvania, which include the following: Splatter Paintball; Lake Mountain Sports Club; and Summer Music Festivals. As of July 31, 2004, we decided to close two summer operation centers. The Fern Ridge Campground was closed in October 2004. Our decision to close the campground was based on Tobyhanna Township’s decision not to renew future approvals for our existing sewage disposal process. It is management’s position that the cost of connecting the campground to the township’s central sewage system was not cost effective and not in our best interest. We will be exploring different options as to the future use of the campground site which is located in close proximity to Interstate 80 and Route 115 in Blakeslee, Pennsylvania. Traxx Motorcross Park closed in November 2004. We believe that this site, which is located next to the Jack Frost Mountain ski area, is a prime location for an additional housing community, which was the driving force behind our decision to close this park.

Land Resource Management

Land Resource Management consists of land sales, land purchases, timbering operations and a construction division. Timbering operations consist of selective timbering on our land holdings. Contracts are entered into for parcels which have had the timber selectively marked. We are devising a long-term plan of managed timbering whereby significant attention is given to protecting the environment and retaining the value of the land. The

construction division is responsible for the residential land development activities which include overseeing the construction of single and multi-family homes and development of infrastructure.

Funds expended to date for real estate development in Laurelwoods have been primarily for infrastructure improvements. We are in the initial construction phase for 23 single family homes. Other expenditures for all development projects in the planning phases include fees for architects, engineers, consultants, studies and permits.

Competition

The skiing industry is highly competitive and capital intensive. Our competitors include major ski resorts throughout the United States, Canada and Europe as well as other worldwide recreation resorts, including warm weather resorts and various alternative leisure activities. Locally, we compete with other area ski resorts. There are approximately eight ski areas in close proximity to our resort: Camelback, Blue Mountain, Shawnee, Montage, Eagle Rock, Bear Creek, Alpine Mountain, and Elk. We believe that local competition enhances the area and attracts tourists. Our competitive position depends on a number of factors, such as our proximity to population centers, the availability and cost of transportation to and within a resort, natural snowfall, the quality and coverage of snowmaking operations, resort size, the attractiveness of terrain, lift ticket prices, prevailing weather conditions, the appeal of related services, the quality and the availability of lodging facilities, and resort reputation. Some of our competitors have greater competitive positions and relative ability to withstand adverse developments.

Our Real Estate Management/Rental Operations segment faces competition from similar retail centers that are near our retail properties with respect to the renewal of leases and re-letting of space as leases expire. Any new competitive properties that are developed close to our existing properties may impact our ability to lease space to creditworthy tenants. Increased competition for tenants may require us to make capital improvements to properties that we would not have otherwise planned to make, which could adversely affect our results of operations.

Planned Real Estate Development

We will actively pursue land sales and purchases and will offer financing to attract new land sale customers. We will continue to buy and sell existing units in our resort communities utilizing section 1031 deferred asset exchanges to defer tax impact. Several projects are underway for new residential development in close proximity to our ski areas.

Maintenance

We continue to invest in our ski areas by selectively upgrading on-mountain facilities and guest services, employing targeted marketing strategies to attract customers. We have invested approximately $1 million in capital expenditures during the last fiscal year. We believe our existing resort infrastructure is reasonably well maintained. We use targeted advertising, database marketing and strategic marketing alliances to enhance the image of our resorts and increase regional market share.

Properties

Blue Ridge Real Estate Company

The physical properties of Blue Ridge consist of approximately 18,690 acres owned by Blue Ridge and Northeast Land Company. These properties include the Jack Frost Mountain Ski Area, the retail store leased to Wal-Mart, the Oxbridge Square Shopping Center in Richmond Virginia and the Coursey Commons Shopping Center in Baton Rouge, Louisiana, residential investment properties, a sewage treatment facility, corporate headquarters building, and other miscellaneous facilities.

Ski Facilities

The Jack Frost Mountain Ski Area, which has been under lease to Jack Frost Mountain Company since June 1, 1981, is located near White Haven, Carbon County, Pennsylvania, and commenced operations in December 1972. The Jack Frost Mountain Ski Area consists of 21 slopes and trails including a snowboard slope, snow tubing hill, four double chairlifts, two triple chairlifts, one quad chairlift, one dual double chairlift and various buildings, including a Summit Lodge with food service, a cocktail lounge, a ski shop, and a ski rental shop. The total lift capacity per hour is 13,200 skiers. These lifts are in good condition and are operated as needed during the ski season. These facilities are situated on approximately 473 acres owned by Blue Ridge and leased to Jack Frost Mountain Company.

Real Estate Management Operations

Blue Ridge owns 18,690 acres of land which are predominately located in the Pocono Mountains. The majority of this property is leased to various hunting clubs. Blue Ridge also owns several cottages in the area that are leased to private individuals. Blue Ridge owns nine residential investment properties located in our various resort communities.

Blue Ridge owns and leases to Jack Frost Mountain Company a sewage treatment facility to serve the resort housing at Jack Frost Mountain.

Blue Ridge also owns The Sports Complex at Jack Frost Mountain, which consists of a swimming pool, fitness trail, tennis courts and accompanying buildings.

Blue Ridge also owns The Stretch, an exclusive member-only fishing club located along a two mile stretch of the Tunkhannock Creek.

Blue Ridge’s Corporate Office Building is located on Route 940 and Mosey Wood Road.

Northeast Land Company owns 101 acres of land located in the Pocono Mountains. Northeast Land Company owns two residential investment properties located in our various resort communities.

Big Boulder Corporation

The physical properties owned by Big Boulder consist of approximately 925 acres located in the Pocono Mountains. The properties include the Big Boulder Ski Area, a sewage treatment facility, the Mountain’s Edge Restaurant and the Big Boulder Lake Club.

Ski Facilities

The Big Boulder Ski Area’s physical properties were leased to Lake Mountain Company on June 1, 1983, and are located in Kidder Township, Carbon County, Pennsylvania. Big Boulder Ski Area commenced operations in 1947. The Big Boulder Ski Area contains 14 slopes and trails, including a snowboard terrain park, snow tubing hill, five double chairlifts, two triple chairlifts, and various buildings, including a base lodge that provides food service, a cocktail lounge, a ski shop and a ski rental service. The total lift capacity per hour is 9,600 skiers. These lifts are in good condition and are operated as needed during the ski season. These facilities are situated on approximately 90 acres owned by Big Boulder.

Real Estate Management Operation

A sewage treatment facility was constructed by Big Boulder Corporation to serve the resort housing within the Big Boulder tract. The facility has the capacity of treating 225,000 gallons per day. Big Boulder Corporation constructed the Mountain’s Edge Restaurant which consists of 8,800 square feet and is located on the east shore of Big Boulder Lake, Kidder Township, Carbon County, Pennsylvania. The facility, which is leased to a private operator, commenced operations in May 1986. The restaurant has dining capacity for 100 patrons.

Big Boulder also owns the Big Boulder Lake Club, which includes a 175-acre lake, swimming pool, tennis courts, boat docks and accompanying buildings.

Legal Proceedings

We are currently not a party to any material legal proceedings.

MANAGEMENT

Executive Officers and Directors

The name, age and position of our executive officers and directors as of October 31, 2004 are as follows:


Name	Age		Position (1)
Patrick M. Flynn (2)(3)		28	President, Chief Executive Officer and Director
Eldon D. Dietterick (2)(3)		59	Executive Vice-President and Treasurer
Richard T.Frey		53	Vice-President
Milton Cooper (4)		74	Director
Michael J. Flynn (2)(3)		68	Chairman of the Board
Wolfgang Traber (4)		59	Director

(1)		Blue Ridge and Big Boulder have two individual boards of directors, but each board consists of the same individual members.

(2)		Member of the Executive Committee

(3)		Member of the Audit Committee

(4)		Member of the Compensation Committee

The backgrounds of our executive officers and directors as of October 31, 2004 are set forth below.

Patrick M. Flynn has served as President and Chief Executive Officer since October 2001. Since then, he has also served as a director at Blue Ridge and Big Boulder. He has served as the Director of Real Estate at Kimco Realty Corporation since May 2001. Prior to joining us, from June 1995 to May 2001, Mr. Flynn was also a consultant at MIT Consulting. Mr. Flynn is the son of Michael J. Flynn.

Eldon D. Dietterick was appointed Executive Vice-President and Treasurer in October, 2001. He has been employed by Blue Ridge and Big Boulder on a full-time basis since January 1985. Prior to his appointment as Executive Vice-President and Treasurer, Mr. Dietterick served as the Secretary and Treasurer from October 1998 until October 2001.

Richard T. Frey has served as Vice-President of Blue Ridge and Big Boulder since October 2001. From 1992 until October 2001, Mr. Frey was employed as our Director of Food Services at both Jack Frost and Big Boulder ski areas.

Milton Cooper has served as a director of Blue Ridge and Big Boulder since 1983. Mr. Cooper also serves as a director of Getty Realty Corporation, and as Chief Executive Officer and Chairman of the board of directors of Kimco Realty Corporation.

Michael J. Flynn has served as Chairman of the Board of Blue Ridge and Big Boulder since 1990. Mr. Flynn also serves as President, Chief Operating Officer and Vice Chairman of the board of directors of Kimco Realty Corporation.

Wolfgang Traber has served as a director of Blue Ridge and Big Boulder since 1986. Since August 1994, Mr. Traber has been Chairman of the Board of Hanseatic Corporation, a New York corporation. Mr. Traber also serves as a director of M.M. Warburg & Co. KgaA, Kimco Income REIT, Kappa Ventures, Langen GbR, 442 BV, Hanseatic Americas Ltd., and Hamburg-Berliner Immobilien AG.

Director Compensation

Directors receive $1,000 for each board meeting they attend, but do not receive compensation for committee meetings. Michael J. Flynn received a $35,000 consulting fee during the fiscal year ended October 31, 2003. However, no consulting fee was paid to Mr. Flynn during fiscal year ended October 31, 2004.

Executive Compensation

The following summary compensation table sets forth information concerning compensation for services rendered in all capacities during the year ended October 31, 2004 awarded to, earned by or paid to our Chief Executive Officer and our other most highly compensated executive officers whose salary and bonus exceeded $100,000 for the year ended October 31, 2004. We refer to these persons as our named executive officers.


			Annual Compensation (1)				Long-Term Compensation
							Awards
							Securities
							Underlying
Name and Principal Position	Years		Salary		Bonus		Options
Patrick M. Flynn		2004		0	$	40,000		10,000
Chief Executive Officer and President		2003		0	$	40,000		5,000
		2002		0	$	30,000		5,000

Eldon D. Dietterick		2004	$	110,000	$	24,000		7,000
Executive Vice-President and Treasurer		2003	$	102,000	$	17,000		4,000
		2002	$	102,000	$	20,000		3,000

Richard T. Frey		2004	$	97,000	$	20,000		5,000
Vice-President		2003	$	90,000	$	15,000		3,000
		2002	$	90,000	$	18,000		2,000

(1)

Compensation was paid to Mr. Dietterick and Mr. Frey by Blue Ridge Real Estate Company, a portion of which was then allocated to Big Boulder Corporation.

Stock Options

The following table contains information regarding grants of options to purchase shares of our common stock to our named executive officers during the year ended October 31, 2004.

Amounts in the following table represent potential realizable gains that could be achieved for the options if exercised at the end of the option term. The 5% and 10% assumed annual rates of compounded stock price appreciation are calculated based on the requirements of the Securities and Exchange Commission and do not represent an estimate or projection of our future common stock prices. These amounts represent certain assumed rates of appreciation in the value of our common stock from the fair market value on the date of grant. Actual gains, if any, on stock option exercises depend on the future performance of the common stock and overall stock market conditions. The amounts reflected in the following table may not necessarily be achieved.

Option Grants in Last Fiscal Year


	Individual Grants									Potential Realizable
										Value at Assumed
	Number of		Percent of							Annual Rates of
	Securities		Total Options							Stock Price Appreciation
	Underlying		Granted to			Exercise				for Option Term
	Options		Employees			Price Per		Expiration
Name	Granted		in Fiscal 2004			Share		Date		5%		10%
Patrick M. Flynn		10,000		31.25	%	$	17.75		02/13/09	$	49,040	$	108,366
Eldon D. Dietterick		7,000		21.875	%	$	17.75		02/13/09	$	34,328	$	75,856
Richard T. Frey		5,000		15.625	%	$	17.75		02/13/09	$	24,520	$	54,183

Fiscal Year-End Option Values

The following table provides information concerning the number and value of unexercised options to purchase our common stock held as of October 31, 2004 by our named executive officers. Value of the unexercised in-the-money options is calculated on the basis of an assumed $27.00 per share price on October 31, 2004.

Aggregated Fiscal Year-End Option Values


	Number of Securities				Value of Unexercised
	Underlying Unexercised				In-the-Money Options
Name	Options at October 31, 2004				at October 31, 2004
	Exercisable		Unexercisable		Exercisable		Unexercisable
Patrick M. Flynn		20,000		0	$	255,500		0
Eldon D. Dietterick		14,000		0	$	178,650		0
Richard T. Frey		10,000		0	$	127,550		0

Stock Option and Other Compensation Plans

We have a defined benefit pension plan. Our eligible employees participate in the pension plan which provides to each such participant annual retirement income beginning at age 65 equal product of (x) 31% of the first $10,000 of such participant’s average compensation for the five highest consecutive years in the last ten year prior to retirement during which the employee was most highly paid plus 40% of such earnings in excess of $10,000; and (y) the ratio of the participant’s years of credited service (if less than 15 years) to 15 years.

The table that follows shows the estimated annual benefits payable upon retirement to persons in specified remuneration and years of service classifications under the pension plan. The retirement benefits shown are based upon retirement at the age of 65.



	Years of Service
Average Salary*		5		10		15**
$15,000		$	1,700	$	3,400	$	5,100
$30,000		$	3,700	$	7,400	$	11,100
$45,000		$	5,700	$	11,500	$	17,100
$60,000		$	7,700	$	15,400	$	23,100
$75,000		$	9,700	$	19,400	$	29,100
$90,000		$	11,700	$	23,400	$	35,100
$105,000		$	13,700	$	27,400	$	41,100
$120,000		$	15,700	$	31,400	$	47,100
$135,000		$	17,700	$	35,400	$	53,100
$150,000		$	19,700	$	39,400	$	59,100
$160,000		$	21,000	$	42,000	$	63,000

*Based on 5 consecutive years of highest earnings in the last 10 years.

**Minimum number of years of continuous service required to receive maximum pension.

Remuneration covered by the pension program includes salary, overtime and awards under an annual incentive program. Eldon D. Dietterick, Richard T. Frey and Patrick M. Flynn had, respectively, 19 years, 14 years and 3 years of credited service under this plan as of October 31, 2004.

The annual benefits payable under the plan are not subject to deduction for Social Security benefits or other offset amounts.

CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS

Kimco is our controlling shareholder and Kimco Realty Corporation, the parent company of Kimco, is presently providing consulting services to us. The services are focused on land development, acquisitions and disposals. The consulting fees are accrued monthly and are capitalized as part of land development. For the fiscal year ended October 31, 2003, the amount was $125,000. Kimco Realty Corporation served as the management company for the Dreshertown Plaza Shopping Center from June 2003 to March 2004, at which point the shopping center was sold. During its management term, Kimco Realty Corporation was paid $50,977 in management fees.

During June 2004, two commercial rental real estate properties were acquired, the Oxbridge Square Shopping Center, Richmond, Virginia and the Coursey Commons Shopping Center, Baton Rouge, Louisiana as replacement properties in our Real Estate Management/Rental Operations segment. Together the properties approximated $20,000,000 of acquired value. The purchase was financed by approximately $8,044,000 of cash held in escrow from the sale of Dreshertown Plaza, plus assuming a long-term note approximating $4,050,000 and obtaining a short-term bridge loan from Kimco Capital Corp., a wholly-owned subsidiary of Kimco Realty Corporation, approximating $7,375,000 with interest payable at 6% per annum. As of September 3, 2004, the short-term bridge loan from Kimco Capital Corp. was paid in full and replaced with long-term financing with JP Morgan Chase Bank in the amount of $7.7 million. As of the dates of purchase, a wholly-owned subsidiary of Kimco Realty Corporation was, and currently remains, the management company for both shopping centers and receives a fixed monthly fee of 4.5% of rental income on store leases. As of December 1, 2004, that subsidiary received $24,600 for management fees earned on the new shopping centers.

Michael J. Flynn, the Chairman of our board of directors, is also the President, Chief Operating Officer and Vice Chairman of the board of directors of Kimco Realty Corporation. In addition, Patrick M. Flynn, who serves as one of our directors and is our President and Chief Executive Officer, is the Director of Real Estate at Kimco Realty Corporation. Finally, Milton Cooper, who serves as one of our directors, also serves as Chief Executive Officer and Chairman of the board of directors of Kimco Realty Corporation.

In connection with this offering, Kimco has agreed, as standby purchaser, to purchase for a purchase price of $____ per share any and all shares not subscribed for by our shareholders. As a result of Kimco’s commitment to act as standby purchaser, the total number of shares to be purchased by Kimco as standby purchaser will be equal to the difference between ___ and the number of shares purchased by our shareholders pursuant to this rights offering. We also granted Kimco registration rights with respect to the shares that Kimco purchases that are not otherwise subscribed for by our shareholders in this rights offering. As a result, Kimco can cause us to register the shares it purchases pursuant to its standby purchase commitment and such shares would be eligible for resale in the public market without restriction. On January 4, 2005, we entered into a Standby Securities Purchase Agreement with Kimco which provides further detail regarding Kimco’s standby purchase commitment.

If no shareholders exercise their subscription rights, Kimco will purchase all of the shares pursuant to its standby purchase commitment. In that case, Kimco’s proportionate ownership of our stock will increase to ___% in relation to those non-exercising shareholders and Kimco will be able to control all matters submitted to a vote of our shareholders and be able to direct our management and policies.

PRINCIPAL STOCKHOLDERS

The following table sets forth information regarding the beneficial ownership of our common stock as of December 1, 2004 and on an as adjusted basis to reflect the sale of the common stock offered in this offering by:

•   all persons known by us to beneficially own more than 5% of our common stock;

•   each of our directors;

•   each of our named executive officers; and

•   all of our directors and executive officers as a group.

The number of shares beneficially owned by each shareholder is determined under rules issued by the Securities and Exchange Commission and includes voting or investment power with respect to securities. Under these rules, beneficial ownership includes any shares as to which the individual or entity has sole or shared voting power or investment power and includes any shares that an individual or entity has the right to acquire beneficial ownership of within 60 days of December 1, 2004 through the exercise of any warrant, stock option or other right. Unless otherwise indicated, the address of all listed stockholders is c/o Blue Ridge Real Estate Company, Blakeslee, Pennsylvania 18610. Each of the shareholders listed has sole voting and investment power with respect to the shares beneficially owned by the shareholder unless noted otherwise, subject to community property laws where applicable.


				Percentage of Shares
				Beneficially Owned
	Number of Shares
	Beneficially Owned			Before			After
Name of Beneficial Owner	(1)			Offering			Offering (2)
Milton Cooper
c/o Kimco Realty Services, Inc. 3333 New Hyde Park Rd., Suite 100 New Hyde Park, NY 10042-0020		1,234,989	(3)		64.45	%		____%	(4)

Michael J. Flynn		36,100	(5)		*			*

Patrick M. Flynn		20,000	(6)		*			*

Wolfgang Traber		—			*			*

Eldon D. Dietterick		14,155	(7)		*			*

Richard T. Frey		10,112	(8)		*			*

Kimco Realty Corporation 3333 New Hyde Park Rd., Suite 100 New Hyde Park, NY 10042-0020		1,012,579	(9)		52.84	%		____	%
All directors and executive officers as a group (6 people) (10)		1,315,354			65.93	%		____	%

Less than 1%.

(1)   Shares are beneficially owned when a person, directly or indirectly, has or shares the voting power thereof (that is, the power to vote, or direct the voting, of such shares) and investment power thereof (that is, the power to dispose, or to direct the disposition, of such shares).

(2)   Assuming each shareholder exercised its basic subscription privilege in full.

(3)   Based on information provided by Mr. Cooper, he has the sole voting and dispositive power over 154,607 shares. The number of shares listed also includes 67,803 shares as to which Mr. Cooper disclaims beneficial ownership; such shares are owned by KC Holdings, Inc., of which Mr. Cooper is Chairman of the board of directors and President and the owner of approximately 8% of the outstanding stock. The above number of shares also includes 1,012,579 shares which are held of record by Kimco Realty Services, Inc., which is a wholly-owned subsidiary of Kimco Realty Corporation, a Real Estate Investment Trust. Mr. Cooper is Chairman of the board of directors and Chief Executive Officer of Kimco Realty Corporation, but disclaims beneficial ownership of the shares held by Kimco Realty Services, Inc. Finally, the above number includes 17,991 shares owned by the Cooper Family Foundation, of which Mr. Cooper is President but disclaims beneficial ownership of the shares, and 714 shares held by a trust for which Mr. Cooper serves as trustee, but as to which shares he disclaims beneficial ownership. The business address of KC Holdings, Inc., Kimco Realty Services, Inc. and Kimco Realty Corporation is c/o Kimco Realty Corporation, 3333 New Hyde Park Road, Suite 100, New Hyde Park, NY 11042-0020.

(4)   Kimco Realty Services, Inc., which as of October 31, 2004 was the record holder of approximately 52.84% of our common stock and our controlling shareholder, has agreed, as a standby purchaser, to purchase 100% of the shares of our common stock that are not subscribed for in the rights offering by our shareholders at $  per share on a standby purchase commitment basis. Assuming Kimco purchases 100% of the shares of our common stock in this rights offering, Kimco will own ___% of our shares after the offering, and Mr. Cooper will beneficially own ___% of our shares.

(5)   Includes currently exercisable option to purchase 35,000 shares of common stock.

DESCRIPTION OF CAPITAL STOCK

Under a Security Combination Agreement between Blue Ridge and Big Boulder and under the bylaws of Blue Ridge and Big Boulder, shares of Blue Ridge and Big Boulder are issued in combined common stock certificates, each certificate representing the same number of shares of each of Blue Ridge and Big Boulder. Shares of each corporation may be transferred only together with an equal number of shares in the other corporation.

At the closing of this offering, our outstanding capital stock will consist of ___ shares of common stock, without par value, stated value $.30 per combined share. Shares of our common stock are currently listed for quotation on the OTC Bulletin Board under the symbol “BLRGZ.” Blue Ridge and Big Boulder are Pennsylvania corporations and are subject to the Pennsylvania Business Corporation Law of 1988.

Common Stock

3,000,000 shares of common stock have been authorized under the articles of incorporation of Blue Ridge and Big Boulder, and, upon completion of this offering, each corporation will have ___ shares of common stock outstanding. Holders of our common stock are entitled to receive, as, when and if declared by our boards of directors from time to time, such dividends and other distributions in cash, stock or property from our assets or funds legally available for such purposes.

Holders of common stock are entitled to one vote for every share standing in his or her name on the books of the company which is entitled to vote at such meeting. There are no preemptive, conversion, redemption or sinking fund provisions applicable to the common stock. All outstanding shares of common stock are fully paid and non-assessable.

Registration Rights

We granted Kimco the right to require us to register the shares that Kimco purchases that are not otherwise subscribed for by our shareholders in this rights offering under the Securities Act, under the terms of the Standby Securities Purchase Agreement between us and Kimco. Subject to limitations specified in this agreement, these registration rights consist of the following:

• an unlimited number of piggyback registration rights that require us to register sales of Kimco’s shares when we undertake a public offering, subject to the discretion of the managing underwriter of the offering to decrease the amount that Kimco may register; and

• two rights to require us to register sales of shares on Form S-3, a short form of registration statement permitted to be used by some companies, which Kimco may exercise if it requests registration of the sale of more than $2.0 million of common stock.

If these registration rights are exercised, we will bear all registration expenses other than underwriting discounts and commissions.

Shareholder Action by Written Consent

Under Pennsylvania law, any action that may be taken at a meeting of the shareholders may be taken without a meeting if such action is authorized by the unanimous written consent of all shareholders entitled to vote at a meeting for such purposes.

Amendments to Our Bylaws

Our bylaws provide that the vote of a majority of all directors or the vote of the majority of the outstanding stock entitled to vote is required to alter, amend or repeal our bylaws.

Certain Anti-Takeover Provisions

Pennsylvania Control-Share Acquisitions Law

Generally, subchapters 25E, F, G, H, I and J of the Pennsylvania corporate laws place certain procedural requirements and establish certain restrictions upon the acquisition of voting shares of a corporation which would entitle the acquiring person to cast or direct the casting of a certain percentage of votes in an election of directors. Our bylaws explicitly provide that subchapters E, G, and H (and thus, by implication subchapters I and J) do not

apply to Blue Ridge and Big Boulder. Our bylaws do not, however, exempt us from subchapter 25F. In general, Subchapter 25F of the Pennsylvania corporate laws delays for five years and imposes conditions upon “business combinations” with an “interested shareholder.” The term “business combination” is defined broadly to include various merger, consolidation, division, exchange or sale transactions, including transactions utilizing our assets for purchase price amortization or refinancing purposes. An “interested shareholder,” in general, would be a beneficial owner of at least 20% of our voting shares.

The above description of subchapter 25F of the Pennsylvania corporate laws merely summarizes the material anti-takeover provisions applicable to Blue Ridge and Big Boulder that are contained in the Pennsylvania corporate laws, but are not a complete discussion of those provisions. These provisions may discourage purchases of our stock or a non-negotiated tender or exchange offer for our stock and, accordingly, may be considered disadvantageous by a shareholder who would desire to participate in any such transaction.

Section 1715 of the Pennsylvania Business Corporation Law

Under Section 1715 of the Pennsylvania Business Corporation Law, our directors are not required to regard the interests of the shareholders as being dominant or controlling in considering our best interests. The directors may consider, to the extent they deem appropriate, such factors as:

•   the effects of any action upon any group affected by such action, including our shareholders, employees, suppliers, customers and creditors, and communities in which we have offices or other establishments;

•   our short-term and long-term interests, including benefits that may accrue to us from our long-term plans and the possibilities that these interests may be best served by our continued independence;

•   the resources, intent and conduct of any person seeking to acquire control of us; and

•   all other pertinent factors.

Section 1715 further provides that any act of our board of directors, a committee of the board of directors or an individual director relating to or affecting an acquisition or potential or proposed acquisition of control to which a majority of our disinterested directors have assented will be presumed to satisfy the standard of care set forth in the Pennsylvania Business Corporation Law, unless it is proven by clear and convincing evidence that our disinterested directors did not consent to such act in good faith after reasonable investigation. As a result of this and the other provisions of Section 1715, our directors are provided with broad discretion with respect to actions that may be taken in response to acquisitions or proposed acquisitions of corporate control.

Section 1715 may discourage purchases of our common stock or a non-negotiated tender or exchange offer for our common stock and, accordingly, may be considered disadvantageous by a shareholder who would desire to participate in any such transaction. As a result, Section 1715 may have a depressive effect on the price of our common stock.

Limitation of Liability and Indemnification of Directors and Officers

Section 1741 of the Pennsylvania Business Corporation Law, the PBCL, empowers a corporation to indemnify any officer or director acting in his or her capacity as a representative of the corporation who was or is a party or is threatened to be made a party to any action or proceeding against expenses, judgments, penalties, fines and amounts paid in settlement in connection with such action or proceeding whether the action was instituted by a third party or arose by or in the right of the corporation. The PBCL limits the ability of a corporation to indemnify its officers and directors for conduct constituting willful misconduct or recklessness, or acts in violation of criminal statute.

Our articles of incorporation provide that our directors and officers shall not be personally liable for monetary damages (including, without limitations, any judgment, amount paid in settlement, penalty, punitive damages or expense of any nature (including, without limitations, attorneys’ fees and disbursement)) for any action taken, or any failure to take any action, unless the director has breached or failed to perform the duties of his office under our articles, bylaws or applicable provisions of law and the breach or failure to perform constitutes self-dealing, willful misconduct or recklessness. Further, the articles provide that indemnification shall not apply to the responsibility or liability of a director or officer pursuant to any criminal statute or for the payment of taxes.

Our bylaws provide for the indemnification of any director or officer made part of any action, suit or proceeding against the reasonable expenses, including attorneys’ gees, actually and necessarily incurred by him in connection with the defense of such action, suit or proceed, or in connection with any appeal therein, except in relation to matters as to which it shall be adjudged in such action, suit or proceeding that such director or officer is liable for negligence or misconduct in the performance of his duties. In the case of a criminal action, suit or proceeding, a conviction or judgment (whether based on a plea of guilty or nolo contendere or its equivalent, or after trial) shall not be deemed an adjudication that such officer, director or employee is liable for negligence or misconduct in the performance of his duties if such officer, director or employee was acting in good faith in what he considered to be our best interests and with no reasonable cause to believe that the action was illegal. Further, the bylaws provide that the board of directors may authorize us to purchase and maintain directors’ and officers’ liability insurance, insuring against any liability asserted against him and incurred by him in his capacity or arising out of his status as a director and/or officer to the extent authorized by law.

Transfer Agent and Registrar

The transfer agent for our common stock is HSBC Bank USA, National Association, Brooklyn, New York.

SHARES ELIGIBLE FOR FUTURE SALE

Prior to this offering there has been a limited and sporadic trading market for our common stock. However, our management does not believe such limited activity constitutes an established public trading market. We cannot assure you that a liquid trading market for our common stock will develop or be sustained after this offering. Future sales of substantial amounts of common stock, including shares issued upon exercise of options and warrants, in the public market, or the anticipation of those sales, could adversely affect market prices prevailing from time to time and could impair our ability to raise capital through sales of our equity securities.

Upon completion of this offering, we will have ___ outstanding shares of common stock. All of the ___ shares sold in this offering will be freely tradable without restriction under the Securities Act unless purchased by our “affiliates,” as that term is defined in Rule 144 under the Securities Act. ___ shares of common stock to be outstanding after this offering are “restricted securities” under Rule 144. ___ shares will be freely tradeable under Rule 144(k) and ___ shares will be eligible for resale under Rule 144, subject to volume limitations.

Restricted securities may be sold in the public market only if registered or if they qualify for an exemption from registration under Rule 144 under the Securities Act, which is summarized below.

Rule 144

In general, under Rule 144, a person who has beneficially owned shares of our common stock for at least one year would be entitled to sell, within any three-month period, a number of shares that does not exceed the greater of:

• 1% of the number of shares of common stock then outstanding, which will equal approximately ___ shares immediately after this offering; and

• the average weekly trading volume of the common stock on the OTC Bulletin Board during the four calendar weeks preceding the filing of a notice on Form 144 with respect to the sale.

Sales under Rule 144 are also subject to manner of sale provisions and notice requirements and to the availability of current public information about us.

Rule 144(k)

Shares of our common stock eligible for sale under Rule 144(k) may be sold at any time before or after the completion of this offering. In general, under Rule 144(k), a person may sell shares of common stock acquired from us, without regard to the manner of sale, the availability of public information or volume, if:

• the person is not our affiliate and has not been our affiliate at any time during the three months preceding such a sale; and

• the person has beneficially owned the shares proposed to be sold for at least two years, including the holding period of any prior owner other than an affiliate.

Registration Rights

We granted Kimco the right to require us to register the shares that Kimco purchases that are not otherwise subscribed for by our shareholders in this rights offering under the Securities Act. After registration pursuant to these rights, these shares will become freely tradable without restriction under the Securities Act. For more information regarding these registration rights, see “Description of Capital Stock — Registration Rights” included elsewhere in this prospectus.

Stock Options

As of December 1, 2004, we had outstanding options to purchase 96,000 shares of common stock. On September 7, 2004, we filed a registration statement on Form S-8 under the Securities Act to register all of the shares of common stock subject to outstanding options and other awards issuable under various agreements.

PLAN OF DISTRIBUTION

We will distribute by mail a copy of this prospectus and the subscription certificates evidencing the subscription rights to our holders of record as of ___, 2005, on or about ___, 2005. We expect that the holders of record who hold shares of our common stock on behalf of beneficial owners will forward a copy of this prospectus and the related subscription information and forms to those beneficial holders in adequate time to permit beneficial owners to complete and deliver any subscription instructions to those banks, brokers or other nominees. However, we cannot assure you that this will be the case.

As discussed above, we have engaged HSBC Bank USA, National Association as our subscription agent to assist in the distribution of the subscription rights, this prospectus and the related subscription information and forms. HSBC Bank USA, National Association, as our subscription agent, will receive and process all subscription certificates from our holders of record and will distribute certificates for the shares of our common stock purchased by holders of record upon the expiration of this offering. Certain of our employees, officers or directors may solicit responses from our shareholders to the rights offering, but such individuals will not receive any commissions or compensation for such services other than their normal employment compensation.

CERTAIN U.S. FEDERAL INCOME TAX CONSIDERATIONS

The following is a general discussion of certain United States federal income tax consequences to U.S. holders, as defined below, of the receipt, ownership and exercise of the rights distributed in the rights offering. This discussion is based on the Internal Revenue Code of 1986, as amended, the Code”, Treasury regulations promulgated thereunder, and administrative and judicial interpretations thereof, all as in effect as of the date hereof and all of which are subject to change, possibly with retroactive effect. This discussion is not binding on the Internal Revenue Service, the IRS, or the courts. Accordingly, no assurance can be given that the tax consequences described herein will not be challenged by the IRS or that such a challenge would not be sustained by a court. No ruling has been sought from the IRS, and no opinion of counsel has been rendered, as to the federal income tax consequences set forth in this discussion.

This discussion does not address all aspects of U.S. federal income taxation that may be applicable to holders in light of their particular circumstances or to holders subject to special treatment under the U.S. federal income tax laws, including, but not limited to, financial institutions, brokers and dealers in securities or currencies, insurance companies, tax-exempt organizations, persons who hold their shares as part of a straddle, hedge, conversion or other risk-reduction transaction, persons liable for the alternative minimum tax, U.S. expatriates, persons whose functional currency is not the U.S. dollar and foreign taxpayers. This discussion also does not address any aspect of state, local or foreign income or other tax laws. This discussion is limited to U.S. holders which hold our shares as capital assets. For purposes of this discussion, a “U.S. holder” is a holder that is, for U.S. federal income tax purposes:

•   a citizen or resident of the United States;

•   a corporation or partnership created or organized in or under the laws of the United States or any political subdivision thereof;

•   an estate the income of which is subject to U.S. federal income taxation regardless of its source; or

•   a trust if a U.S. court is able to exercise primary supervision over the administration of the trust and one or more U.S. persons have the authority to control all substantial decisions of the trust.

YOU SHOULD CONSULT YOUR TAX ADVISOR AS TO THE PARTICULAR TAX CONSEQUENCES TO YOU OF YOUR RECEIPT, OWNERSHIP AND EXERCISE OF THE RIGHTS, INCLUDING THE APPLICABILITY OF ANY FEDERAL ESTATE OR GIFT TAX LAWS OR ANY STATE, LOCAL OR FOREIGN TAX LAWS.

Receipt of the Rights

You will not recognize taxable income for U.S. federal income tax purposes in connection with the receipt of rights in the rights offering.

Tax Basis and Holding Period of the Rights

The tax basis of the rights received by you in the rights offering will be zero unless either (1) the fair market value of the rights on the date such rights are distributed is equal to at least 15% of the fair market value on such date of the shares with respect to which they are received or (2) you elect to allocate part of the tax basis of such shares to the rights. If either (1) or (2) is true, then, if you exercise the rights, your tax basis in your shares will be allocated between the rights and the shares with respect to which the rights were received in proportion to their respective fair market values on the date the rights are distributed. We have not obtained an independent appraisal of the valuation of the rights and, therefore, you should consult with your tax advisor to determine the proper allocation of basis between the rights and the shares with respect to which the rights are received.

Your holding period for the rights will include your holding period for the shares with respect to which the rights were received.

LEGAL MATTERS

Certain legal matters with respect to the validity of the shares of common stock offered hereby will be passed upon for us by Morgan, Lewis & Bockius LLP, Philadelphia, Pennsylvania.

EXPERTS

Parente Randolph, independent auditors, have audited our combined balance sheets at October 31, 2002 and 2003, and the related combined statements of operations and earnings retained in the business and cash flows for the years ended October 31, 2003, and 2002, the seven months ended October 31, 2001 and the year ended March 31, 2001. We have included our financial statements in the prospectus and elsewhere in the registration statement in reliance on Parente Randolph’s report, given on their authority as experts in accounting and auditing.

WHERE YOU CAN FIND MORE INFORMATION

We have filed with the Securities and Exchange Commission a registration statement on Form S-1 under the Securities Act with respect to the shares of common stock we are offering to sell. This prospectus, which constitutes part of the registration statement, does not include all of the information contained in the registration statement. You should refer to the registration statement and its exhibits for additional information. Whenever we make reference in this prospectus to any of our contracts, agreements or other documents, the references are not necessarily complete and you should refer to the exhibits attached to the registration statement for copies of the actual contract, agreement or other document.

We also file annual, quarterly and special reports, proxy statements and other information with the Securities and Exchange Commission. You can read the registration statement and our filings with the Securities and Exchange Commission over the Internet at the Securities and Exchange Commission’s website at http://www.sec.gov. You may also read and copy any document that we file with the Securities and Exchange Commission at its Public Reference Room at 450 Fifth Street, NW, Washington DC 20549.

You may also obtain copies of the documents we file with the Securities and Exchange Commission at prescribed rates by writing to the Public Reference Section of the Securities and Exchange Commission at 450 Fifth Street, NW, Washington, DC 20549. Please call the Securities and Exchange Commission at 1-800-SEC-0330 for further information on the operation of the Public Reference Room.

Independent Auditors’ Report

To Shareholders of
Blue Ridge Real Estate Company
and Big Boulder Corporation:

We have audited the accompanying combined balance sheets of Blue Ridge Real Estate Company and subsidiaries and Big Boulder Corporation and subsidiaries (the “Companies”) as of October 31, 2003 and 2002, and the related combined statements of operations and earnings retained in the business and cash flows for the years ended October 31, 2003 and 2002, the seven months ended October 31, 2001 and the year ended March 31, 2001. These financial statements are the responsibility of the Companies’ management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the combined financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the combined financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall combined financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the combined financial statements referred to above present fairly, in all material respects, the financial position of Blue Ridge Real Estate Company and subsidiaries and Big Boulder Corporation and subsidiaries as of October 31, 2003 and 2002, and the results of their operations and their cash flows for the years ended October 31, 2003 and 2002, the seven months ended October 31, 2001 and the year ended March 31, 2001 in conformity with accounting principles generally accepted in the United States of America.

Parente Randolph, PC
Wilkes-Barre, Pennsylvania
January 9, 2004, except for
Note 4 and Note 5 paragraph (b),
as to which the date is January 27, 2004

F-2

BLUE RIDGE REAL ESTATE COMPANY and SUBSIDIARIES
AND
BIG BOULDER CORPORATION and SUBSIDIARIES

COMBINED BALANCE SHEETS
October 31, 2003 and 2002


ASSETS	10/31/03		10/31/02
Current Assets:
Cash and cash equivalents (all funds are interest bearing)	$	178,315	$	261,311
Accounts receivable and notes receivable		705,408		388,292
Inventories		295,828		247,460
Prepaid expenses and other current assets		822,537		918,210
Deferred operating costs		2,509,778		2,275,784

Total current assets		4,511,866		4,091,057

Cash held in escrow		309,308		107,909

Notes receivable noncurrent		353,238		0

Properties:
Land held for investment, principally unimproved (14,389 and 19,714, respectively, acres per land ledger)		1,791,594		1,867,352
Land and land development costs(5,124 acres per land ledger)		918,860		0
Land improvements, buildings and equipment		53,309,527		56,190,649

		56,019,981		58,058,001
Less accumulated depreciation and amortization		35,944,275		37,611,139

		20,075,706		20,446,862

Assets held for sale		2,710,292		0

	$	27,960,410	$	24,645,828


LIABILITIES AND SHAREHOLDERS’ EQUITY	10/31/03		10/31/02
Current Liabilities:
Notes payable - line of credit	$	1,188,000	$	600,000
Current installments of long-term debt and capital lease obligations		7,101,661		5,266,548
Accounts and other payables		979,509		913,825
Accrued claims		250,942		208,642
Deferred revenue		737,533		698,242
Accrued pension expense		733,710		890,493
Accrued liabilities		824,998		631,913
Deferred income taxes		832,000		796,000

Total current liabilities		12,648,353		10,005,663

Long-term debt and capital lease obligations, less current installments		3,889,095		2,783,257
Deferred income non-current		515,631		515,631

Other non-current liabilities		12,572		28,756

Deferred income taxes		1,371,000		1,110,000

Commitments and contingencies
Combined shareholders’ equity:
Capital stock, without par value, stated value $.30 per combined share, Blue Ridge and Big Boulder each authorized 3,000,000 shares, each issued 2,198,148 shares		659,444		659,444
Capital in excess of stated value		1,461,748		1,461,748
Compensation recognized under employee stock plans		200,900		0
Earnings retained in the business		9,287,074		10,166,211

		11,609,166		12,287,403
Less cost of 282,018 and 281,968 shares of capital stock in treasury as of October 31, 2003 and 2002, respectively.		2,085,407		2,084,882

		9,523,759		10,202,521

		27,960,410		24,645,828

The accompanying notes are an integral part of the combined financial statements.

F-3

BLUE RIDGE REAL ESTATE COMPANY and SUBSIDIARIES
AND
BIG BOULDER CORPORATION and SUBSIDIARIES

COMBINED STATEMENTS OF OPERATIONS
AND EARNINGS RETAINED IN THE BUSINESS
for the years ended October 31, 2003 and 2002, the seven months ended October 31, 2001
and the year ended March 31, 2001


	10/31/03			10/31/02			10/31/01			03/31/01
Revenues:
Ski operations	$	10,269,984		$	10,015,075		$	0		$	11,267,371
Real estate management		3,129,394			3,029,396			1,562,649			3,109,799
Summer recreation operations		1,876,724			2,439,963			2,099,387			2,651,591
Land resource management		2,620,907			1,280,021			0			0
Rental income		1,964,609			1,871,456			1,100,031			1,867,690

		19,861,618			18,635,911			4,762,067			18,896,451

Costs and expenses:
Ski operations		10,669,427			10,108,567			1,100,477			11,246,003
Real estate management		2,750,152			2,585,552			1,419,318			2,676,191
Summer recreation operations		1,738,786			2,250,002			1,935,710			2,292,473
Land resource management		585,137			523,542			0			0
Rental income		3,256,216			968,084			576,287			950,258
General and administration		1,055,746			703,976			650,425			1,768,375

		20,055,464			17,139,723			5,682,217			18,933,300

(Loss) income from operations		(193,846	)		1,496,188			(920,150	)		(36,849	)

Other income (expense):
Interest and other income		22,475			18,066			55,642			866,127
Interest expense		(424,766	)		(374,905	)		(296,041	)		(736,865	)

		(402,291	)		(356,839	)		(240,399	)		129,262

(Loss) income before income taxes		(596,137	)		1,139,349			(1,160,549	)		92,413

Provision (credit) for income taxes:
Current		(14,000	)		14,000			(46,453	)		259,417
Deferred		297,000			438,591			(309,674	)		(419,536	)

		283,000			452,591			(356,127	)		(160,119	)

Net (loss) income		(879,137	)		686,758			(804,422	)		252,532
Earnings retained in business:
Beginning of year		10,166,211			9,479,453			10,283,875			10,031,343

End of year	$	9,287,074		$	10,166,211		$	9,479,453		$	10,283,875

Basic and diluted (loss) earnings per weighted average combined share	($	0.45	)	$	0.36		($	0.42	)	$	0.13

The accompanying notes are an integral part of the combined financial statements.

F-4

BLUE RIDGE REAL ESTATE COMPANY
AND
BIG BOULDER CORPORATION

NOTES TO COMBINED FINANCIAL STATEMENTS
AS OF OCTOBER 31, 2003

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

Basis of Combination:

The combined financial statements include the accounts of Blue Ridge Real Estate Company (“Blue Ridge”) and its wholly-owned subsidiaries, Northeast Land Company, Jack Frost Mountain Company, Boulder Creek Resort Company and BRRE Holdings, Inc.; and Big Boulder Corporation (“Big Boulder”) and its wholly-owned subsidiaries, Lake Mountain Company and BBC Holdings, Inc. Under a Security Combination Agreement between Blue Ridge and Big Boulder and under the by-laws of both Companies, shares of the Companies are combined in unit certificates, each certificate representing concurrent ownership of the same number of shares of each company; shares of each company may be transferred only together with an equal number of shares of the other company. All significant intercompany accounts and transactions are eliminated.

Revenue Recognition:

Revenues are derived from a wide variety of sources, including sales of lift tickets, ski school tuition, dining, retail stores, equipment rental, property management services, timbering and other recreational activities. Revenues are recognized as services are performed or products are delivered. Timbering revenues from stumpage contracts are recognized in accordance with Staff Accounting Bulletin No. 104 — Revenue Recognition, (“SAB 101”). At the time a stumpage contract is signed, the risk of ownership has been passed to the buyer at a fixed, determinable cost. Reasonable assurance of collectibility has been determined by the date of signing, and the few obligations of the Companies’ have already been met. Therefore, full accrual recognition at the time of contract execution is appropriate under SAB 101 guidance.

Seasonality:

Operations are highly seasonal at both ski mountains with the majority of revenues realized during the ski season from late November through the end of March. The length of the ski season and the profitability of operations are significantly impacted by weather conditions. Although the mountains have snowmaking capacity to mitigate some of the effects of adverse weather conditions, abnormally warm weather or lack of adequate snowfall can materially affect revenues.

Disposition of Land and Resort Homes:

The Companies recognize income on the disposition of real estate in accordance with the provisions of Statement of Financial Accounting Standards No. 66, “Accounting for Sales of Real Estate” (“SFAS 66”). Down payments of less than 20% are accounted for as deposits as required by SFAS No. 66.

The costs of developing land for resale as resort homes and the costs of constructing certain related amenities are allocated to the specific parcels to which the costs relate. Such costs, as

F-5

well as the costs of construction of the resort homes, are charged to operations as sales occur. Land held for resale and resort homes under construction are stated at lower of cost or market.

Land and Land Development Costs:

The Companies capitalize as land and land development costs, the original acquisition cost, direct construction and development costs, property taxes, interest incurred on costs related to land under development and other related costs (engineering, surveying, landscaping, etc.) until the property reaches its intended use. The cost of sales for individual parcels of real estate or condominium units within a project is determined using the relative sales value method. Selling expenses are charged against income in the period incurred.

Properties and Depreciation:

Properties are stated at cost. Depreciation and amortization is provided principally using the straight-line method over the following years:


Land improvements			10-30
Buildings			3-30
Equipment and furnishings			3-20
Ski facilities:
Land improvements			10-30
Buildings			5-30
Machinery and equipment			5-20

Upon sale or retirement of depreciable property, the cost and related accumulated depreciation are removed from the related accounts, and resulting gains or losses are reflected in income.

Interest, real estate taxes, and insurance costs, including those costs associated with holding unimproved land, are normally charged to expense as incurred. Interest cost incurred during construction of facilities is capitalized as part of the cost of such facilities.

Maintenance and repairs are charged to expense, and major renewals and betterments are added to property accounts.

Impairment losses are recognized in operating income as they are determined. The Companies review their long-lived assets whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. In that event, the Companies calculate the expected future net cash flows to be generated by the asset. If those net future cash flows are less than the carrying value of the asset, an impairment loss is recognized in operating income. The impairment loss is the difference between the carrying value and the fair value of the asset. No such losses were recognized as of October 31, 2003.

Deferred Operating Costs:

Deferred operating costs are capitalized from April through November for costs directly related to the winter ski season. These costs are deferred in order to match operating expenses of the ski season with revenues generated from ski activities. Deferred operating costs are then recognized ratably over the months of December through March, the ski season period. Significant expenditures capitalized as deferred operating costs at October 31, 2003 include depreciation, advertising, insurance, real estate taxes and other costs.

F-6

Inventories:

Inventories consist of food, beverage, and retail merchandise and are stated at cost which approximates market, with cost determined using the first-in, first-out method.

Deferred Revenue:

Deferred revenue consists of revenue billed in advance for services and dues that are not yet earned. Revenue billed in advance for services consists of season lift tickets and advance ticket sales and gift certificates for the ski resorts. The Companies recognize revenue billed in advance ratably over the principal months of the ski season, December through March. Dues that are not yet earned consist of rents related to our commercial properties that have been paid in advance, and dues related to memberships in our hunting and fishing clubs paid in advance. The Companies recognize revenue related to the hunting and fishing clubs over the one-year period that the dues cover.

Income Taxes:

The Companies account for income taxes utilizing the asset and liability method of recognizing the tax consequence of transactions that have been recognized for financial reporting or income tax purposes. Among other things, this method requires current recognition of the effect of changes in statutory tax rates on previously provided deferred taxes. Valuation allowances are established, when necessary, to reduce tax assets to the amount expected to be realized. Blue Ridge, including its subsidiaries, and Big Boulder, including its subsidiaries, report as separate entities for federal income tax purposes. State income taxes are reported on a separate company basis.

Deferred Income:

Amounts received under a contract with the Pennsylvania Department of Transportation for reimbursement of the cost of a constructed asset are deferred. The amounts will be recognized as income over the period in which depreciation on those assets is charged. This asset has not yet been placed in service.

Advertising Costs:

Advertising costs directly related to ski operations are capitalized as deferred operating costs for the fiscal year ended October 31, 2003. All other advertising costs are expensed when incurred. Advertising expense for Fiscal 2003, 2002, the seven months ended October 31, 2001 and Fiscal 2001 were $1,385,482, $1,463,455, $216,559 and $1,538,647, respectively.

Use of Estimates and Assumptions:

The preparation of financial statements and related disclosures in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. For example, unexpected changes in market conditions or a downturn in the economy could adversely affect actual results. Estimates are used in accounting for, among other things, inventory obsolescence, accounts and notes receivables, deferred operating costs, legal liability, insurance liability, depreciation, employee benefits,

F-7

taxes, and contingencies. Estimates and assumptions are reviewed periodically and the effects of revisions are reflected in the Combined Financial Statements in the period they are determined to be necessary.

Management believes that its accounting policies regarding revenue recognition, deferred operating costs, long lived assets, deferred revenues, income taxes and other reserves, among others, affect its more significant judgments and estimates used in the preparation of its Combined Financial Statements. For a description of these critical accounting policies and estimates, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” Management believes there have been no significant changes in the Companies’ critical accounting policies or estimates since the Companies’ fiscal year ended October 31, 2002.

Statement of Cash Flows:

For purposes of reporting cash flows, the Companies consider cash equivalents to be all highly liquid investments with maturities of three months or less when acquired.

Concentration of Credit Risk:

Financial instruments which potentially subject the Companies to concentration of credit risk consist principally of temporary cash investments. The Companies’ temporary cash investments are held by financial institutions. The Companies have not experienced any losses related to these investments.

Earnings (Loss) Per Share:

Basic earnings (loss) per share is calculated based on the weighted-average number of shares outstanding. Diluted earnings (loss) per share includes the dilutive effect of stock options.

Business Segments:

The Companies and the subsidiaries, under SFAS No. 131 operate in four business segments — Ski Operations, Real Estate Management/Rental Operations, Summer Recreation Operations and Land Resource Management. The Companies’ two ski facilities operate principally during the months of December through March. Costs and expenses net of revenues received in advance, directly related to the Ski Operations that are incurred during the months of April through November are capitalized as deferred operating costs and recognized as revenue and operating expenses, ratably, over the ski operating season. Revenues and operating expenses of the Real Estate Management / Rental Operations, Summer Recreation Operations and Land Resource Management are as disclosed on the statement of operations.

Stock Compensation:

During Fiscal 1998, the Companies adopted an employee stock option plan. The Companies apply APB Opinion No. 25, “Accounting for Stock Issued to Employees,” in accounting for its employee stock options as permitted by SFAS No. 123, “Accounting for Stock Based Compensation,” and SFAS No. 148, “Accounting for Stock-Based Compensation-Transition and Disclosure.” Under APB No. 25, because the exercise price of the employee stock options equals the estimated fair market value of the Companies’ underlying stock on the date of the grant, no compensation expense is recognized. However, during Fiscal 2003, the original term of 35,000 options granted at an original exercise price of $6.75 were extended to July 1, 2008. In accordance with FASB Interpretation No. 44, “Accounting for Certain Transactions Involving

F-8

Stock Compensation” (“FIN 44”), the extension of the life of the award requires a new measurement of compensation as if the award was newly granted. Because the exercise price was less than the current fair market value at the new date of grant, compensation cost of $122,900, net of tax has been recognized in the combined statement of operations.

Had compensation cost for the Companies’ employee stock option plan been determined consistent with SFAS No. 123 and SFAS No. 148, the Companies’ net income and earnings per share would have been reduced to the pro forma amounts indicated below:


	10/31/03			10/31/02
Net (loss) income, as reported	$	(879,137	)	$	686,758
Add: Stock-based employee compensation expense included in reported net (loss) income, net of related tax effects		122,900			—
Deduct: Total stock-based employee compensation expense determined under fair value based method for all awards, net of tax effects		(346,368	)		(82,276	)

Pro forma net (loss) income	$	(1,102,605	)	$	604,482

Basic (loss) earnings per share:
As reported	$	(0.45	)	$	0.36

Pro forma	$	(0.57	)	$	0.32

Diluted (loss) earnings per share:
As reported	$	(0.45	)	$	0.36

Pro forma	$	(0.57	)	$	0.31

Under SFAS No. 123, the fair value of stock-based awards to employees is calculated through the use of option pricing models. These models also require subjective assumptions, including future stock price volatility and expected time to exercise, which greatly affect the calculated values. The Companies’ calculations were made using the Black-Scholes option pricing model with the following weighted average assumptions used for grants in 2003 and 2002, respectively: 4.4 and 5.6 years expected life; stock volatility of 5.9% and 4.1%; a risk-free interest rate of 3.0% and 2.5%; and no dividends during the expected term. At October 31, 2001 and March 31, 2001, no options were granted, therefore, there is no difference between reported net income and pro forma net income.

F-9

New Accounting Pronouncements:

In November 2002, the Financial Accounting Standards Board (“FASB”) issued Financial Interpretation No. 45 (“FIN 45”), “Guarantor’s Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others.” This interpretation elaborates on the disclosures to be made by a guarantor in its interim and annual financial statements about its obligations under certain guarantees that it has issued. It also clarifies that a guarantor is required to recognize, at inception of a guarantee, a liability for the fair value of the obligation undertaken in issuing the guarantee. The initial recognition and initial measurement provisions of FIN 45 are applicable on a prospective basis to guarantees issued or modified after December 31, 2002. The disclosure requirements in the interpretation are effective for financial statements of interim or annual periods ending after December 15, 2002. The Companies adopted the provisions of FIN 45 as of January 1, 2003, which did not have a significant impact on the Companies’ financial position or results of operations.

In May 2003, the FASB issued SFAS No. 150, “Accounting for Certain Financial Instruments with Characteristics of Both Liabilities and Equity.” SFAS No. 150 establishes standards for how an issuer classifies and measures certain financial instruments with characteristics of both liabilities and equity; and requires that financial instruments within its scope, many of which currently are classified as equity, be classified as liabilities (or in some circumstances). SFAS No. 150 is effective for financial instruments entered into or modified after May 31, 2003, and otherwise is effective at the first interim period beginning after June 15, 2003. The FASB issued FASB Staff Position (“FSP”) 150-3 on November 7, 2003 to defer the effective date for applying the provisions of SFAS No. 150 for certain mandatorily redeemable noncontrolling interest. The Companies do not expect the implementation of SFAS No. 150 will have a significant impact on its financial position or results of operations.

2. CHANGE IN FISCAL REPORTING PERIOD

At an executive session held on August 28, 2001 the Board of Directors resolved that the Companies’ fiscal year end be changed from March 31st to October 31st. This change is effective for each of the Companies at October 31, 2001, resulting in a 7 month transition period which does not include any ski area revenue. The purpose is to allow for a more natural business year and to conform the Companies’ reporting period to that of the majority stockholder’s financial statements.

F-10

3. CONDENSED FINANCIAL INFORMATION:

Condensed financial information of the constituent Companies, Blue Ridge and its subsidiaries and Big Boulder and its subsidiaries, at October 31, 2003, 2002 and 2001 and March 31, 2001 and for each of the periods then ended is as follows:

Blue Ridge and Subsidiaries


						7 Mos. Ended
	10/31/03			10/31/02		10/31/01			03/31/01
FINANCIAL POSITION:
Current assets	$	2,342,819		$	1,822,718	$	1,520,615		$	1,346,838
Total assets		20,238,523			17,601,995		16,028,020			16,368,221
Current liabilities		11,531,451			9,128,902		4,332,664			3,125,297
Shareholders’ equity		3,801,014			4,454,828		3,894,672			4,404,959
OPERATIONS:
Revenues		14,152,869			12,731,076		3,782,404			12,367,702
Income (loss) before taxes		(701,187	)		951,294		(536,374	)		(75,807	)
Provision (credit) for income taxes		153,000			380,639		(62,685	)		(284,176	)
Net (loss) income		(854,187	)		570,655		(473,689	)		208,369

Big Boulder and Subsidiaries


						7 Mos. Ended
	10/31/03			10/31/02		10/31/01			03/31/01
FINANCIAL POSITION:
Current assets	$	2,169,047		$	2,268,339	$	2,188,032		$	2,602,388
Total assets		7,721,887			7,043,833		6,898,423			7,605,859
Current liabilities		1,116,902			876,761		711,744			361,244
Shareholders’ equity		5,722,745			5,747,693		5,631,591			5,962,322
OPERATIONS:
Revenues		5,708,749			5,904,835		979,663			6,528,749
Income (loss) before taxes		105,050			188,055		(624,175	)		168,220
Provision (credit) for income taxes		130,000			71,952		(293,442	)		124,057
Net (loss) income		(24,950	)		116,103		(330,733	)		44,163

4. SHORT-TERM FINANCING:

Management has obtained two new lines of credit with Manufacturers and Traders Trust Company totaling $3.1 million pursuant to the termination of its line of credit with PNC Bank, N.A. The $2.1 million line is used for general operation and the $1 million line was secured for real estate transactions. At October 31, 2003, Blue Ridge had utilized approximately $999,000 of the general line of credit, aggregating $2,100,000 which is an on demand line with no expiration date. The line of credit bears interest at .50% less than the prime rate (3.50% at October 31, 2003). At October 31, 2003, the Companies had also utilized $189,000 of the real estate line of credit, aggregating $1,000,000. The real estate line of credit bears the same interest as the general line. The weighted average interest rate at October 31, 2003 was 3.81%. The agreement requires, among other things, that the Companies comply with consolidated debt to worth, debt service coverage and tangible net worth ratios. The Companies have met or obtained waivers for each of these covenants at January 27, 2004. The line of credit agreement enables the Companies to issue letters of credit in amounts up to

F-11

$100,000. At October 31, 2003, a $20,000 letter of credit to Tobyhanna Township was outstanding. Outstanding letters of credit reduce the amounts available under the line of credit.

5. LONG-TERM DEBT:

Long-term debt as of October 31, 2003 and 2002 consists of the following:


	10/31/03		10/31/02
Mortgage note payable to bank, interest is LIBOR plus 160 basis points (2.72% at October 31, 2003) payable monthly with principal reduction of $18,000 through maturity, February 2004	$	4,383,000	$	4,599,000
Mortgage note payable to bank, interest at 80% of the bank’s prime rate (3.20% at October 31, 2003) payable in monthly installments of $24,187 plus interest through Fiscal 2005		532,120		822,366
Mortgage note payable to insurance company, interest fixed at 10.5% payable in monthly installments of $15,351 including interest through Fiscal 2014		1,148,278		1,208,439
Mortgage note payable to bank, interest at 6.84% payable monthly with principal reduction at $40,000 per month December to March through 2004, paid in entirety February 2003 prior to maturity		0		320,000
Mortgage note payable to bank, interest at LIBOR plus 200 basis points, (fixed at a SWAP rate 3.61% at October 31, 2003), payable monthly with principal reduction of $39,286 per month January to April through 2009 (a), (b)		942,857		1,100,000
Mortgage note payable to bank, interest fixed at 3.43875% (for first year of loan, thereafter rate to be negotiated) payable in monthly installments of $8,377 including interest through Fiscal 2008		819,958		0
Mortgage note payable to bank, interest fixed at 3.57% (for first year of loan, thereafter rate to be negotiated) payable in monthly installments of $4,651 including interest through Fiscal 2008		465,590		0
Mortgage note payable to bank, interest at the bank’s prime rate (4% at October 31, 2003) payable in entirety upon maturity date of April 30, 2004.		1,900,000		0
Capital lease obligation payable to bank, implicit interest at 5.28%, payable in 20 principal and interest installments of $18,498 in the months of January to April through Fiscal 2007		258,946		0
Capital lease obligation payable to bank, implicit interest at 5.28%, payable in 20 principal and interest installments of $38,300 in the months of January to April through Fiscal 2007		540,007		0

		10,990,756		8,049,805
Less current installments		7,101,661		5,266,548

	$	3,889,095	$	2,783,257

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5. LONG-TERM DEBT: (continued)

Properties at cost, which have been pledged as collateral for long-term debt, include the following at October 31, 2003:


Investment properties leased to others	$	7,698,619
Ski facilities	$	17,906,470

(a) The Companies have entered into an interest swap agreement, which is considered a derivative financial instrument, to hedge its variable interest rate payment obligations on its long-term debt. The derivative is not used for trading purposes and involves little complexity. The notional amount of the interest rate swap agreement is equivalent to the principal balance of the long-term debt and is used to measure the interest to be paid or received, and does not represent the amount of exposure to credit loss. Exposure to credit loss is limited to the receivable amount, if any, that may be generated as a result of this swap agreement.

The fair value of the derivative financial instrument, which is the amount the Companies would receive or pay to terminate the agreement, is not significant. No carrying amounts were recorded in the accompanying combined balance sheet and no gains or losses were recognized in income during 2003.

(b) During Fiscal 2002 the Companies entered into a $1,100,000 mortgage note payable with Manufacturers and Traders Trust Company. The agreement requires, among other things, that the Companies comply with annual consolidated debt to worth and consolidated debt service coverage ratios and meet a consolidated tangible net worth threshold. The Companies have not met with the required consolidated debt service coverage ratio or the required consolidated tangible net worth at October 31, 2003. The primary reason for default is the debt classified as current for Dreshertown Shopping Plaza which totals $6,067,000. The Companies have met the consolidated debt to worth ratio and have obtained waivers for those in default at January 27, 2004.

The aggregate amount of long-term debt maturing in each of the five years ending subsequent to October 31, 2003, is as follows: 2004 — $7,101,661; 2005 — $792,414; 2006 — $562,781; 2007 — $576,196; 2008 — $1,068,414; thereafter $889,290.

6. INCOME TAXES:

The provision (credit) for income taxes is as follows:


	10/31/03			10/31/02		10/31/01			03/31/01
Currently payable:
Federal	($	14,000	)	$	14,000	($	46,453	)	$	259,417
State		0			0		0			0

		(14,000	)		14,000		(46,453	)		259,417

Deferred:
Federal		96,000			368,865		(537,361	)		(315,926	)
State		201,000			69,726		227,687			(103,610	)

		297,000			438,591		(309,674	)		(419,536	)

	$	283,000		$	452,591	($	356,127	)	($	160,119	)

F-13

6. INCOME TAXES: (continued)

A reconciliation between the amount computed using the statutory federal income tax rate and the provision (credit) for income taxes is as follows:


	10/31/03			10/31/02		10/31/01			03/31/01
Computed at statutory rate	($	201,532	)	$	387,379	($	394,587	)	$	31,420
State net operating losses subject to valuation allowance		306,330			0		0			0
State income taxes, net of federal income tax		132,660			46,019		218,656			0
Prior year over accrual		0			0		(130,594	)		(107,367	)
Nondeductible expenses		69,989			0		0			0
Other		(19,563	)		19,193		(3,149	)		3,919
AMT (utilization) tax		(4,884	)		0		(46,453	)		(88,091	)

Provision (credit) for income taxes	$	283,000		$	452,591	($	356,127	)	($	160,119	)

The components of the deferred tax assets and (liabilities) as of October 31, 2003 and 2002 are as follows:


	10/31/03			10/31/02
Current deferred tax liability:
Deferred operating costs	($	1,040,000	)	($	924,000	)
Accrued expenses		180,000			101,000
Deferred revenues		28,000			27,000

Current deferred tax liability		(832,000	)		(796,000	)

Noncurrent deferred tax liability:
Depreciation		(3,406,000	)		(2,638,000	)
Deferred income, sewer line and tower		214,000			221,000
Capital lease obligation		(4,000	)		0
Net operating losses and AMT credit carryforward		2,920,000			2,177,000
Valuation allowance		(1,095,000	)		(870,000	)

Noncurrent deferred tax liability		(1,371,000	)		(1,110,000	)

Deferred income tax liability, net	($	2,203,000	)	($	1,906,000	)

At October 31, 2003, the Companies have $245,620 of Alternative Minimum Tax (AMT) credit carryforward available to reduce future income taxes. The AMT credit has no expiration date.

The Companies filed and received approval from the IRS to change their tax year-end. In connection with this filing, the Companies have agreed to certain regulatory provisions in order to obtain the IRS’s approval. This relates primarily to the federal net operating loss created in the short tax period ended October 31, 2001, approximating $3,570,000. The Companies may not carry back the net operating loss. Instead, the Companies must carry the loss forward to apply to taxable income over the next six years. That is, the loss carryforward is limited in those years to one-sixth of the total amount. Any losses unused after the six years will expire in 2021.

At October 31, 2003, the Companies have available approximately $4,645,000 of federal net operating losses, including the $3,570,000 above. They will begin to expire in 2021.

F-14

6. INCOME TAXES: (continued)

The Companies also have state net operating loss carryforwards of approximately $10,956,000, that will begin to expire in 2005. The Companies have recorded a valuation allowance against state net operating losses, which are not expected to be utilized.

7. PENSION BENEFITS:


Assumptions	10/31/03			10/31/02			10/31/01			03/31/01
Discount Rates used to determine projected benefit obligations as of October 31, 2003, 2002 and 2001 and March 31, 2001		6.50	%		7.25	%		7.25	%		7.25	%
Expected long-term rates of return on assets		8.50	%		8.50	%		8.50	%		8.50	%
Rates of increase in compensation levels		4.00	%		4.00	%		4.00	%		5.00	%


Change in Benefit Obligation	10/31/03			10/31/02
Benefit obligation at beginning of year	$	3,525,594		$	3,321,744
Service cost (net of expenses)		194,237			133,279
Interest cost		261,011			219,313
Plan amendments		0			0
Actuarial (gain) loss		591,074			15,706
Benefit payments		(159,245	)		(164,448	)

Benefit obligation at end of year	$	4,412,671		$	3,525,594


Change in Plan Assets	10/31/03			10/31/02
Fair value of plan assets at beginning of year	$	2,207,622		$	2,755,894
Actual return on plan assets		255,142			(333,915	)
Employer contributions		476,586			0
Benefits paid		(159,245	)		(164,448	)
Actual expenses paid during the year		(43,158	)		(49,909	)

Fair value of plan assets at end of year	$	2,736,947		$	2,207,622


Reconciliation of Funded Status of the Plan	10/31/03			10/31/02
Funded status at end of year	($	1,675,724	)	($	1,317,972	)
Unrecognized transition obligation		81,265			89,745
Unrecognized net prior service cost		7,692			8,303
Unrecognized net actuarial gain		853,057			329,431

Net amount recognized at end of year	($	733,710	)	($	890,493	)


Components of Net Periodic Benefit Cost	10/31/03		10/31/02			10/31/01			03/31/01
Service cost	$	237,437	$	170,579		$	130,757		$	238,365
Interest cost		261,011		219,313			129,820			220,819
Expected return on plan assets		201,264		228,316			143,485			287,388
Net amortization and deferral:
Amortization of transition obligation		8,480		8,480			4,947			8,480
Amortization of prior service cost		611		611			356			611
Amortization of accumulated gain		13,528		(12,754	)		(16,857	)		(48,721	)

Net amortization and deferral	$	22,619	($	3,663	)	($	11,554	)	($	39,630	)
Total net periodic pension cost	$	319,803	$	157,913		$	105,538		$	132,166

F-15

8. PROPERTIES:

Properties consist of the following at October 31, 2003 and 2002.


	10/31/2003		10/31/2002
Land, held for investment	$	1,791,594	$	1,867,352
Land and land development costs		918,860		0
Land improvements		5,574,589		5,501,314
Corporate buildings		470,907		470,907
Buildings leased to others		5,828,587		10,177,175
Ski Facilities
Land		4,552		4,552
Land improvements		8,256,234		8,194,370
Buildings		6,792,365		6,708,477
Machinery & equipment		23,534,269		19,565,698
Equipment & furnishings		2,848,024		5,568,156

		56,019,981		58,058,001
Less accumulated depreciation and amortization		35,944,275		37,611,139

	$	20,075,706	$	20,446,862

Included in machinery and equipment is $1,011,778 of assets held under capital lease at October 31, 2003.

9. ACCRUED LIABILITIES:

Accrued liabilities consist of the following at October 31, 2003 and 2002.


	10/31/2003		10/31/2002
Accrued Payroll	$	238,810	$	273,759
Accrued Security & Other Deposits		199,739		186,558
Accrued Professional Fees		210,959		144,732
Accrued - Miscellaneous		175,490		26,864

	$	824,998	$	631,913

10. LEASES:

The Companies are lessors under various operating lease agreements for the rental of land, land improvements and investment properties leased to others. Rents are reported as income over the terms of the leases as they are earned. A shopping center is leased to various tenants for renewable terms averaging 5.55 years with options for renewal. A store has been net leased until January 2039. Information concerning rental properties and minimum future rentals under current leases as of October 31, 2003, is as follows:


	Properties Subject to Lease
				Accumulated
	Cost			Depreciation
Investment properties leased to others	$	7,698,619		$	3,930,357
Land and land improvements		5,648,482			1,399,995
Minimum future rentals:
Fiscal years ending October 31: 2004	$	1,665,680
2005		1,472,579
2006		1,380,504
2007		1,296,930
2008		1,234,722
Thereafter		16,194,415	*

(A)	$	23,244,830

F-16

10. LEASES: (continued)

On December 22, 2003 the Companies signed an agreement for the sale of the Dreshertown Plaza shopping center. If this agreement is closed in March of 2004, $8,242,886 will have to be deducted from the future lease total (A) above.

On November 21, 2003 the Companies signed an agreement for the sale of four communication towers and pertinences. If this agreement is closed in April of 2004, $1,752,787 will have to be deducted from the future lease total (A) above.

* Includes $ 1,254,750 under a land lease expiring in 2072 and $ 6,299,020 under a net lease for a store expiring in 2039. There were no contingent rentals included in income for the fiscal years ended October 31, 2003 and 2002 or the seven months ended October 31, 2001 or the fiscal year ended March 31, 2001. Includes all option years and rental escalations, recognized using straight-line basis.

In Fiscal 2003, an agreement with a management company relating to the shopping center, was terminated. The management company was paid $1,972,090 for a buy out of their contract, which represented 25 % of the fair market value of the shopping center at the time the agreement was terminated.

11. FAIR VALUE OF FINANCIAL INSTRUMENTS

The estimated fair values of the Companies’ financial instruments are as follows at October 31, 2003 and 2002:


	October 31, 2003				October 31, 2002
	Carrying		Fair		Carrying		Fair
	Amount		Value		Amount		Value
ASSETS:
Cash and cash equivalents	$	178,315	$	178,315	$	261,311	$	261,311
Accounts receivable		705,408		705,408		388,292		388,292
Cash held in escrow		309,308		309,308		107,909		107,909
LIABILITIES:
Notes payable, line of credit		1,188,000		1,188,000		600,000		600,000
Accounts and other payables		979,509		979,509		913,825		913,825
Long-term debt		10,990,756		11,541,516		8,049,805		8,614,305

Fair Values were determined as follows:

Cash and cash equivalents, accounts receivable, cash held in escrow, notes payable, line of credit, accounts and other payables: The carrying amounts approximate fair value because of the short-term maturity of these instruments.

Long-term debt: The fair value of notes payable is estimated using discounted cash flows based on current borrowing rates available to the Companies for similar types of borrowing arrangements.

F-17

12. QUARTERLY FINANCIAL INFORMATION (Unaudited)

The results of operations for each of the quarters in the last two years are presented below.

Earnings (Loss)

Quarter

Income (Loss)

Per Weighted

Year ended

Operating

from

Net

Avg. Combined

10/31/03

Revenues

Operations

Share

1st

7,996,925

733,934

370,786

0.19

2nd

6,745,852

662,428

348,851

0.19

3rd

2,377,948

(2,141,551

)

(1,471,221

)

(0.77

)

4th

2,740,893

551,343

(127,553

)

(0.06

)

19,861,618

193,846

)

879,137

)

0.45

)

Year ended

10/31/02

1st

6,537,300

217,442

69,937

0.04

2nd

7,149,862

1,718,168

1,204,185

0.63

3rd

2,490,727

182,121

9,376

0.01

4th

2,458,022

(621,543

)

(596,740

)

(0.32

)

18,635,911

1,496,188

686,758

0.36

The quarterly results of operations for Fiscal 2003 and 2002, reflect the cyclical nature of the Companies’ business since (1) the Companies’ two ski facilities operate principally during the months of December through March and (2) land dispositions occur sporadically and do not follow any pattern during the fiscal year. Revenues generated from advance ticket sales have been recorded as deferred revenue, and likewise various operating costs directly related to the two ski facilities have been recorded as deferred operating costs.

13. BUSINESS SEGMENT INFORMATION:

The following information is presented in accordance with SFAS No. 131, “Disclosures about Segments of an Enterprise and Related Information.” In accordance with SFAS No. 131, the Companies’ business segments were determined from the Companies’ internal organization and management reporting, which are based primarily on differences in services.

The Companies and the subsidiaries, under SFAS No. 131, operate in four business segments consisting of the following:

Ski Operations:

Two ski areas located in the Pocono Mountains of Northeastern Pennsylvania.

Real Estate Management/Rental Operations:

Investment properties leased to others located in Eastern Pennsylvania and South Carolina, fees from managing investor-owned properties, principally resort homes, recreational club activities and services to the trusts that operate resort communities, sales of investment properties, and rental of land and land improvements.

Summer Recreation Operations:

Seasonal recreational operating centers located in the Pocono Mountains of Northeastern Pennsylvania — Splatter Paintball, Fern Ridge Campground, Lake Mountain Sports Club, Summer Music Festivals and TRAXX Motocross, ATV and BMX Park.

F-18

13. BUSINESS SEGMENT INFORMATION: (continued)

Land Resource Management:

Land Resource Management consists of land sales, land purchases, timbering operations and a construction and excavation division. Land sales revenue will be recognized in accordance with SFAS 66 when all conditions for full accrual recognition are met. The Companies endeavor to take advantage of the tax deferred treatment of like kind exchanges under IRS code section 1031. In a typical transaction, proceeds of a land sale are held in escrow by an intermediary, pending the identification of a property suitable for exchange. Timbering operations consist of selective timbering on the Companies’ land holdings. Contracts are entered into for parcels which have had the timber selectively marked. Management is devising a long-term plan of managed timbering whereby, significant attention is given to protecting the environment and retaining the value of the land.

Income or loss for each segment represents total revenue less operating expenses. General and administrative expenses are allocated to each business segment based on percentage of revenue. Identifiable assets are those utilized in the operation of the respective segments; corporate assets consist principally of cash and non-revenue producing properties held for investment purposes.


	10/31/03			10/31/02			10/31/01			03/31/01
Revenues:
Ski operations	$	10,269,984		$	10,015,075		$	0		$	11,267,371
Real estate management/rental operations		5,094,003			4,900,852			2,662,680			4,977,489
Summer recreation operations		1,876,724			2,439,963			2,099,387			2,651,591
Land resource management		2,620,907			1,280,021			0			0

	$	19,861,618		$	18,635,911		$	4,762,067		$	18,896,451

Income (loss):
Ski operations		(399,443	)		(93,492	)		(1,100,477	)		21,368
Real estate management/rental operations		(912,365	)		1,347,216			667,075			1,351,040
Summer recreation operations		137,938			189,961			163,677			359,118
Land resource management		2,035,770			756,479			0			0

	$	861,900		$	2,200,164		($	269,725	)	$	1,731,526

General and administrative expenses:
Ski operations		545,902			(378,322	)		(390,255	)		(1,061,025	)
Real estate management/rental operations		270,772			(185,131	)		(169,110	)		(459,778	)
Summer recreation operations		99,757			(92,170	)		(91,060	)		(247,572	)
Land resource management		139,315			(48,353	)		0			0

	$	1,055,746		($	703,976	)	($	650,425	)	($	1,768,375	)

Interest and other income:
Ski operations		(7,478	)		4,378			1,436			17,710
Real estate management/rental operations		29,953			13,688			54,206			848,417
Summer recreation operations		0			0			0			0
Land resource management		0			0			0			0

	$	22,475		$	18,066		$	55,642		$	866,127

Interest expense:
Ski operations		112,450			(67,198	)		(47,546	)		(161,016	)
Real estate management/rental operations		310,858			(307,707	)		(248,495	)		(575,849	)
Summer recreation operations		0			0			0			0
Land resource management		1,458			0			0			0

	$	424,766		($	374,905	)	($	296,041	)	($	736,865	)

Income (loss) before income taxes	($	596,137	)	$	1,139,349		($	1,160,549	)	$	92,413

F-19

13. BUSINESS SEGMENT INFORMATION: (continued)

For the fiscal years ended October 31, 2003 and 2002, the seven months ended October 31, 2001 and the fiscal year ended March 31, 2001, no one customer represented more than 10 % of total revenues.

Identifiable assets, net of accumulated depreciation at October 31, 2003, 2002, 2001 and March 31, 2001 and depreciation expense and capital expenditures for the years then ended by business segment are as follows:

Identifiable

Depreciation

Capital

October 31, 2003

Assets

Expense

Expenditures

Ski operations

12,367,446

1,585,448

2,845,725

Real estate management/rental operations

2,006,763

161,095

109,659

Summer recreation operations

10,883,557

402,031

1,707,395

Land Resource Management

88,834

14,963

51,005

Other corporate

2,632,652

64,454

30,102

Total

27,979,252

2,227,991

4,743,886


October 31, 2002	Assets		Expense		Expenditures
Ski operations	$	9,697,759	$	1,291,229	$	2,855,099
Real estate management/rental operations		9,388,281		368,288		56,795
Summer recreation operations		1,995,857		161,531		150,517
Land Resource Management		63,253		5,986		58,463
Other corporate		3,500,678		69,280		37,102

Total	$	24,645,828	$	1,896,314	$	3,157,976


October 31, 2001	Assets		Expense		Expenditures
Ski operations	$	9,800,297	$	0	$	258,718
Real estate management/rental operations		9,629,654		217,202		8,666
Summer recreation operations		2,034,785		84,706		93,680
Land Resource Management		0		0		0
Other corporate		1,461,707		50,560		3,986

Total	$	22,926,443	$	352,468	$	365,050


March 31, 2001	Assets		Expense		Expenditures
Ski operations	$	11,333,038	$	1,327,065	$	1,251,464
Real estate management /rental operations		8,971,600		363,542		48,838
Summer recreation operations		1,918,743		146,052		535,782
Land Resource Management		0		0		0
Other corporate		1,750,699		132,495		38,503

Total	$	23,974,080	$	1,969,154	$	1,874,587

14. CONTINGENT LIABILITIES and COMMITMENTS:

The Companies are party to various legal proceedings incidental to their business. Certain claims, suits, and complaints arising in the ordinary course of business have been filed or are possible of assertion against the Companies. In the opinion of management, all such matters are without merit or are of such kind, or involve such amounts, which are not expected to have a material effect on the combined financial position or results of operations of the Companies.

Management has established a $150,000 accrual specific to the remediation of an environmental issue discovered at Dreshertown Shopping Plaza. The accrual is based on an

F-20

estimate provided by environmental clean-up consultants and is recorded as a current accrued liability in the October 31, 2003 combined balance sheet. Remediation is expected to occur within the next fiscal year.

In December 2003, the companies entered into an additional capital lease agreement with a bank for one air compressor, with a commitment of approximately $284,000.

15. RELATED PARTY TRANSACTIONS:

The Companies have acquired the consulting services of Kimco Realty Corporation, the major shareholder. The services are focused on land development, acquisitions and disposals, as well as timbering. The consulting fees are accrued monthly and are capitalized as part of land development. For the fiscal year ended October 31, 2003 the amount was $125,000. As of June 2003, Kimco Realty Corporation is the management company for the Dreshertown Plaza shopping center. Kimco Realty Corporation received $28,662 for management fees incurred for the period June 2003 through October 2003.

16. STOCK OPTIONS and CAPITAL STOCK:

During Fiscal 1998, the Companies adopted an employee stock option plan, under which an officer was granted options to purchase shares of the Companies’ common stock. The exercise price on the 35,000 options is $6.75 and the original term was extended in February 2003 to July 1, 2008. In accordance with FIN 44, the extension of the life of the award requires a new measurement of compensation as if the award was newly granted. Because the exercise price was less than the current fair market value at the date of the grant, compensation cost of $122,900, net of tax has been recognized in the combined condensed statement of operations.

During Fiscal 2002, additional corporate officers were granted stock options in varying amounts for a total of 11,000 shares, all expiring December 10, 2006. Additionally, during Fiscal 2003, six key employees were granted stock options totaling 18,000 shares, due to expire on December 2, 2007.

Option activity during the years ended October 31, 2003 and 2002, the seven months ended October 31, 2001 and the year ended March 31, 2001 is as follows:


	10/31/03				10/31/02
			Weighted				Weighted
			Average				Average
			Exercise				Exercise
	Shares		Price		Shares		Price
Outstanding at beginning of year:		46,000	$	7.65		35,000	$	6.75
Granted		18,000	$	10.90		11,000	$	10.50
Exercised		—		—		—		—
Canceled		—		—		—		—

Outstanding at end of year		64,000	$	8.56		46,000	$	7.65

Options exercisable at year-end		64,000	$	8.56		46,000	$	7.65

Option price range	$	6.75 - $10.90			$	6.75 - $10.50

Weighted average fair value of options granted during year	$	8.20			$	2.71

Weighted average remaining contractual life (in years)		4.4				5.6

F-21

16. STOCK OPTIONS and CAPITAL STOCK: (continued)


	10/31/03				03/31/01
			Weighted				Weighted
			Average				Average
			Exercise				Exercise
	Shares		Price		Shares		Price
Outstanding at beginning of year:		35,000	$	6.75		35,000	$	6.75
Granted		—		—		—		—
Exercised		—		—		—		—
Canceled		—		—		—		—

Outstanding at end of year		35,000	$	6.75		35,000	$	6.75

Options exercisable at year-end		35,000	$	6.75		35,000	$	6.75

Option price range	$	6.75			$	6.75

Weighted average fair value of options granted during year	$	0.00			$	0.00

Weighted average remaining contractual life (in years)		1.7				2.3

17. PER SHARE DATA:

Earnings per share for the years ended October 31, 2003 and 2002, the seven months ended October 31, 2001 and the year ended March 31, 2001 are computed as follows:


	10/31/03			10/31/02		10/31/01			03/31/01
Net (loss) earnings	($	879,137	)	$	686,758	($	804,422	)	$	252,532
Weighted average combined shares of common stock outstanding used to compute basic earnings per combined share		1,916,130			1,916,431		1,917,858			1,926,402
Additional combined common shares to be Issued assuming exercise of stock options, net of combined shares assumed reacquired		19,114			13,899		12,470			10,195
Combined shares used to compute dilutive effect of stock option		1,935,244			1,930,330		1,930,328			1,936,597
Basic and diluted (loss) earnings per combined common share	($	0.45	)	$	0.36	($	0.42	)	$	0.13

18. SUBSEQUENT EVENTS:

In Fiscal 2004 two properties are intended for sale and being scheduled to close. On November 21, 2003, the Companies signed an agreement of sale for four communication towers and appurtenances with a selling price of $1,469,000. This sale is scheduled to close in April of 2004 and will be treated as a section 1031 — tax deferred exchange. On December 22, 2003, the Companies signed an agreement of sale for the Dreshertown Shopping Center with a selling price of $15,000,000. The property is scheduled to close in March of 2004 and will also be treated as a section 1031 — tax deferred exchange.

F-22

BLUE RIDGE REAL ESTATE COMPANY and SUBSIDIARIES
BIG BOULDER CORPORATION AND SUBSIDIARIES

COMBINED CONDENSED BALANCE SHEETS


	(UNAUDITED)
	July 31,		October 31,
	2004		2003
ASSETS
Current Assets:
Cash and cash equivalents (all funds are interest bearing)	$	94,274	$	178,315
Accounts receivable and notes receivable		603,456		705,408
Inventories		120,512		295,828
Prepaid expenses and other current assets		661,613		822,537
Deferred operating costs		0		2,509,778

Total current assets		1,479,855		4,511,866

Cash held in escrow		0		309,308

Notes receivable noncurrent		308,099		353,238

Land and land development costs (5,124 acres per land ledger)		3,208,838		918,860

Properties:
Land held for investment (14,616 and 14,389, respectively, acres per land ledger)		6,356,971		1,791,594
Land improvements, buildings and equipment		70,925,784		53,309,527

		77,282,755		55,101,121
Less accumulated depreciation and amortization		38,369,704		35,944,275

		38,913,051		19,156,846

Assets held for sale		0		2,710,292

	$	43,909,843	$	27,960,410

See accompanying notes to unaudited financial statements.

F-23

LIABILITIES AND SHAREHOLDERS’ EQUITY


	(UNAUDITED)
	July 31,		October 31,
	2004		2003
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current Liabilities:
Notes payable — line of credit	$	1,674,180	$	1,188,000
Current installments of long-term debt and capital lease obligations		8,347,592		7,101,661
Accounts and other payables		745,245		979,509
Accrued claims		128,903		250,942
Deferred revenue		489,832		737,533
Accrued pension expense		780,523		733,710
Accrued liabilities		790,668		824,998
Deferred income taxes		705,032		832,000

Total current liabilities		13,661,975		12,648,353

Long-term debt and capital lease obligations, less current installments		7,217,091		3,889,095

Deferred income non-current		515,631		515,631

Other non-current liabilities		6,020		12,572

Deferred income taxes		6,086,499		1,371,000

Commitments and contingencies
Combined shareholders’ equity:
Capital stock, without par value, stated value $.30 per combined share, Blue Ridge and Big Boulder each authorized 3,000,000 shares, each issued 2,198,148 shares		659,444		659,444
Capital in excess of stated value		1,461,748		1,461,748
Compensation recognized under employee stock plans		200,900		200,900
Earnings retained in the business		16,185,942		9,287,074

		18,508,034		11,609,166
Less cost of 282,018 shares of capital stock in treasury as of July 31, 2004 and October 31, 2003, respectively.		2,085,407		2,085,407

		16,422,627		9,523,759

	$	43,909,843	$	27,960,410

See accompanying notes to unaudited financial statements.

F-24

BLUE RIDGE REAL ESTATE COMPANY and SUBSIDIARIES
BIG BOULDER CORPORATION and SUBSIDIARIES

COMBINED CONDENSED STATEMENTS OF OPERATIONS
THREE AND NINE MONTHS ENDED JULY 31, 2004 & 2003
(UNAUDITED)


	Three Months Ended						Nine Months Ended
	July 31, 2004			July 31, 2003			July 31, 2004			July 31, 2003
Revenues:
Ski operations	$	39,385		$	0		$	9,657,793		$	10,269,983
Real estate management		944,478			807,688			2,707,995			2,446,903
Summer recreation operations		1,079,440			686,452			1,303,747			920,205
Land resource management		199,866			372,629			923,341			1,974,232
Rental income		365,005			511,179			1,246,883			1,509,402

		2,628,174			2,377,948			15,839,759			17,120,725

Costs and expenses:
Ski operations		1,432,601			467,804			10,809,136			10,109,600
Real estate management		745,156			717,731			2,261,090			2,080,574
Summer recreation operations		879,928			634,336			1,254,164			1,016,099
Land resource management		196,407			205,058			425,257			800,701
Rental income		202,600			2,248,100			616,528			3,019,019
General and administration		246,960			246,470			666,970			839,921
Asset impairment loss		1,021,034			0			1,021,034			0

		4,724,686			4,519,499			17,054,179			17,865,914

Loss from operations		(2,096,512	)		(2,141,551	)		(1,214,420	)		(745,189	)

Other income (expense):
Interest and other income		1,084,774			(8,881	)		13,116,312			4,077
Interest expense		(164,476	)		(103,789	)		(414,424	)		(320,472	)

		920,298			(112,670	)		12,701,888			(316,395	)

Income (loss) before income taxes		(1,176,214	)		(2,254,221	)		11,487,468			(1,061,584	)

Provision (benefit) for income taxes		(381,899	)		(783,000	)		4,588,600			(310,000	)

Net income (loss)	($	794,315	)	($	1,471,221	)	$	6,898,868		($	751,584	)

Basic earnings (loss) per weighted average combined share	($	0.41	)	($	0.77	)	$	3.60		($	0.39	)

Diluted earnings (loss) per weighted average combined share	($	0.41	)	($	0.77	)	$	3.53		($	0.39	)

See accompanying notes to unaudited financial statements.

F-25

BLUE RIDGE REAL ESTATE COMPANY
AND
BIG BOULDER CORPORATION

NOTES TO UNAUDITED FINANCIAL STATEMENTS
AS OF JULY 31, 2004

1. The combined condensed financial statements include the accounts of Blue Ridge Real Estate Company and its wholly-owned subsidiaries (Northeast Land Company, Jack Frost Mountain Company, Boulder Creek Resort Company, Oxbridge Square Shopping Center, LLC, Coursey Commons Shopping Center, LLC and BRRE Holdings, Inc.) and Big Boulder Corporation and its wholly-owned subsidiaries (Lake Mountain Company and BBC Holdings, Inc.). In the opinion of management, the accompanying unaudited combined condensed financial statements contain all adjustments (consisting of only normal recurring accruals) necessary to present fairly the financial position as of July 31, 2004, and the results of operations and the statements of cash flows for the three and nine month periods ended July 31, 2004 and 2003.

Certain information and footnote disclosures have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission. These combined financial statements should be read in conjunction with the financial statements and notes thereto included in the Companies’ Annual Report on Form 10-K for the year ended October 31, 2003.

2. The preparation of financial statements and related disclosures in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. For example, unexpected changes in market conditions or a downturn in the economy could adversely affect actual results. Estimates are used in accounting for, among other things, inventory obsolescence, accounts and notes receivables, legal liability, insurance liability, depreciation, employee benefits, taxes, and contingencies. Estimates and assumptions are reviewed periodically and the effects of revisions are reflected in the Combined Condensed Financial Statements in the period they are determined to be necessary.

Management believes that its accounting policies regarding accounts and notes receivable, long lived assets, revenue recognition and other reserves, among others, affect its more significant judgments and estimates used in the preparation of its Combined Condensed Financial Statements. For a description of these critical accounting policies and estimates, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” Management has changed the method of recording deferred operating costs since the Companies’ fiscal year ended October 31, 2003.

Prior to Fiscal 2004, management’s estimate of deferred operating costs was primarily based on deferring costs directly related to ski operations in order to match those costs to the period in which ski operating revenues are recognized. Ski operating revenues are recognized principally over the months of December through March. Effective April 1, 2004, the Companies elected to change their method of deferring certain ski operating costs incurred during the non-ski season. Upon investigation of competitor’s practices, management has determined that a change in accounting principle should be made in order to report ski operations in accordance with the predominant industry practice used by similar operating companies. Additionally, the

F-26

Companies believe the new method better enables users of the financial statements, including management, to benchmark the Companies’ ski operations segment results against its competitors by removing the timing difference associated with matching certain ski operating costs incurred in a prior fiscal year against current fiscal year ski operating revenues. The effect of this change in accounting principle is a $1,310,817 increase to Ski operations costs and expenses, resulting in reduced net income of the same, net of a current tax benefit of $524,327. This expense is included in the Combined Condensed Statement of Operations.

The following table summarizes the effect of the change in accounting principle on income from operations, net income and earnings per share for the three and nine months ended July 31, 2004.


	Three Months
	Ended			Nine Months Ended
	July 31, 2004			July 31, 2004
Loss from operations, as reported	$	(2,096,512	)	$	(1,214,420	)
Effect on current period of the change in accounting principle		944,223			1,310,817

Income (loss) from operations, prior to change in principle	$	(1,152,289	)	$	96,397

Net income (loss), as reported	$	(794,315	)	$	6,898,868
Effect on current period of change in accounting principle, net of tax		566,534			786,490

Net income (loss), prior to change in principle	$	(227,781	)	$	7,685,358

Basic earnings (loss) per weighted average combined share, as reported	$	(0.41	)	$	3.60
Effect on current period of change in accounting principle, net of tax		0.30			0.41

Basic earnings per weighted averaged combined share, prior to change in principle	$	(0.11	)	$	4.01

Diluted earnings (loss) per weighted average combined share, as reported	$	(0.41	)	$	3.53
Effect on current period of change in accounting principle, net of tax		0.29			0.40

Diluted earnings (loss) per weighted average combined share, prior to change in principle	$	(0.12	)	$	3.93

F-27

The following table summarizes the pro forma effect of the change in accounting principle on income from operations, net income and earnings per share for the three and nine-month periods ended July 31, 2004 and 2003, had the change been in effect previously.


	Three Months Ended						Nine Months Ended
	July 31, 2004			July 31, 2003			July 31, 2004			July 31, 2003
Loss from operations, as reported	$	(2,096,512	)	$	(2,141,551	)	$	(1,214,420	)	$	(745,189	)
Effect of ski costs expensed for the period April thru July that were previously deferred		—			(1,052,714	)		—			(1,433,807	)
Effect of ski costs expensed in the three and nine-month periods that would have been previously expensed in the prior fiscal year		—			—			2,509,778			2,275,784

Pro forma income (loss) from operations	$	(2,096,512	)	$	(3,194,265	)	$	1,295,358		$	96,788

Net income (loss), as reported	$	(794,315	)	$	(1,471,221	)	$	6,898,868		$	(751,584	)
Effect of ski costs expensed for the period April thru July that were previously deferred, net of tax effect		—			(631,628	)		—			(860,284	)
Effect of ski costs expensed in the three and nine-month periods that would have been previously expensed in the prior fiscal year, net of tax effect		—			—			1,505,867			1,365,470

Pro forma net income (loss)	$	(794,315	)	$	(2,102,849	)	$	8,404,735		$	(246,398	)

Basic earnings (loss) per weighted average combined share, as reported	$	(0.41	)	$	(0.77	)	$	3.60		$	(0.39	)
Effect of ski costs expensed for the period April through July that were previously deferred, net of tax effect		—			(0.33	)		—			(0.45	)
Effect of ski costs expensed in the three and nine-month periods that would have been previously expensed in the prior fiscal year, net of tax effect		—			—			0.79			0.71

Basic earnings (loss) per weighted average combined share, pro forma	$	(0.41	)	$	(1.10	)	$	4.39		$	(0.13	)

F-28


	Three Months Ended						Nine Months Ended
	July 31, 2004			July 31, 2003			July 31, 2004		July 31, 2003
Diluted earnings (loss) per weighted average combined share, as reported	$	(0.41	)	$	(0.77	)	$	3.53	$	(0.39	)
Effect of ski costs expensed for the month of April that were previously deferred, net of tax effect		—			(0.33	)		—		(0.45	)
Effect of ski costs expensed in the three and six-month periods that would have been previously expensed in the prior fiscal year, net of tax effect		—			—			0.79		0.71

Diluted earnings (loss) per weighted average combined share, pro forma	$	(0.41	)	$	(1.10	)	$	4.32	$	(0.13	)

The first interim period of fiscal 2004 ended January 31, 2004, prior to the change in accounting principle taking effect. Had the change previously been in effect, income from operations would have been $1,518,331, net income would have been $817,155 and basic and diluted earnings per weighted average combined share would have been $0.43 for the period ended January 31, 2004.

3. The Companies account for notes receivable on a cost basis. Interest income is recorded on a monthly basis. Late payment fees are charged on overdue payment of principal and interest. Notes receivable are evaluated at origination and monitored on an ongoing basis for credit worthiness. Notes receivable are considered fully collectible by management and accordingly no allowance for loan losses is considered necessary. Any note 90 days past due is reviewed by management for write off.

Accounts receivable are reported at net realizable value. Accounts are written off when they are determined to be uncollectible based upon management’s assessment of individual accounts. The allowance for doubtful accounts, which is insignificant, is estimated based on the Companies’ historical losses and the financial stability of its customers.

4. The Companies and the subsidiaries, under SFAS No. 131, operate in four business segments — Ski Operations, Real Estate Management/Rental Operations, Summer Recreation Operations and Land Resource Management.

The results of operations for the three and nine months are not necessarily indicative of the results to be expected for the full year since the Companies’ two ski facilities operate principally during the months of December through March.

Revenues and operating expenses of the Real Estate Management/Rental Operations, Summer Recreation Operations and Land Resource Management are as disclosed on the statement of operations.

5. The provision for income taxes for the three and nine months ended July 31, 2004 represents the estimated annual effective tax rate for the year ending October 31, 2004. The effective income tax rate for the first nine months of Fiscal 2004 was estimated at 40%.

F-29

6. During Fiscal 1998, the Chairman of the Board of the Companies was granted options for 35,000 shares of the Companies’ common stock. The Companies apply APB Opinion No. 25, “Accounting for Stock Issued to Employees,” in accounting for its employee stock options as permitted by SFAS No. 123, “Accounting for Stock Based Compensation,” and SFAS No. 148, “Accounting for Stock-Based Compensation-Transition and Disclosure.” Under APB No. 25, because the exercise price of the employee stock options equals the estimated fair market value of the Companies’ underlying stock on the date of the grant, no compensation expense is recognized. However, during Fiscal 2003, the original term of 35,000 options granted at an original exercise price of $6.75 were extended to July 1, 2008. In accordance with FIN 44, the extension of the life of the award requires a new measurement of compensation as if the award was newly granted. Because the exercise price was less than the current fair market value at the new date of grant, compensation cost of $122,900, net of tax has been recognized in the combined statement of operations in 2003.

As of February 13, 2004, seven key employees were granted stock options totaling 32,000 shares. The shares were issued at an exercise price of $17.75 per share which equals the estimated fair market value of the Companies’ underlying stock on the date of grant.

Had compensation cost for the Companies’ employee stock options been determined consistent with SFAS No. 123 and SFAS No. 148, the Companies’ net income and earnings per share would have been reduced to the pro forma amounts indicated below:


	Three Months Ended						Nine Months Ended
	7/31/04			7/31/03			7/31/04			7/31/03
Net income (loss), as reported	$	(794,315	)	$	(1,471,221	)	$	6,898,868		$	(751,584	)
Add: Stock-based employee compensation expense included in reported net income, net of related tax effects		—			—			—			122,900
Deduct: Total stock-based employee compensation expense determined under fair value based method for all awards, net of tax effects		—			—			(218,170	)		(172,102	)

Pro forma net income (loss)	$	(794,315	)	$	(1,471,221	)	$	6,680,698		$	(800,786	)

Basic earnings (loss) per share:
As reported	$	(0.41	)	$	(0.77	)	$	3.60		$	(0.39	)

Pro forma	$	(0.41	)	$	(0.77	)	$	3.49		$	(0.41	)

Diluted earnings (loss) per share:
As reported	$	(0.41	)	$	(0.77	)	$	3.53		$	(0.39	)

Pro forma	$	(0.41	)	$	(0.77	)	$	3.42		$	(0.41	)

F-30

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

Item 13. Other Expenses of Issuance and Distribution

The expenses payable in connection with this offering are as follows:


Securities and Exchange Commission registration fee	$	1,825
Subscription Agent fee		35,000
Printing and engraving expenses		*
Legal fees and expenses		*
Accounting fees and expenses		*
Blue Sky fees and expenses (including legal fees)		*
Miscellaneous		*

Total		*

To be filed by amendment.

All expenses are estimated except for the Securities and Exchange Commission fee.

Item 14. Indemnification of Directors and Officers

II-1

Item 15. Recent Sales of Unregistered Securities

During the preceding three years, we granted stock options to purchase 69,000 shares of our common stock, at a weighted average price of $11.62 per share, to our employees, officers and directors. We filed a registration statement on Form S-8 on September 1, 2004 with the Securities and Exchange Commission to register the shares of our common stock underlying the options. All of such option grants were granted at the then current fair value of our common stock.

We did not employ an underwriter in connection with the issuance of the securities described above. We believe that the issuance of the foregoing securities was exempt from registration under either (i) Section 4(2) of the Securities Act as transactions not involving any public offering and such securities having been acquired for investment and not with a view to distribution, or (ii) Rule 701 under the Securities Act as transactions made pursuant to a written compensatory benefit plan or pursuant to a written contract relating to compensation. All recipients had adequate access to information about us.

II-2

Item 16. Exhibits and Financial Statement Schedules

(a) Exhibits:


Exhibit Number		Description
3.1		Articles of Incorporation of Blue Ridge Real Estate Company (filed September 23, 1967 as Exhibit b-1(i) to Form 10 and incorporated herein by reference)

3.2		Articles of Incorporation of Big Boulder Corporation (filed September 23, 1967 as Exhibit b-1(i) to Form 10 and incorporated herein by reference)

3.3		Bylaws of Blue Ridge Real Estate Company, as amended through August 12, 1997

3.4		Bylaws of Big Boulder Corporation, as amended through August 12, 1997

4.1		Revised Specimen Unit Certificate Evidencing Shares of Registrants’ Common Stock (filed August 28, 1990 as an Exhibit to Form 10-K and incorporated herein by reference)

4.2		Security Combination Agreement between Blue Ridge Real Estate Company and Big Boulder Corporation (filed September 23, 1967 as Exhibit b-3 to Form 10 and incorporated herein by reference)

4.3		Form of Subscription Rights Certificate to Subscribe for Shares of the Registrants’ Stock

5.1*		Opinion of Morgan, Lewis & Bockius LLP

10.1		Standby Securities Purchase Agreement, dated as of January 4, 2005, by and among Blue Ridge Real Estate Company, Big Boulder Corporation and Kimco Realty Services, Inc. (filed January 5, 2005 as Exhibit 10.1 to Form 8-K and incorporated herein by reference)

10.2		Construction Line of Credit Mortgage Note, Manufacturers and Traders Trust Company

10.3		First Mortgage, NorthMarq Capital (formerly Principal Mutual), Building leased to Wal-Mart (filed August 26, 1991 as Exhibit 10.1.6 to Form 10-K and incorporated herein by reference)

10.4		LIBOR Term Note, Manufacturer and Traders Trust Company (filed January 29, 2003 as Exhibit 99.13 to Form 10-K and incorporated herein by reference)

10.5		Mortgage, Manufacturer and Traders Trust Company, 187 Midlake Condominiums, Lake Harmony Carbon County (filed February 13, 2004 as Exhibit 10.6 to Form 10-K and incorporated herein by reference)

10.6		Mortgage, Manufacturer and Traders Trust Company, 240 Midlake Condominiums, Lake Harmony Carbon County (filed February 13, 2004 as Exhibit 10.8 to Form 10-K and incorporated herein by reference)

10.7		Mortgage, Manufacturer and Traders Trust Company, 366 Laurelwoods, Lake Harmony Carbon County (filed February 13, 2004 as Exhibit 10.9 to Form 10-K and incorporated herein by reference)

10.8		Mortgage, Manufacturer and Traders Trust Company, 373 Laurelwoods, Lake Harmony Carbon County (filed February 13, 2004 as Exhibit 10.10 to Form 10-K and incorporated herein by reference)

10.9		Mortgage, Manufacturer and Traders Trust Company, 374 Laurelwoods, Lake Harmony Carbon County (filed February 13, 2004 as Exhibit 10.11 to Form 10-K and incorporated herein by reference)

II-3


Exhibit Number		Description
10.10		Mortgage, Manufacturer and Traders Trust Company, 251 Snow Ridge Village, White Haven Carbon County (filed February 13, 2004 as Exhibit 10.15 to Form 10-K and incorporated herein by reference)

10.11		Acquisition of Building leased to Wal-Mart (filed August 26, 1991 as Exhibit 10.2.4 to Form 10-K and incorporated herein by reference)

10.12		Lease Agreement with Wal-Mart Real Estate Business Trust, dated May 30, 2003.

10.13		Lease Agreement with Ukrop’s Supermarkets, Inc., dated November 2, 1979, as amended.

10.14		Form of Amended and Restated Stock Option Agreement (filed January 5, 2005 as Exhibit 10.2 to Form 8-K and incorporated herein by reference)

10.15		Schedule of Optionees and Material Terms of Amended and Restated Stock Option Agreements (filed January 5, 2005 as Exhibit 10.3 to Form 8-K and incorporated herein by reference)

21.1		List of all subsidiaries of the Registrants (filed February 13, 2004 as Exhibit 21.1 to Form 10-K and incorporated herein by reference)

23.1		Consent of Parente Randolph

23.2*		Consent of Morgan, Lewis & Bockius, LLP (included in Exhibit 5.1)

24.1		Power of Attorney (included on signature page to this registration statement)

99.1		Instructions for Use of Blue Ridge and Big Boulder Subscription Rights Certificates

99.2		Notice of Guaranteed Delivery

99.3		Notice to Shareholders of Subscription Rights

99.4		Letter to Security Dealers, Commercial Banks, Trust Companies and Other Nominees

99.5		Client Prospectus Letter

99.6		Nominee Holder Certificate

99.7		Beneficial Owner Election Form

99.8*		Form of Subscription Agent Agreement between the Registrants and HSBC Bank USA, National Association

* To be filed by amendment.

II-4

Financial Statement Schedules

All information for which provision is made in the applicable accounting regulations of the Securities and Exchange Commission is either included in the financial statements or is not required under the related instructions or is inapplicable, and therefore has been omitted.

Item 17. Undertakings

Insofar as indemnification for liabilities arising under the Securities Act of 1933, or the Act, may be permitted to directors, officers and controlling persons of the Registrant pursuant to provisions described in Item 14 above, or otherwise, the Registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.

II-5

Signatures

Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the township of Kidder, State of Pennsylvania, on January 5, 2005.

BLUE RIDGE REAL ESTATE COMPANY
BIG BOULDER CORPORATION

By /s/ Patrick M. Flynn
Patrick M. Flynn
Chief Executive Officer and President
Principal Executive Officer

By /s/ Eldon D. Dietterick
Eldon D. Dietterick
Executive Vice-President and Treasurer Principal Financial and Accounting Officer

Power of Attorney

Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated. Each person whose signature appears below in so signing also makes, constitutes and appoints Christine A. Liebold his true and lawful attorney-in-fact and agent, with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities, to execute and cause to be filed with the Securities and Exchange Commission any and all amendments and post-effective amendments to this Registration Statement and a related registration statement that is to be effective upon filing pursuant to Rule 462(b) under the Securities Act of 1933, and in each case to file the same, with all exhibits thereto and other documents in connection therewith, and hereby ratifies and confirms all that said attorney-in-fact or her substitute or substitutes may do or cause to be done by virtue hereof.


Signature	Title	Date

/s/ Michael J. Flynn *Michael J. Flynn*	Chairman of the Board	January 5, 2005
/s/ Patrick M. Flynn *Patrick M. Flynn*	Chief Executive Officer, President and Director	January 5, 2005
/s/ Eldon D. Dietterick *Eldon D. Dietterick*	Executive Vice-President and Treasurer	January 5, 2005
/s/ Milton Cooper *Milton Cooper*	Director	January 5, 2005
/s/ Wolfgang Traber *Wolfgang Traber*	Director	January 5, 2005

II-6


Subscription Agent		HSBC Bank USA, National Association.

Questions		Questions regarding the rights offering should be directed to Christine A. Liebold, our Secretary, at (570) 443-8433, extension 1028.

Shares Outstanding Before the Rights Offering		1,916,130 shares of our common stock were outstanding as of January 3, 2005.

Shares Outstanding After Completion of Rights Offering		___ shares of our common stock will be outstanding immediately after the completion of the rights offering.

Risk Factors		Shareholders considering making an investment in the rights offering should consider the risk factors described in “Risk Factors” beginning on page 6.

Fees and Expenses		We will bear the expenses relating to the rights offering.

OTC Bulletin Board Trading Symbol		Shares of our common stock are currently listed for quotation on the OTC Bulletin Board under the symbol “BLRGZ”


Audited Consolidated Financial Statements
Report of Independent Auditors			F-2
Consolidated Combined Balance Sheets as of October 31, 2002 and 2003			F-3
Consolidated Combined Statements of Operations for the Years ended October 31, 2002 and 2003, the Seven Months ended October 31, 2001 and the Year ended March 31, 2001			F-4
Notes to Audited Consolidated Financial Statements			F-5

Unaudited Consolidated Financial Statements
Consolidated Combined Condensed Balance Sheets as of July 31, 2004 and October 31, 2003			F-23
Consolidated Combined Condensed Statements of Operations for the Three and Nine Months ended July 31, 2004 and 2003			F-25
Notes to Unaudited Consolidated Financial Statements			F-26


	Page
PROSPECTUS SUMMARY		1
SUMMARY CONSOLIDATED FINANCIAL DATA		2
THE OFFERING		3
RISK FACTORS		6
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS		14
USE OF PROCEEDS		15
MARKET PRICE AND DIVIDEND POLICY		16
THE RIGHTS OFFERING		17
DETERMINATION OF THE SUBSCRIPTION PRICE		25
SELECTED FINANCIAL DATA		26
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS		27
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK		39
BUSINESS		40
MANAGEMENT		44
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS		47
PRINCIPAL STOCKHOLDERS		48
DESCRIPTION OF CAPITAL STOCK		51
SHARES ELIGIBLE FOR FUTURE SALE		54
PLAN OF DISTRIBUTION		55
CERTAIN U.S. FEDERAL INCOME TAX CONSIDERATIONS		56
LEGAL MATTERS		58
EXPERTS		58
WHERE YOU CAN FIND MORE INFORMATION		58
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS		F-1
BYLAWS OF BLUE RIDGE REAL ESTATE COMPANY
BYLAWS OF BIG BOULDER CORPORATION
FORM OF RIGHTS SUBSCRIPTION CERTIFICATE
CONSTRUCTION LINE OF CREDIT MORTGAGE NOTE
LEASE AGREEMENT WITH WAL-MART REAL ESTATE TRUST
LEASE AGREEMENT WITH UKROP'S SUPERMARKETS, INC.
CONSENT OF PARENTE RANDOLPH
INSTRUCTIONS FOR USE OF BLUE RIDGE AND BIG BOULDER SUBSCRIPTION RIGHTS CERTIFICATES
NOTICE OF GUARANTEED DELIVERY
NOTICE TO SHAREHOLDERS OF SUBSCRIPTION RIGHTS
LETTER TO SECURITY DEALERS, COMMERCIAL BANKS, TRUST COMPANIES AND OTHER NOMINEES
CLIENT PROSPECTUS LETTER
NOMINEE HOLDER CERTIFICATE
BENEFICIAL OWNER ELECTION FORM

	•	Ski Operations consist of two ski areas located in the Pocono Mountains of Northeastern Pennsylvania.

	•	Real Estate Management/Rental Operations consists of: investment properties leased to others located in Eastern Pennsylvania, South Carolina, Virginia and Louisiana; fees from managing investor-owned properties, principally resort homes; recreational club activities and services to the trusts that operate resort communities; sales of investment properties; and rental of land and land improvements.

	•	Summer Recreation Operations consist of seasonal recreational operating centers located in the Pocono Mountains of Northeastern Pennsylvania, which include the following: Splatter Paintball; Lake Mountain Sports Club; and Summer Music Festivals.

	•	Land Resource Management consists of land sales, land purchases, timbering operations and a construction division. Timbering operations consist of selective timbering on our land holdings. Contracts are entered into for parcels which have had the timber selectively marked. The construction division is responsible for the residential land development activities which include overseeing the construction of single and multi-family homes and development of infrastructure.

	•	changes in domestic and international economic conditions;

	•	interest rates;

	•	population growth and changing demographics; and

	•	seasonal weather cycles (e.g., dry summers, wet winters).

	•	cash flow from operations;

	•	bank borrowings;

	•	public offerings of debt or equity;

	•	private placements of debt or equity;

	•	non-recourse, sale leaseback or other financing; or

	•	some combination of the above.

	•	national and local economic climate;

	•	local real estate conditions (such as an oversupply of space or a reduction in demand for real estate in an area);

	•	attractiveness of the properties to prospective purchasers and tenants;

	•	competition from other available property or space;

	•	our ability to obtain adequate insurance;

	•	unexpected construction costs or delays;

	•	government regulations and changes in real estate, zoning, land use, environmental or tax laws;

	•	interest rate levels and the availability of financing; and

	•	potential liabilities under environmental and other laws.

	•	Our ability to successfully complete this rights offering;

	•	Borrowing costs, and our ability to generate cash flow to pay interest and scheduled amortization payments as well as our ability to refinance such indebtedness or to sell assets when it comes due;

	•	Our ability to continue to generate sufficient working capital to meet our operating requirements;

	•	Our ability to maintain a good working relationship with our vendors and customers;

	•	The ability of vendors to continue to supply our needs;

	•	Our ability to provide competitive pricing to sell homes;

	•	Actions by our competitors;

	•	Fluctuations in the price of building materials;

	•	Our ability to achieve gross profit margins at which we can be profitable, including margins on services we perform on a fixed price basis;

	•	Our ability to attract and retain qualified personnel in our business;

	•	Our ability to effectively manage our business;

	•	Our ability to obtain and maintain approvals from local, state and federal authorities on regulatory issues;

	•	Our relations with our controlling shareholder, including its continuing willingness to provide financing and other resources;

	•	Pending or new litigation; and

	•	Changes in market demand, weather and/or economic conditions within our local region and nationally.

	•	65% to develop a golf course at Jack Frost Mountain;

	•	25% to develop residential communities at Jack Frost Mountain; and

	•	10% to develop residential communities at Big Boulder Ski Area.

	•	our need for capital;

	•	the alternative methods available to us for raising capital;

	•	the pro rata nature of a rights offering to our shareholders;

	•	the willingness of Kimco, our controlling shareholder, to subscribe for the shares and to purchase any and all shares offered in this rights offering but not subscribed for by our other shareholders;

	•	the market price of our common stock; and

	•	general conditions of the securities markets.

	•	mail notice of the amendment to all shareholders of record as of the record date;

	•	extend the expiration date by at least ten days; and

	•	offer all subscribers no less than ten days to revoke any subscription already submitted.

	•	A properly completed and duly executed rights subscription certificate;

	•	Any required signature guarantees; and

	•	Payment in full of $___ per share to be purchased through your basic subscription and over-subscription privileges.

	•	receipt and clearance of any uncertified check;

	•	receipt by the Subscription Agent of any certified check or bank draft drawn upon a U.S. bank, any money order, or any funds transferred by wire transfers; or

	•	receipt of good funds in the Subscription Agent’s account designated above.

	•	all persons known by us to beneficially own more than 5% of our common stock;

	•	each of our directors;

	•	each of our named executive officers; and

	•	all of our directors and executive officers as a group.

(1)	Shares are beneficially owned when a person, directly or indirectly, has or shares the voting power thereof (that is, the power to vote, or direct the voting, of such shares) and investment power thereof (that is, the power to dispose, or to direct the disposition, of such shares).

(2)	Assuming each shareholder exercised its basic subscription privilege in full.

(3)	Based on information provided by Mr. Cooper, he has the sole voting and dispositive power over 154,607 shares. The number of shares listed also includes 67,803 shares as to which Mr. Cooper disclaims beneficial ownership; such shares are owned by KC Holdings, Inc., of which Mr. Cooper is Chairman of the board of directors and President and the owner of approximately 8% of the outstanding stock. The above number of shares also includes 1,012,579 shares which are held of record by Kimco Realty Services, Inc., which is a wholly-owned subsidiary of Kimco Realty Corporation, a Real Estate Investment Trust. Mr. Cooper is Chairman of the board of directors and Chief Executive Officer of Kimco Realty Corporation, but disclaims beneficial ownership of the shares held by Kimco Realty Services, Inc. Finally, the above number includes 17,991 shares owned by the Cooper Family Foundation, of which Mr. Cooper is President but disclaims beneficial ownership of the shares, and 714 shares held by a trust for which Mr. Cooper serves as trustee, but as to which shares he disclaims beneficial ownership. The business address of KC Holdings, Inc., Kimco Realty Services, Inc. and Kimco Realty Corporation is c/o Kimco Realty Corporation, 3333 New Hyde Park Road, Suite 100, New Hyde Park, NY 11042-0020.

(4)	Kimco Realty Services, Inc., which as of October 31, 2004 was the record holder of approximately 52.84% of our common stock and our controlling shareholder, has agreed, as a standby purchaser, to purchase 100% of the shares of our common stock that are not subscribed for in the rights offering by our shareholders at $ per share on a standby purchase commitment basis. Assuming Kimco purchases 100% of the shares of our common stock in this rights offering, Kimco will own ___% of our shares after the offering, and Mr. Cooper will beneficially own ___% of our shares.

(5)	Includes currently exercisable option to purchase 35,000 shares of common stock.

(6)	Consists of currently exercisable options to purchase 20,000 shares of common stock.

(7)	Includes currently exercisable options to purchase 14,000 shares of common stock.

(8)	Includes currently exercisable options to purchase 10,000 shares of common stock.

(9)	Kimco Realty Services, Inc. is the holder of record of 1,012,579 shares of our common stock. Kimco Realty Corporation is the parent corporation of Kimco Realty Services, Inc. and has voting and dispositive power over the shares of common stock held by Kimco Realty Services, Inc.

(10)	Includes currently exercisable options to purchase 79,000 shares of common stock.

	•	an unlimited number of piggyback registration rights that require us to register sales of Kimco’s shares when we undertake a public offering, subject to the discretion of the managing underwriter of the offering to decrease the amount that Kimco may register; and

	•	two rights to require us to register sales of shares on Form S-3, a short form of registration statement permitted to be used by some companies, which Kimco may exercise if it requests registration of the sale of more than $2.0 million of common stock.

	•	the effects of any action upon any group affected by such action, including our shareholders, employees, suppliers, customers and creditors, and communities in which we have offices or other establishments;

	•	our short-term and long-term interests, including benefits that may accrue to us from our long-term plans and the possibilities that these interests may be best served by our continued independence;

	•	the resources, intent and conduct of any person seeking to acquire control of us; and

	•	all other pertinent factors.

	•	1% of the number of shares of common stock then outstanding, which will equal approximately ___ shares immediately after this offering; and

	•	the average weekly trading volume of the common stock on the OTC Bulletin Board during the four calendar weeks preceding the filing of a notice on Form 144 with respect to the sale.

	•	the person is not our affiliate and has not been our affiliate at any time during the three months preceding such a sale; and

	•	the person has beneficially owned the shares proposed to be sold for at least two years, including the holding period of any prior owner other than an affiliate.

	•	a citizen or resident of the United States;

	•	a corporation or partnership created or organized in or under the laws of the United States or any political subdivision thereof;

	•	an estate the income of which is subject to U.S. federal income taxation regardless of its source; or

	•	a trust if a U.S. court is able to exercise primary supervision over the administration of the trust and one or more U.S. persons have the authority to control all substantial decisions of the trust.


	BLUE RIDGE REAL ESTATE COMPANY BIG BOULDER CORPORATION
	By		/s/ Patrick M. Flynn
			*Patrick M. Flynn*
			Chief Executive Officer and President Principal Executive Officer


	By		/s/ Eldon D. Dietterick
			*Eldon D. Dietterick*
			*Executive Vice-President and Treasurer Principal Financial and Accounting Officer*