UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended January 31, 2010

( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

BLUE RIDGE REAL ESTATE COMPANY

BIG BOULDER CORPORATION

(exact name of Registrants as specified in their charters)

State or other jurisdiction of incorporation or organization: Pennsylvania

Address of principal executive office:   Route 940 and Moseywood Road, Blakeslee, Pennsylvania

Zip Code:   18610

Registrants’ telephone number, including area code:  (570) 443-8433

     Indicate by check mark whether the registrants (1) have filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such period that the registrants were required to file such reports) and (2) have been subject to such filing requirements for the past 90 days.

ýYES          ¨NO

     Indicate by check mark whether the registrants have submitted electronically and posted on their corporate Web sites, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrants were required to submit and post such files).  

¨YES          ¨NO

     Indicate by check mark whether the registrants are large accelerated filers, accelerated filers, non-accelerated filers or smaller reporting companies.  See definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large Accelerated filer ¨

Accelerated Filer                 ¨

Non-Accelerated filer   ý (Do not check if smaller reporting company)

Smaller reporting company ¨

     Indicate by check mark whether the registrants are shell companies (as defined in Rule 12b-2 of the Exchange Act).

¨YES          ýNO

      The number of shares of the registrants’ common stock outstanding as of the close of business on March 16, 2010 was 2,450,424 shares.*

*Under a Security Combination Agreement between Blue Ridge Real Estate Company ("Blue Ridge") and Big Boulder Corporation ("Big Boulder") (together, the "Companies") and under the by-laws of the Companies, shares of the Companies are combined in unit certificates, each certificate representing the same number of shares of each of the Companies.  Shares of each Company may be transferred only together with an equal number of shares of the other Company.  For this reason, a combined Blue Ridge/Big Boulder Form 10-Q is being filed.  Except as otherwise indicated, all information applies to both Companies.  

INDEX

Page No.

PART I - FINANCIAL INFORMATION

Item 1.  Financial Statements

Combined Condensed Balance Sheets – January 31, 2010 and October 31, 2009

1

Combined Condensed Statements of Operations - Three Months ended

January 31, 2010 and 2009

2

Combined Condensed Statement of Changes in Shareholders’ Equity –

Three months ended January 31, 2010

3

Combined Condensed Statements of Cash Flows - Three Months Ended

January 31, 2010 and 2009

4

Notes to Financial Statements

5

Item 2.  Management's Discussion and Analysis of Financial Condition and Results

of Operations

10

Item 3.  Quantitative and Qualitative Disclosures About Market Risk

17

Item 4T.  Controls and Procedures

17

PART II - OTHER INFORMATION

Item 1.  Legal Proceedings

18

Item 1A.  Risk Factors

18

Item 6.  Exhibits

18

PART I – FINANCIAL INFORMATION

Item 1.   FINANCIAL STATEMENTS

BLUE RIDGE REAL ESTATE COMPANY and SUBSIDIARIES

BIG BOULDER CORPORATION and SUBSIDIARIES

COMBINED CONDENSED BALANCE SHEETS

See accompanying notes to unaudited financial statements.

- 1 -

BLUE RIDGE REAL ESTATE COMPANY and SUBSIDIARIES

BIG BOULDER CORPORATION and SUBSIDIARIES

COMBINED CONDENSED STATEMENTS OF OPERATIONS

See accompanying notes to unaudited financial statements.

- 2 -

BLUE RIDGE REAL ESTATE COMPANY and SUBSIDIARIES

BIG BOULDER CORPORATION and SUBSIDIARIES

COMBINED CONDENSED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY

FOR THE THREE MONTHS ENDED JANUARY 31, 2010

(UNAUDITED)

(a) Capital stock, at stated value of $.30 per combined share

(b) 282,018 shares held in treasury, at cost

See accompanying notes to unaudited financial statements

- 3 -

BLUE RIDGE REAL ESTATE COMPANY and SUBSIDIARIES

BIG BOULDER CORPORATION and SUBSIDIARIES

COMBINED CONDENSED STATEMENTS OF CASH FLOWS

See accompanying notes to unaudited financial statements.

- 4 -

NOTES TO UNAUDITED FINANCIAL STATEMENTS

1. Basis of Combination

     The  combined  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, Moseywood Construction Company, Jack Frost National Golf Course, Inc., Blue Ridge Acquisition Company, BRRE Holdings, Inc., Coursey Commons Shopping Center, LLC, Coursey Creek, LLC, Cobble Creek, LLC, Flower Fields Motel, LLC, Blue Ridge WNJ, LLC and Blue Ridge WMN, LLC) (collectively “Blue Ridge”) and Big Boulder Corporation and its  wholly-owned  subsidiaries  (Lake  Mountain  Company and BBC  Holdings, Inc.) (collectively “Big Boulder” and, together with Blue Ridge, the “Companies”).

     The condensed balance sheet as of October 31, 2009, which has been derived from audited financial statements, and the combined condensed financial statements as of and for the three month period ended January 31, 2010 and 2009, which are unaudited, are presented pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Accordingly, these combined condensed financial statements should be read in conjunction with the combined financial statements and notes thereto contained in the Companies’ 2009 Annual Report on Form 10-K. In the opinion of management, the accompanying combined condensed financial statements reflect all adjustments (which are of a normal recurring nature) necessary for a fair statement of the results for the interim periods.

     Due to intermittent revenues from land resource management, the results of operations for any interim period are not necessarily indicative of the results expected for the full fiscal year.

2. Significant Accounting Policies

     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, land development costs, accounts and mortgages receivables, the unguaranteed residual value of assets under direct financing leasing arrangements, 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 revenue recognition, land development costs, long lived assets, net investment in direct financing leases, deferred income and income taxes 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”. There are no significant changes in the Companies’ critical accounting policies or estimates since the Companies’ fiscal year ended October 31, 2009 (“Fiscal 2009”).

     Cash held in escrow represents deposits held by the Companies for real estate transactions or other funds placed into escrow with a third party intermediary for the purpose of an Internal Revenue Code Section 1031 tax deferred exchange.

New Accounting Pronouncements

   In September 2006, the FASB issued SFAS No. 157, “Fair Value Measurements” as codified in ASC 820, “Fair Value Measurements and Disclosures” (“ASC 820”). ASC 820 provides guidance for using fair value to measure assets and liabilities. ASC 820 also responds to investors’ requests for expanded information about the extent to which a company measures assets and liabilities at fair value, the information used to measure fair value, and the effect of fair value measurements on earnings. The Company adopted ASC 820 with respect to financial instruments effective for its fiscal year beginning November 1, 2008. In February 2008, the FASB issued FASB Staff Position (“FSP”) FAS 157-2 (“FSP 157-2”) (codified in ASC 820) which delays the effective date of ASC 820 for all nonfinancial assets and nonfinancial liabilities, except those that are recognized or

- 5 -

disclosed at fair value in the financial statements on a recurring basis (at least annually). FSP 157-2 applies to, but is not limited to, long-lived assets (asset groups) measured at fair value for an impairment assessment (i.e., inventory impairment assessments). FSP 157-2 defers the effective date for non-financial assets and non-financial liabilities of ASC 820 for the Companies to November 1, 2009. The Companies adoption of ASC 820 related to non-financial assets and non-financial liabilities did not have a material impact on the Companies’ combined condensed balance sheet, results of operations and cash flows.

   In December 2008, the FASB issued FSP SFAS No. 132(R)-1, “Employer’s Disclosures about Postretirement Benefit Plan Assets.” The disclosure requirements of this FSP are included in ASC Topic 715 — “Compensation-Retirement Benefit” (“Topic 715”) as pending transition guidance that require the disclosure of more information about investment allocation decisions, major categories of plan assets, including concentrations of risk and fair value measurements, and the fair value techniques and inputs used to measure plan assets. The disclosures about plan assets required by Topic 715 must be provided for fiscal years ending after December 15, 2009. With the adoption of Topic 715 there has been no impact on the Companies’ combined condensed financial statements.

   In June 2009, the FASB issued SFAS No. 166, “Accounting for Transfers of Financial Assets — an amendment of FASB Statement No. 140” (“SFAS 166”). SFAS 166 has not yet been codified. SFAS 166 eliminates the concept of a qualifying special-purpose entity, creates more stringent conditions for reporting a transfer of a portion of a financial asset as a sale, clarifies other sale-accounting criteria, and changes the initial measurement of a transferor’s interest in transferred financial assets. SFAS 166 is applicable for annual periods beginning after November 15, 2009 and interim periods therein and thereafter. SFAS 166 will be effective for the Company’s fiscal year beginning November 1, 2010. The Company is currently assessing the impact, if any, of SFAS 166 on its combined condensed financial statements.

   In August 2009, the FASB issued Accounting Standards Update No. 2009-5, “Fair Value Measurements and Disclosures (Topic 820) — Measuring Liabilities at Fair Value,” (“ASU 2009-5”), which amends ASC 820 to provide additional guidance to clarify the measurement of liabilities at fair value in the absence of observable market information. ASU 2009-5 is effective for the Company beginning November 1, 2009. The adoption of ASU 2009-5 did not have a material impact on the Companies’ combined condensed balance sheet, results of operations and cash flows

3. Segment Reporting

     The Companies currently operate in three business segments, which consist of Real Estate Management/Rental Operations, Summer Recreation Operations and Land Resource Management segments.

4. Income Taxes

     The benefit for income taxes for the three months ended January 31, 2010 and 2009 is estimated using the estimated annual effective tax rate for the years ending October 31, 2010 and 2009.  The effective income tax rate for the first three months of the fiscal year ending October 31, 2010 (“Fiscal 2010”) and Fiscal 2009 was estimated at 34%.

   The Companies changed their policies for Accounting for Uncertainty in Income Taxes as of the quarter ended January 31, 2008. This change clarified the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements, by defining a criterion that an individual tax position must meet for any part of the position to be recognized in an enterprise’s financial statements. The interpretation requires a review of all tax positions and applies a “more-likely-than-not” recognition threshold. A tax position that meets the more-likely-than-not recognition threshold is measured as the largest amount of tax benefit that is greater than 50 percent likely of being realized upon the ultimate settlement with the taxing authority that has full knowledge of all relevant information. As of November 1, 2007, there has been no impact on the Companies’ combined financial statements, nor has there been any impact on any subsequent periods.

   The Companies’ continuing practice is to recognize interest and/or penalties related to income tax matters as income tax expense in its combined financial statements. As of and for the three months ended January 31, 2010, no interest and penalties have been accrued in the combined balance sheet and no expense has been incurred in the combined statement of operations.

- 6 -

   At January 31, 2010, federal and state tax returns for years ending October 31, 2006 and later are subject to future examination by the respective tax authorities.

5.  Stock Based Compensation

          During the three months ended January 31, 2010, no stock options were issued or exercised.

     The fair value of each option award is estimated at the date of grant using a Black-Scholes option pricing model.  Expected volatilities are based upon historical volatilities of the Companies’ stock.  The Companies use historical data to estimate option exercises and employee terminations with the valuation model.  The expected term of options granted is derived from the output of the valuation model and represents the period of time that options granted are expected to be outstanding.  The risk-free rate for periods within the contractual term of the option is based on the U.S. Treasury yield curve in effect at the time of grant.

     Option activity during the three month period ended January 31, 2010 is as follows:

       Activity related to non-vested options for the period ended January 31, 2010 is as follows:

     No options were exercised during the three months ended January 31, 2010 or 2009.

     The Companies’ policy regarding the exercise of options is that optionees utilize an independent broker to manage the transaction, whereby, the broker sells the exercised shares on the open market.

6.  Land and Land Development Costs

     Land and improvements in progress held for development consists of the following:

   The increase in land unimproved designated for development was result of a reclassification of land costs from land held for investment. Residential development costs were increased by primarily the continued construction of the Boulder Lake Village condominium project located on Big Boulder Lake.

   Infrastructure development decreased as these projects progressed to the residential development phase ($368,262).

- 7 -

7.  Land

8.  Pension Benefits

     Components of Net Periodic Benefit Cost:

   The Companies expect to contribute $402,121 their pension plan in Fiscal 2010.  As of January 31, 2010, the Companies made contributions totaling $79,286.  The Companies anticipate contributing an additional $322,835 to fund its pension in Fiscal 2010.

9.  Investment in Direct Financing Leases

     The Companies lease the Jack Frost and Big Boulder ski areas under direct financing leases through 2034.  The leases provide for minimum rental payments plus scheduled increases based upon the consumer price index, which increases shall not exceed 4% in any given year.  Minimum annual future lease payments due under those leases at January 31, 2010 is as follows:

- 8 -

     The Companies net investment in direct financing leases consists of the following as of January 31, 2010:

     Unearned interest income is amortized to income using the interest method.  The scheduled lease increases over the terms of the leases have been accounted for on a straight line basis in accordance with generally accepted accounting principles.  The unguaranteed residual is evaluated on an ongoing basis.

10.  Per Share Data

     Earnings per share (“EPS”) are based on the weighted average number of common shares outstanding during the period.  Diluted EPS assumes weighted average options have been exercised to purchase shares of common stock in the three months ended January 31, 2010 and 2009, net of assumed repurchases using the treasury stock method. Certain unexercised stock options to purchase shares of the Companies’ common stock were excluded from the dilutive calculation for the three months ended January 31, 2010 and 2009 due to the exercise price of the options being greater than the market price of the Companies’ common stock.

     Weighted average basic and diluted shares, taking into consideration shares issued, weighted average options used in calculating EPS and treasury shares repurchased, for each of the periods are presented  as follows:

     Basic loss per weighted average combined share from continuing operations is computed as follows:

     Diluted loss per weighted average combined share from continuing operations is computed as follows:

11. Subsequent Event

On February 25, 2010, the Companies entered into a Deed of Trust and Security Agreement and Purchase Money Promissory Note (the “Note”) with The Stephen A. Grove Descendants Trust in the amount of $670,000, which encumbers certain real property owned by Blue Ridge located in Fort Collins, Colorado.  This property is currently leased to AmRest, LLC d/b/a Applebee’s. The Note has a term of five years and requires monthly payments in the amount of $3,908.33 beginning March 1, 2010 and ending February 28, 2015, at which time the remaining principal balance and all interest accrued shall become due and payable. The interest rate is fixed at 7.00%.

- 9 -

Item 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Special Note Regarding Forward-Looking Statements

Some of the statements in this Quarterly Report on Form 10-Q constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, that are made based upon, among other things, current assumptions by management, expectations and beliefs concerning future developments and their potential effect on the Companies.  In some cases you can identify forward-looking statements where statements are preceded by, followed by or include the words “believes,” “expects,” “anticipates,” “plans,” “future,” “potential,” “probably,” “predictions,” “continue” or the negative of such terms or similar expressions.  All statements, other than statements of historical fact, regarding the Companies’ strategy, future operations, financial position, estimated revenue, projected costs, projected savings, prospects, plans, opportunities and objectives constitute “forward-looking statements,” including but not limited to statements regarding the current and future real estate market in the Pocono Mountains; the timing of the agreements of sale with The Conservation Fund, the timing and outcome of the Companies’ planned land development; compensation expense related to non-vested awards; contributions to the Companies’ pension plan; the Companies’ land development and infrastructure plans in and around Jack Frost Mountain and Big Boulder Lake and Ski Resort; and the Companies’ anticipated cash needs.

These statements involve known and unknown risks, uncertainties and other factors that may cause the Companies’ or their 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.  Because forward-looking statements involve risks and uncertainties, there are important factors that could cause actual results to differ materially from those expressed or implied by these forward-looking statements, including but not limited to:

▪

Changes in market demand and/or economic conditions within the Companies’ local region and nationally, including changes in consumer confidence, volatility of mortgage interest rates and inflation;

▪

The status of the current and future real estate market in the Pocono Mountains;

▪

Borrowing costs, and the Companies’ ability to generate cash flow to pay interest and scheduled debt payments as well as the Companies’ ability to refinance such indebtedness;

▪

The Companies’ ability to continue to generate sufficient working capital to meet the Companies’ operating requirements;

▪

The Companies’ ability to obtain and maintain approvals from local, state and federal authorities on regulatory issues;

▪

The Companies’ ability to provide competitive pricing to sell homes;

▪

The Companies’ ability to achieve gross profit margins to meet operating expenses;

▪

Fluctuations in the price of building materials;

▪

The Companies’ ability to effectively manage the Companies’ business;

▪

The Companies’ ability to attract and retain qualified personnel in the Companies’ business;

▪

The Companies’ ability to negotiate leases for the future operations of our facilities;

▪

The Companies’ relations with the Companies’ controlling shareholder, including its continuing willingness to provide financing and other resources;

▪

Actions by the Companies’ competitors;

▪

Effects of changes in accounting policies, standards, guidelines or principles; and

▪

Terrorist acts, acts of war and other factors over which the Companies have little or no control.

As a result of these factors, the Companies cannot assure you that the forward-looking statements in this Quarterly Report on Form 10-Q will prove to be accurate.  Furthermore, if the Companies’ 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 the Companies or any other person that the Companies will achieve their objectives and plans in any specified time frame, if at all.  

The Companies may not update these forward-looking statements, even though their situation may change in the future.  The Companies qualify all the forward-looking statements contained in this Quarterly Report on Form 10-Q by the foregoing cautionary statements.

- 10 -

Overview

Since the early 1980s, the Companies have developed five resort communities in close proximity to their Jack Frost Mountain and Big Boulder Ski Area resorts.  The Companies’ resorts are located in the Pocono Mountains of Pennsylvania, an area which offers year-round regional tourist appeal and a quiet, relaxing vacation environment.

The Companies own 14,208 acres of land in Northeastern Pennsylvania, along with 14 acres in various other states.  Of these land holdings, the Companies’ have designated 3,162 acres as held for development.  It is expected that all of the Companies’ planned developments will be subdivided and sold as parcels of land, while others will be developed into single and multi-family housing.

The real estate industry is cyclical and is subject to numerous economic factors including general business conditions, changes in interest rates, inflation and oversupply of properties.  Any sustained period of weakness or weakening business or economic condition in the markets in which the Companies currently operate or intend to do business or in related markets, such as those they have experienced, will impact the demand for the type of properties the Companies intend to develop.

The Companies are constructing Phase I and II of the Laurelwoods II community of single family and multi-family homes and a condominium project known as Boulder Lake Village.

For the fiscal year ended October 31, 2010, or Fiscal 2010, management intends to continue selective sales of land, some of which may be treated as section 1031 tax deferred exchanges under the Internal Revenue Code.

Management is also taking various steps to attract new home and land sale customers. For example, purchasers who want to purchase newly constructed single family homes in the Companies’ Laurelwoods II community development and can make a down payment of at least 20%, have the option of financing their mortgage through Big Boulder Corporation with interest only payments for five years.  The Companies are also offering a one year membership with the Lake Mountain Club and complimentary passes to the Jack Frost National Golf Course to the purchasers of the existing Laurelwoods II single family and duplex townhomes.  The Companies are also offering to pay six months’ of homeowner’s association fees on behalf of any current homeowner in the Blue Heron, Midlake Condominium, Laurelwoods Community and Snow Ridge Village developments that provide a purchaser referral which results in the sale of an existing Laurelwoods II single family home.  The Companies have instituted discount price incentives for the 18 units to be sold in Building J of the Boulder Lake Village condominiums.  For the first six units sold, a 3% discount will apply, for the next six units sold, a 2% discount will apply, and for the final six units sold, a 1% discount will apply. The Companies are also offering financing opportunities for the purchase of selected tracts of land.

The Companies also generate revenue by the selective timbering of their land.  Management relies on the advice of their forester, who is engaged on a consulting basis and who receives a commission on each stumpage contract, for the timing and selection of certain parcels for timbering whereby significant attention is given to protecting the environment and retaining the value of these parcels for future timber harvests.  The Companies’ forester is in the process of updating the inventory of the Companies’ timber resources to aid in land valuations so that management will have more current valuation information before entering into future timber agreements.

The Jack Frost National Golf Course opened in the spring of 2007.  The golf course is managed by Billy Casper Golf, LLC, a nationally-recognized golf course management company.

The Companies also intend to advertise certain subdivisions for sale to recognized land developers in order to facilitate the market for housing and to reduce the inherent risk associated with land development.

- 11 -

Recent Developments

On February 25, 2010, the Companies purchased certain real property and all improvements thereon located in Fort Collins Colorado.  The property was purchased from RCI Realty, LLC and consists of a free-standing Applebee’s restaurant including 4,593 square feet of leasable space and 0.822 acres of land.  The property and improvements is currently leased to AmRest, LLC (formerly Restaurant Concepts II, LLC) pursuant to a lease agreement dated January 1, 2007.  The tenant began operations effective the same date.  

The purchase price of the acquired asset was $1,364,000.  The purchase price was funded by cash held in escrow from the sale of the Laurens, South Carolina Wal-Mart property via a third party intermediary, a Deed of Trust and Security Agreement and Purchase Money Promissory Note with The Stephen A. Grove Descendants Trust and funds from the Companies’ general operating line of credit.  The acquisition is a replacement property for the tax deferred like-kind exchange of the Wal-Mart property in accordance with Internal Revenue Code Section 1031.

Due to the sustained weakness of the housing market nationwide, the Companies continue to monitor the progress of residential home sales within the Northeast region.  No new residential development projects will be started until the market stabilizes.

The Companies continue to research income producing investment properties for potential acquisition.

Critical Accounting Policies and Significant Judgments and Estimates

The Companies have identified the most critical accounting policies upon which the Companies’ 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 deferred tax assets and liabilities, net investment in direct financing leases, the valuation of land development costs and long-lived assets, and revenue recognition.

Revenues are derived from a wide variety of sources, including sales of real estate, management of investment properties, home construction, property management services, golf activities, timbering and leasing activities.  Revenues are recognized as services are performed, except as noted below.

Timbering revenues from stumpage contracts are recognized at the time a stumpage contract is signed. At the time a stumpage contract is signed, the risk of ownership is passed to the buyer at a fixed, determinable cost.  There is no transfer of title in connection with these contracts.  Reasonable assurance of collectibility is determined by the date of signing and, at that time, the obligations of the Companies’ are satisfied.  Therefore, full accrual recognition at the time of contract execution is appropriate.

The Companies recognize income on the disposition of real estate using the full accrual method.  The full accrual method is appropriate at closing when the sales contract has been signed, the buyer has arranged permanent financing and the risks and rewards associated with ownership have been transferred to the buyer.  In the few instances that the Companies finance the sale, more than a 20% down payment is required from the buyers.  The remaining financed purchase price is not subject to subordination.  Down payments of less than 20% are accounted for as deposits.

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 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.

The Companies recognize revenue and costs on custom home construction using the percentage of completion method of accounting when construction is beyond the preliminary stage, the buyer is committed and may only require a refund in the event of non-delivery, if the sales proceeds are collectible and if the aggregate sales proceeds and the total cost of the project can be reasonably estimated.  Total estimated revenues and construction costs are reviewed periodically, and any change is applied prospectively.

Management’s estimate of deferred tax assets and liabilities is primarily based on the difference between the tax basis and financial reporting basis of depreciable assets and the net investment in direct financing leases, like-kind exchanges of assets, net operating losses, stock options and accruals.  Valuation allowances are established when necessary to reduce tax assets to the amount expected to be realized.

- 12 -

The Companies have capitalized as the net investment in direct financing leases that portion of the leased premises pertaining to Jack Frost Mountain and Big Boulder Ski Areas, which met the criteria for accounting for these transactions as direct financing leases.  The accounting was based on estimates and assumptions about the fair values and estimated useful lives of the leased properties, as well as the collectibility of lease payments and recoverability of the unguaranteed residual value of the leased properties.  The Companies periodically review the net investment in direct financing leases for events or changes in circumstances that may impact collectibility, and recoverability of the unguaranteed residual value of leased properties.

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.  Revenue is recognized upon signing of the closing documents.  At closing, a binding contract is in effect, the buyer has arranged for permanent financing and the Companies are assured of payment in full.  Also at the time of closing, the risks and rewards associated with ownership have been transferred to the buyer.  Selling expenses are recorded when incurred.

Long-lived assets, namely properties, are recorded at cost. Depreciation and amortization is provided principally using the straight-line method over the estimated useful life of the asset. Upon sale or retirement of the asset, 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.

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.  The impairment loss is recognized in the period incurred.

Deferred income consists of dues, rents and deposits on land or home sales. Rents that are not yet earned are related to the Companies’ commercial properties that have been paid in advance, and dues are related to memberships in their hunting and fishing clubs and golf course memberships paid in advance. The Companies recognize revenue related to the hunting and fishing clubs and golf course memberships over the one-year period that the dues cover.  The Companies recognize revenue related to the fishing club over a five month period from May through September, and the golf course over a seven month period, April through October.  Deposits are required on land and home sales.

The Companies sponsor a defined benefit pension plan as detailed in footnote 8.  The accounting for pension benefits is determined by specialized accounting and actuarial methods using numerous estimates, including discount rates, expected long-term investment returns on plan assets, employee turnover, mortality and retirement ages, and future salary increases.  Changes in these key assumptions can have a significant effect on the pension plan’s impact on the Companies’ financial statements.  The Companies engage the services of an independent actuary and investment consultant to assist them in determining these assumptions and in calculating pension income.  The plan is currently underfunded and, accordingly, the Companies have made contributions to the fund of $362,058 and $467,392 in Fiscal 2009, and in the fiscal year ended October 31, 2008, or Fiscal 2008, respectively.  The Companies expect to contribute $402,121 to the pension plan in Fiscal 2010.  The Companies also have in place a 401(k) pension plan available to all full time employees, which is funded entirely by employee contributions.

The Companies recognize as compensation expense an amount equal to the grant date fair value of the stock options issued over the required service period.  Compensation cost was measured using the modified prospective approach.

- 13 -

The fair value of each option award is estimated at the date of grant using a Black-Scholes option pricing model.  Expected volatilities are based upon historical volatilities of the Companies’ stock.  The Companies use historical data to estimate option exercises and employee terminations with the valuation model.  The expected term of options granted is derived from the output of the valuation model and represents the period of time that options granted are expected to be outstanding.  The risk-free rate for periods within the contractual term of the option is based on the U.S. Treasury yield curve in effect at the time of grant.

The Companies have no off-balance sheet arrangements as defined in Item 303(a)(4)(ii) of Regulation S-K.

Results of Operations for the Three Months Ended January 31, 2010 and 2009

Operations for the three months ended January 31, 2010 resulted in a net loss of ($499,328), or ($0.20) per combined share, compared to a net loss of ($127,258), or ($0.05) per combined share, for the three months ended January 31, 2009.

Revenues

Combined revenue of $1,164,508 for the three months ended January 31, 2010 represents a decrease of $2,004,562, compared to the three months ended January 31, 2009.  Real Estate Management Operations / Rental Operations revenue decreased $230,009, or 22%, for the three months ended January 31, 2010, compared to the three months ended January 31, 2009. Summer Recreation Operations revenue increased $5,420, or 111%, for the three months ended January 31, 2010, compared to the three months ended January 31, 2009. Land Resource Management revenue decreased $1,779,973, or 85% for the three months ended January 31, 2010 compared to the three months ended January 31, 2009.

Real Estate Management/Rental Operations

Real Estate Management Operations / Rental Operations had revenue of $830,231 for the three months ended January 31, 2010, compared to $1,060,240 for the three months ended January 31, 2009, which resulted in a decrease of $230,009, or 22%.  This was primarily attributed to a decrease in Moseywood Construction Company’s new home construction sales.  Revenue for the new home construction for the three months ended January 31, 2010 was $84,596.43, compared to $186,012 for the three months ended January 31, 2009, a decrease of $101,416 or 55%.   On July 3, 2008, management decided to complete all new homes under contract and not to accept any new home construction contracts due to the ongoing slowdown of the overall economy.  Additionally sales commissions revenue on residential home sales at our resort communities for the three months ended January 31, 2010 was $0 as compared to $87,434 for the three months ended January 31, 2009, a decrease of $87,314 or 100%. Management made the decision to close the Jack Frost – Big Boulder Real Estate sales office and, on April 24, 2009, the companies signed an Agreement with Pocono Resorts Realty. The Agreement provided for, among other things, the transfer of current home sale listings, the use of Company-owned signboards and the use of real estate sales offices currently located in the Jack Frost Mountain and Big Boulder Ski Area lodges. Also as part of the Agreement and upon approval by municipal and state agencies, Pocono Resorts Realty will be allowed to use a model home in either the Laurelwoods II or Boulder Lake Village developments as a sales office to sell the Companies’ newly constructed homes at Big Boulder.  Trust service fees, which are fees for water, sewer and road maintenance, for the three months ended January 31, 2010, were $167,698 as compared to $149,307 for the three months ended January 31, 2009, which resulted in an increase of $18,392 or 12%.  Rental revenue for the three months ended January 31, 2010 was $525,145 as compared to $581,689 for the three months ended January 31, 2009 resulting in a decrease of $56,544, or 10%.

Summer Recreation Operations

Summer Operations revenue relating to the Jack Frost National Golf Course for the three months ended January 31, 2010 was $10,298 as compared to $4,878 for the three months ended January 31, 2009, for an increase of $5,420.  These revenues were primarily derived from minimal course play in early November of each season prior to the course closing.

Land Resource Management

For the three months ended January 31, 2010, Land Resource Management had revenue of $323,979 compared to $2,103,952 for the three months ended January 31, 2009, which resulted in a decrease of $1,779,973.  This decrease is primarily attributable to one condominium sale ($320,000) in the Boulder Lake

- 14 -

Village community for the three months ended January 31, 2010, as compared to three home sales in Laurelwoods II community and one condominium sale in Boulder Lake Village for the three months ended January 31, 2009 ($1,834,956) for a decrease of $1,514,956.  For the three months ended January 31, 2010, timbering revenue was $0 as compared to $261,483 for the three months ended January 31, 2009.

Operating Costs

Real Estate Management/Rental Operations

Operating costs associated with Real Estate Management Operations / Rental Operations for the three months ended January 31, 2010 were $600,713 compared to $871,431 for the three months ended January 31, 2009, which represents a decrease of $270,718, or 31%.  For the three months ended January 31, 2010, new home construction costs were $75,148 compared to $196,974 for the three months ended January 31, 2009, for a decrease of $121,825, or 62%.  Operating expenses for the new home construction division for the three months ended January 31, 2010 were $17,947 as compared to $87,997 for the three months ended January 31, 2009 for a decrease of $70,050, or 80%. These decreases relate to management’s decision on July 3, 2008 not to accept any new home construction contracts.

Summer Recreation Operations

Operating expenses associated with Summer Operations for the three months ended January 31, 2010 were $242,501 as compared to $230,666 for the three months ended January 31, 2009, which represents an increase of $11,835, or 5%.  These increased costs are primarily attributable to an increase in course repairs and maintenance ($11,447).

Land Resource Management

Operating costs associated with Land Resource Management for the three months ended January 31, 2010 were $407,429 compared with $1,726,884 for the three months ended January 31, 2009, which represents a decrease of $1,319,455.  This is primarily attributable to a decrease in construction costs related to real estate development, which was $246,733 for the three months ended January 31, 2010 as compared to $1,254,695 for the three months ended January 31, 2009, for a decrease of $1,007,963.  This is the result of one condominium sale in Boulder Lake Village for the three months ended January 31, 2010, as compared to three home sales in the Laurelwoods II community and one condominium sale in Boulder Lake Village for the three months ended January 31, 2009.  Correspondingly, the Land Resource Management operating expenses for the three months ended January 31, 2010 were $192,889 as compared to $489,688 for the three months ended January 31, 2009, for a decrease of $296,800.  

General and Administration

General and Administration costs for the three months ended January 31, 2010 were $442,982 compared to $376,705 for the three months ended January 31, 2009, which represents an increase of $66,279 or 18%.  This is primarily the result of a reallocation of salaries, related benefits and payroll taxes to better reflect actual job related duties.

Other Income (Expense)

Interest and other income was $87,855 for the three months ended January 31, 2010 compared to $87,798 for the three months ended January 31, 2009, which represents an increase of $57.

Interest expense for the three months ended January 31, 2010 was $311,133 compared to $234,909 for the three months ended January 31, 2009, which represents an increase of $76,244 or 32%.  This was primarily the result of the refinancing of two commercial retail properties in August 2009.

Tax Rate

The effective tax rate for the three months ended January 31, 2010 and 2009 was 34%.  The rate for 2010 is specific to federal taxes.  There is no benefit for state income tax in 2010 because the Companies fully reserved the future benefit.  

Liquidity and Capital Resources

As reflected in the Combined Condensed Statements of Cash Flows, net cash used in operating activities was $677,836 for the three months ended January 31, 2010 versus net cash provided by operating activities of

- 15 -

$308,916 for the three months ended January 31, 2009.  The decrease in net cash provided by operating activities for the three months ended January 31, 2010 is primarily attributable to reduced sales in Phase II of the Laurelwoods II residential community.  

For the three months ended January 31, 2010, the construction of Building J in the Boulder Lake Village condominium community at Big Boulder was our major capital expenditure.

On May 22, 2009, the Companies entered into a Deed of Trust and Security Agreement and Real Estate Lien Note (the “Barbers Hill Note”) with Barbers Hill Bank, a branch of Anahuac National Bank, in the amount of $1,050,000, which encumbers certain real property owned by Blue Ridge located in Chambers County, Texas.  This property is currently leased to Jack in the Box Eastern Division, L.P. The Barbers Hill Note has a term of five years and requires monthly payments in the amount of $7,254 beginning June 22, 2009 and ending May 22, 2014, at which time the remaining principal balance and all interest accrued shall become due and payable.  The proceeds of the Barbers Hill Note will be used toward funding the completion of Building J of the Boulder Lake Village condominium project and general operations.  The interest rate is fixed at 6.75%.

On August 28, 2009, Blue Ridge, through its wholly owned subsidiary, Blue Ridge WNJ, LLC, entered into a mortgage and security agreement and a $4,038,000 Senior Secured Note (the “Wells Fargo Note”) with Wells Fargo Bank Northwest, N.A. (“Wells Fargo”).  The Wells Fargo Note is secured by the mortgage, which encumbers certain real property known as the Walgreens Store located in Dover Township, Ocean County, New Jersey.  A portion of the proceeds of the Wells Fargo Note were used to prepay the existing note outstanding with State Farm Bank, which previously encumbered the New Jersey Walgreens property.  Beginning on September 15, 2009, interest and principal payments are due and payable monthly until August 15, 2031.  The interest rate is fixed at 6.90%.

On August 28, 2009, Blue Ridge, through its wholly owned subsidiary, Blue Ridge WMN, LLC, entered into a mortgage and security agreement and a $4,340,000 Senior Secured Note (the “Second Wells Fargo Note”) with Wells Fargo.  The Second Wells Fargo Note is secured by the mortgage, which encumbers certain real property known as the Walgreens Store located in White Bear Lake, Washington County, Minnesota.  A portion of the proceeds of the Second Wells Fargo Note were used to prepay the existing note outstanding with State Farm Bank which previously encumbered the Minnesota Walgreens property.  Beginning on September 15, 2009, interest and principal payments are due and payable monthly until August 15, 2031.  The interest rate is fixed at 6.90%.

The Companies have a line of credit with Manufacturers and Traders Trust (“M&T”) Company to fund real estate development in the aggregate amount of $17,900,000 with an interest rate of the greater of overnight LIBOR plus 3.5% or the daily 30-day LIBOR plus 3.5%, with an interest rate floor of 5.5%.  In addition, the Companies were required to establish an interest reserve account of $690,000 as security for the payment of interest, which was established in the third quarter of Fiscal 2009 with the proceeds from a sale of land.  Interest is due and payable on a monthly basis and, at January 31, 2010, the interest rate equaled 5.5% and the balance of the interest reserve escrow account was $353,055.  The remaining principal and any accrued interest is due and payable on April 19, 2010.  The Companies are currently negotiating an extension of this credit facility.  The Companies are using $7,900,000 of the $17,900,000 M & T line of credit to fund the construction of residential development projects.  The Companies have utilized a portion of the proceeds from the sale of one Boulder Lake Village condominium unit to pay $217,988 on this sublimit during first quarter of Fiscal 2010.  At January 31, 2010, $4,775,389 was outstanding on this sub-limit.  The Companies also utilized $6,000,000 of the $17,900,000 to fund site-development.    The Companies have utilized a portion of the proceeds from the sale of one Boulder Lake Village condominium unit to pay $66,655 on this sublimit during the first quarter of Fiscal 2010.  At January 31, 2010, $3,823,192 was outstanding on this sub-limit.  The Companies also utilize a total of $4,000,000 of the $17,900,000 to fund the expansion of the water and sewer systems at both Big Boulder and Jack Frost Mountain Ski Areas. This expansion is necessary to accommodate the new construction.  The Companies have utilized the proceeds of two land sales to repay the balance of $3,461,510 on this sublimit during Fiscal 2009.  At January 31, 2010, $0 was outstanding on the $4,000,000 sub-limit.  The total principal amount outstanding under the aggregate line of credit will not exceed the lesser of (a) $17,900,000, or (b) 80% of the cost or appraised value of the units.  The loan agreement requires, among other things, that the Companies comply with consolidated debt to worth, debt service coverage and tangible net worth ratios.  The Companies had not met the required debt service coverage ratio at October 31, 2009, but had obtained a waiver from the Bank for this covenant.

- 16 -

The Companies also have a $3,100,000 line of credit with M & T for general operations.  At January 31, 2010, $1,553,862 was outstanding on the $3,100,000 line at a 5.5% interest rate.  

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, public offerings or private placements of debt or equity 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 as to reduce market risk associated with changing economic conditions.

Item 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Our exposure to market risk is limited primarily to the fluctuating interest rates associated with variable rate indebtedness.  At January 31, 2010, we had $10,337,923 of variable rate indebtedness, representing 38% of our total debt outstanding, at an average rate of 4.38% (calculated as of January 31, 2010).  Our average interest rate is based on our various credit facilities and our market risk exposure fluctuates based on changes in underlying interest rates.

Exposure to market risk may also exist in our mortgages receivable issued in connection with land sales.  Mortgages receivable are considered fully collectible by management and, accordingly, no allowance for loan losses is considered necessary.

Item 4T.  CONTROLS AND PROCEDURES

(a)  Evaluation of Disclosure Controls and Procedures.

Management, with the participation of the Companies’ chief executive officer and chief financial officer, evaluated the effectiveness of the Companies’ disclosure controls and procedures as of the end of the period covered by this report. Based on that evaluation, the Companies’ chief executive officer and chief financial officer concluded that the Companies’ disclosure controls and procedures as of the end of the period covered by this report have been designed and are functioning effectively to provide reasonable assurance that the information required to be disclosed by us in reports filed under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and is accumulated and communicated to the Companies’ management, including the Companies’ principal executive and principal financial officers, or person performing similar functions, as appropriate to allow timely decisions regarding required disclosure. The Companies believe that a controls system, no matter how well designed and operated, cannot provide absolute assurance that the objectives of the controls system are met, and no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within a company have been detected.

(b)  Change in Internal Control over Financial Reporting.

No change in the Companies' internal control over financial reporting occurred during the Companies’ most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

- 17 -

PART II - OTHER INFORMATION

Item 1.  LEGAL PROCEEDINGS

The Companies are presently party to certain lawsuits arising in the ordinary course of their business.  The Companies believe that none of their current legal proceedings will be material to their business, financial condition or results of operations.

Item 1A.  RISK FACTORS

No update.

Item 6.  EXHIBITS

* Filed herewith

- 18 -

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrants have duly caused this report to be signed on their behalf by the undersigned thereunto duly authorized:

BLUE RIDGE REAL ESTATE COMPANY

BIG BOULDER CORPORATION

(Registrants)

Dated:   March 17, 2010

/s/ Eldon D. Dietterick

Eldon D. Dietterick

Executive Vice President/Treasurer

Dated:   March 17, 2010

/s/ Cynthia A. Van Horn

Cynthia A. Van Horn

Chief Accounting Officer

- 19 -

EXHIBIT INDEX

* Filed herewith

- 20 -