GREAT AMERICAN RECREATION INC, 10KSB, 1995-09-25

GREAT AMERICAN RECREATION INC
10KSB, 1995-09-25
MISCELLANEOUS AMUSEMENT & RECREATION

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SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-KSB

[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED]

For the fiscal year ended April 30, 1995

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]

For the transition period from ___________, 19_____ to __________, 19_____

Commission File Number 0-9949

Great American Recreation, Inc.
(Name of small business issuer in its charter)

New Jersey 22-2381071
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)

P.O. Box 848 McAfee, New Jersey 07428
(Address of principal executive offices) (Zip Code)

Issuer's telephone number: 201-827-2000

Securities registered pursuant to Section 12(b) of the Exchange Act: None

Securities registered pursuant to Section 12(g) of the Exchange Act:

Common Stock, $.01 par value

Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has
been subject to such filing requirements for the past 90 days.

Yes X No ______

Check if there is no disclosure of delinquent filers in response to Item 405
of Regulation S-B is not contained in this form, and no disclosure will be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this
Form 10-KSB. [ X ]

State issuer's revenues for its most recent fiscal year: $20,192,705.

The aggregate market value of the voting stock held by non-affiliates of the
registrant as of September 18, 1995 was $2,176,814. Non-affiliates have been
determined on the basis of holdings set forth under Item 11 of this Annual
Report on Form 10-KSB computed by reference to the price at which the stock
was sold, or the average bid and asked prices of such stock, as of a
specified date within the past 60 days.

State the number of shares outstanding of each of the Registrant's classes
of common equity, as of the latest practicable date: 54,420,358 as of
August 30, 1995.

DOCUMENTS INCORPORATED BY REFERENCE
None

PART I

Item 1. Description of Business

Great American Recreation, Inc., together with its
subsidiaries (hereinafter collectively referred to as the
"Company"), owns and operates a summer Action Park and a winter
recreational ski area located in northern New Jersey, approximately
50 miles northwest of Manhattan and 90 miles northeast of
Philadelphia.

Introductory Statement. On May 17, 1995 First Fidelity Bank,
N.A. ("First Fidelity") commenced an action (the "Foreclosure
Action") in the Superior Court of New Jersey, Chancery Division -
Sussex County against the Company, substantially all of its
subsidiaries, Princeton-New York Parent, Inc. ("Princeton") and its
subsidiaries and others alleging that the indebtedness owing to
First Fidelity by the Company and Princeton is in default and
seeking to foreclose on certain real and personal assets which are
collateral for the obligations of the Company and its subsidiaries
and Princeton and its subsidiaries. First Fidelity is also seeking
certain other relief in the action. The assets involved in the
Foreclosure Action constitute substantially all of the assets of
the Company and its subsidiaries as well as of Princeton and its
subsidiaries. A director of the Company is also an officer,
Director and principal shareholder of Princeton and the agreements
and other instruments evidencing the obligations of the Company and
its subsidiaries and Princeton and its subsidiaries to First
Fidelity contain cross-default provisions whereby a default by the
Company, any of its subsidiaries, Princeton or any of its
subsidiaries under any of their obligations to First Fidelity
constitutes a default by each of the other obligors under their
obligations to First Fidelity. In addition, the Company and
Princeton have guaranteed the obligations of the other and their
respective subsidiaries to First Fidelity. First Fidelity claims
the Company and its subsidiaries owe it, as of May 15, 1995, an
aggregate of approximately $16,240,000 plus interest, counsel fees
and other costs as permitted by the relevant loan documents and
that Princeton-Parent and its subsidiaries owe it, as of May 15,
1995, an aggregate of approximately $2,738,000 plus interest,
counsel fees and other costs as permitted by the relevant loan
documents. The Company and Princeton claim that the principal
amount owing by the Company at April 30, 1995 was $14,900,000 and
by Princeton on that date was $2,330,520.

The Company and Princeton and their subsidiaries have filed an
answer denying the material allegations of the Complaint and
setting forth a counterclaim asserting, among other things, that
First Fidelity engaged in bad faith and misconduct and breached its
fiduciary duties to the defendants in failing to provide certain
construction financing relating to a condominium project of a
subsidiary of Princeton, refused to grant non-disturbance
agreements to the Company and a subsidiary of Princeton in
connection with the sale of long-term contractual rights to use
amenities on the property by a joint venture between the Company
and Princeton all of which were critical to the defendants' ability
to perform under their obligations to First Fidelity and to meet
the Company's other obligations.

If First Fidelity is successful in the Foreclosure Action it
will succeed to the ownership of substantially all of the Company's
assets without any assumption of the Company's liabilities. The
Company believes that its equity in the assets which are the
subject of the Foreclosure Action exceeds the amount First Fidelity
claims it is owed by both the Company and Princeton. However,
there can be no assurance as to the outcome of the Foreclosure
Action (or any of the other legal proceedings to which the Company
is a party - see Item 3. Legal Proceedings) and thereby there can
be no assurance that the Company will not be forced to commence a
reorganization proceeding under the Federal Bankruptcy Laws or may
not be forced into liquidation by its creditors. Under such
circumstances there can be no assurance that after paying all
outstanding secured and other indebtedness ranking senior there
will be any assets available for distribution to the Company's
holders of its outstanding subordinated debentures or shareholders
or that such holders will retain any equity or subordinated debt
interest in the Company following any reorganization proceeding.
See Item 6. Management's Discussion and Analysis or Plan of
Operations.

Over the past seven years, the Company, Princeton and their
subsidiaries have reduced their principal indebtedness to First
Fidelity from a total of approximately $54.9 million in principal
advances to its present level of approximately $17.2 million ($6.4
million of which represents participation by entities other than
First Fidelity).

On September 13, 1995, a non-affiliated person entered into an
option agreement with First Fidelity to acquire from First Fidelity
the indebtedness of the Company and its affiliates owing to First
Fidelity, the related collateral and First Fidelity's interest in
the Foreclosure Action. The non-affiliated person paid
approximately $1,627,000 for the option which provides for a final
closing date of October 27, 1995. The consummation of the option
agreement is subject to the fulfillment of numerous conditions and
the delivery of various documents, including releases and
indemnification agreements from the Company and its affiliates in
favor of First Fidelity. There can be no assurance that the First
Fidelity indebtedness, and the related collateral and Foreclosure
Action will be acquired by the non-affiliated person, that such
person will not pursue the Foreclosure Action or that the Company
will be able to obtain from the non-affiliated person any
agreements favorable to the Company and its future activities.

In March 1989, the Company refinanced the mortgage on one of
its ski lodges in order to make available additional cash for
operations. The Company entered into a $5,000,000 mortgage, which
was originally scheduled to be repaid over five years ending March
1, 1994. The mortgage has two participants with each participant
originally holding an equal share of the mortgage. Interest on the
mortgage is 12% for one participant's share of the Loan, and 12-
1/2% for the other. This loan is guaranteed by certain individuals,
including a director of the Company. The Company has been notified
that because of First Fidelity continuing its foreclosure
proceeding, the participants of the mortgage will commence a
foreclosure action with respect to their first lien position. The
participants have advised the Company that provided the Company
remains current on its payment obligations to the participants and
First Fidelity does not move to a Sheriff's Sale, the participants
in this mortgage will forbear from concluding this action for a
period of six months from August 1, 1995.

On August 7, 1995, American Stock Transfer and Trust Company,
a trustee under a Debenture Indenture dated as of June 12, 1991
under which there is outstanding $6,288,659 principal amount of
subordinated debentures due May 31, 2006, commenced a lawsuit in
the United States District Court for the District of New York
alleging that the Company had defaulted in the payment of interest
due on the debentures, that the entire principal amount and accrued
interest is now due and payable and seeking to recover a judgment
for such amount. The Company has filed an answer in this
litigation which, among other things, alleges that the plaintiff is
disqualified from so acting by reason of conflicts of interest in
fulfilling its duties to the debentureholders and is thereby barred
from maintaining this lawsuit. There can be no assurance that the
Company will be successful in its defense of this litigation or
that as a result of the institution of this litigation that the
Company will not be compelled to commence a proceeding under
Chapter XI of the Federal Bankruptcy laws.

As stated above, the Company is currently in default and a
lawsuit has been filed against the Company in connection with
certain subordinated debentures due May 31, 2006 in the principal
amount of $6,288,659. In addition, the Company is currently in
default with respect to its 10% subordinated debentures due January
7, 1996 in the principal amount of $4,480,300; 15% subordinated
debentures due August 1, 1995 in the principal amount of $550,000;
and 13% convertible subordinated debentures due December 31, 1996
in the principal amount of $1,455,500.

Recreational Activities

Ski Areas. The Company's ski area includes two distinct, but
interconnected groupings of lifts and trails known as Vernon Valley
ski area and Great Gorge ski area. Each has its own base lodge and
support facilities and patron parking. Vernon Valley includes eight
lifts and tows and twenty-four trails and Great Gorge includes nine
lifts and tows and twenty-eight trails. Additionally, there are a
number of trails connecting the Vernon Valley and Great Gorge ski
areas. The trails throughout the ski area are of varying difficulty
and accommodate the requirements of beginner, novice, intermediate
and expert skiers. The mountain's orientation protects the snow
cover from the sun and forestation affords protection from the
wind, with ski trails located on the northerly side of several
peaks of Hamburg Mountain in New Jersey. The entire facility
extends along approximately two miles on the easterly side of Route
94 in Vernon Township, Sussex County, New Jersey. The seventeen
lifts and tows serving the slopes in the ski area are rated to lift
an aggregate of 14,000 persons per hour. The entire facility
includes approximately twenty-six miles of ski trails and seventeen
ski lifts and tows ranging from 210 feet to 6,023 feet in length.

The Company also operates a ski school. Instruction is given
during normal business hours of the ski area. Rates for group
instruction during the 1994-1995 ski season were $16.75 per session
on both weekdays and weekends and private sessions were $45 per
hour on weekdays and $60 per hour on weekends and holidays. Rates
for group instruction during the 1993-1994 ski season were $16.75
per session and private lessons were $45 per hour on weekdays and
$60 per hour on weekends and holidays. During the 1994-1995
season, the Company's ski area was open from 9:00 a.m. to 10:00
p.m. on weekdays and from 8:30 a.m. to 10:00 p.m. on weekends.

During the 1994-1995 ski season, attendance was approximately
239,000 as compared to 356,000 in the prior season. Daily
attendance during the 1994-1995 season averaged 1,700 on weekdays
and 3,800 on weekends and holidays as compared to 2,400 and 5,300,
respectively, in the prior season. Peak attendance for the 1994-
1995 season was 6,500 as compared to 7,700 in the 1993-1994 season.
The Company attributes the decline in attendance in 1994-1995
primarily to the unusually warm winter conditions throughout the
ski season, which lead to poorer snow conditions and, therefore, a
lack of desire by the skiing public to participate in the sport.
This decline was evidenced throughout the Northeastern United
States.

The Company from time to time enhances its ski area by
widening and improving trails and by adding to or improving its ski
lifts and tows. It also fully replaces its skis, poles and boots
every three years. In addition, from time to time, it refurbishes
its ski lodges.

Management of the Company believes, on the basis of its
observations of other major ski areas, that the Company has one of
the largest artificial snow-making facilities in North America.
Virtually all of the twenty-six miles of slopes in the ski area are
capable of being covered by these snow-making facilities. Assuming
proper weather conditions for snow-making, the Company is able to
cover the trails to a depth of three feet within a period of two
weeks. Water is supplied to the entire snow-making system from
wells and lakes located on the property.

The Company attracts patrons through extensive advertising on
both radio and television and in newspapers throughout the New York
and New Jersey areas. In addition, the Company's marketing
employees regularly solicit schools, employers, local recreation
departments and other organizations to visit the ski area on a
special group basis. Because of the proximity of the ski area to
major metropolitan areas, charter bus excursions are a significant
source of patrons. The Company believes that the substantial
majority of its patrons are persons visiting the ski area for a
single day as opposed to weekend or week-long vacation visits.

Tickets are sold on both a seasonal and daily basis, with
tickets for a full day, half day, twilight or evening available.
Rates for adults are higher than those for children. During the
1994-1995 season, the Company's season ticket prices ranged from
$470 for junior night season tickets to $570 for adult unlimited
tickets. Daily rates ranged from $20 to $27 for juniors to $28 to
$38 for adults. Juniors are persons 12 years of age and younger.
The Company increased the 1994-1995 ticket prices approximately
2.65% from the 1993-1994 season and had increased the 1993-1994
ticket prices approximately 3.92% from the 1992-1993 season.

The Company also realizes revenue from the operation of bars
and lounges at both the Vernon Valley and Great Gorge base lodges,
the sale of food and beverages at the cafeterias, and the rental of
skis and boots. During the 1994-1995 ski season, revenue from the
sale of lift tickets, ski schools and ski equipment rentals
accounted for approximately 77% of total revenue, revenues from
bars, lounges and cafeterias accounted for approximately 17% of
total revenue, and revenue from ski shops, which sell ski clothes
and equipment and accessory items and souvenirs, and miscellaneous
income accounted for approximately 6% of revenue.

Summer Action Park. The Company operates a summer Action Park
on the premises adjacent to its ski area in Vernon Township, Sussex
County, New Jersey. The park presently encompasses approximately
160 acres adjacent to Route 94.

The Action Park includes a wide variety of recreational and
sports facilities emphasizing the active participation of the
patron in the activity. The activities in the Company's Action Park
are distinguishable from the majority of features in ride oriented
amusement parks in that at the Company's Action Park the patron's
involvement is a necessary aspect of the activity. The park
includes numerous water related activities, including a wave pool,
a rapids ride, a variety of water slides in various configurations,
swimming pools and boat rides. In most of the Company's Action Park
activities patron involvement relates to the control, direction or
speed of the activity. Traditional facilities such as basketball
courts, picnic pavilions, and a children's park are also included.
The park also includes a variety of motorized rides. The different
activities are designed to appeal to patrons of various ages and
interests. In addition, the park includes an approximately 30,000
square foot tent pavilion and the "Cobblestone Village" of eighteen
shops and stores aggregating approximately 19,000 square feet of
retail space. Various entertainment features are provided at
several locations throughout the park and, in addition, the Company
holds a series of special weekend festivals at the Park throughout
the summer. The Company is engaged in a continuing program of
adding additional features and enhancing existing ones.

The Action Park is in operation from Memorial Day through
Labor Day. It seeks to attract individual day visitors as well as
groups solicited by the Company's marketing employees from schools,
local recreation commissions and employers. The Action Park is open
from 10 a.m. to 9 p.m. seven days a week. Admission to the park
during the 1995 summer season is $27.00 per adult person, which
entitles the patron to participate in substantially all activities
in the park. The adult ticket price was $27.00 in the 1994 summer
season. Group tickets and rates are available. General admission
and junior rates are available and, after certain hours, reduced
rates apply.

Of the Company's revenues from its Action Park during the
fiscal years ended April 30, 1995 and 1994, approximately 71% was
from the sale of Action Park admission tickets, approximately 20%
was from food and beverage sales and 9% was from admissions to
festivals and music concerts, the sales of souvenirs and from other
miscellaneous items. Total attendance at the Action Park during
the 1994 summer season was 400,606 persons as compared to 468,847
persons for the 1993 summer season.

Colorado Action Park. In August 1981, the Company acquired,
through a wholly owned subsidiary, certain Action Park assets
located near Denver, Colorado. The assets consist principally of an
alpine slide, a water slide, and related equipment and operating
assets. These assets are operated as a small "Action Park." During
the fiscal years ended April 30, 1995 and 1994 revenues of this
Action Park were $635,000 and $563,000, respectively and total
costs of operations were $521,000 and $491,000, respectively.

Mountain Top Recreation Center. In addition to the operation
of its ski area and Action Park, the Company is engaged in
developing the Mountain Top Recreation Center on an approximately
925 acre wooded property located generally on the summit of Hamburg
Mountain adjacent to the ski area and Action Park. This Recreation
Center includes the development of the 300 site campground
recreational facility, a proposed 27 hole golf course and club
house and, in the final stage, a proposed 400 room resort hotel.
Certain of these facilities require local and other government
approvals before development can occur. See "Real Estate
Interests." Already constructed on the property is a children's
log fort. The property includes an approximately 23 acre lake with
beaches for use by the occupants. The Company has been engaged in
obtaining the necessary government approvals for the development of
the property. Already constructed are ingress and egress roads,
ten year-round occupancy wood cabins, tent platforms, and amenities
such as trails, a pavilion, basketball courts and other
recreational facilities.

The Company's ownership of the land is subject to the
requirement that the land be continually utilized for conservation
or recreation or fish and game purposes. The Company is also
restricted from using the land to calculate density restrictions in
the Company's residential development of adjacent lands. The
Company believes that its development plans comply with these
restrictions.

It is intended that certain of these facilities will be made
available to the Resort Club, Inc. See "Real Estate Interests"
below.

Limitations on Liability Insurance. Effective May 15, 1995,
the Company obtained a general liability insurance policy insuring
the Company against loss in the aggregate amount of $4,000,000 per
occurrence and $4,000,000 in the aggregate during the policy year.
The policies provide for a deductible whereby the Company is
obligated to pay the first $250,000 of claims during the policy
year. The policies insure the Company on a claims-made basis
whereby the event giving rise to the claim and the assertion of the
claim must both occur during the policy year. The Company has
obtained a bond to cover the first $250,000 of liability. Prior to
May 15, 1995, the Company did not carry general liability insurance
covering it from liability to patrons to its Action Park and ski
area. By reason of that absence of liability insurance, the
Company will be required to pay out of its own resources any claims
it is ultimately determined to be liable for resulting from
injuries to patrons in its Action Park and ski area which occurred
prior to May 15, 1995. At April 30, 1995, the Company had accrued
approximately $3,771,000 for uninsured liability claims, an amount
considered adequate by Management. Such sum has not been funded
and, in view of the Foreclosure Proceeding and the Company's
current financial condition, the Company may be unable to pay the
claims of those persons who sustained personal injuries prior to
May 15, 1995. See Item 3. Legal Proceedings. The Company
discontinued its liability insurance coverage in 1986 by reason of
the substantial general increases in liability insurance premiums
throughout the insurance industry which made insurance coverage
prohibitively expensive for the Company.

In the operation of the Company's ski area, the Company's
liability to injured skiers is limited by a New Jersey statute
which, in general, provides that skiers assume the inherent risks
of skiing created by weather conditions, conditions of snow and
trails, other skiers and all other inherent conditions and bars
suits against an operator of a ski area, unless the operator has
violated its statutory duties set forth in the statute.

Real Estate Interests

Commencing in 1983 the Company began placing additional
emphasis on real estate development activities through a wholly
owned subsidiary, Stone Hill of Vernon, Inc., including the
construction of a 1,436 unit condominium development on properties
adjacent to the Action Park and ski area and the development of
other contiguous and non-contiguous parcels of real estate. In
June 1989, the Company combined its real estate development
activities with those of Princeton whereby Princeton acquired Stone
Hill of Vernon, Inc. and another subsidiary that owns and operates
a health club and spa. In addition to owning the Company's former
real estate subsidiaries and the operation of the health club and
spa, Princeton proposes to engage in further development of
residential condominium properties in the area of the Company's ski
area and Action Park.

The terms of the June 1989 transaction with Princeton whereby
the Company disposed of its real estate interests provided, among
other things, that the Company would receive 30% of the common
stock of Princeton and 5% of the gross revenues realized from the
sale of residential units developed and sold on the land owned by
the combined entities, excluding residential unit sales on the
hotel property of Princeton acquired in September 1988. In
addition, Princeton assumed certain indebtedness of the former real
estate subsidiaries guaranteed by the Company, initially
aggregating $26,500,000 in October 1989 and aggregating
approximately $9,017,000 as of April 30, 1995, and agreed to
reimburse the Company's net operating costs of the former
subsidiaries from the date of the plan to divest to the closing of
the transaction, which totaled approximately $6,400,000 and,
furthermore, also agreed to pay to the Company an additional
$2,100,000. The Company received an $8.5 million note for the cost
reimbursement and the purchase price of the subsidiaries which was
payable over a maximum of ten years, with interest at prime plus 2
1/2%, payable quarterly. This transaction, which was completed at
the end of the second quarter of fiscal 1990, resulted in a gross
pre-tax gain to the Company of approximately $3,178,000. Due to the
element of common control between the Company and Princeton, this
gain was deferred.

Prior to the June 1989 transaction, in September 1988,
Princeton-New York Investors, Inc. ("Princeton Investors"), then
owned by a present Director of the Company and certain other
persons, certain of whom were then but are no longer Directors of
the Company, purchased the 624 room hotel formerly operated as the
Playboy Hotel in Vernon Township, Sussex County, New Jersey and a
574 acre parcel on which the hotel and golf course are located. In
December 1989, pursuant to a corporate reorganization, Princeton
Investors became a wholly-owned subsidiary of Princeton. In
November 1990, Princeton Investors sold the 27 hole golf course on
the 574 acre parcel together with certain land surrounding the golf
course to a person unaffiliated with any of the Company, Princeton
or Princeton Investors. The amount of the gross cash consideration
received by Princeton Investors at closing of the sale of the golf
course was $18,596,000 (net of expenses related to the sale
totalling $1,404,000), which was utilized to pay related debt
payments, legal and other fees related to the sale and for working
capital purposes. Also in November 1990, the Company sold 7 acres
of land to Princeton Investors which immediately resold the
property, combined with additional acreage, in connection with its
sale of the golf course. In addition, the Company transferred a
liquor license to the unaffiliated purchaser as part of the
transaction. As a consequence, the Company realized an aggregate
of $1,225,000 from the November 1990 transaction which was offset
against an obligation of the Company to Princeton.

On April 5, 1991 (the "April 1991 Transaction"), Princeton
entered into an agreement with Valley Properties, Inc., a non-
affiliated investor believed by the Company to be an affiliate of
Valley Development, L.P., for Valley Properties, Inc. to acquire
all of the outstanding Common Stock of Princeton Investors. Valley
Development, L.P. had on various dates commencing on November 1,
1989 purchased a preferred stock interest in Princeton Investors.
Effective April 5, 1991, Valley Properties, Inc. assumed control
over the operations and assets of Princeton Investors. After the
April 1991 Transaction Princeton retained operations comprising
real estate development activities and the operation of a health
club and spa. The April 1991 Transaction, provided for a purchase
price payable to Princeton of $1,500,000, all of which was
received. As additional consideration, Valley Properties, Inc.
arranged for a loan of $500,000 to the Company, agreed to transfer
to Princeton 25% of the 674 building unit lots, substantially all
of which are the subject of contracts to sell where substantially
all of the purchase price has been received, on a 198 acre parcel
surrounding the golf course and to grant to Princeton an option to
purchase the remaining condominium units, subject to the terms of
the April 5, 1991 agreement. On August 12, 1994, Princeton
Investors and certain affiliated entities commenced a proceeding
under Chapter XI of the United States Bankruptcy Code. As a
consequence of these proceedings, Princeton's ability to obtain the
transfer to it of the 25% of the 674 building unit lots and to
exercise the option to purchase the remaining condominium lots has
become doubtful. In the judgment of management of the Company,
Princeton's inability to be able to enforce these contractual
rights against Princeton Investors has impaired the carrying value
of the Company's investment in Princeton. See Item 6.
Management's Discussion and Analysis or Plan of Operation and Note
12 to Notes to Consolidated Financial Statements. In addition, as
a result of the Princeton Investors bankruptcy, the Company has
fully reserved for its outstanding receivables in the aggregate
amount of $922,446 due from Princeton Investors at April 30, 1995.

As of April 30, 1992, the Company exchanged its 30% common
stock interest in Princeton, receivables in the amount of
$12,323,843 and its entitlement to 5% of residential unit sales
revenue of Princeton for 1,000 shares of the 10% pay-in-kind
preferred stock of Princeton having a liquidation value of
$12,500,000. See Item 12. Certain Relationships and Related
Transactions and Note 7 of Notes to Consolidated Financial
Statements for a further description of this transaction and the
terms of the Preferred Stock. The new investment in preferred
stock was accounted for under the cost method commencing April 30,
1992. During the fiscal years ended April 30, 1995 and 1994, the
Company recorded $1,581,074 and $1,432,375 in revenue from the
issuance of additional shares of preferred stock as dividends paid
on the pay-in-kind preferred stock by Princeton. At April 30,
1995, primarily as a consequence of the Princeton Investors
bankruptcy proceeding described above as well as the inability of
the Company and Princeton to obtain certain agreements of First
Fidelity enabling the development of properties serving as
collateral for the loan from First Fidelity, the Company's
aggregate investment of $12,060,888 in the preferred stock of
Princeton was fully reserved. In addition, the Company has
adjusted the carrying value of its outstanding receivable balance
with Princeton at April 30, 1995 to $13,000,000 which is net of a
reserve allowance of $12,542,727. All future advances to Princeton
by the Company will be fully reserved. See Item 6. Management's
Discussion and Analysis or Plan of Operation.

The Company owns substantial real estate acreage located
adjacent to and on the peaks above its ski areas which is capable,
on an aggregate of approximately 925 acres, of being developed as
a golf course, recreational camp sites and a hotel and, on an
additional separate parcel located adjacent to Route 94, of being
developed as a shopping center. The golf course, recreational camp
sites and hotel are intended to be developed in stages. As an
initial stage the Company contemplates the development of the 300
site campground recreational area. Subsequent stages include the
development of a 27 hole golf course and club house and, in the
final stage, a 400 room resort hotel. The shopping center is
preliminarily proposed to be developed on an approximately 5 acre
site on property across Route 94 from the Great Gorge ski lodge.
Various portions of the projects are currently being reviewed by
local governmental authorities as part of the approval process. The
township planning board has granted approval to the 300 campground
sites. The Company has constructed ten campsite cabins on the
property. Approval has been obtained from the local governmental
authority for the 27 hole golf course and club house. The Company
intends to pursue obtaining the necessary approvals for the
development of the hotel. Certain county approvals are also
required for these projects which approvals have either been
granted or are pending. There can be no assurance that final
favorable approvals will be obtained for all of these projects.
The Company believes that it has satisfied the State of New Jersey
that these plans are in compliance with deed restrictions relating
to the development of the property in question. Proceeding with
the projects is also dependent upon obtaining financing for the
developments and, until the local governmental approval process is
completed, the Company does not intend to proceed with seeking such
financing. Accordingly, there can be no assurance that approval for
the projects will be obtained or that financing will be available
or when such projects will be undertaken. See Item 2. Description
of Property for a description of an option on certain of these
lands held by Mountain Investment Fund.

The Company and Princeton have terminated a previously agreed
joint venture agreement relating to the joint development of
certain recreational and other assets.

Other Interests

The Company holds interests in the net purse proceeds paid to
five professional boxers. During the fiscal years ended April 30,
1995 and 1994, the Company had net revenues of approximately
$49,000 and $157,000, respectively, from these activities. See
Item 6. Management's Discussion and Analysis or Plan of Operation.
The Company anticipates that net revenues, if any, contributed by
these activities in the future will not be material.

Permits and Licenses

The Company's ski lifts and tows are subject to annual
inspections by the State of New Jersey and are required to be
granted permits by the State. All lifts and tows were granted
permits for the year ending September 1995. In the opinion of the
Company's management, the Company's equipment is adequately
maintained and suitable for the Company's operations.

The Company is required to obtain annual permits from the New
Jersey State Department of Labor to operate certain of its Action
Park patron participation activities and the operation of the rides
is subject to the New Jersey Carnival-Amusement Rides Safety Act.
The activities are subject to periodic inspection and, if
determined to be unsafe, an activity can be closed until such
condition is corrected.

A subsidiary corporation of the Company holds a license for
the sale of alcoholic beverages at the Vernon Valley and Great
Gorge ski areas and Action Park.

Seasonality

The Company's ski area is in operation from December through
March and its Action Park is in operation during the months of May
through Labor Day. In the months of October and November, the
Company generates cash receipts from the advance sale of tickets
and season passes to its ski area. During the fiscal year ended
April 30, 1995 approximately 16% and during the fiscal year ended
April 30, 1994, approximately 7% of the Company's ski season
revenues were realized during the months of October and November.
Accordingly, although the Company's cash receipts from its
recreational activities are seasonal, it generates receipts from
recreational activities in each month of the year other than April
and May.

Competition

The Company's principal competitors in the operation of its
ski area are Hunter Mountain near Hunter, New York (approximately
100 miles from New York City) and Camelback Ski Area near
Stroudsburg, Pennsylvania (approximately 90 miles from New York
City). These ski areas are approximately 105 miles and 80 miles,
respectively, from the Company's ski area. Both Hunter and
Camelback have facilities to accommodate large numbers of skiers
per day; have snow-making capabilities sufficient to provide
generally adequate snow cover; have private ski schools and rentals
to accommodate beginning skiers; and are generally comparable in
size and accommodations to the Company's facilities. The Company
also experiences competition from a number of other ski areas
located in the Pocono or Catskill Mountains, which are within a
radius of approximately 40 miles of the Company's facility but more
distant than the Company's ski area from the metropolitan New
York-northern New Jersey area, as well as a number of small ski
areas throughout New Jersey. Management of the Company believes it
has a competitive advantage over these ski areas because of its
proximity to New York City and northern New Jersey and its larger
snow-making capability.

In the operation of its Action Park, the Company experiences
competition from a variety of sources, including amusement parks,
other ski areas with action activities and numerous other summer
leisure-time activities. Competition is experienced from Great
Adventure Amusement Park in Central New Jersey and other parks
located in the New York - New Jersey area, as well as all types of
local summer recreational facilities, including other musical
festivals and concerts, swimming pools, beaches and tennis courts.
Many of the Company's competitors are larger, better known and able
to afford a more substantial program of facilities and promotional
activities.

Although the Company experiences intense competition for
patrons at its ski area and Action Park, it believes it is the only
recreation facility within the New York Metropolitan area that can
accommodate large numbers of visitors for both the winter and
summer seasons. In addition, through its affiliation with
Princeton, the Company has year-round access to overnight
accommodations, as well as to golfing, hiking, tennis, health spa
facilities, and other amenities which, in the opinion of
management, creates the New York Metropolitan area's only four
season large scale resort.

Local real estate taxes in Vernon Township, New Jersey are a
significant expense of the Company and management of the Company
believes these taxes to be significantly higher than the real
estate taxes paid by its closest competitors. Recently, following
appeals of its tax assessments, the Company obtained a reduction in
its real estate taxes, however, the Company believes the amount of
its real estate taxes creates a competitive disadvantage to the
Company which impedes the development of the Company's recreation
activities.

Employees

Throughout the year, in connection with the operation of its
Action Park and ski areas the Company employs as many as 2,600
persons, the substantial majority of which are employed on a
seasonal basis. The Company believes it enjoys a satisfactory
relationship with its employees. At present the Company has
approximately 157 year-round employees.

Backlog

Backlog is not a material aspect of the Company's recreational
business.

Research and Development

The Company does not engage in any material research and
development activities in connection with its recreation
activities.

Foreign Sales

The Company does not engage in foreign sales.

Environmental Factors

The Company believes that it is in material compliance with
Federal, State and local provisions which have been enacted or
adopted regulating the discharge of materials into the environment
or otherwise relating to the protection of the environment.

Item 2. Description of Property.

The Company's recreational facilities are located on
approximately 1,600 acres adjacent to Route 94 in Vernon Township,
Sussex County, New Jersey.

The Vernon Valley ski area base facility includes a lodge and
additional support buildings of approximately 45,000 square feet.
Included in the base lodge are approximately 6,000 square feet of
cafeteria space and approximately 4,000 square feet of bar and
lounges. The base lodge also contains a ski shop, repair shop and
garage, offices, storage and utility rooms, locker rooms, game
room, a ski rental area and rest room facilities.

The Great Gorge ski area base facility includes approximately
40,000 square feet of lodge and additional support buildings. The
Great Gorge base lodge contains approximately 4,000 square feet of
cafeteria and approximately 1,600 square feet of bar and lounge and
two restaurants aggregating approximately 5,000 square feet. The
lodge also contains a ski shop, repair shop and garage, offices,
storage and utility rooms, locker rooms, ski rental and repair
shop, lunch room and rest room facilities. The Norsemen's Club,
which affords its members a private club room and certain
preferential skiing activities for an additional charge, is also
located in this lodge.

Of the lands owned by the Company, 1,200 acres were acquired
in 1986 from the State of New Jersey. The legislation authorizing
the sale of this land to the Company requires that the land be
continually utilized for conservation or recreation or fish and
game purposes. The Company is also restricted from using the land
to calculate density restrictions in the Company's residential
development of adjacent lands.

In June 1990, the Company granted a 25-year option to Mountain
Investment Fund to purchase this 1,200 acre parcel, approximately
200 acres owned by Princeton, and the Company's former leasehold
interest in 360 undeveloped acres located in Vernon Township
formerly leased from the City of Newark, for an aggregate purchase
price of $5 million. The option was granted in consideration of
such optionee acquiring a $5 million participation in the Company's
indebtedness to First Fidelity (which participation the Company has
agreed may be applied toward the purchase price under the option).
In the event the option is exercised, the purchaser is required to
lease to the Company, for nominal consideration, for a reasonable
term, property required for the operation of the Company's
recreational facilities and reasonable expansion and reasonable
access to any restaurant and related facilities constructed on the
property. Accordingly, the exercise of the option is not expected
to interfere with the activities conducted at the Company's ski
area and Action Park. Presently, a portion of the Company's ski
slopes cross this property. In the event of the exercise of the
option, the determination of the consideration to be paid by the
Company for the lease of the facilities to the Company as well as
the other terms of the lease would be subject to negotiation within
the terms of the Option. Accordingly, the Company is unable to
state at this time the terms that would be contained in such lease
but they would be based primarily on the requirement in the option
that the lease be for a reasonable term, with nominal consideration
and with provision for reasonable expansion. Mountain Investment
Fund is believed by the Company to be under common control with
Princeton Investors, Valley Properties, Inc., and Valley
Development, L.P., however, the Company does not possess
information sufficient to specifically identify the beneficial
owners of Mountain Investment Fund, Valley Properties, Inc., Valley
Development, L.P. or Princeton Investors. Such beneficial owners
are not affiliated directly or indirectly with the Company. See
Item 1. Description of Business - Real Estate Interests.

The Company also owns and operates a small action park located
near Denver, Colorado. The assets are located on an approximately
37 acre parcel leased from a non-affiliated person.

Item 3. Legal Proceedings.

Routinely in the operation of its Action Park and ski area,
the Company is named as defendant in legal proceedings based on
personal injuries. See Item 1. Business. Limitations on Liability
Insurance.

On May 17, 1995 First Fidelity commenced (the Foreclosure
Action) against the Company, substantially all of its subsidiaries,
Princeton and its subsidiaries and others alleging that the
indebtedness owing to First Fidelity by the Company and Princeton
is in default and seeking to foreclose on certain real and personal
assets which are collateral for the obligations of the Company and
its subsidiaries and Princeton and its subsidiaries. First
Fidelity is also seeking certain other relief in the action. The
assets involved in the Foreclosure Action constitute substantially
all of the assets of the Company and its subsidiaries as well as of
Princeton and its subsidiaries. A director of the Company is also
an officer, Director and principal shareholder of Princeton and the
agreements and other instruments evidencing the obligations of the
Company and its subsidiaries and Princeton and its subsidiaries to
First Fidelity contain cross-default provisions whereby a default
by the Company, any of its subsidiaries, Princeton or any of its
subsidiaries under any of their obligations to First Fidelity
constitutes a default by each of the other obligors under their
obligations to First Fidelity. In addition, each of the Company
and Princeton have guaranteed the obligations of the other and
their respective subsidiaries to First Fidelity. First Fidelity
claims the Company and its subsidiaries owe it, as of May 15, 1995,
an aggregate of approximately $16,240,000 plus interest, counsel
fees and other costs as permitted by the relevant loan documents
and that Princeton-Parent and its subsidiaries owe it, as of May
15, 1995, an aggregate of approximately $2,738,000 plus interest,
counsel fees and other costs as permitted by the relevant loan
documents. The Company claims that the principal amount owing by
the Company at April 30, 1995 was $14,900,000 and by Princeton on
that date was $2,330,520.

If First Fidelity is successful in the Foreclosure Action it
will succeed to the ownership of substantially all of the Company's
assets without any assumption of the Company's liabilities. The
Company believes that its equity in the assets which are the
subject of the Foreclosure Action exceeds the amount First Fidelity
claims it is owed by both the Company and Princeton. However,
there can be no assurance as to the outcome of the Foreclosure
Action (or any of the other legal proceedings to which the Company
is a party) and thereby there can be no assurance that the Company
will not be forced to commence a reorganization proceeding under
the Federal Bankruptcy Laws or may not be forced into liquidation
by its creditors. Under such circumstances there can be no
assurance that after paying all outstanding secured and other
indebtedness ranking senior there will be any assets available for
distribution to the Company's holders of its outstanding
subordinated debentures or shareholders or that such holders will
retain any equity or subordinated debt interest in the Company
following any reorganization proceeding. See Item 6. Management's
Discussion and Analysis or Plan of Operations. A consent order has
been entered into in the litigation whereby the Company has agreed
not to disburse any monies other than for the payment of ordinary
business expenses without the consent of First Fidelity and further
provides that the Company cannot enter into any agreement pursuant
to which it or a subsidiary would incur any payment obligation
outside of the ordinary course of business.

On June 23, 1995, First Fidelity commenced an action (the
"Guaranty Action") in the Superior Court of New Jersey, Law
Division - Morris County against the Company, its subsidiaries,
Princeton, its subsidiaries, Mr. Gene Mulvihill, a Director of the
Company, and others seeking to obtain a judgement against such
persons arising out of their guarantees of the indebtedness of the
Company and Princeton described above owing to First Fidelity.

In lawsuits instituted by four plaintiffs who were on the
Company's premises without permission and were injured in a
toboggan accident during non-business hours in March 1988, a jury
returned verdicts against the Company in the aggregate amount of
$1,300,000. On February 8, 1995 the Appellate Division in a
unanimous decision affirmed the Trial Court's decision. On March
10, 1995, the Company filed a Petition with the New Jersey Supreme
Court requesting Certification of the Appellate Division's
decision. This petition was granted in June 1995. Based on the
issues on appeal, it is management's opinion that the matter should
be reversed on appeal. However, due to the uncertainty associated
with the litigation and the Appellate Division's unanimous decision
on February 8, 1995, the Company has accrued an additional
$1,585,000 in fiscal 1995 relating to this case.

Although management has consulted with counsel, the foregoing
is not based on a legal opinion and there can be no assurance that
management's opinion will be correct. Any final judgment the
Company is required to pay will be paid out of its available funds.
However, the Company has collateralized the judgment with certain
real estate. Management is unable to specify a specific dollar
range for the loss but believes it will not exceed $350,000,
however, due to the Appellate Division's unanimous decision on
February 8, 1995 an aggregate of $1,935,000 has been accrued for
this case. There can be no assurance, however, that the Company
will not be required to pay the entire amount of the judgment.

On or about December 9, 1994, Plaintiff's in two lawsuits
renewed their Motions for Summary Judgment against the Company on
the issue of damages in the matters of Sidney Waters, John B. Early
and Emily Del Conte, t/a Waters Realty, a New Jersey Partnership
vs. Stony Point Recreation Corporation, a New Jersey Corporation,
and Great American Recreation, Inc., a New Jersey Corporation,
pending in the Superior Court of New Jersey, Law Division, Camden
County, Docket No.: L-076167-85; and EDWA Realty, a New Jersey
Partnership vs. Stony Point Recreation of New Jersey, Inc., Stony
Point Recreation Corporation, a New York Corporation, and Great
American Recreation, Inc., a New Jersey Corporation, pending in the
Superior Court of New Jersey, Law Division, Camden County, Docket
No.: L-075410-85.

Prior to December 9, 1994, the Court had entered summary
judgment as to liability against all Defendant's, including the
Company. On March 17, 1995, the court entered Judgment against the
Company in the Waters case in the sum of $963,364 and in the EDWA
Realty case in the sum of $590,448. Based on the Court's decision
on March 17, 1995, an aggregate of $1,553,812 was accrued in the
third quarter of 1995 relating to this case. The Company has filed
a notice of appeal from the grant of summary judgment.

On January 28, 1994, Parkway Power Corporation and certain of
its affiliated entities and Robert Morgenroth commenced a lawsuit
in the Law Division, Superior Court, Sussex County, New Jersey,
against the Company, Great Mountain Development Corporation,
Princeton New York Investors, Inc. and a director of the Company,
seeking the delivery of certain condominium units and to recover
the sum of $1.2 million alleging, among other things, that the
defendants have breached a settlement agreement resolving certain
litigation previously instituted by the plaintiffs. The Company
filed an answer and other responsive pleadings and believes it has
meritorious defenses to the claims asserted in the litigation. The
Company's belief is based on the facts that the Company fully
performed under the terms of the settlement agreement and that it
was the responsibility of Princeton New York Investors, Inc. to
deliver the condominium units to plaintiffs and plaintiffs failed
to enforce its rights against Princeton New York Investors, Inc.
The Company's belief is supported by discussions with its counsel
in the matter and the Company has not obtained an opinion of
counsel to support its belief.

On October 31, 1986, Stony Point Recreation Corporation
("Stony Point") an approximately 30.9% subsidiary of the Company,
commenced a case in the United States Bankruptcy Court for the
District of New Jersey under Chapter XI of the Federal Bankruptcy
Act. During the third quarter of fiscal 1988 Stony Point entered
Chapter VII liquidation proceedings. At April 30, 1987, the Company
had established a valuation allowance for its investment in Stony
Point of $1,400,000 and approximately $574,000 for its advances
made to Stony Point. Additional valuation reserves of approximately
$587,000, $421,000, $392,000, $452,000, $513,000, $484,000,
$457,000 and $465,000 for the fiscal years 1995, 1994, 1993, 1992,
1991, 1990, 1989 and 1988 for advances made to and interest income
from Stony Point in the fiscal years 1995, 1994, 1993, 1992, 1991,
1990, 1989 and 1988. The Company believed, based upon the fact that
the mortgages secure approximately 180 acres of land and
management's estimates of land values in the locality, that the
remaining first and second mortgages receivable from Stony Point
were adequately collateralized by the assets of Stony Point and
that the Company would realize the carrying value of these
mortgages receivable when the properties were sold. These
properties are the subject of a real estate tax foreclosure action
commenced by the Borough of Pine Hill, New Jersey. The prospects
for sale of these properties are subject to existing tax sale
certificates of the municipality in the approximate total sum of
$880,000, and on which the municipality is currently seeking to
foreclose in a case pending in the Superior Court of New Jersey,
Chancery Division, Camden County. As a result of the Foreclosure
Action commenced by First Fidelity against the Company and the
consent order entered into by the Company in that litigation, it is
unlikely that the Company will have the funds necessary to pay the
existing tax liens. Therefore, the Company has fully reserved the
carrying values of these mortgages of $2,199,206 at April 30, 1995.
(See Notes 11 and 12 of Notes to Consolidated Financial
Statements).

Item 4. Submission of Matters to a Vote of Security Holders.

No matter was submitted during the fourth quarter of the
fiscal year ended April 30, 1995 to a vote of security holders.

PART II

Item 5. Market for Common Equity and Related Stockholder Matters.

The Company's Common Stock was, through August 23, 1995,
traded on NASDAQ's National Market System under the trading symbol
GRAR. The following table sets forth the ranges of the high and
low sales prices for the Company's Common Stock for the periods
indicated as reported by NASDAQ, Inc. The prices represent inter-
dealer prices, without adjustment for retail mark-ups, mark-downs
or commissions.

High Low

1992

1st Quarter..... $6.88 $6.25
2nd Quarter..... $6.38 $2.63
3rd Quarter..... $3.75 $1.88
4th Quarter..... $2.75 $1.50

1993

1st Quarter..... $2.00 $ .625
2nd Quarter..... $1.75 $ .625
3rd Quarter..... $2.75 $1.375
4th Quarter..... $2.50 $ .812

1994

1st Quarter..... $1.375 $ .625
2nd Quarter..... $ .875 $ .375
3rd Quarter..... $ .594 $ .125
4th Quarter..... $ .500 $ .156

1995

1st Quarter..... $ .188 $ .094
2nd Quarter..... $ .156 $ .031

On August 15, 1995 the closing sale price was $.094. The
Company's outstanding Participating Subordinated Debentures,
Subordinated Debentures due December 31, 1996, Subordinated
Debentures due January 7, 1996, 10% Subordinated PIK Debentures due
May 31, 2006, Zero Coupon Subordinated Debentures due December 31,
2002 and Common Stock Purchase Warrants are traded in the over-the-
counter market.

The Company, at a hearing before NASDAQ Hearing Panel on
August 21, 1995, sought an exemption for the continued listing of
its Common Stock on the NASDAQ Stock Market. The Hearing Panel
denied the Company's request, and effective on August 24, 1995 the
Company's securities were no longer traded on the NASDAQ Stock
Market. The Company has appealed this denial to a NASDAQ Review
Committee, but there can be no assurance that this appeal will
reverse the decision of the Hearing Panel. It can be expected that
the removal of the Company's shares from the NASDAQ Stock Market
will materially adversely affect the liquidity for the Company's
shares and there can be no assurance that an active trading market
for the Company's securities will develop.

Subsequent to August 23, 1995, the Company's Common Stock has
been quoted and traded in the over-the-counter market.

As of August 15, 1995, the Company had 9,115 common
stockholders of record and estimates that as of that date it had
approximately 17,800 beneficial holders of its Common Stock.

Item 6. Management's Discussion and Analysis or Plan of Operation.

Management's Discussion and Analysis of Financial Condition and
Results of Operations.

Capital Commitments and Requirements at April 30, 1995

As is described elsewhere herein, First Fidelity has commenced
the Foreclosure Action against the Company and others. If First
Fidelity is successful in the Foreclosure Action it will succeed to
the ownership of substantially all of the Company's assets without
any assumption of the Company's liabilities. The Company believes
that its equity in the assets which are the subject of the
Foreclosure Action exceeds the amount First Fidelity claims it is
owed by both the Company and Princeton. However, there can be no
assurance as to the outcome of the Foreclosure Action (or any of
the other legal proceedings to which the Company is a party - see
Item 3. Legal Proceedings) and thereby there can be no assurance
that the Company will not be forced to commence a reorganization
proceeding under the Federal Bankruptcy Laws or may not be forced
into liquidation by its creditors. Under such circumstances there
can be no assurance that after paying all outstanding secured and
other indebtedness ranking senior there will be any assets
available for distribution to the Company's shareholders or holders
of its outstanding subordinated debentures or that such holders
will retain any equity or subordinated debt interest in the Company
following any reorganization proceeding.

In addition to the amounts owing to First Fidelity described
above, the Company has outstanding secured indebtedness in the
amount of $4,327,798, all of which is currently due on demand and,
excluding subordinated indebtedness owing by the Company and its
subsidiaries, $3,844,671 of other unsecured indebtedness, all of
which is currently due on demand. The Company has outstanding an
aggregate of $25,753,451 principal amount of unsecured subordinated
indebtedness, of which $12,774,459 is currently in default. Under
the terms of $24,030,949 principal amount of such subordinated
indebtedness, Senior Debt is defined to include all indebtedness of
the Company, including indebtedness guaranteed by the Company, and
any other obligation which may be classified, in accordance with
generally accepted accounting principles, as a liability of the
Company, whether outstanding on the date of issue of the debentures
or thereafter incurred. Upon any payment or distribution of assets
of the Company to creditors upon any dissolution, winding up, total
or partial liquidation, reorganization or readjustment of the
Company, whether voluntary or involuntary, or bankruptcy,
insolvency, receivership or other proceedings, all principal of
(and premium, if any) and interest due or to become due upon all
Senior Debt must be paid in full before the holders of the
subordinated debentures or the trustee are entitled to receive or
retain any assets so paid or distributed in respect of the
subordinated debentures. By reason of such subordination, in the
event of insolvency, creditors of the Company who are holders of
Senior Debt may recover more, ratably, than the holders of the
subordinated debentures.

There can be no assurance that by reason of the Foreclosure
Action and because of the Company's other outstanding indebtedness
that is currently due and payable and the litigation described
above that the Company will not be forced to commence a
reorganization proceeding under the Federal bankruptcy laws or
commence other proceedings to protect it from its creditors. There
can be no assurance that such proceedings may not lead to the
eventual liquidation of the Company and the distribution of its
assets to its creditors. Additionally there can be no assurance
that the assets of the Company will be adequate to enable any
recovery by the holders of its subordinated debentures or other
creditors or any distribution to stockholders.

As of April 30, 1995, the sum of approximately $14,900,000 was
owing by the Company to First Fidelity and the Company had
guaranteed obligations of others to First Fidelity of approximately
$2,331,000. Through October 1994, the Company amended the terms of
its indebtedness to First Fidelity on several occasions commencing
in 1990 to obtain relief or extend the due dates of payments of
principal then due to First Fidelity. At July 31, 1994, ongoing
negotiations between the Company and First Fidelity were continuing
with respect to the deferral of payments of all or a portion of the
aggregate of $1,400,000 of principal owing to First Fidelity due
prior to December 31, 1994. In addition, in July 1994, First
Fidelity requested that the Company amend its most recent extension
dated March 30, 1994 of the due date of the indebtedness owing to
First Fidelity. First Fidelity requested this amendment because it
had been advised by a participant in First Fidelity's loan to the
Company that the extension of the due date of the repayment of
principal on the loan to July 1, 1996 was in violation of the
participation agreement between First Fidelity and the participant,
which the participant asserts limits First Fidelity's authority to
grant extensions to 90 days. First Fidelity denied that the
extension constituted a violation of the participation agreement.
Based on the Company's expectation, as a result of the Company's
discussions with First Fidelity, that First Fidelity would provide
further 90-day extensions of the due date of the indebtedness, the
Company amended its loan agreement with First Fidelity to provide
that the $14,900,000 of principal of this indebtedness owing to
First Fidelity was due on September 30, 1994, with a further
extension to December 30, 1994, subject to the Company paying
interest only. The amendment included an extension of the due date
of principal due during the year ended December 31, 1994, including
the principal in arrears owing to First Fidelity.

Until April 30, 1992, the Company had a receivable from
Princeton in the amount of $12,323,843. Effective April 30, 1992,
the Company converted this receivable together with its 30% common
stock interest in Princeton and its entitlement to 5% of the
residential unit sales and revenues of Princeton into 1,000 shares
of 10% pay-in-kind preferred stock of Princeton with a liquidation
value of $12,500,000 and a carrying value as of April 30, 1992 of
$7,749,778, which was determined in accordance with accounting
principles applied in connection with quasi-reorganizations which
resulted in and represents an allocation of the fair value of all
of the Company's assets. Under the terms of this preferred stock,
the dividend is payable by the issuance of additional shares of
pay-in-kind preferred stock or, at the option of Princeton, in
cash. During the fiscal years ended April 30, 1995 and 1994, the
Company recorded $1,581,074 and $1,432,375 in revenue from the
issuance of additional shares of preferred stock as dividends paid
on the pay-in-kind preferred stock by Princeton. Also during these
periods the Company billed Princeton approximately $3,270,000 and
$3,194,000 for reimbursement of expenses incurred for providing
certain support services including payroll, marketing and staffing
essentially on a cost basis. At April 30, 1995, as a consequence
of the Princeton Investors bankruptcy proceeding and First
Fidelity's refusal to grant a non-disturbance in connection with
the sale of long-term contractual rights to use amenities on the
property described above, the Company's aggregate investment of
$12,060,888 in the preferred stock of Princeton was fully reserved.
In addition, the Company has adjusted the carrying value of its
outstanding receivable balance with Princeton at April 30, 1995 to
$13,000,000, which is net of a reserve allowance of $12,542,727.
All future advances to Princeton by the Company will be fully
reserved.

In order to secure the payment to the Company of its
receivable from Princeton in the amount of approximately
$25,543,000 as of April 30, 1995 and the liquidation value of the
shares of Preferred Stock of Princeton, the Company has requested
and Princeton has agreed, subject to obtaining required lender
approval, to grant to the Company mortgages secured by certain real
estate of Princeton, subordinate to approximately $5,452,000 in
outstanding secured indebtedness, to secure payment of Princeton's
liability to the Company and the liquidation value of the Company's
shares of preferred stock. Although the Company believes these
mortgages provide adequate collateral to the Company, there can be
no assurance that the excess of Princeton's assets over its
liabilities secured by mortgages senior to those granted to the
Company will enable the Company to recover in full its receivable
from Princeton and liquidation value of the preferred stock.

The Company and Princeton have terminated a previously agreed
joint venture agreement relating to the joint development of
certain recreational and other assets.

The Company's ski area is in operation from Thanksgiving Day
through March, and its Action Park is in operation during the
months of May through Labor Day. In the months of October and
November, the Company generates cash receipts from the advance sale
of tickets and season passes to its ski area. From time to time,
these seasonal aspects cause the Company to experience periodic
liquidity shortages. The Company believes that notwithstanding
these periodic liquidity shortages, it has expended sufficient
funds to adequately maintain its ski area and Action Park
equipment. It is the Company's policy to expend adequate amounts of
its cash resources on the maintenance of these facilities.

It is the nature of the Company's business that periodically
it must make significant capital investments in property and
equipment, and will receive revenue from these investments
seasonally over a number of years. During the two fiscal years
ended April 30, 1995 and 1994, the Company expended approximately
$3,658,000 and $4,270,000, respectively, primarily for improved
recreational facilities. Included in capital investments during
the fiscal years ended April 30, 1995 and 1994 is approximately
$2,015,000 and $2,428,000 attributable to the Company's
recreational campground project on top of the Hamburg Mountain. If
the Company is to remain competitive, it is necessary to continue
to make prudent investments in new improvements to the Action Park
and ski areas and other recreational activities; however, these
potential improvements may be limited by capital shortages caused
by other unfavorable business performance, or the inability of the
Company to refinance its debt with less onerous principal payments.
Although the Company's policy is to purchase or create new
attractions every year, the Company believes, because its
attractions have useful lives generally extending over periods of
up to ten or more years, the elimination of such capital
expenditures would not significantly affect the Company's revenues
for an estimated period of approximately two to five years.

Effective May 15, 1995, the Company obtained a general
liability insurance policy insuring the Company against loss in the
aggregate amount of $4,000,000 per occurrence and $4,000,000 in the
aggregate during the policy year. The policies provide for a
deductible whereby the Company is obligated to pay the first
$250,000 of claims during the policy year. The policies insure the
Company on a claims-made basis whereby the event giving rise to the
claim and the assertion of the claim must both occur during the
policy year. The Company has obtained a bond to cover the first
$250,000 of liability. Prior to May 15, 1995, the Company did not
carry general liability insurance covering it from liability to
patrons to its Action Park and ski area. By reason of that absence
of liability insurance, the Company will be required to pay out of
its own resources any claims it is ultimately determined to be
liable for resulting from injuries to patrons in its Action Park
and ski area which occurred prior to May 15, 1995. At April 30,
1995, the Company had accrued approximately $3,771,000 for
uninsured liability claims, an amount considered adequate by
Management. Such sum has not been funded and, in view of the
Foreclosure Proceeding and the Company's current financial
condition, the Company may be unable to pay the claims of those
persons sustaining personal injuries and, possibly, its other
obligations. See Item 3. Legal Proceedings. The Company
discontinued its liability insurance coverage in 1986 by reason of
the substantial general increases in liability insurance premiums
throughout the insurance industry which made insurance coverage
prohibitively expensive for the Company.

The Company is contingently liable under certain contracts
entered into by its former real estate subsidiaries to sell real
estate, which require delivery of residential units at stipulated
dates or the purchaser is entitled to a refund of the purchase
price. At April 30, 1995, the Company is contingently liable under
contracts having aggregate purchase prices of approximately
$3,917,000 which are currently refundable and guaranteed by the
Company. In addition to continuing to construct residential units
for delivery to these purchasers, the Company's former subsidiaries
are seeking to renegotiate these contracts so as to be able to
substitute alternative residential units. However, in the event
these negotiations are not successful, the Company could be
obligated to refund a portion or all of these sums. These former
real estate subsidiaries are now subsidiaries of Princeton and are
obligated on this indebtedness. Princeton is not directly liable on
these obligations.

The Company is also contingently liable under guarantees on
approximately $5,101,000 of debt and other liabilities of former
subsidiaries, including Princeton.

Under the terms of current loan agreements, among other
restrictions, the Company is restricted from paying cash dividends
or reacquiring its capital stock in excess of certain limitations.
In addition, under the provisions of certain publicly held
debentures, Vernon Valley, a wholly owned subsidiary of the
Company, is restricted from making loans and advances and paying
dividends to the Company. The aggregate amount of consolidated net
assets that is restricted as of April 30, 1995, is approximately
$6,673,000.

Liquidity

The Company had a net loss applicable to common shareholders
of approximately $38,569,000 during the fiscal year ended April 30,
1995. The Company had net income applicable to common shareholders
of $740,000 during the fiscal year ended April 30, 1994. During
these periods, the Company's operations were funded primarily as
follows:

Fiscal Year Ended April 30, 1995. During the fiscal year
ended April 30, 1995, the Company had a net loss before unusual
items of approximately $1,120,000. Included in this net loss is
depreciation and amortization of approximately $1,217,000, a non-
cash expense. Also included in net income is approximately
$1,581,000 of dividend income resulting from the issuance by
Princeton of additional shares of preferred stock paid as a
dividend payable-in-kind, which is a non-cash dividend. After
reflecting the net change in assets and liabilities, resulting
primarily from the increase in the receivable from Princeton, other
receivables and prepaid assets, net cash used in operations was
approximately $4,429,000. Investing activities included additions
to properties of $3,658,000. Financing activities provided net cash
of approximately $3,889,000 during the fiscal year from additional
borrowings and the sale of equity securities. Repayment of
borrowings amounted to approximately $125,000 during the twelve-
month period. Accordingly, during the 1995 fiscal year the
Company's cash decreased by approximately $4,198,000.

Fiscal Year Ended April 30, 1994. During the fiscal year
ended April 30, 1994, the Company had income from operations of
approximately $1,882,000. Included in net income is depreciation
and amortization of approximately $1,077,000, a non-cash expense.
Also included in net income is $1,432,375 of dividend income
resulting from the issuance by Princeton of additional shares of
preferred stock paid as a dividend payable-in-kind, which is a non-
cash dividend. After reflecting the net change in assets and
liabilities, resulting primarily from the increase in the
receivable from Princeton, other receivables and prepaid assets,
net cash used in operations was approximately $6,273,000.
3Investing activities included additions to properties of $4,270,000
offset by the utilization of cash held in escrow for interest and
debt payments of approximately $2,056,000. Financing activities
provided net cash of approximately $12,772,000 during the fiscal
year from additional borrowings and the sale of equity securities.
Repayment of borrowings amounted to approximately $2,992,000 during
the twelve month period. The Company also paid dividends of
approximately $677,000 on its 10% cumulative convertible preferred
stock. Accordingly, during the 1994 fiscal year the Company's cash
increased by approximately $4,286,000.

General. The Company's consolidated financial statements are
prepared in conformity with generally accepted accounting
principles, which contemplates continuation of the Company as a
going concern. The Company has incurred a net loss for the year
ended April 30, 1995 of $38,568,811, of which $37,448,566
represents unusual items. See Note 12 to Notes to Consolidated
Financial Statements. In addition, the Foreclosure Action was
commenced by First Fidelity on May 17, 1995, alleging the Company
and substantially all of its subsidiaries are in default on
indebtedness owing First Fidelity and seeking to foreclose on
certain real and personal assets which are collateral for the
obligations of the Company and its subsidiaries. First Fidelity
claims the Company and its subsidiaries owe it, as of May 15, 1995,
an aggregate of approximately $16,240,000, plus interest, counsel
fees and other costs as permitted by the relevant loan documents,
and that Princeton, and its subsidiaries, owe it as of May 15,
1995, an aggregate of approximately $2,378,000, plus interest,
counsel fees, and other costs as permitted by the relevant loan
documents. Many of the Company's debt instruments also contain
cross-default provisions whereby a default by the Company, or any
of its subsidiaries, constitutes a default of the related debt
instrument. On August 7, 1995, American Stock Transfer and Trust
Company, a trustee under a Debenture Indenture dated as of June 12,
1991 under which there is outstanding $6,288,659 principal amount
of subordinated debentures due May 31, 2006, commenced a lawsuit in
the United States District Court for the District of New York
alleging that the Company had defaulted in the payment of interest
due on the debentures, that the entire principal amount and accrued
interest is now due and payable and seeking to recover a judgment
for such amount. The Company has filed an answer in this
litigation which, among other things, alleges that the plaintiff is
disqualified from so acting by reason of conflicts of interest in
fulfilling its duties to the debentureholders and is thereby barred
from maintaining this lawsuit. There can be no assurance that the
Company will be successful in its defense of this litigation or
that as a result of the institution of this litigation that the
Company will not be compelled to commence a proceeding under
Chapter XI of the Federal Bankruptcy laws.

These factors create uncertainty whether the Company can
continue as a going concern. The Company's plans to mitigate the
effects of the uncertainties of the Company's continued existence
are: 1) to seek to replace First Fidelity's debt with other long-
term debt financing with more favorable repayment terms; 2) to
improve profitability by reducing operating costs in fiscal 1996;
3) to substantially reduce the Company's capital spending in fiscal
1996; 4) to offer the current bondholders incentives to convert
their interest bearing bonds for entitlements to the Company's
amenities, shares of stock in the Company and non-interest bearing
bonds of the Company; and 5) to continue to seek additional funding
through private sources to supplement the Company's cash needs.
Management believes that these plans can be effectively implemented
in the next twelve month period. The Company's ability to continue
as a going concern is dependent on the implementation and success
of these plans. The financial statements do not include any
adjustments in the event the Company is unable to continue as a
going concern.

Capital Resources

In recent years the Company relied extensively on secured bank
debt to finance its expansion activities. The Company believed it
prudent to reduce its reliance on secured bank debt financing and
increase its equity and subordinated debt capital and accordingly
made recent public offerings of Subordinated Debentures, Common
Stock and Preferred Stock to reduce this reliance. The Company's
exchange offers completed in September 1994 described below were
intended to further reduce the Company's outstanding indebtedness.
Management of the Company believes that the Company's extensive
reliance in the past on secured bank debt and its accompanying
higher interest costs, without any increase in equity capital, has
been a cause, in addition to its recent losses and among other
factors, of the Company's recent shortages of liquidity.

The Company's sources of funds and capital over the past two
fiscal years ended April 30, 1995 and its material commitments for
capital at April 30, 1995 are as follows:

Sources of Funds and Capital - Fiscal Year ended April 30, 1995.
During the fiscal quarter ended January 31, 1995, the Company sold
for an aggregate consideration of $600,000, $600,000 principal
amount of promissory notes due February 15, 1995 together with
2,000,000 common stock purchase warrants expiring February 15, 1997
exercisable at $.30 per share. The Company also sold for an
aggregate consideration of $1,875,000, $1,875,000 principal amount
of its promissory notes due on demand together with 12,500 shares
of Series B Convertible Preferred Stock convertible into 12,500,000
shares of the Company's Common Stock. The proceeds received were
used for working capital purposes.

During Fiscal 1995, the Company also issued demand notes for
an aggregate of $649,000 with interest ranging from 8% to 18%.

On June 3, 1994, the Company commenced an exchange offer for
certain of its outstanding debentures. For each $100 principal
amount of the Company's 10% PIK Subordinated Debentures, due May
31, 2006 an exchanging holder received $30.00 in principal amount
Zero Coupon Debentures due May 31, 2006 and 130 shares of the
Company's Common Stock; for each $100 principal amount of the
Company's 10% Subordinated Debentures, due January 7, 1996, and for
each $100 principal amount of the Company's 13% Convertible
Subordinated Debentures, due December 31, 1996 an exchanging holder
received $100 in principal amount of the New Zero Coupon Debentures
and 130 Shares of Common Stock. At the conclusion of the exchange
offers on September 8, 1994, $6,404,500 principal amount of the 10%
PIK Subordinated Debentures had been tendered, approximately
$1,269,700 principal amount of the 10% Subordinated Debentures had
been tendered and approximately $469,500 principal amount of the
13% Convertible Subordinated Debentures had been tendered. All
debentures tendered were accepted.

Sources of Funds and Capital - Fiscal Year Ended April 30, 1994. In
May 1993, the Company completed a private sale of debt and equity
securities which raised gross proceeds of $750,000. In connection
with this transaction, the Company issued warrants to purchase
850,000 shares of Common Stock exercisable at $1.00 per share and
promissory notes bearing interest at prime plus 2% and due July 30,
1993. The net proceeds after deducting selling commissions, fees
and expenses were used for capital improvements to the Company's
Action Park and for working capital and general corporate purposes.
In October 1993, the Company completed the public sale of 9,200,000
shares of common stock and received net proceeds of $8,792,000.
The net proceeds, after deducting selling commissions, fees and
expenses, were used to repay indebtedness, capital improvements,
the repayment of obligations of Princeton, and for working capital
and general corporate purposes. In March 1994, the Company
completed a public sale of 13,800,000 shares of common stock and
raised net proceeds of $6,419,000. The net proceeds after
deducting selling commissions, fees and expenses were used to repay
indebtedness, capital improvements, the repayment of obligations of
Princeton, and for working capital and general corporate purposes.

Quasi Reorganization

Effective April 30, 1992, the Company's Board of Directors
approved a corporate readjustment of the Company's accounts in the
form of quasi-reorganization. The quasi-reorganization, often
referred to as "Fresh Start Accounting", is an accounting procedure
which accomplishes, with respect to the Company's accounts and
financial statements, what might have been accomplished in a
reorganization by legal proceedings. The Company's land holdings
had appreciated substantially since their initial acquisition while
the Company's other operating assets had depreciated since
acquisition. The Company's assets and liabilities were adjusted to
reflect current conditions (and a more meaningful relationship
between land and the other non-current assets) and its capital
accounts were adjusted to eliminate the accumulated deficit. On
completion of the readjustment as of April 30, 1992, the Company's
accounts and financial statements were substantially similar to
those of a new company commencing business. The Company believes
the quasi-reorganization was appropriate because at April 30, 1992
it has completed its reorganizations with respect to real estate
development activities, raised substantial new capital and
completed the necessary operational restructuring which permitted
the concentration of its efforts on recreational activities.

The quasi-reorganization resulted in a significant write-up of
non-depreciable assets with a significant write-down of depreciable
assets based upon an independent appraisal. The result was a
substantial improvement in reported net income in the absence of
any improvement in operating performance. The effect of the quasi-
reorganization in subsequent financial statements was to reduce
depreciation and amortization expense by approximately $4,072,000
per year. These reductions and changes are discussed below and have
had a material effect on the comparability of the Company's
financial statements as compared with those for years ending
through April 30, 1992.

The boards of directors of the Company and Princeton
authorized the conversion of the Company's 30% equity interest in
Princeton, along with receivables and its entitlement to 5% of
residential unit sales revenue of Princeton into a preferred stock
investment. The conversion to preferred stock was made to improve
Princeton's financial condition and recognize the long-term nature
of the Company's investment in Princeton. The investment in
preferred stock is accounted for under the cost method commencing
April 30, 1992. Under this method of accounting the Company will
include dividends paid by Princeton on the preferred stock, which
are paid in kind by issuance of additional shares of preferred
stock, in income when received. The Company will no longer include
a share of Princeton's income or losses in its income statement.

At April 30, 1995, as a consequence of the Princeton
Investors' bankruptcy proceeding (Note 12) and First Fidelity's
refusal to grant a non-disturbance agreement in connection with the
sale of long-term contractual rights to use amenities on the
Company's and Princeton's properties (Note 6), the Company's
aggregate investment of $12,060,888 in the preferred stock of
Princeton was fully reserved. In addition, the Company has
adjusted the carrying value of its outstanding receivable balance
with Princeton at April 30, 1995 to $13,000,000, which is net of a
reserve allowance of $12,542,727. All future advances to Princeton
by the Company will be fully reserved.

Results of Operations

Fiscal Year Ended April 30, 1995 Compared with Fiscal Year
Ended April 30, 1994. Revenue from operations for the fiscal year
1995 decreased $4,885,000 (18.2%) from the comparable fiscal 1994
periods. Revenue during the fiscal year ended April 30, 1995
aggregated $20,193,000 as compared to revenue aggregating
$24,678,000 during the prior fiscal year. The net loss applicable
to common shareholders for the fiscal year 1995 was $38,568,811
($0.76 per share) as compared to net income applicable to common
shareholders of $739,855 ($0.03 per share) in the comparable prior
year period or a decrease of $39,308,666 ($0.79 per share).
Revenue decreased from the comparable prior fiscal year primarily
as a result of unfavorable weather conditions during both the
summer and winter seasons.

Costs of operations for the fiscal year 1995 increased
$726,248 (4.9%). This increase is primarily attributable to an
increase in accrued liabilities and the related liability reserve,
additional bad debt expense and increased utility costs offset by
the decrease in direct operating costs associated with the decrease
in Action Park and skiing attendance.

Selling, general and administrative expenses for the fiscal
year 1995 decreased $1,651,140 (29.3%). This decrease is due
primarily to a decrease in personnel expenses and marketing and
advertising costs.

The Company's interest expense for the fiscal year 1995
decreased $549,000 (21.0%). This decrease is primarily
attributable to the Company's exchange offering which commenced on
June 3, 1994 and resulted in a net decrease of debt in the amount
of $5,612,029, as well as additional interest charged to Princeton
on the Company's outstanding indebtedness with Princeton which
increased from $19,043,179 at April 30, 1994 to $25,542,727 at
April 30, 1995.

The Company recorded amortization of financing costs in fiscal
1995 of $66,718 as compared to $95,111 recorded in fiscal 1994.

Dividend income from Princeton for the fiscal year 1995
increased $148,699 (10.4%) from the comparable fiscal 1994 period.

Depreciation and amortization expense from operations for the
fiscal year 1995 increased $167,572 (17.1%) as a result of
additional investments in fixed assets.

A Director of the Company is also a principal in Princeton.
Princeton was billed for services rendered by the Company and these
amounts were mutually agreed upon by the management of both
companies. Upon the sale of the Company's real estate businesses
to this company (see Notes 4 and 7 to Notes to Consolidated
Financial Statements), the Company has continued to provide certain
support services including payroll, marketing and staffing
essentially on a cost basis. In fiscal 1995 and 1994 approximately
$3,270,000 and $3,194,000 of costs associated with these activities
have been billed with an off-setting reduction to the appropriate
Company expense.

In the third and fourth quarters of Fiscal 1995, the Company
recorded certain unusual losses as a result of events that occurred
during Fiscal 1995 which included a write-down of goodwill relating
to the Company's investment in boxing of $5,077,811, a reserve on
the Princeton Preferred Stock investment and receivable of
$24,603,614, non-cash financing costs of $625,000, a reserve on the
Stony Point mortgage receivable of $2,199,206, a reserve on the
Princeton Investors receivable of $922,446, elimination of original
issue discounts associated with bonds currently in default of
$1,434,016, litigation claims of $3,488,812, offset by a real
estate tax refund of $902,338 (see Note 12 of Notes to Consolidated
Financial Statements).

No income benefits were provided in fiscal 1995 and 1994 due
to the Company's net operating loss carryforward from prior years.

Retained earnings and current net income were inadequate to
cover preferred stock dividend requirements for the fiscal year
ended April 30, 1995. Accordingly, in accordance with generally
accepted accounting principles, dividend provisions by the Company
on its outstanding shares of preferred stock during the fiscal year
were recorded as liquidating dividends charged against capital
surplus. During the fiscal year ended April 30, 1994, preferred
stock dividends were paid out of current net income.

Fiscal Year Ended April 30, 1994 Compared with Fiscal Year
Ended April 30, 1993. Revenue from operations for the fiscal year
1994 increased $3,985,092 (19.3%) from the comparable fiscal 1993
periods. Revenue during the fiscal year ended April 30, 1994
aggregated $24,678,097 as compared to revenue aggregating
$20,693,005 during the prior fiscal year. The net income
applicable to common shareholders for the fiscal year 1994 was
$739,855 ($0.03 per share) as compared to net income applicable to
common shareholders of $214,869 ($0.02 per share) in the comparable
prior year period or an increase of $1,666,712. Revenue increased
from the comparable prior fiscal year primarily as a result of
favorable weather conditions during both the summer and winter
seasons.

Costs of operations for the fiscal year 1994 increased
$1,496,334 (11.6%). This increase is attributable to the increase
in direct operating costs associated with the increase in Action
Park and skiing attendance.

Selling, general and administrative expenses for the fiscal
year 1994 increased $2,119,692 (60.4%). This increase is due
primarily to an increase in personnel expenses, legal fees, and
marketing and advertising costs.

The Company's interest expense for the fiscal year 1993
decreased $1,564,270 (37.4%). This decrease is primarily a result
of approximately $877,000 of capitalized interest allocated to the
Hamburg, Mountain campground project which commenced construction
in the third quarter of fiscal 1993, as well as additional interest
charged to Princeton on the Company's outstanding indebtedness with
Princeton which increased from $10,479,813 at April 30, 1993 to
$19,043,179 at April 30, 1994.

The Company recorded amortization of financing costs in fiscal
1994 of $95,111 as compared to $-0- recorded in fiscal 1993. This
increase is primarily a result of a private placement completed in
the first quarter of 1994.

Dividend income from Princeton for the fiscal year 1994
increased $134,715 (10.4%) from the comparable fiscal 1993 period.

Depreciation and amortization expense from operations for the
fiscal year 1994 increased $306,228 (45.3%) as a result of
additional investments in fixed assets.

Certain Directors of the Company are also principals in
Princeton. Princeton was billed for services rendered by the
Company and these amounts were mutually agreed upon by the
management of both companies. Upon the sale of the Company's real
estate businesses to this company (see Notes 4 and 7 to Notes to
Consolidated Financial Statements), the Company has continued to
provide certain support services including payroll, marketing and
staffing essentially on a cost basis. In fiscal 1994 and 1993
approximately $3,194,000 and $3,494,000 of costs associated with
these activities have been billed with an off-setting reduction to
the appropriate Company expense.

No income benefits were provided in fiscal 1994 and 1993 due
to the Company's net operating loss carryforward from prior years.

Income from operations was $1,881,581 during the fiscal year
ended April 30, 1994 as compared to $214,869 during the fiscal year
ended April 30, 1993.

Effect of Inflation. Over the past three years inflation in
the national economy has not had a significant impact on the
Company's revenues or earnings. During those periods, admission and
other charges at the Company's recreational facilities were
increased in an amount equal to or greater than the relevant rate
of inflation.

Item 7. Financial Statements.

The financial statements contained on pages F-1 et seq. are
incorporated herein by reference.

Item 8. Changes In and Disagreements With Accountants on
Accounting and Financial Disclosure.

During the fiscal year ended April 30, 1995, the Company did
not file any Current Report on Form 8-K reporting any change in
accountants in which there was a reported disagreement on any
matter of accounting principles or practices, financial statement
disclosure or auditing scope or procedure.

PART III

Item 9. Directors and Executive Officers of the Registrant.

The following table sets forth certain information regarding
the Directors and executive officers of the Company and certain of
its subsidiaries.
Director
Name Age Position Since(1)

Richard Pye......... 46 President and Director 1994

Joseph R. Bellantoni 33 Vice President; Chief -
Financial Officer

Julia Mulvihill..... 35 Director; Chief
Operating Officer 1986

Gene W. Mulvihill(2). 60 Director 1974

Amos Phillips....... 65 Director 1980

James Conlin(2)...... 61 Director 1980

Edward Kelley....... 69 Director 1991

Henry Johnson....... 46 Director 1992
____________________

(1) Includes period of time such person was a Director of Vernon Valley, a
predecessor of the Company.

(2) Member of Audit Committee.

All Directors were elected to their position at a meeting of
shareholders held on February 23, 1994 and will hold office until
the next annual meeting of the Company's shareholders. All of the
executive officers will hold office until the next annual meeting
of the Board of Directors following the annual meeting of
shareholders, unless previously removed by the Board of Directors.

Mr. Pye was employed by the Company on December 1, 1993 in the
capacity as President. Mr. Pye has been a self-employed management
consultant since February 1991. From February 1987 to February
1991, he was the Chief Information Officer of The Taggart Group, an
investment and management firm.

Mr. Bellantoni has been employed by the Company since
February, 1989. He became the Vice President of Administration in
1993 and Chief Financial Officer in June, 1994. From May 1987 to
February 1989 he was employed by Jaymont Properties, Inc. an owner,
developer, and manager of commercial real estate as a Project
Analyst. Prior to working with Jaymont, Mr. Bellantoni was
employed by Peat Marwick, Main & Co. from November 1983 to May
1987.

Ms. Mulvihill has been employed by the Company since September
1982 and has been the Chief Operating Officer of Great American
Recreation, Inc. since January 1986. Ms. Mulvihill is the daughter
of Mr. Gene W. Mulvihill.

Mr. Mulvihill was Chairman of the Board and principal
executive officer of the Company from its organization in 1981
through January 1991. In January 1991, Mr. Mulvihill withdrew from
having responsibility for any other operating and executive
matters, except certain finance related matters from which he
resigned in December 1994. By virture of his participation in
negotiations with banks and certain others, Mr. Mulvihill may be
deemed to make a significant contribution to the business of the
Company and thereby may be deemed to be an executive officer of the
Company, as that term is defined under the Securities Exchange Act
of 1934. Mr. Mulvihill is primarily a private investor and has
interests in real estate and ranching. Mr. Mulvihill is an officer,
Director and principal shareholder of Princeton-New York Parent,
Inc., the corporation that acquired the Company's former real
estate subsidiaries and formerly owned, through a subsidiary, the
adjacent former Playboy Hotel properties acquired in 1988. Mr.
Mulvihill is the father of Ms. Julia Mulvihill.

Mr. Phillips has been a private real estate investor for more
than the past five years.

Mr. Conlin has, since June 1979, been a self-employed member
of the New York Stock Exchange.

Mr. Kelley has, in the past, been employed by the Company or
Vernon Valley in charge of food service. Mr. Kelley resigned his
position with the Company in July 1987. Mr. Kelley was first
elected a Director of the Company in 1981 and remained a Director
until February 12, 1991 when he resigned. He was reelected a
Director in June 1991.

Mr. Johnson was employed by Gaming Devices Funding, Inc. and
Triple Threat Enterprises, Inc., as a manager and trainer of
professional boxing fighters, from 1989 through March 1992. He was
employed by the Company in a similar capacity through February 11,
1994. Prior thereto he was employed by the United States Army as
a non-commissioned officer as the coach of the United States Army
Boxing Team, a position he held from 1976 to 1988. In 1988 he was
the coach of the United States Boxing Team in the Olympics held in
Seoul, Korea.

Mr. Mulvihill is a Director of Dominion Resources, Inc.,
which is engaged in the operation of a cellular telephone system in
Bibb, Alabama. Other than the foregoing, none of the Company's
Directors are Directors of any other corporation which is subject
to the periodic reporting requirements of the Securities Exchange
Act of 1934 or is a registered investment company under the
Investment Company Act of 1940.

Director and Officer Securities Reports

The Federal securities laws require the Company's Directors
and executive officers, and persons who own more than 10% of a
registered class of the Company's equity securities to file with
the Securities and Exchange Commission initial reports of ownership
and reports of changes in ownership of any equity securities of the
Company. Copies of such reports are required to be furnished to
the Company. To the Company's knowledge, based solely on review of
the copies of such reports furnished to the Company, all persons
subject to these reporting requirements filed the required reports
on a timely basis with respect to the Company most recent fiscal
year.

Item 10. Executive Compensation.

The following table sets forth the compensation paid to the
chief executive officer of the Company and the other four most
highly compensated executive officers of the Company whose
compensation exceeded $100,000 in the last fiscal year (which
includes the one person named in addition to the chief executive
officer) during the Company's three fiscal years ended April 30,
1995.

<TABLE>

SUMMARY COMPENSATION TABLE(1)

Name and Other Annual All Other
Principal Position Year(2) Salary Bonus Compensation Compensation

Richard Pye 1995 $80,963 $0 $0 $0
President and Chief 1994 $40,000 $0 $0 $0
Executive Officer(3) 1993 - - - -
________________________

<FN>

(1) No long term compensation was paid to any of the named individuals for the periods reported.
(2) Information relates to the fiscal years ended April 30.
(3) Mr. Pye was employed by the Company on December 1, 1993. See "Employment Contract" below.

</FN>
</TABLE>

Employment Contract. Effective December 1, 1993, the Company
entered into a one-year agreement with Mr. Pye pursuant to which he
receives compensation of $80,000 for providing senior executive
services to the Company as an independent contractor. These
services include, among other things, providing the services of a
President of the Company. Under the terms of the agreement, Mr.
Pye provides as an independent contractor at least sixteen hours of
services per week with any services in excess of those hours
compensated on an hourly basis. Unless terminated by either party,
at the expiration of the initial and each succeeding one year term
the agreement is extended for an additional one-year period. In
order to induce him to serve the Company in this capacity, Mr. Pye
was granted a warrant to purchase 500,000 shares of the Company's
Common Stock at a price of $.83 per share, exercisable as to a
cumulative 50,000 of such shares on each six month anniversary of
the agreement with the first 50,000 shares exercisable on December
1, 1993. Such warrant terminates on December 1, 1998. Grant of
this warrant to Mr. Pye was approved by the shareholders of the
Company at a meeting held on February 23, 1994. Mr. Pye is not
restricted under the terms of the agreement from serving other
persons whose business may be in competition with that of the
Company. The agreement also grants Mr. Pye certain rights of
indemnification to the extent permitted by law.

Option Grants in year ended April 30, 1995.

<TABLE>
Option/SAR Grants in Last Fiscal Year

Individual Grants

<S> <C> <C> <C> <C> <C>
Potential
Realizable
Value at Assumed
Number of % of Total Annual Rates of
Securities Options/SARs Exercise Stock Price
Underlying Granted to or Base Appreciation for
SARs/Options Employees in Price Expiration Option Term(1)
Name Granted(#) Fiscal year ($/Sh) Date 5%($) 10%($)

Richard Pye 150,000 100% $0.83 12/1/98 $385,000 $590,000
________________________

<FN>

(1) Potential realizable value is calculated based on an assumption that the fair market value of each
share of Common Stock appreciates at the annual rates shown (5% and 10%), compounded annually, from the date
of grant until the end of the warrant term (5 years). The value is net of the exercise price. The 5% and
10% assumed rates are mandated by the rules of the Securities and Exchange Commission for purposes of
calculating potential realizable value and do not represent the Company's estimate or projection of future
stock prices and should not in any manner be relied upon as such.

</FN>
</TABLE>

Stock Option Holdings

The following table provides information with respect to the named
executive officer regarding Company options held at the end of the
Company's year ended April 30, 1995 (such officer did not exercise any
options during the most recent fiscal year).

<TABLE>

Aggregate Option Exercises in 1995
and Option Values at December 31, 1995

Value of Unexercised
Number of Unexercised In-the-Money
Options at April 30, 1995(#) Options at April 30, 1995($)
Name Exercisable Unexercisable Exercisable Unexercisable

Richard Pye 150,000 350,000 (1) -0-
________________________

<FN>

(1) Based on the closing price of the Company's Common Stock on the NASDAQ National Market system on
September 18, 1995, the fair market value of the common stock underlying this option was less than the
exercise price.

</FN>
</TABLE>

Item 11. Security Ownership of Certain Beneficial Owners and
Management.

Set forth below is information concerning the Common Stock
ownership of all persons known by the Company to own beneficially
5% or more of the Company's Common Stock, and the Common Stock
ownership of each Director of the Company and all Directors and
officers of the Company as a group, as of July 26, 1995.

Percentage of
Name of Amount and Nature of Outstanding Shares
Beneficial Owner(1) Beneficial Ownership(2)(3) Owned(3)

Richard Pye......... 200,000(4) .4%
Gene W. Mulvihill... -0- -0-
Julia Mulvihill..... -0- -0-
Amos Phillips....... -0- -0-
Joseph R. Bellantoni -0- -0-
James Conlin........ 10,000(5) -0-
Edward Kelley....... 1,600 -0-
Henry Johnson....... 100,000(6) .2%
All Officers and Directors
as a Group..... 311,600(7) .6%
____________________

<FN>

(1) The addresses of all of such persons other than Messrs. Phillips, Conlin and
Kelley is c/o the Company. The address of Mr. Phillips is R.D. #2, P. O. Box 808,
Sussex, New Jersey 07461, the address of Mr. Conlin is 355 Madison Avenue, Convent,
New Jersey 07960, and the address of Mr. Kelley is RD #4, Box 99, Vernon, New Jersey
07462.

(2) This tabular information is intended to conform with Rule 13d-3 promulgated
under the Securities Exchange Act of 1934 relating to the determination of
beneficial ownership of securities under that act.

(3) After giving effect to the exercise of the Common Stock Purchase Warrants or
options owned, in each case, by the person (or group) whose percentage ownership is
set forth opposite the respective percentage.

(4) Pursuant to an agreement dated December 1, 1993 Mr. Pye was issued a warrant
to purchase 500,000 shares of the Company's Common Stock exercisable at a price of
$.83 per share. The warrant is exercisable in cumulative installments of 50,000
shares on each six month anniversary of the agreement with the first 50,000 shares
exercisable on December 1, 1993.

(5) Includes 10,000 shares that may be purchased at $2.50 per share on exercise
of Common Stock Purchase Warrants expiring through November 1997.

(6) Includes an option to purchase 100,000 shares of restricted common stock,
exercisable at $3.125 per share, which was the closing bid price on July 10, 1992.

(7) Includes the shares held of record and beneficially, as well as an aggregate
of 300,000 shares issuable on exercise of outstanding Common Stock Purchase Warrants
and options.

</FN>
</TABLE>

Item 12. Certain Relationships and Related Transactions.

Loans and Guarantees

As of April 30, 1995, Directors of the Company have guaranteed
loans of the Company outstanding as of April 30, 1995 as follows:

Name Amount Guaranteed

Gene Mulvihill . . . . . . . $ 9,827,798
Robert Holuba* . . . . . . . 1,897,363
Stanley Holuba* . . . . . . . 1,897,363
Total . . . . . . . $13,622,524
____________________

* Messrs. Holuba resigned as Directors of the Company effective August 7, 1995.

Since June 1991, the Company has completed public offerings of
its securities. Of the funds received by the Company, an aggregate
of approximately $13,361,000 was utilized to repay principal and
interest on loans either directly extended by or guaranteed by
Directors and approximately $7,315,000 was loaned to Princeton or
its subsidiaries. Messrs. Mulvihill and Holuba are Directors and
principal shareholders of Princeton.

Real Estate and Related Transactions

As of April 30, 1992, the board of directors of the Company
and Princeton authorized the conversion of the Company's 30% common
stock interest in Princeton, receivables in the amount of
$12,323,843 and its entitlement to 5% of residential unit sales
revenue of Princeton into 1,000 shares of the 10% pay-in-kind
preferred stock (the "10% preferred stock") of Princeton having a
stated value of $12,500,000. See Note 7 of Notes to Consolidated
Financial Statements. Under the terms of the 10% preferred stock,
the Company is entitled to receive a cumulative preferential
dividend, payable in additional shares of 10% preferred stock, or
at the option of Princeton in cash, based upon the stated value of
the 10% preferred stock, which initially aggregated $12,500,000.
Dividends accrue daily and are payable quarterly on each January
31, April 30, July 31, and October 31. Dividends accruing on the
10% preferred stock are to be paid in lieu of cash dividends by the
issuance on each dividend payment date of additional shares of 10%
preferred stock having an aggregate stated value equal to the
amount of the preferred dividend to be paid, or at the option of
Princeton in cash. The 10% preferred stock has no voting rights
under any circumstances, including the failure of Princeton to pay
any dividends on the 10% preferred stock, is not convertible into
any other securities of Princeton and has no rights of redemption
by the holder. Princeton has the option to redeem the 10% preferred
stock at any time upon payment of its liquidation value plus
accrued and unpaid dividends. On liquidation, dissolution or
winding up of the Company, the holders of the 10% preferred stock
will be entitled to be paid, before any payment to the holders of
Common Stock, an amount in cash equal to the liquidation value per
share and thereafter such holders shall not be entitled to any
further payment. The terms of the 10% preferred stock were
established by the board of directors of the Company and Princeton.
At April 30, 1995, primarily as a consequence of the Princeton
Investors bankruptcy proceeding described above, as well as the
inability of the Company and Princeton to obtain certain agreements
of First Fidelity, the Company's aggregate investment of
$12,060,888 in the preferred stock of Princeton was fully reserved.

Other Transactions

Mr. Mulvihill is a Director and principal shareholder of
Princeton. Princeton was billed for services rendered by the
Company. The value of the services rendered by the Company was
mutually agreed upon by the management of both companies. The value
of the managerial, administration and support services was based
upon the efforts of management of the Company in raising capital
for Princeton, providing assistance to Princeton in developing a
real estate marketing program for its real estate, providing
assistance in obtaining local and state approvals necessary to
implement the marketing program and establishing a system of
financial controls for Princeton. Also included were personnel
services and the related estimated overhead expenses. Upon the
closing of the sale of the Company's real estate business to
Princeton as of October 31, 1989, the Company agreed to provide
Princeton with certain support services (such as payroll) on a cost
basis. During fiscal 1995 and 1994, the Company billed Princeton
for approximately $3,270,000 and $3,193,000, respectively, for
services with an offsetting reduction to the appropriate Company
expense. The Company also invoiced Princeton approximately
$2,293,000 and $1,289,000, respectively, for interest expenses.
These payments were determined by the Company's financial personnel
and were reviewed by the Company's executive officers. See Note 7
of Notes to Consolidated Financial Statements. The Company has
adjusted the carrying value of its outstanding receivable balance
with Princeton at April 30, 1995 to $13,000,000 which is net of a
reserve allowance of $12,542,727. All future advances to Princeton
by the Company will be fully reserved. The Company implemented
this reserve allowance primarily as a consequence of the Princeton
Investors' bankruptcy proceeding, as well as the inability of the
Company and Princeton to finalize certain agreements with First
Fidelity.

Pursuant to an agreement, in 1976 the Company granted to TRC
International, Inc. ("TRC"), a company in which Mr. Mulvihill has
an ownership interest, the right to own and operate an Alpine Slide
on the Company's Action Park property through the year 2018.
Pursuant to the agreement, the first $895,000 of revenues from all
the Alpine Slides on the property, including an additional Alpine
Slide owned and operated by the Company, is allocated to TRC, less
a 10% rental fee paid to the Company. The second $895,000 is
allocated to the Company, with all excess revenues divided equally
between the parties. The revenues of the Alpine Slides is estimated
on the basis of a stipulated dollar amount per rider. The $895,000
sums are subject to adjustment to reflect increases in admission
charges to the Action Park. Substantially all of the expenses of
operating the slides are borne by TRC although certain expenses,
including but not limited to, maintenance expenses, are allocated
between TRC and the Company on a basis believed by management of
the Company to be fair. The gross allocable receipts of TRC from
the operation of the slides in each of the fiscal years ended April
30, 1995 and 1994 were $694,000 and $755,000, respectively. The
Company offset against amounts owing to TRC the sums of $191,000
and $206,000, in the fiscal years ended April 30, 1995 and 1994,
respectively, for labor, parts, supplies and other miscellaneous
expenses incurred on behalf of TRC. TRC's remaining operating
expenses were paid by it directly. Management of the Company
believes that the terms of the Company's transactions with TRC,
when entered into were no less advantageous to the Company than
those which could have been obtained from non-affiliated persons.
The Company estimates that its revenue from all of the Alpine
Slides, including the 10% rental paid to it by TRC, during the
fiscal years ended April 30, 1995 and 1994, were $69,400 and
$75,500, respectively. During the fiscal years ended April 30, 1995
and 1994, estimated payments of $512,000 and $436,000, were
provided to TRC under this agreement, resulting in receivables from
TRC at April 30, 1995 and 1994, of approximately $163,000 and
$84,000, respectively. The receivable resulted from payments made
during the summer season in advance of a final year end adjustment.

On April 1, 1991, the Company entered into a five-year lease
agreement with a corporation owned by Mr. Mulvihill and Mr. Stanley
Holuba whereby the Company leased from the corporation 500 river
ride rafts and a seventy foot high sports tower with bungee jumping
equipment. Under the lease, the Company is required to pay a
minimum of $300,000 during the first year, $180,000 during the
second year, and $120,000 during each of the last three years of
the lease. Through the fiscal year ended April 30, 1994 all lease
obligations to the affiliated corporation were fulfilled. At April
30, 1995, a balance of $120,000 representing the Summer 1994
payment remained unpaid. At the end of the lease, the Company has
the right to either purchase the equipment at its fair market value
or renegotiate the lease.

Pursuant to a September 11, 1985 agreement, the Company leased
from Mr. Edward Kelly, a Director of the Company, an aggregate of
approximately 35 acres of land adjacent to the Company's Action
Park. Under the agreement the Company leases the parcel for a term
of fifty years for recreational activities. The rental under the
lease was approximately $183,000 per annum through April 30, 1990
and increased to approximately $215,000 per annum as of May 1, 1990
and is subject to adjustment every five years for increases in the
consumer price index subsequent to July 15, 1991 and is subject to
further adjustment for an amount equal to 1% of the amount by which
the annual gross revenue from the Action Park and ski area and
related activities exceeds $13 million in the adjustment year. As
of April 30, 1995, the Company's former real estate subsidiary is
indebted to Mr. Kelly in the amount of approximately $1,731,000 for
real estate purchased in 1985. In connection with that
transaction, the Company guaranteed this indebtedness to Mr. Kelly
and secured approximately $1,411,000 the guarantee with a second
mortgage on one of the Company's ski lodges. At a board of
directors meeting held on December 21, 1989, the Company
acknowledged that certain of the land lease fees amounting to
approximately $833,000 at April 30, 1995, owed by the Company (see
Note 6 to Notes to Consolidated Financial Statements), and certain
installment purchase payments and mortgage payments, plus accrued
interest, amounting to $1,731,000 at April 30, 1995, guaranteed by
the Company, due to Mr. Kelly, were in arrears. In return for Mr.
Kelly agreeing to a moratorium on payments, the board agreed to
consider alternate forms of compensation for Mr. Kelly. At the
July 30, 1990 board of directors meeting, Mr. Kelly agreed to
accept certain other forms of compensation including a food and
beverage concession stand located at Action Park. The Company has
significant leasehold improvements on the leased property. The
Company is seeking to negotiate payment terms for its obligations.

The Company pays fees for reimbursement of clerical and other
services and rent not to exceed $8,000 per month and certain other
direct expenses to a company affiliated with Mr. Mulvihill.

General

Management of the Company believes that the foregoing
transactions described under this Item 12 were as favorable to the
Company as could have been obtained at the time and under the
circumstances from non-affiliated persons. The Company's management
attempted to raise capital throughout the periods referred to above
from non-affiliated persons. In accordance with the New Jersey
Business Corporation Law, each of the transactions was approved by
a majority of the Company's disinterested Directors.

Item 13. Exhibits and Reports on Form 8-K.

(a) Exhibits:

2 (a) Agreement and Plan of Merger dated June 15, 1989
among Princeton-New York, Inc., Stone Hill of Vernon, Inc. and
Princeton-New York Investors, Inc.(4)
(b) Merger Related Agreement dated as of June 15, 1989
among Princeton-New York Sub, Inc., Stone Hill of Vernon, Inc. and
Registrant.(4)
(c) Agreement dated as of June 15, 1989 among
Princeton-New York Investors, Inc., Princeton-New York Sub, Inc.
and Registrant.(4)

(d) Stock Purchase Agreement dated as of June 15, 1988
between the Registrant and Stone Hill of Vernon, Inc.(4)

3 (a) Certificate of Incorporation of
Registrant.(1)

(b) Certificate of Merger filed November 2, 1981.(1)

(d) Certificate of Amendment filed September 7,
1982.(4)

(e) Certificate of Amendment filed March 9, 1987.(4)

(f) Certificate of Amendment filed January 18,
1990.(4)

(g) Certificate of Designations.(5)

4 (a) Specimen Common Stock Certificate.(1)

(b) Form of Debenture Indenture, including Form of
Debenture dated December 16, 1981 between
Registrant and J. Henry Schroder Bank and Trust
Company.(1)

(c) Form of Debenture Indenture, including Form of
Debenture, dated January 14, 1981 between
Registrant and J. Henry Schroder Bank & Trust
Company.(2)

(d) Form of Warrant Agreement between Registrant and
Registrar and Transfer Company relating to
warrants dated December 16, 1981.(1)

(e) Form of Warrant Agreement between Registrant and
Registrar and Transfer Company relating to
warrants dated January 14, 1981.(2)

(f) Form of Debenture Indenture, including Form of
Debenture, dated January 7, 1986, between
Registrant and First Fidelity Bank, National
Association, New Jersey.(3)

(g) Form of Debenture Indenture, including Form of
Debenture, dated as of June 12, 1991, between
Registrant and American Stock Transfer and Trust
Company.(4)

(h) Preferred Stock Certificate.(5)

(i) Form of Debenture Indenture, including Form of
Debenture, dated as of May 7, 1992, between
Registrant and American Stock Transfer and Trust Company(6)

10(a) Profit Sharing Plan.(2)

(b) Agreement dated November 16, 1979 between Vernon
Valley Recreation Association and Robert Holuba
and Stanley Holuba.(3)

(d) Agreements dated October 15, 1982 between
Registrant and Robert Holuba and Stanley
Holuba.(3)

(e) Warrant dated August 26, 1983 issued to Stanson
Chemicals, Inc.(3)

(f) 1983 Agreement between Stanley and Robert Holuba
with Stone Hill of Vernon, Inc. and amendment
thereto dated November 7, 1983.(3)

(g) Letter agreements dated May 20, 1985 between
Registrant and Robert Holuba and Stanley
Holuba.(3)

(h) 1985 Incentive Stock Option Plan(3)

(i) Agreement dated February 11, 1986 among Vernon
Valley Development Corp., Great Valley Real Estate
Corporation and Registrant.(4)

(j) Loan Agreement dated November 19, 1987 between
First Fidelity Bank, NA and the Registrant.(4)

(k) Agreement dated June 28, 1990 among First Fidelity
Bank, National Association, Registrant and
Princeton-New York Parent, Inc.(4)

(l) Letter Agreement dated February 20, 1991 between
First Fidelity Bank, NA and Registrant.(4)

(m) Form of Common Stock Purchase Warrant to be issued
to Julia Mulvihill, Robert Brennan, Robert Holuba
and Stanley Holuba(4).

(n) Third Addendum to the June 28, 1990 Agreement made
June 26, 1991 among First Fidelity Bank, National Association, New
Jersey, Great American Recreation, Inc. and Princeton-New York
Parent, Inc.(5)

(o) Agreement of Acquisition of Assets by and among
Triple Threat Enterprises, Inc., Great American Boxing, Inc. and
Registrant(6)

(p) Letter agreement dated March 31, 1992 and Term
Sheet with First Fidelity Bank N.A., New Jersey
(6)

(q) Lease Agreement dated April 1, 1991 between
Registrant and S&G Leasing Corp.(6)

(r) Asset Purchase and Secured Loan Agreement dated
July 23, 1992 by and among Triple Threat Enterprises, Inc., Great
American Boxing, Inc. and Registrant.(7)

(s) Common Stock Purchase Warrant issued to Triple
Threat Enterprises, Inc.(7)

(t) Pledge of Stock and Escrow Agreement dated July
23, 1992 by and among Triple Threat Enterprises,
Inc., Registrant, Great American Boxing, Inc. and Mason, Briody,
Gallagher & Taylor, Esqs.(7)

(u) Sixth Addendum to the June 28, 1990 Agreement
entered into September 30, 1992 among First Fidelity Bank, National
Association, Registrant and Princeton-New York Parent, Inc.(8)

(v) Amended and Restated Acquisition of Assets and
Secured Loan Agreement By and Among Triple Threat Enterprises, Inc.
d/b/a Gaming Devices Funding, Inc., Great American Boxing, Inc.,
Great Valley Real Estate Corp. and Registrant dated September 23,
1992(8)

(i) Common Stock Purchase Warrant A-1(8)
(ii) Common Stock Purchase Warrant A-2(8)
(iii) Secured Convertible Purchase Note(8)
(iv) Second Secured Convertible Promissory
Note(8)

(w) Secured Loan and Registration rights Agreement By
and Among Triple Threat Enterprises, Inc. d/b/a
Gaming Devices Funding, Inc., Great American Boxing, Inc. and the
Registrant(8)

(i) Common Stock Purchase Warrant A-3(8)
(ii) Third Secured Convertible Note(8)

(x) Seventh Addendum to the June 28, 1990 Agreement
entered into September 30, 1992 among First Fidelity Bank, National
Association, Registrant and Princeton-New York Parent, Inc.(8)

(y) Consolidated and Restated Agreement of Acquisition
of Assets and Secured Loan and Registration Rights Agreement by and
among Triple Threat Enterprises, Inc., Great American Boxing, Inc,
and Registrant(9)

(z) Amendment No. 1 to Consolidated and Restated
Agreement of Acquisition of Assets and Secured Loan and
Registration Rights Agreement by and among Triple Threat
Enterprises, Inc., Great American Boxing, Inc. and Great American
Recreation, Inc.(9)

(aa) Ninth Addendum to the June 28, 1990 Agreement
entered into June 28, 1993 among First Fidelity Bank, National
Association, Registrant and Princeton - New York Parent, Inc. (10)

(bb) Note and Warrant Purchase Agreement dated May 17,
1993(10)

(cc) Form of Debenture Indenture, including form of
Debenture, dated as of July 8, 1994, between Registrant and
American Stock Transfer and Trust Company(11)

(dd) Eleventh Addendum to the June 28, 1990 Agreement
entered into March 30, 1993 among First Fidelity Bank, National
Association, Registrant and Princeton-New York Parent, Inc. (13)

(i) Amended Eleventh Addendum (13)

(ee) Form of Common Stock Purchase Warrant expiring
February 15, 1997 (12)

(gg) Joint Venture Agreement between Registrant and
Princeton-New York Parent, Inc. (12)

_______________________

(1) Filed as an exhibit to the Registration Statement on Form
S-l (File No. 2-74811) of the Registrant and incorporated herein by
reference.

(2) Filed as an exhibit to the Registration Statement on Form
S-l (File No. 2-69804) of Vernon Valley Recreation Association,
Inc., a wholly owned subsidiary of the Registrant and incorporated
herein by reference.

(3) Filed as an exhibit to the Registration Statement on Form
S-1 (File No. 33-227) of the Registrant and incorporated herein by
reference.

(4) Filed as an exhibit to the Registration Statement on Form
S-1 (File No. 33-39074) of the Registrant and incorporated herein
by reference.

(5) Filed as an exhibit to the Registration Statement on Form
S-1 (File No. 33-42763) of the Registrant and incorporated herein
by reference.

(6) Filed as an exhibit to the Registration Statement on Form
S-1 (File No. 33-47162) of the Registrant and incorporated herein
by reference.

(7) Filed as an exhibit to the Registrant's Annual Report on
Form 10-K for the fiscal year ended April 30, 1992.

(8) Filed as an exhibit to the Registration Statement on Form
S-1 (File No. 33-51856) of the Registrant and incorporated herein
by reference.

(9) Filed as an exhibit to the Registration Statement on Form
S-1 (File No. 33-57190) of the Registrant and incorporated herein
by reference.

(10) Filed as an exhibit to the Registration Statement on
Form S-1 (File No. 33-76164) of the Registrant and incorporated
herein by reference.

(11) Filed as an exhibit to the Registration Statement on
Form S-1 (File No. 33-78864) of the Registrant and incorporated
herein by reference.

(12) Filed as an exhibit to the Registration Statement on
Form S-1 (File No. 33-84810) of the Registrant and incorporated
herein by reference.

22 Subsidiaries of Registrant.

Name State of Incorporation

Vernon Valley Recreation
Association, Inc. New Jersey
Great Gorge New Jersey
Great Heritage, Inc. Colorado
Great Valley Real Estate
Corporation New Jersey
TAV, Inc. New Jersey
Stonehill Maintenance Corp. New Jersey
Stonehill Management Inc. New Jersey
Vernon Valley Sewer
Company, Inc. New Jersey
Great American Boxing, Inc. New Jersey
Great American Construction, Inc. New Jersey
Stonehill Sewer Co., Inc. New Jersey
Stonehill Water Co., Inc. New Jersey

(b) The Company did not file any current reports on Form
8-K during the fourth quarter of the fiscal year ended April 30,
1995.

Signatures

Pursuant to the requirements of Section 13 or 15(d) of the Securities
and Exchange Act of 1934, the Registrant has duly caused this Report to be
signed on its behalf by the undersigned thereunto duly authorized.

GREAT AMERICAN RECREATION, INC.

By /s/ Richard Pye
Richard Pye, President

Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
Registrant in the capacities and on the dates indicated.

Signature Title Date

/s/ Richard Pye
(Richard Pye) President and Director
(Principal Executive Officer) September 30, 1995

/s/ Joseph Bellantoni
(Joseph Bellantoni) Vice President-Finance
(Principal Financial and
Accounting Officer) September 20, 1995

/s/ Gene W. Mulvihill
(Gene W. Mulvihill) Director September 20, 1995

/s/ Amos Phillips
(Amos Phillips) Director September 20, 1995

(James Conlin) Director , 1995

/s/ Julia Mulvihill
(Julia Mulvihill) Director September 20, 1995

(Edward Kelley) Director , 1995

Director , 1995
(Henry Johnson)

REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

To the Board of Directors and Stockholders of
Great American Recreation, Inc. and Subsidiaries

We have audited the accompanying consolidated balance sheet of Great
American Recreation, Inc. and Subsidiaries as of April 30, 1995, and
the related consolidated statements of operations, stockholders' equity, and
cash flows for each of the two fiscal years in the period ended April 30,
1995. These consolidated financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
consolidated financial statements based on our audits.

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

In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of Great
American Recreation, Inc. and Subsidiaries as of April 30, 1995, and
the results of its operations and its cash flows for each of the two fiscal
years in the period ended April 30, 1995, in conformity with generally accepted
accounting principles.

The accompanying consolidated financial statements have been prepared
assuming the Company will continue as a going concern. As discussed in Note 4
to the consolidated financial statements, the Company is a defendant in a
foreclosure action to foreclose a number of mortgages and security interest
which encumber a variety of different types of collateral, including real
property, rents, machinery, equipment, note receivables and pledged stock.
The Company also has a significant working capital deficiency and has
encountered difficulties in paying its creditors on a timely basis, including
violating loan agreements, that raises substantial doubt about its ability to
continue as a going concern. Management's plans in regard to these matters
are also described in Note 13. The consolidated financial statements do not
include any adjustments that might result from the outcome of this uncertainty.

MORTENSON AND ASSOCIATES, P.C.
Certified Public Accountants

Cranford, New Jersey
September 22, 1995

GREAT AMERICAN RECREATION, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
April 30, 1995
<TABLE>

ASSETS

<S> <C>

April 30, 1995
Current Assets:
Cash $ 137,586

Other receivables, net (including allowance for
doubtful accounts of $1,966,820 at April 30,
1995) 1,857,344
Prepaid and other assets 299,225
Current Assets 2,294,155

Noncurrent Assets:

Receivable from Princeton, net
(including reserve allowance of $12,542,727
at April 30, 1995) 13,000,000
Other assets (Notes 1 and 2) 543,375
Properties, at cost (Notes 1, 2 & 6):
New Jersey:
Land 37,890,195
Buildings and improvements 1,501,818
Winter ski area 1,642,204
Summer Action Park 3,625,833
Mountain Top Recreation Center 5,585,437
Vehicles, equipment, furnishings and
improvements 2,161,007
Colorado:
Summer recreational facility 406,793
52,813,287
Less: accumulated depreciation and amortization 2,223,352

Net Properties 50,589,935
Noncurrent Assets 64,133,310
Total Assets $66,427,465

</TABLE>

See accompanying notes

GREAT AMERICAN RECREATION, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
April 30, 1995

<TABLE>

LIABILITIES AND STOCKHOLDERS' EQUITY

<S> <C>

April 30, 1995
Current Liabilities:
Accounts payable $ 4,413,380
Accrued liabilities (Note 3) 11,881,573
Deferred revenue and other liabilities
(Notes 1 and 2) 152,769
Debt (Note 4):
Mortgages 19,227,798
Equipment financing 24,653
Subordinated debentures 13,707,654
Unsecured 3,844,671
Total Debt 36,804,776
Current Liabilities 53,252,498

Noncurrent Liabilities:
Debt (Note 4):
Subordinated debentures 5,490,760
Total Debt 5,490,760
Noncurrent Liabilities 5,490,760
Total Liabilities 58,743,258

Commitments and contingencies (Note 6)

Redeemable Preferred Stock (2005 aggregate
liquidation value $8,350,000, 1,670,000
shares issued and outstanding at
April 30, 1995 - Note 9) 2,172,352

Stockholders' Equity:
$10 Convertible preferred stock:
$1.00 par value; authorized 5,000,000 shares,
601,404 issued and outstanding at April 30,
1995, (Note 9) 601,404
Series B Convertible Preferred Stock
$1.00 par value; 12,500 shares issued and
outstanding at April 30, 1995 (Note 9) 12,500
Common stock:
$.01 par value; authorized 100,000,000 shares,
54,420,358 issued at April 30, 1995 (Note 8) 544,204
Paid-in capital in excess of par value 42,031,908
Retained earnings since elimination of deficit
of $31,017,247 in April 30, 1992 quasi-
reorganization (Note 2) (37,614,087)
Common stock in treasury, at cost, 2,378 shares (64,074)
Total Stockholders' Equity 5,511,855
Total Liabilities and Stockholders'
Equity $66,427,465

</TABLE>

See accompanying notes

GREAT AMERICAN RECREATION, INC, AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS
Years Ended April 30, 1995 and 1994

Fiscal years ended
April 30,
1995 1994

Revenue:
Admission $10,708,498 $13,336,509
Food & beverage 3,559,009 4,625,055
Other 5,925,198 6,716,533
20,192,705 24,678,097
Cost of operations:
Admission 9,212,630 8,172,309
Food & beverage 2,906,213 2,975,343
Other 3,514,352 3,759,295
$15,633,195 $14,906,947
Selling, general and
administrative 3,975,806 5,626,946
Interest expense 2,068,492 2,617,646
Amortization of financing
costs 66,718 95,111
Dividend income from
Princeton New York Parent (1,581,074) (1,432,375)
Depreciation and amortization 1,149,813 982,241
$21,312,950 $22,796,516

$(1,120,245) $1,881,581

Unusual items (Note 12) (37,448,566) -0-
Income (loss) from operations $(38,568,811) $1,881,581
Less: Preferred Stock dividend
requirements -0- 1,141,726
Net income (loss) applicable to
common shareholders $(38,568,811) $739,855
Per common share (Primary):

Net income (loss) $ (0.77) $ 0.03

Weighted average number
of shares outstanding 50,026,003 23,053,948

Per common share (Fully diluted):

Net income (loss) $ * $ 0.03

Weighted average number of shares outstanding
assuming conversion of stock options
and warrants based on the treasury stock
method when dilutive 50,524,194 24,465,998

</TABLE>

* Anti-Dilutive

See accompanying notes

GREAT AMERICAN RECREATION, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
Years Ended April 30, 1995 and 1994

10% Cumulative Series B Retained
Preferred Preferred Common Earnings/
Number Number Number Paid in (Accumulated) Treasury
Shares Amount Shares Amount of Shares Amount Capital (Deficit) Stock

Balance
4/30/93 920,000 $920,000 16,909,455 $169,095 $21,330,043 $214,869 $(64,074)
Preferred
stock converted
to common
(Note 9) (39,635) (39,635) 118,905 1,189 38,446
Stock issued
for services
rendered
(Note 8) 250,000 2,500 472,500
Stock issued
in connection
with public
offerings
(Note 8) 23,000,000 230,000 14,747,591
Dividend on Preferred Stock (1,141,726)
Net income 1,881.581

Balance
4/30/94 880,365 $880,365 0 0 40,278,360 $402,784 $36,588,580 $954,724 $(64,074)

Preferred Stock
converted to
common stock
(Note 9) (278,961) (278,961) 2,231,688 22,317 256,644
Stock issued
in connection
with exchange
offering
(Note 8) 10,586,810 105,868 5,457,125
Stock issued in
connection with
legal settlement
(Note 8) 1,000,000 10,000 40,000
Stock issued in
connection with
conversion of debt
(Note 8) 23,500 235 11,541
Stock issued
for services
rendered
(Note 8) 300,000 3,000 90,900
Issuance of Series
B Preferred
Stock (Note 9) 12,500 $12,500 612,500
Dividend on
Preferred Stock (1,025,382)
Net loss (38,568,811)

Balance
4/30/95 601,404 $601,404 12,500 $12,500 54,420,358 $544,204 $42,031,908 $(37,614,087) $(64,074)

</TABLE>

See accompanying notes

GREAT AMERICAN RECREATION, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
Years ended April 30, 1995 and 1994
<TABLE>

Fiscal years ended
April 30,
1995 1994

Cash flows for operating activities:
Income (loss) from operations $(38,568,811) $ 1,881,581
Adjustments to reconcile net (loss) income
to net cash (used in) provided by
operations:
Depreciation and amortization 1,149,813 982,241
Amortization of financing costs 66,718 95,111
Reserve on advances and investment in
unconsolidated subsidiary (Note 11) 587,452 437,541
Dividend income paid in kind (1,581,075) (1,432,375)
Interest expense paid in kind -0- 309,097
Write-Down of Goodwill (Note 12) 5,077,811 -0-
Reserve of Stony Point Mortgage (Note 12) 2,199,206 -0-
Write-Off of Original Issue Discount
of Subordinated Debentures (Note 12) 1,434,016 -0-
Reserve on Advances to Princeton (Note 12) 12,542,727 -0-
Reserve of Investment in Princeton (Note 12) 12,060,888 -0-
Reserve of Receivables from
Princeton Investors, Inc. (Note 12) 922,445 -0-
Debt Issuance Costs (Note 12) 625,000 -0-
Change in assets and liabilities:
Increase in receivable from Princeton (6,499,248) (8,579,523)
Prepaid and other assets 344,050 (378,100)
Deferred charges -0-
Deferred financing costs -0- (95,111)
Other receivables (110,798) (593,369)
Advances to unconsolidated subsidiary
(Note 11) (972,932) (420,937)
Accounts payable and accrued liabilities 7,178,427 616,871
Deferred revenue and other liabilities (884,614) 904,302
Net cash (used in) provided by
operations (4,428,925) (6,272,671)
Cash flows from investing activities:
Utilization of escrow held for debt
payments -0- 1,520,000
Utilization of escrow held for interest
payments -0- 536,111
Additions to properties (3,657,762) (4,270,070)

Net cash (used in) provided by
investing activities (3,657,762) (2,213,959)

Cash flows from financing activities:
Additional borrowings - third party 4,062,751 1,463,004
Repayment of borrowings - third party (124,803) (2,248,744)
Repayment of borrowings - related party -0- (742,804)
Issuance of common stock -0- 14,977,591
Costs in Connection with Exchange Offering (49,036) -0-
Dividends on preferred stock -0- (676,905)
Net cash (used in) provided by
financing activities 3,888,912 12,772,142
Net increase (decrease) in cash (4,197,775) 4,285,512
Cash balance at beginning of year 4,335,361 49,849
Cash balance at end of period $ 137,586 $4,335,361

</TABLE>

See accompanying notes<PAGE>

GREAT AMERICAN RECREATION, INC. AND SUBSIDIARIES
SUPPLEMENTARY SCHEDULE OF NON-CASH
OPERATING, INVESTING AND FINANCING ACTIVITIES
Years Ended April 30, 1995 and 1994

<TABLE>
<S> <C> <C>
Fiscal Years Ended April 30,
1995 1994

Accounts payable 93,900 475,000
Common stock and Paid-in-Capital
issued for services (Note 8) (93,900) (475,000)
Subordinated Debentures 5,612,029 -0-
Common Stock and Paid-in-Capital
issued in connection
with exchange offering (Note 8) (5,612,029) -0-
Common Stock and Paid-in-Capital (Note 8) (11,776) -0-
Subordinated debentures converted
to common stock 11,776 -0-
Preferred Stock and Paid-in-Capital
issued in connection with financing
costs of demand loans (Note 9) (625,000) -0-
Financing costs 625,000 -0-
Common Stock and Paid-in-Capital
issued in connection with
settlement of lawsuit (Note 9) (50,000) -0-
Other assets - stock held in escrow 50,000 -0-
Net non-cash operating,
investing & financing
activities $ -0- $ -0-

</TABLE>

See accompanying notes

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of consolidation

The accompanying Consolidated Financial Statements include the accounts of
Great American Recreation, Inc. (the "Company") and the accounts of all
majority-owned subsidiaries. The consolidated balance sheet is a classified
presentation which distinguishes between current and noncurrent assets and
liabilities. The Company believes that a classified balance sheet provides a
more meaningful presentation consistent with the business cycles of the
Company's operations. All significant intercompany accounts and transactions
have been eliminated in consolidation. An investment in a 30.9% owned
subsidiary, which is currently in bankruptcy proceedings, was previously
carried at net estimated realizable value and fully reserved in fiscal 1995
(See Note 11). The Comp4any's investment in Princeton New York Parent, Inc.,
hereinafter referred to as "Princeton", was carried under the equity method of
accounting through the period ended April 30, 1992. On April 30, 1992, the
board of directors of the Company and Princeton authorized the conversion of
the Company's common stock investment, along with receivables, and its
entitlement to 5% of residential unit sales revenue of Princeton into
a preferred stock investment (See Notes 2, 7 and 12).

Operations

The Company owns and operates, through its wholly-owned subsidiary, Vernon
Valley Recreation Association, Inc. ("Vernon Valley"), a summer Action Park and
a winter recreational ski area in northern New Jersey. Great Gorge, a
wholly-owned subsidiary of the Company, owns a recreational ski area which is
operated by Vernon Valley. Another of the Company's subsidiaries, Great
Heritage, Inc., operates a summer recreational facility in Colorado. Great
American Boxing, Inc., has an interest in the gross fees, honoraria, and other
compensation of four professional boxers. In addition, the Company has a 30.9%
interest in Stony Point Recreation Corporation (See Note 11). Other subsidiaries
operate property rental, management and maintenance businesses.

Inventories

Inventories for operations, included in prepaid and other assets, consist
primarily of merchandise for resale and food and beverage supplies and are
valued at the lower of cost (first-in, first-out) or market. Inventories were
$170,533 at April 30, 1995.

Properties and depreciation

Properties include expenditures for new facilities and improvements which
substantially increase the useful lives of existing facilities. The costs of
these assets include in-house labor, an applicable portion of overhead expenses
and interest. Capitalized leases are also included in properties. The cost of
maintenance and repairs is charged to expense as incurred.

<PAGE>
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

For financial reporting purposes, property and equipment is depreciated
using the straight-line method. The useful lives of such assets, as previously
estimated, and the estimated remaining useful lives beyond April 30, 1992
established as part of the quasi-reorganization discussed below, are as follows
(in years):

Original Estimated
Estimate Remaining Life
Building and equipment............... 5-40 20
Winter ski area...................... 5-20 10
Summer Action Park................... 20 10
Vehicles, equipment, furnishings
and improvements................... 3-20 3-8
Colorado summer recreational
facility........................... 5-20 10

The Company implemented a quasi-reorganization as of April 30, 1992, which
resulted in adjustment of the properties account based on their relative fair
values and the elimination of accumulated depreciation as of April 30, 1992.

The implementation of the quasi-reorganization did not result in a change
in the Company's method of depreciation or any material change in the remaining
useful lives of the Company's property and equipment.

Property and equipment purchased after April 30, 1992, is depreciated using
the straight-line method. The useful lives of such assets are estimated as
follows:

Building and equipment................ 5-40
Winter ski area....................... 5-20
Summer Action Park.................... 20
Vehicles, equipment, furnishings and
improvements........................ 3-20
Colorado summer recreational
facility............................ 5-20

Leasehold improvements are amortized over the shorter of the lives of the
leases or estimated useful lives of the improvements. Depreciation deducted for
income tax purposes is computed on the straight-line and accelerated methods and
at generally shorter estimated useful lives than used for financial reporting
purposes.

Interest

Interest is capitalized on those assets that require a period of time to
bring them to a condition for their intended use and for which interest cost is
being incurred. At April 30, 1995 and 1994, such assets, from operations, were
comprised principally of additions and improvements to the Company's summer
Action Park and winter ski areas. In the third quarter of fiscal 1993, the
Company commenced construction on a 300 site campground. In accordance with
Financial Accounting Standards Board Statement No. 34, interest allocated to
this project is accumulated and deferred until such time that the assets can be
utilized. For the fiscal years ended April 30, 1995 and 1994, $424,195 and
$876,820 of interest has been allocated to this project, respectively.

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

The following table summarizes interest incurred and the amounts
capitalized during the period (000's omitted):

Year Ended April 30,
1995 1994

Operations:
Amortization of finance costs $ 67 $ 95
Interest expense-third party 4,361 3,907
Capitalized interest 424 943
Subtotal 4,852 4,945
Less Interest charged to
Princeton Parent (2,293) (1,289)
Total interest incurred from
Operations $2,559 $3,656

Interest payments from operations made in fiscal 1995 and 1994 are
$3,623,000 and $4,984,000 respectively.

Deferred charges

Deferred charges consist principally of debt issuance costs. Costs of
issuance are being amortized using the straight line method over the terms of
the related debt. Total amortization of deferred finance charges from
operations, amounted to approximately $66,718 and $95,111 for the years ended
April 30, 1995 and 1994, respectively.

Other assets

At April 30, 1995 other assets consisted primarily of a liquor license.

Income taxes

Earnings (loss) per common share

Primary earnings (loss) per share of common stock were computed by dividing
income (loss) for the period by the weighted average number of shares of common
stock and common stock equivalents outstanding for each year. Common stock
equivalents are not included where the effect would be anti-dilutive. In
computing the weighted average number of shares of common stock and common stock
equivalents outstanding for the respective years, shares issuable upon exercise
of warrants and options have been reduced by shares of common stock assumed to
be purchased with the proceeds from the exercise at the average market price of
the Company's common stock during the year.

Deferred revenue

At April 30, 1995, deferred revenues from operations consisted of monies
received in advance for its recreational facilities of its Action Park and Ski
area.

Profit sharing plan

The Company has a profit sharing plan covering substantially all full time
employees. The Company has not provided for a contribution since fiscal 1986.

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Cash Equivalents

For purposes of the statements of cash flows, the Company considers all
highly liquid investments purchased with an original maturity of three months or
less to be cash equivalents.

Concentration of Credit Risk

The Company currently maintains cash accounts with financial institutions
which exceed the maximum amounts insured by the Federal Depository Insurance
Corporation.

During the fiscal years ended April 30, 1995 and 1994, the Company recorded
$1,581,074 and $1,432,375 in revenue from the issuance of additional shares of
preferred stock as dividends paid on the pay-in-kind preferred stock by
Princeton. Also during these periods the Company billed Princeton approximately
$3,270,000 and $3,194,000 for reimbursement of expenses incurred for providing
certain support services including payroll, marketing and staffing essentially
on a cost basis. At April 30, 1995, as a consequence of the Princeton Investors
bankruptcy proceeding and First Fidelity's refusal to grant a non-disturbance in
connection with the sale of long-term contractual rights to use amenities of the
Company and Princeton, the Company's aggregate investment of $12,060,888 in the
preferred stock of Princeton was fully reserved. In addition, the Company has
adjusted the carrying value of its outstanding receivable balance with
Princeton at April 30, 1995 to $13,000,000, which is net of a reserve allowance
of $12,542,727. All future advances to Princeton by the Company will be fully
reserved.

Certain fiscal 1994 items have been reclassified to conform with the fiscal
1995 presentation.

New Authoritative Pronouncements

The Financial Accounting Standards Board ("FASB") has issued Statement of
Financial Accounting Standards ("SFAS") No. 107, "Disclosure about Fair Value of
Financial Instruments." In October of 1994, the FASB issued SFAS No. 119,
"Disclosure about Derivative Financial Instruments and Fair Value of Financial
Instruments." While SFAS No. 119 primarily creates new disclosure requirements
for derivative financial instruments which the Company does not trade in at this
time, the technical disclosure amendments to SFAS No. 107 created by SFAS No.
119 will be implemented on April 1, 1996. The FASB has also issued SFAS No.
115, "Accounting for Certain Investments in Debt and Equity Securities," which
the Company adopted on April 1, 1995. The adoption of these new statements is
not expected to have a material impact on the Company's financial position or
results of operations.

2. QUASI-REORGANIZATION

As of April 30, 1992, the board of directors of the Company and all of its
subsidiaries approved a corporate readjustment of their accounts, effected in
the form of a quasi-reorganization, which resulted in the adjustment of assets
and liabilities to estimated fair values and the elimination of the accumulated
deficit, effective April 30, 1992. The Company had implemented the
quasi-reorganization at that time since it had completed its reorganizations
with respect to real estate development activities, raised substantial new
capital and completed the necessary restructuring which would permit the
concentration of efforts on recreational activities.

2. QUASI-REORGANIZATION (continued)

The net amount of such revaluation adjustments, together with the
accumulated deficit as of the date thereof, was transferred to paid-in capital
in accordance with the accounting principles applicable to quasi-
reorganizations. The adjustments included writedowns of certain deferred costs
and other intangibles not considered to have future value, revaluations of land
and depreciable assets, receivables and adjustments to deferred gains, deferred
revenue and debt.

The effect of the quasi-reorganization reduced the burden of depreciation,
amortization and interest on future operations and will effect the comparability
of future operating statements with those for years ending through April 30,
1992. The fair value adjustment to the properties was based upon an independent
appraisal and represent the value in use to the Company. The effect of the fair
value adjustment was to write-up nondepreciable assets and write-down
depreciable assets resulting in the appearance of improved operating performance
due primarily to a reduction in reported depreciation and amortization expense
by approximately $4,072,000 per year. Any future income tax benefits resulting
from the utilization of net operating loss and other carryforwards existing at
April 30, 1992 and timing differences resulting from the quasi-reorganization,
will be excluded from the results of operations and credited to paid-in capital.

In conjunction with the quasi-reorganization, the board of directors of the
Company and Princeton authorized the conversion of the Company's 30% equity
interest in Princeton, along with receivables and its entitlement to 5% of
residential unit sales revenue of Princeton into a preferred stock investment.
Accordingly, the new investment in preferred stock is accounted for under the
cost method.

3. ACCRUED LIABILITIES

Accrued liabilities at April 30, 1995 consists of the following:

April 30, 1995

Payroll and payroll taxes 1,223,810
Real estate taxes 346,867
Interest 2,546,615
Insurance related claims (Notes 6 and 12) 3,771,003
Workmen's compensation insurance 417,269
Lease litigation reserve (Note 6) 833,141
Dividends payable 987,851
Reserve on Stony Point Guarantee (Note 12) 1,553,812
Other 201,205
$11,881,573
<PAGE>
4. DEBT

Debt at April 30, 1995 consists of the following:

April 30, 1995
Mortgages and other secured debt:

First mortgage loans in default to
principal lending bank, $13,150,000
with interest at prime plus 2.5%,
and a $1,750,000 line of credit in
default at prime plus 2.5% $ 14,900,000
First mortgage loans payable on demand,
interest from 12% to 12.5% 4,327,798
$ 19,227,798
Less current portion (19,227,798)
Noncurrent portion $ -0-

Equipment financing:

Obligations under capital leases,
interest at 13.31% with installments
to December 1995 $ 24,653
$ 24,653
Less current portion (24,653)
Noncurrent portion $ -0-

Subordinated debentures:

10% subordinated PIK debentures,
originally due May 31, 2006
currently in default $ 6,288,659

Zero coupon subordinated debentures,
due December 31, 2002 7,634,400
Less: unamortized discount (4,044,572)

Zero coupon subordinated debentures,
due May 31, 2006 3,622,090
Less: unamortized discount (2,510,463)

10% subordinated debentures, originally
due January 7, 1996 currently in default 4,480,300

15% participating subordinated debentures,
originally due August 1, 1995 currently
in default 550,000

13% convertible subordinated debentures,
originally due December 31, 1996,
convertible into common stock at $87.00
per share currently in default 1,455,500

4. DEBT (Continued)
April 30, 1995

9% subordinated debentures, due December 31,
1988, convertible into common stock at
$125.00 per share 73,500

Subordinated and cumulative debentures
due through August 2001, interest rates
between 0% and 15% and/or free and
unlimited skiing 914,500

5% subordinated and cumulative debentures,
payment deferred pending satisfaction of
senior indebtedness 734,500
$ 19,198,414
Less current portion (13,707,654)
Noncurrent portion $ 5,490,760

Unsecured:

Unsecured notes payable, interest from
prime to 18%, balance due on demand $ 3,844,671
$ 3,844,671
Less current portion (3,844,671)
Noncurrent portion $ -0-
Total debt $ 42,295,536
Less total current portion $(36,804,776)
Total noncurrent portion $ 5,490,760

The prime interest rate was 9.0% at April 30, 1995.

Primary Lending Bank Activity

On May 17, 1995, First Fidelity Bank, N.A. ("First Fidelity") commenced
(the Foreclosure Action) against the Company, substantially all of its
subsidiaries, Princeton and its subsidiaries and others alleging that the
indebtedness owing to First Fidelity by the Company and Princeton is in default
and seeking to foreclose on certain real and personal assets which are
collateral for the obligations of the Company and its subsidiaries and Princeton
and its subsidiaries. First Fidelity is also seeking certain other relief in
the action. The assets involved in the Foreclosure Action constitute
substantially all of the assets of the Company and its subsidiaries as well as
of Princeton and its subsidiaries. A director of the Company is also an
officer, Director and principal shareholder of Princeton and the agreements and
other instruments evidencing the obligations of the Company and its subsidiaries
and Princeton and its subsidiaries to First Fidelity contain cross-default
provisions whereby a default by the Company, any of its subsidiaries, Princeton
or any of its subsidiaries under any of their obligations to First Fidelity
constitutes a default by each of the other obligors under their obligations to
First Fidelity. In addition, each of the Company and Princeton have guaranteed
the obligations of the other and their respective subsidiaries to First
Fidelity. First Fidelity claims the Company and its subsidiaries owe it,
as of May 15, 1995, an aggregate of approximately $16,240,000 plus interest,
counsel fees and other costs as permitted by the relevant loan documents and
that Princeton, and its subsidiaries, owe it, as of May 15, 1995, an aggregate
of approximately $2,738,000 plus interest, counsel fees and other costs as
permitted by the relevant loan documents. The Company claims that the principal
amount owing by the Company at April 30, 1995 was $14,900,000 and by Princeton
on that date was $2,330,520.

4. DEBT (Continued)

The Company and Princeton and their subsidiaries have filed an answer
denying the material allegations of the Complaint and setting forth a
counterclaim asserting, among other things, that First Fidelity engaged in bad
faith and misconduct and breached its fiduciary duties to the defendants in
failing to provide certain construction financing relating to a condominium
project of a subsidiary of Princeton, refused to grant non-disturbance
agreements to the Company and a subsidiary of Princeton in connection with
the sale of long-term contractual rights to use amenities on the property
by a joint venture between the Company and Princeton all of which were
critical to the defendants' ability to perform under their obligations to
First Fidelity and to meet the Company's other obligations.

If First Fidelity is successful in the Foreclosure Action it will succeed
to the ownership of substantially all of the Company's assets without any
assumption of the Company's liabilities. The Company believes that its equity
in the assets which are the subject of the Foreclosure Action exceeds the amount
First Fidelity claims it is owed by both the Company and Princeton. However,
there can be no assurance as to the outcome of the Foreclosure Action (or any of
the other legal proceedings to which the Company is a party) and thereby there
can be no assurance that the Company will not be forced to commence a
reorganization proceeding under the Federal Bankruptcy Laws or may not be forced
into liquidation by its creditors. Under such circumstances there can be no
assurance that after paying all outstanding secured and other indebtedness
ranking senior there will be any assets available for distribution to the
Company's holders of its outstanding subordinated debentures or shareholders or
that such holders will retain any equity or subordinated debt interest in the
Company following any reorganization proceeding. A consent order has been
entered into in the litigation whereby the Company has agreed not to disburse
any monies other than for the payment of ordinary business expenses without the
consent of First Fidelity and further provides that the Company cannot enter
into any agreement pursuant to which it or any subsidiary would incur any
payment obligation outside of the ordinary course of business.

On September 13, 1995, a non-affiliated person entered into an option
agreement with First Fidelity to acquire from First Fidelity the indebtedness of
the Company and its affiliates owing to First Fidelity, the related collateral
and First Fidelity's interest in the Foreclosure Action. The non-affiliated
person paid approximately $1,627,000 for the option which provides for a final
closing date of October 27, 1995. The consummation of the option agreement is
subject to the fulfillment of numerous conditions and the delivery of various
documents, including releases and indemnification agreements from the Company
and its affiliates in favor of First Fidelity. There can be no assurance that
the First Fidelity indebtedness, and the related collateral and Foreclosure
Action will be acquired by the non-affiliated person, that such person will
not pursue the Foreclosure Action or that the Company will be able to obtain
from the non-affiliated person any agreements favorable to the Company and its
future activities.

Other secured debt

4. DEBT (Continued)

continuing its foreclosure proceeding, the participants of the mortgage will
commence a foreclosure action with respect to their first lien position. The
participants have advised the Company that provided the Company remains current
on its payment obligations to the participants and First Fidelity does not move
to a Sheriff's Sale, the participants of this mortgage will forbear from
concluding this action for a period of six months from August 1, 1995.

Subordinated debentures

On June 3, 1994, the Company commenced an exchange offer offering to
certain debentureholders pursuant to which the debentureholders had the right to
exchange each $100 in principal amount of old debentures held by such holders
for the following securities: For each $100 principal amount of the Company's
10% Subordinated Debentures due May 31, 2006, an exchange holder received
$30.00 in principal amount Zero Coupon Debentures due May 31, 2006 and 130
shares of the Company's Common Stock, and for each $100 principal amount of
the company's 10% Subordinated Debentures due January 7, 1996 and for each
$100 principal amount of the Company's 13% Convertible Subordinated Debentures
due December 31, 1996 an exchanging holder received $100 in principal amount of
Zero Coupon Debentures and 130 Shares of Common Stock. At the conclusion of
the exchange offer, $6,404,500 principal amount of the 10% PIK Subordinated
Debentures had been tendered, $1,269,700 principal amount of the 10%
Subordinated Debentures had been tendered and $469,500 principal amount of
the 13% Convertible Subordinated Debentures had been tendered. All debentures
tendered were accepted. The exchange offer expired on September 8, 1994.

On August 7, 1995, American Stock Transfer and Trust Company, a trustee
under a Debenture Indenture dated as of June 12, 1991 under which there is
outstanding $6,288,659 principal amount of subordinated debentures due May 31,
2006, commenced a lawsuit in the United States District Court for the District
of New York alleging that the Company had defaulted in the payment of interest
due on the debentures, that the entire principal amount and accrued interest is
now due and payable and seeking to recover a judgment for such amount. The
Company has filed an answer in this litigation which, among other things,
alleges that the plaintiff is disqualified from so acting by reason of
conflicts of interest in fulfilling its duties to the debentureholders and is
thereby barred from maintaining this lawsuit. There can be no assurance that
the Company will be successful in its defense of this litigation or that as a
result of the institution of this litigation that the Company will not be
compelled to commence a proceeding under Chapter XI of the Federal
Bankruptcy laws.

As stated above, the Company is currently in default and a lawsuit has been
filed against the Company in connection with the Company's 10% subordinated
debentures due May 31, 2006 in the principal amount of $6,288,659. In addition,
the Company is currently in default with respect to its 10% subordinated
debentures due January 7, 1996 in the principal amount of $4,480,300; 15%
subordinated debentures due August 1, 1995 in the principal amount of $550,000;
and 13% convertible subordinated debentures due December 31, 1996 in the
principal amount of $1,455,500. As a result of such defaults, the Company has
recorded these subordinated debentures as current and, accordingly, has written
off the original issue discount associated with these debentures in the
aggregate amount of $1,434,016 as an unusual item.

4. DEBT (Continued)

Other Debt

During fiscal 1995, the Company sold for an aggregate consideration of
$600,000, $600,000 principal amount of promissory notes due February 15, 1995
together with 2,000,000 common stock purchase warrants expiring February 15,
1997 exercisable at $.30 per share. The Company also sold for an aggregate
consideration of $1,875,000, $1,875,000 principal amount of its promissory notes
due on demand together with 12,500 shares of Series B Convertible Preferred
Stock convertible into 12,500,000 shares of the Company's Common Stock. The
proceeds received were used for working capital purposes. In connection with
the issuance of the Series B Convertible Preferred stock, the Company recorded
non-cash financing costs of $625,000.

During fiscal 1995, the Company also issued demand notes for an aggregate
of $649,000 with interest ranging from 8% to 18%.

Other information

Under terms of current loan agreements, the Company cannot among other
restrictions, pay cash dividends on its common stock or reacquire a substantial
portion of its capital stock. In addition, under the provisions of loan
agreements with certain lenders and certain publicly held debentures, Vernon
Valley and another of the Company's subsidiaries are restricted from making
loans and advances and paying dividends to the Company. The aggregate amount of
consolidated net assets that is restricted as of April 30, 1995 is approximately
$6,673,000.

Aggregate maturities and sinking fund requirements of operations for debt
and capitalized lease obligations as of April 30, 1995 are summarized as follows
(000's omitted):

Revolving
Amortized Unamortized lines of Subordinated
Fiscal Year term term credit debentures Total
1996................ $ 25 $ 21,322 $ 1,750 $13,708 $36,805
1997................ 0 0 0 (473) (473)
1998................ 0 0 0 (587) (587)
1999................ 0 0 0 (640) (640)
2000................ 0 0 0 (700) (700)
Beyond.............. 0 0 0 7,891 7,891
Total............... $ 25 $ 21,322 $1,750 $19,199 $42,296

</TABLE>

5. INCOME TAXES

In connection with the quasi-reorganization effected on April 30, 1992 (See
Note 2), the Company has adopted Financial Accounting Standards Board Statement
No. 109, Accounting for Income Taxes, effective on that date. As of April 30,
1995, the Company has available for Federal income tax purposes a net operating
loss carryover of approximately $33.1 million, which is available to be applied
against future Federal income taxes. The loss carryovers expire principally in
the years April 30, 1995 through 2010. Due to the Company's greater than 50%
change in direct and indirect ownership over the past three years, primarily
resulting from the public sale of its securities, a limitation of approximately

5. INCOME TAXES (continued)

$1,800,000 is imposed on the amount of net operating loss deductions the Company
can utilize in any one year. The Company did not assign any value to the
benefits of its loss carryovers, which significantly exceed the income tax
effects of temporary differences at April 30, 1992, or to the temporary
differences created by the quasi-reorganization. As a result of the
quasi-reorganization, any future income tax benefits resulting from the
utilization of net operating loss and other carryforwards and temporary
differences resulting from the quasi-reorganization will be credited directly
to additional paid in capital.

The Company recorded no Federal income tax expense or benefit for fiscal
1995 and 1994 because the Company was in a net operating loss carryforward
position for Federal income tax purposes.

6. COMMITMENTS AND CONTINGENCIES

General

Effective May 15, 1995, the Company obtained a general liability insurance
policy insuring the Company against loss in the aggregate amount of $4,000,000
per occurrence and $4,000,000 in the aggregate during the policy year. The
policies provided for a deductible whereby the Company is obligated to pay the
first $250,000 of claims during the policy year. The Company has obtained a
bond to cover the first $250,000 of liability. Prior to May 15, 1995, the
Company did not carry general liability insurance covering it from liability to
patrons to its Action Park and ski area. By reason of that absence of
liability insurance, the Company will be required to pay out of its own
resources any claims it is ultimately determined to be liable for resulting
from injuries to patrons in its Action Park and ski area which occurred prior
to May 15, 1995. At April 30, 1995, the Company had accrued approximately
$3,771,000 for uninsured liability claims, an amount considered adequate by
Management. Such sum has not been funded and, in view of the Foreclosure
Proceeding and the Company's current financial condition, the Company may be
unable to pay the claims of those persons sustaining personal injuries and,
possibly, its other obligations. The Company discontinued its liability
insurance coverage in 1986 by reason of the substantial general increases
in liability insurance premiums throughout the insurance industry which
made insurance coverage prohibitively expensive for the Company.

By reason of the sale of certain subsidiaries on November 1, 1989 and the
requirements of a debt refinancing with First Fidelity on June 28, 1990, the
Company is contingently liable at April 30, 1995 on approximately $9 million of
the debt and other liabilities of these former subsidiaries under various loan
guarantees that survived the sale and certain cross-default provisions of
certain debt instruments. Accordingly, a default by these former subsidiaries
is a default under the Company's debt agreements.

Total rental expense, from operations, on non-capitalized leases amounted
to approximately $505,000 and $563,000 for the years ended April 30, 1995 and
1994, respectively. Rent from operations is included in the cost of operations.

On October 6, 1986, the Company acquired approximately 1,240 acres of land
from the State of New Jersey, which it formerly leased, for a total
consideration of approximately $4,367,000, including associated costs of all
of which has been paid. The conditions of the sale require that the land being
used as part of the ski facility be continually utilized for conservation,
recreation or fish and game purposes.

6. COMMITMENTS AND CONTINGENCIES (continued)

Pursuant to a September 11, 1985 agreement, the Company leased from Mr.
Edward Kelly, a Director of the Company, an aggregate of approximately 35 acres
of land adjacent to the Company's Action Park. Under the agreement the Company
leases the parcel for a term of fifty years for recreational activities. The
rental under the lease was approximately $183,000 per annum through April 30,
1990 and increased to approximately $215,000 per annum as of May 1, 1990 and is
subject to adjustment every five years for increases in the consumer price index
subsequent to July 15, 1991 and is subject to further adjustment for an amount
equal to 1% of the amount by which the annual gross revenues from the Action
Park and ski area and related activities exceeds $13 million in the adjustment
year. As of April 30, 1995, the Company's former real estate subsidiary is
indebted to Mr. Kelly in the amount of approximately $1,731,000 for real estate
purchased in 1985. In connection with that transaction, the Company guaranteed
this indebtedness to Mr. Kelly and secured approximately $1,411,000 of the
guarantee with a second mortgage on one of the Company's ski lodges. At a Board
of Directors meeting held on December 21, 1989, the Company acknowledged that
certain of the land lease fees, amounting to $833,000 at April 30, 1995, owed by
the Company (see Note 3) and certain installment purchase payments and mortgage
payments, plus accrued interest, amounting to $1,731,000 at April 30, 1995,
guaranteed by the Company due to Mr. Kelly, were in arrears. In return for Mr.
Kelly agreeing to a moratorium on payments, the Board agreed to consider
alternate forms of compensation for Mr. Kelly. At the July 30, 1990 Board of
Directors meeting, Mr. Kelly agreed to accept certain other forms of
compensation including a food and beverage concession stand located at Action
Park. The Company has significant leasehold improvements on the leased
property. The Company is seeking to negotiate payment terms for its
obligations.

Litigation

On May 17, 1995 First Fidelity commenced (the Foreclosure Action) against
the Company, substantially all of its subsidiaries, Princeton and its
subsidiaries and others alleging that the indebtedness owing to First Fidelity
by the Company and Princeton is in default and seeking to foreclose on certain
real and personal assets which are collateral for the obligations of the Company
and its subsidiaries and Princeton and its subsidiaries. First Fidelity is also
seeking certain other relief in the action. The assets involved in the
Foreclosure Action constitute substantially all of the assets of the Company and
its subsidiaries as well as of Princeton and its subsidiaries. A director of
the Company is also an officer, director and principal shareholder of Princeton
and the agreements and other instruments evidencing the obligations of the
Company and its subsidiaries and Princeton and its subsidiaries to First
Fidelity contain cross-default provisions whereby a default by the Company, any
of its subsidiaries, Princeton or any of its subsidiaries under any of their
obligations to First Fidelity constitutes a default by each of the other
obligors under their obligations to First Fidelity. In addition, each of the
Company and Princeton have guaranteed the obligations of the other and their
respective subsidiaries to First Fidelity. First Fidelity claims the Company
and its subsidiaries owe it, as of May 15, 1995, an aggregate of approximately
$16,240,000 plus interest, counsel fees and other costs as permitted by the
relevant loan documents and that Princeton and its subsidiaries owe it, as of
May 15, 1995, an aggregate of approximately $2,738,000 plus interest, counsel
fees and other costs as permitted by the relevant loan documents. The Company
claims that the principal amount owing by the Company at April 30, 1995 was
$14,900,000 and by Princeton on that date was $2,330,520.

6. COMMITMENTS AND CONTINGENCIES (continued)

The Company and Princeton and their subsidiaries have filed an answer
denying the material allegations of the Complaint and setting forth a
counterclaim asserting, among other things, that First Fidelity engaged in bad
faith and misconduct and breached its fiduciary duties to the defendants in
failing to provide certain construction financing relating to a condominium
project of a subsidiary of Princeton, refused to grant non-disturbance
agreements to the Company and a subsidiary of Princeton in connection with the
sale of long-term contractual rights to use amenities on the property by a
joint venture between the Company and Princeton all of which were critical to
the defendants' ability to perform under their obligations to First Fidelity
and to meet the Company's other obligations.

If First Fidelity is successful in the Foreclosure Action it will succeed
to the ownership of substantially all of the Company's assets without any
assumption of the Company's liabilities. The Company believes that its equity
in the assets which are the subject of the Foreclosure Action exceeds the amount
First Fidelity claims it is owed by both the Company and Princeton. However,
there can be no assurance as to the outcome of the Foreclosure Action (or any of
the other legal proceedings to which the Company is a party) and thereby there
can be no assurance that the Company will not be forced to commence a
reorganization proceeding under the Federal Bankruptcy Laws or may not be forced
into liquidation by its creditors. Under such circumstances there can be no
assurance that after paying all outstanding secured and other indebtedness
ranking senior there will be any assets available for distribution to the
Company's holders of its outstanding subordinated debentures or shareholders or
that such holders will retain any equity or subordinated debt interest in the
Company following any reorganization proceeding. A consent order has been
entered into in the litigation whereby the Company has agreed not to disburse
any monies other than for the payment of ordinary business expenses without the
consent of First Fidelity and further provides that the Company cannot enter
into any agreement pursuant to which it or any subsidiary would incur any
payment obligation outside of the ordinary course of business.

On June 23, 1995, First Fidelity commenced an action (the "Guaranty
Action") in the Superior Court of New Jersey, Law Division - Morris County
against the Company, its subsidiaries, Princeton, its subsidiaries, Mr. Gene
Mulvihill, a Director of the Company, and others seeking to obtain a judgment
against such persons arising out of their guarantees of the indebtedness of the
Company and Princeton described above owing to First Fidelity.

On September 13, 1995, a non-affiliated person entered into an option
agreement with First Fidelity to acquire from First Fidelity the indebtedness of
the Company and its affiliates owing to First Fidelity, the related collateral
and First Fidelity's interest in the Foreclosure Action. The non-affiliated
person paid approximately $1,627,000 for the option which provides for a final
closing date of October 27, 1995. The consummation of the option agreement is
subject to the fulfillment of numerous conditions and the delivery of various
documents, including releases and indemnification agreements from the Company
and its affiliates in favor of First Fidelity. There can be no assurance that
the First Fidelity indebtedness, and the related collateral and Foreclosure
Action will be acquired by the non-affiliated person, that such person will not
pursue the Foreclosure Action or that the Company will be able to obtain from
the non-affiliated person any agreements favorable to the Company and its future
activities.

6. COMMITMENTS AND CONTINGENCIES (continued)

On August 7, 1995, American Stock Transfer and Trust Company, a trustee
under a Debenture Indenture dated as of June 12, 1991 under which there is
outstanding $6,288,659 principal amount of subordinated debentures due May 31,
2006, commenced a lawsuit in the United States District Court for the District
of New York alleging that the Company had defaulted in the payment of interest
due on the debentures, that the entire principal amount and accrued interest is
now due and payable and seeking to recover a judgment for such amount. The
Company has filed an answer in this litigation which, among other things,
alleges that the plaintiff is disqualified from so acting by reason of conflicts
of interest in fulfilling its duties to the debentureholders and is thereby
barred from maintaining this lawsuit. There can be no assurance that the
Company will be successful in its defense of this litigation or that as a result
of the institution of this litigation that the Company will not be compelled to
commence a proceeding under Chapter XI of the Federal Bankruptcy laws.

In lawsuits instituted by four plaintiffs who were on the Company's
premises without permission and were injured in a toboggan accident during non-
business hours in March 1988, a jury returned verdicts against the Company in
the aggregate amount of $1,300,000. On February 8, 1995 the Appellate Division
in a unanimous decision affirmed the Trial Court's decision. On March 10,
1995, the Company filed a Petition with the New Jersey Supreme Court requesting
Certification of the Appellate Division's decision. This petition was granted
in June 1995. Based on the issues on appeal, it is management's opinion that
the matter should be reversed on appeal. However, due to the uncertainty
associated with the litigation and the Appellate Division's unanimous decision
on February 8, 1995, the Company has accrued an additional $1,585,000 in fiscal
1995 relating to this case.

Although management has consulted with counsel, the foregoing is not based
on a legal opinion and there can be no assurance that management's opinion will
be correct. Any final judgment the Company is required to pay will be paid out
of its available funds. However, the Company has collateralized the judgment
with certain real estate. Management is unable to specify a specific dollar
range for the loss but believes it will not exceed $350,000, however, due to
the Appellate Division's unanimous decision on February 8, 1995 an aggregate of
$1,935,000 has been accrued for this case. There can be no assurance, however,
that the Company will not be required to pay the entire amount of the judgment.

On or about December 9, 1994, Plaintiff's in two lawsuits renewed their
Motions for Summary Judgment against the Company on the issue of damages in the
matters of Sidney Waters, John B. Early and Emily Del Conte, t/a Waters Realty,
a New Jersey Partnership vs. Stony Point Recreation Corporation, a New Jersey
Corporation, and Great American Recreation, Inc., a New Jersey Corporation,
pending in the Superior Court of New Jersey, Law Division, Camden County, Docket
No.: L-076167-85; and EDWA Realty, a New Jersey Partnership vs. Stony Point
Recreation of New Jersey, Inc., Stony Point Recreation Corporation, a New York
Corporation, and Great American Recreation, Inc., a New Jersey Corporation,
pending in the Superior Court of New Jersey, Law Division, Camden County, Docket
No.: L-075410-85.

Prior to December 9, 1994, the Court had entered summary judgment as to
liability against all Defendant's, including the Company. On March 17, 1995,
the court entered Judgment against the Company in the Waters case in the sum of
$963,364 and in the EDWA Realty case in the sum of $590,448. Based on the
Court's decision on March 17, 1995, an aggregate of $1,553,812 was accrued in
the third quarter of 1995 relating to this case. The Company has filed a notice
of appeal from the grant of summary judgment.

6. COMMITMENTS AND CONTINGENCIES (continued)

On January 28, 1994, Parkway Power Corporation and certain of its
affiliated entities and Robert Morgenroth commenced a lawsuit in the Law
Division, Superior Court, Sussex County, New Jersey, against the Company, Great
Mountain Development Corporation, Princeton New York Investors, Inc. and a
director of the Company, seeking the delivery of certain condominium units and
to recover the sum of $1.2 million alleging, among other things, that the
defendants have breached a settlement agreement resolving certain litigation
previously instituted by the plaintiffs. The Company filed an answer and other
responsive pleadings and believes it has meritorious defenses to the claims
asserted in the litigation. The Company's belief is based on the facts that the
Company fully performed under the terms of the settlement agreement and that it
was the responsibility of Princeton New York Investors, Inc. to deliver the
condominium units to plaintiffs and plaintiffs failed to enforce its rights
against Princeton New York Investors, Inc. The Company's belief is supported by
discussions with its counsel in the matter and the Company has not obtained an
opinion of counsel to support its belief.

On October 31, 1986, Stony Point Recreation Corporation ("Stony Point") an
approximately 30.9% subsidiary of the Company, commenced a case in the United
States Bankruptcy Court for the District of New Jersey under Chapter XI of the
Federal Bankruptcy Act. During the third quarter of fiscal 1988 Stony Point
entered Chapter VII liquidation proceedings. At April 30, 1987, the Company had
established a valuation allowance for its investment in Stony Point of
$1,400,000 and approximately $574,000 for its advances made to Stony Point.
Additional valuation reserves of approximately $587,000, $421,000, $392,000,
$452,000, $513,000, $484,000, $457,000 and $465,000 for the fiscal years 1995,
1994, 1993, 1992, 1991, 1990, 1989 and 1988 for advances made to and interest
income from Stony Point in the fiscal years 1995, 1994, 1993, 1992, 1991, 1990,
1989 and 1988. The Company believed, based upon the fact that the mortgages
secure approximately 180 acres of land and management's estimates of land values
in the locality, that the remaining first and second mortgages receivable from
Stony Point were adequately collateralized by the assets of Stony Point and that
the Company would realize the carrying value of these mortgages receivable when
the properties were sold. These properties are the subject of a real estate tax
foreclosure action commenced by the Borough of Pine Hill, New Jersey. The
prospects for sale of these properties are subject to existing tax sale
certificates of the municipality in the approximate total sum of $880,000, and
on which the municipality is currently seeking to foreclose in a case pending in
the Superior Court of New Jersey, Chancery Division, Camden County. As a result
of the Foreclosure Action commenced by First Fidelity against the Company and
the consent order entered into by the Company in that litigation, it is
unlikely that the Company will have the funds necessary to pay the existing tax
liens. Therefore, the Company has fully reserved the carrying values of these
mortgages of $2,199,206 at April 30, 1995.

In the opinion of management, there are no other claims or lawsuits pending
which could have a material effect on the financial position or results of
operations of the Company.
<PAGE>
7. RELATED PARTY TRANSACTIONS

From June 1991 through March 1994, the Company has completed public
offerings of its securities. Of the funds received by the Company, an aggregate
of approximately $13,361,000 was utilized to pay off principal and interest on
loans either directly extended or guaranteed by directors of the Company, and
approximately $7,315,000 was loaned to Princeton New York Parent, Inc., or its
subsidiaries.

Commencing in 1983 the Company began placing additional emphasis on real
estate development activities through a wholly owned subsidiary, Stone Hill of
Vernon, Inc., including the construction of a 1,436 unit condominium development
on properties adjacent to the Action Park and ski area and the development of
other contiguous and non-contiguous parcels of real estate. In June 1989, the
Company combined its real estate development activities with those of Princeton
whereby Princeton acquired Stone Hill of Vernon, Inc. and another subsidiary
that owns and operates a health club and spa. In addition to owning the
Company's former real estate subsidiaries and the operation of the health club
and spa, Princeton proposes to engage in further development of residential
condominium properties in the area of the Company's ski area and Action Park.

The terms of the June 1989 transaction with Princeton whereby the Company
disposed of its real estate interests provided that the Company would receive
30% of the common stock of Princeton and 5% of the gross revenues realized from
the sale of residential units developed and sold on the land owned by the
combined entities. In addition, Princeton assumed certain indebtedness of the
former real estate subsidiaries guaranteed by the Company, initially aggregating
$26,500,000 in October 1989 and aggregating approximately $9,017,000 as of
April 30, 1995, and agreed to reimburse the Company's net operating costs of the
former subsidiaries from the date of the plan to divest to the closing of the
transaction, which totaled approximately $6,400,000 and, furthermore, also
agreed to pay to the Company an additional $2,100,000. The Company received an
$8.5 million note for the cost reimbursement and the purchase price of the
subsidiaries which was payable over a maximum of ten years, with interest at
prime plus 2 1/2%, payable quarterly.

Company has continued to provide certain support services including
payroll, marketing and staffing essentially on a cost basis. Approximately
$3,270,000 and $3,194,000 of cost associated with these activities have been
billed with an off-setting reduction to the appropriate Company expense for the
years ended April 30, 1995 and 1994, respectively. The Company also invoiced
Princeton $2,293,000 and $1,289,000, respectively, for interest expenses.

On April 30, 1992, the boards of directors of the Company and Princeton
authorized the conversion of the Company's 30% equity interest in Princeton,
along with its receivables from Princeton and its entitlement to 5% of
residential unit sales revenue of Princeton into a preferred stock interest.

At April 30, 1995, the preferred stock had a liquidation value of
$16,811,110 and a dividend rate of 10%. Dividends are cumulative and can be paid
in kind with additional preferred stock or, at the option of Princeton, in cash.

<PAGE>
7. RELATED PARTY TRANSACTIONS (continued)

The following represents an analysis of the receivable activity between the
Company and Princeton and their affiliates:

April 30,
1995 1994

Balance at the beginning
of the period $19,043,748 $10,463,955

Cash advanced to Princeton 1,512,958 9,786,424
Cash payments from Princeton (4,931,184) (6,953,768)
Net Cash activity (3,418,226) 2,832,656

Expenses paid by the Company
on behalf of Princeton 9,311,332 6,690,727
Expenses paid by Princeton
on behalf of the Company (1,687,158) (2,233,019)
Net expense activity 7,624,174 4,457,708

Interest accrued on outstanding
receivable balance 2,293,031 1,289,429
Balance at the end of the period $25,542,727 $19,043,748

</TABLE>

At April 30, 1995, as a consequence of the Princeton Investors' bankruptcy
proceeding (Note 12) and First Fidelity's refusal to grant a non-disturbance
agreement in connection with the sale of long-term contractual rights to use
amenities on the Company's and Princeton's properties (Note 6), the Company's
ggregate investment of $12,060,888 in the preferred stock of Princeton was
fully reserved. In addition, the Company has adjusted the carrying value of its
outstanding receivable balance with Princeton at April 30, 1995 to $13,000,000,
which is net of a reserve allowance of $12,542,727. All future advances to
Princeton by the Company will be fully reserved.

TRC International, Inc. ("TRC") operates Alpine Slides on property owned
by the Company. A director of the Company is one of the shareholders of TRC. The
lease provides that the first $895,000 of revenue from all the Alpine Slides
operated on the Company's property is allocated to TRC, the second $895,000 of
revenue is allocated to the Company and thereafter, such revenues are divided
equally by TRC and the Company. The attraction's revenue is estimated on a
stipulated value per rider basis which is subject to adjustment to reflect
increases in admission charges to Action Park. During the two years ended April
30, 1995, the Company has allocated to TRC $694,000 and $755,000, respectively,
of Alpine Slide revenue, net of the 10% rental charge and expenses of operation.
A proportionate share of the expenses of operating the slides are borne by TRC.
The expenses of operation allocated to TRC amounted to $191,000 and $206,000 in
each of the two years ended April 30, 1995. TRC's other operating expenses were
paid by it directly. During fiscal 1995 and fiscal 1994, estimated payments of
$512,000 and $436,000, respectively were provided to TRC under this agreement,
yielding a receivable from TRC at April 30, 1995 and 1994 of approximately
$163,000 and $84,000, respectively.

A director of the Company has made, from time to time, loans for working
capital purposes to the Company. Over the past two fiscal years, this director
has loaned the Company as much as $1,414,076 at any one time. The interest
rates on the loans are prime plus 2%. In addition, directors of the Company
personally guaranteed an aggregate $13,622,524 of the Company's debt at April
30, 1995.

7. RELATED PARTY TRANSACTIONS (continued)

Pursuant to a September 11, 1985 agreement, the Company leased from Mr.
Edward Kelly, a Director of the Company, an aggregate of approximately 35 acres
of land adjacent to the Company's Action Park. Under the agreement the Company
leases the parcel for a term of fifty years for recreational activities. The
rental under the lease was approximately $183,000 per annum through April 30,
1990 and increased to approximately $215,000 per annum as of May 1, 1990 and is
subject to adjustment every five years for increases in the consumer price index
subsequent to July 15, 1991 and is subject to further adjustment for an amount
equal to 1% of the amount by which the annual gross revenues from the Action
Park and ski area and related activities exceeds $13 million in the adjustment
year. As of April 30, 1995, the Company's former real estate subsidiary is
indebted to Mr. Kelly in the amount of approximately $1,731,000 for real estate
purchased in 1985. In connection with that transaction, the Company guaranteed
this indebtedness to Mr. Kelly and secured approximately $1,411,000 of the
guarantee with a second mortgage on one of the Company's ski lodges. At a
board of Directors meeting held on December 21, 1989, the Company acknowledged
that certain of the land lease fees, amounting to $833,000 at April 30, 1995,
owed by the Company (see Note 3) and certain installment purchase payments and
mortgage payments, plus accrued interest, amounting to $1,731,000 at April 30,
1995, guaranteed by the Company due to Mr. Kelly, were in arrears. In return
for Mr. Kelly agreeing to a moratorium on payments, the Board agreed to
consider alternate form of compensation for Mr. Kelly. At the July 30, 1990
board of directors meeting, Mr. Kelly agreed to accept certain other forms of
compensation including a food and beverage concession stand located at Action
Park. The Company has significant leasehold improvements on the leased
property. The Company is seeking to negotiate payment terms for its
obligations.

8. STOCKHOLDERS' EQUITY

Common Stock

As of April 30, 1995, 10,586,810 shares were issued in connection with the
Company's exchange offer, which commenced on June 3, 1994 and expired on
September 8, 1994 (See Note 4).

In the second quarter of fiscal 1995 an aggregate of 300,000 shares of the
Company's $0.01 par value common stock was issued in consideration for services
rendered.

In the third quarter of fiscal 1995, an aggregate of 1,000,000 shares of
the Company's $0.01 par value Common Stock was placed in escrow in connection
with a legal settlement.

During the fiscal quarter ended January 31, 1995, the Company sold for an
aggregate consideration of $600,000, $600,000 principal amount of promissory
notes due February 15, 1995 together with 2,000,000 common stock purchase
warrants expiring February 15, 1997 exercisable at $.30 per share. The Company
also sold for an aggregate consideration of $1,875,000, $1,875,000 principal
amount of its promissory notes due on demand together with 12,500 shares of
Series B Convertible Preferred Stock convertible into 12,500,000 shares of the
Company's Common Stock. The proceeds received were used for working capital
purposes. In connection with the issuance of the Series B Convertible Preferred
Stock, the Company recorded non-cash financing costs of $625,000.

On March 23, 1994 the Company completed a public sale of 13,800,000 shares
of common stock and raised gross proceeds of $7,590,000. The net proceeds were
used to repay indebtedness, capital improvements, the payment of obligations of
Princeton, and for working capital and general corporate purposes.

8. STOCKHOLDERS' EQUITY (continued)

On February 23, 1994, the Company's shareholders approved an amendment to
the Company's Certificate of Incorporation to increase the authorized number of
shares of $.01 par value common stock from 50,000,000 to 100,000,000.

On December 28, 1993, an aggregate of 25,000 shares of the Company's $0.01
par value common stock was issued in consideration for services rendered.

Pursuant to an agreement dated December 1, 1993, Mr. Richard Pye, President
of the Company, was issued a warrant to purchase 500,000 shares of the Company's
common stock exercisable at a price of $.83 per share. The warrant is
exercisable in cumulative installments of 50,000 shares on each six month
anniversary of the agreement with the first 50,000 shares exercisable on
December 1, 1993.

On October 22, 1993, the Company completed the public sale of 9,200,000
shares of common stock and received gross proceeds of $10,350,000. The net
proceeds after deducting selling commissions, fees and expenses were used to
repay indebtedness, capital improvements, the repayment of obligations of
Princeton, and for working capital and general corporate purposes.

On July 26, 1993, an aggregate of 225,000 shares of the Company's $0.01 par
value common stock was issued in consideration for services rendered.

On May 14, 1993, the Company completed a Private Placement of debt which
raised gross proceeds of $750,000. In connection with this Private Placement,
the Company issued warrants to purchase 850,000 shares of the Company's $0.01
par value common stock. The debt will bear interest at prime plus 2% and is due
July 30, 1993. The warrants are immediately exercisable at $1.00 per share.

The Company's 1985 Employee Stock Option Plan provides for the issuance of
up to 15,000 shares of common stock for options granted under the plan. As of
April 30, 1995, no options were outstanding under the plan. The plan expires in
November 1995.

<PAGE>
8. STOCKHOLDERS' EQUITY (continued)

The Company's outstanding common stock options and warrants at April 30,
1995 are as follows:

<TABLE>

Shares Exercise price Expiration Date
Warrants to Directors in
connection with debt............ 1,110,000 From From November
$.50 to $2.50 1997 through
September 1998
Options and warrants to
Officers and Directors.......... 250,000 From From January
$.83 to $3.125 1997 through
December 1998
Warrants to individuals in
connection with debt............ 2,410,000 From November 1997
$.30 to $2.50 through
Warrants to underwriter
in connection with
public offerings................ 1,740,000 From From May
$1.07 to $2.20 1996 through
January 2000

Warrants to individuals in
in connection with March, 1993
Public Offering................ 5,010,000 $1.50 March 1998

Warrants issued in connection
with private placement......... 850,000 $1.00 May 1998
11,370,000
</TABLE>

All of the options and warrants noted above were exercisable at April 30,
1995.

9. PREFERRED STOCK

Authorization of Preferred Stock

The Company's Certificate of Incorporation authorizes the issuance of up
to 5,000,000 shares of "blank check" preferred stock in amounts and with such
designations, rights and preferences as may be determined from time to time by
the board of directors. Accordingly, the board of directors is empowered,
without stockholder approval, to issue preferred stock with dividend,
liquidation, conversion, voting or other rights which could adversely affect the
voting power or other rights of the Company's common stock. In the event of
issuance, the preferred stock could be utilized, under certain circumstances,
as a method of discouraging, delaying or preventing a change in control of
the Company. As of April 30, 1995, the Company, has outstanding 1,670,000
shares of Redeemable Preferred Stock, 601,404 shares of 10% Convertible
Preferred Stock and 12,500 shares of Series B Convertible Preferred Stock.
Although the Company has no present intention to issue any additional shares of
its preferred stock, there can be no assurance that the Company will not do so
in the future.

9. PREFERRED STOCK (continued)

10% Cumulative, Convertible Preferred Stock

On November 20, 1991, the Company completed a public sale of 920,000 shares
of $10 convertible preferred stock. The securities pay an annual dividend of $1
per share and were convertible at a rate of three shares of common stock for
each share of preferred stock owned. The sale resulted in an increase of 920,000
preferred shares outstanding as of November 20, 1991, with an increase to total
stockholders' equity of approximately $9,200,000. In conjunction with the
Company's exchange offering which commenced June 3, 1994, the Company amended
the conversion rate of its Preferred Stock from one share of Preferred for three
shares of Common to one share of Preferred for eight shares of Common. As of
April 30, 1995, an aggregate of 318,596 shares of Preferred Stock has been
converted to Common.

Redeemable Preferred Stock

On March 30, 1993, the Company completed a public sale of Redeemable
Preferred Stock, Common Stock and Redeemable Common Stock Purchase Warrants. The
offering resulted in the sale of 1,670,000 shares of $1.00 par value Redeemable
Preferred Stock, 5,010,000 shares of the Company's $0.01 par value common stock,
and 5,010,000 Redeemable Common Stock Purchase Warrants exercisable at $1.50 per
share one year from the date of closing and raised gross proceeds of $8,350,000.

The Company is required to, on December 31, 2005, redeem the shares of
Redeemable Preferred Stock at a redemption price of $5.00 per share.

Series B Convertible Preferred Stock

In the third quarter of fiscal 1995, the Company sold, for an aggregate
consideration of $1,875,000, $1,875,000 principal amount of its promissory notes
due on demand, together with 12,500 shares of Series B Convertible Preferred
Stock convertible into 12,500,000 shares of the Company's Common Stock. The
proceeds received were used for working capital purposes.

10. UNAUDITED QUARTERLY DATA

<TABLE>

(in thousands except per share amounts)

<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Quarter Ended Quarter Ended Quarter Ended Quarter Ended Year Ended
July 31, October 31, January 31, April 30, April 30,

1994 1993 1994 1993 1995 1994 1995 1994 1995 1994

Revenue. . . . $7,160 $7,048 $5,299 $5,567 $ 3,775 $6,022 $ 3,959 $7,331 $ 20,193 $25,968
Gross Profit . $2,643 $2,596 $1,708 $2,117 $ 311 $2,386 $ (102) $3,962 $ 4,560 $11,061
Preferred Stock
Dividend. . . $ 182 $ 230 $ 274 $ 230 $ (555) $ 308 $ 0 $ 374 $ 0 $ 1,142
Unusual Items. $ 0 $ 0 $ 0 $ 0 $ (9,782) $ 0 $(27,667) $ 0 $(37,449) $ 0
Net Income to
Common Shareholders
(loss). . . . $ 261 $ 283 $ 71 $ 78 $(10,613) $ 224 $(28,288) $ 155 $(38,569) $ 740
Earnings (loss) Per
Common Share:
Net Income(loss) . . . $ .01 $ .02 $ .00 $ .00 $ (0.21) $ .01 $ (0.57) $ .00 $ (0.77) $ .03

</TABLE>

In the third and fourth quarters of Fiscal 1995, the Company recorded
certain unusual losses as a result of events that occurred during Fiscal 1995
which included a write-down of goodwill relating to the Company's investment
in boxing of $5,077,811, a reserve on the Princeton Preferred Stock
investment and receivable of $24,603,614, non-cash financing costs of
$625,000, a reserve on the Stony Point mortgage receivable for $2,199,206,
a reserve on the Princeton Investors receivable of $922,446, elimination
of original issue discounts associated with bonds currently in default of
$1,434,016, litigation claims of $3,488,812, offset by a real estate
tax refund of $902,338 (see Note 12).

Retained earnings and current net income were inadequate to cover
preferred stock dividend requirements for the fiscal year ended
April 30, 1995. Accordingly, in accordance with generally accepted accounting
principles, dividend distributions by the Company on its outstanding shares
of preferred stock during the fiscal year were recorded as liquidating
dividends charged against capital surplus. During the fiscal year ended April
30, 1994, preferred stock dividends were paid out of current net income.

<PAGE>
11. INVESTMENTS IN, AND ADVANCES TO UNCONSOLIDATED 50% OR LESS OWNED COMPANIES

On October 31, 1986, Stony Point Recreation Corporation ("Stony Point") an
approximately 30.9% subsidiary of the Company, commenced a case in the United
States Bankruptcy Court for the District of New Jersey under Chapter XI of the
Federal Bankruptcy Act. During the third quarter of fiscal 1988 Stony Point
entered Chapter VII liquidation proceedings. At April 30, 1987, the Company had
established a valuation allowance for its investment in Stony Point of
$1,400,000 and approximately $574,000 for its advances made to Stony Point.
Additional valuation reserves of approximately $587,000, $421,000, $392,000,
$452,000, $513,000, $484,000, $457,000 and $465,000 for the fiscal years 1995,
1994, 1993, 1992, 1991, 1990, 1989 and 1988 for advances made to and interest
income from Stony Point in the fiscal years 1995, 1994, 1993, 1992, 1991, 1990,
1989 and 1988. The Company believed, based upon the fact that the mortgages
secure approximately 180 acres of land and management's estimates of land values
in the locality, that the remaining first and second mortgages receivable from
Stony Point were adequately collateralized by the assets of Stony Point and that
the Company would realize the carrying value of these mortgages receivable when
the properties were sold. These properties are the subject of a real estate tax
foreclosure action commenced by the Borough of Pine Hill, New Jersey. The
prospects for sale of these properties are subject to existing tax sale
certificates of the municipality in the approximate total sum of $880,000, and
on which the municipality is currently seeking to foreclose in a case pending in
the Superior Court of New Jersey, Chancery Division, Camden County. As a result
of the Foreclosure Action commenced by First Fidelity against the Company and
the consent order entered into by the Company in that litigation, it is unlikely
that the Company will have the funds necessary to pay the existing tax liens.
Therefore, the Company has fully reserved the carrying values of these mortgages
of $2,199,206 at April 30, 1995.

12. UNUSUAL ITEMS

On December 8 and 16, 1994, the Company entered into agreements with non-
affiliated companies whereby the Company assigned its 22-1/2 percent of purse
revenues of Raymond Mercer and Charles Murray in consideration for the non-
affiliated corporations providing all training expense obligations associated
with the fighters.

The Company's wholly owned subsidiary Great American Boxing has under
management, four contenders in the welterweight, middleweight, cruiserweight,
and heavyweight boxing divisions. The performance of this subsidiary has not
lived up to its expectations and a complete reevaluation of whether the Company
should remain in this business has been undertaken. Based on the sale of boxing
interests in the third quarter of 1995 noted above and expected future income
generated from the Company's remaining interests, the Company has determined
that its entire investment has been impaired and, accordingly, has written off
its goodwill related to the investment for an aggregate of $5,077,811.

12. UNUSUAL ITEMS (continued)

approximately 180 acres of land and management's estimates of land values in the
locality, that the remaining first and second mortgages receivable from Stony
Point were adequately collateralized by the assets of Stony Point and that the
Company would realize the carrying value of these mortgages receivable when the
properties were sold. These properties are the subject of a real estate tax
foreclosure action commenced by the Borough of Pine Hill, New Jersey. The
prospects for sale of these properties are subject to existing tax sale
certificates of the municipality in the approximate total sum of $880,000, and
on which the municipality is currently seeking to foreclose in a case pending in
the Superior Court of New Jersey, Chancery Division, Camden County. As a result
of the Foreclosure Action commenced by First Fidelity against the Company and
the consent order entered into by the Company in that litigation, it is unlikely
that the Company will have the funds necessary to pay the existing tax liens.
Therefore, the Company has fully reserved the carrying values of these mortgages
of $2,199,206 at April 30, 1995.

On August 7, 1995, American Stock Transfer and Trust Company, a trustee
under a Debenture Indenture dated as of June 12, 1991 under which there is
outstanding $6,288,659 principal amount of subordinated debentures due May 31,
2006, commenced a lawsuit in the United States District Court for the District
of New York alleging that the Company had defaulted in the payment of interest
due on the debentures, that the entire principal amount and accrued interest is
now due and payable and seeking to recover a judgment for such amount. The
Company has filed an answer in this litigation which, among other things,
alleges that the plaintiff is disqualified from so acting by reason of conflicts
of interest in fulfilling its duties to the debentureholders and is thereby
barred from maintaining this lawsuit. There can be no assurance that the
Company will be successful in its defense of this litigation or that as a result
of the institution of this litigation that the Company will not be compelled to
commence a proceeding under Chapter XI of the Federal Bankruptcy laws.

12. UNUSUAL ITEMS (continued)

course and to grant to Princeton an option to purchase the remaining condominium
units, subject to the terms of the April 5, 1991 agreement. On August 12, 1994,
Princeton Investors and certain affiliated entities commenced a proceeding under
Chapter XI of the United States Bankruptcy Code. As a consequence of these
proceedings, Princeton's ability to obtain the transfer to it of the 25% of the
674 building unit lots and to exercise the option to purchase the remaining
condominium lots has become doubtful. In the judgment of management of the
Company, Princeton's inability to be able to enforce these contractual rights
against Princeton Investors has impaired the carrying value of the Company's
investment in Princeton, which has contributed to the Company's decision to
reserve an aggregate of $24,603,615 of its investment in and receivables to
Princeton. In addition, the Company has also reserved $922,446 of its
receivables to Princeton Investors.

During the fiscal quarter ended January 31, 1995, the Company sold for an
aggregate consideration of $600,000, $600,000 principal amount of promissory
notes due February 15, 1995, together with 2,000,000 common stock purchase
warrants expiring February 15, 1997, exercisable at $.30 per share. The Company
also sold for an aggregate consideration of $1,875,000, $1,875,000 principal
amount of its promissory notes due on demand, together with 12,500 shares of
Series B Convertible Preferred Stock convertible into 12,500,000 shares of the
Company's Common Stock. The proceeds received were used for working capital
purposes. In connection with the issuance of the Series B Convertible Preferred
stock, the Company recorded non-cash financing costs of $625,000.

At April 30, 1995, primarily as a consequence of the Princeton Investors
bankruptcy proceeding described above as well as the inability of the Company
and Princeton to obtain certain agreements of First Fidelity enabling the
development of properties serving as collateral for the loan from First
Fidelity, the Company's aggregate investment of $12,060,888 in the preferred
stock of Princeton was fully reserved. In addition, the Company has adjusted
the carrying value of its outstanding receivable balance with Princeton at
April 30, 1995 to $13,000,000 which is net of a reserve allowance of
$12,542,727. All future advances to Princeton by the Company will be fully
reserved.

On or about December 9, 1994, Plaintiff's in two lawsuits renewed their
Motions for Summary Judgment against the Company on the issue of damages in the
matters of Sidney Waters, John B. Early and Emily Del Conte, t/a Waters Realty,
a New Jersey Partnership vs. Stony Point Recreation Corporation, a New Jersey
Corporation, and Great American Recreation, Inc., a New Jersey Corporation,
pending in the Superior Court of New Jersey, Law Division, Camden County, Docket
No.: L-076167-85; and EDWA Realty, a New Jersey Partnership vs. Stony Point
Recreation of New Jersey, Inc., Stony Point Recreation Corporation, a New York
Corporation, and Great American Recreation, Inc., a New Jersey Corporation,
pending in the Superior Court of New Jersey, Law Division, Camden County, Docket
No.: L-075410-85.

Prior to December 9, 1994, the Court had entered summary judgment as to
liability against all Defendant's, including the Company. On March 17, 1995,
the court entered Judgment against the Company in the Waters case in the sum of
$963,364 and in the EDWA Realty case in the sum of $590,448. Based on the
Court's decision on March 17, 1995, an aggregate of $1,553,812 was accrued
in the third quarter of 1995 relating to this case. The Company has filed a
notice of appeal from the grant of summary judgment.

12. UNUSUAL ITEMS (continued)

In lawsuits instituted by four plaintiffs who were on the Company's
premises without permission and were injured in a toboggan accident during non-
business hours in March 1988, a jury returned verdicts against the Company in
the aggregate amount of $1,300,000. On February 8, 1995 the Appellate Division
in a unanimous decision affirmed the Trial Court's decision. On March 10, 1995,
the Company filed a Petition with the New Jersey Supreme Court requesting
Certification of the Appellate Division's decision. This petition was granted
in June 1995. Based on the issues on appeal, it is management's opinion that
the matter should be reversed on appeal. However, due to the uncertainty
associated with the litigation and the Appellate Division's unanimous decision
on February 8, 1995, the Company has accrued an additional $1,585,000 in fiscal
1995 relating to this case.

Although management has consulted with counsel, the foregoing is not based
on a legal opinion and there can be no assurance that management's opinion will
be correct. Any final judgment the Company is required to pay will be paid out
of its available funds. However, the Company has collateralized the judgment
with certain real estate. Management is unable to specify a specific dollar
range for the loss but believes it will not exceed $350,000, however, due to the
Appellate Division's unanimous decision on February 8, 1995 an aggregate of
$1,935,000 has been accrued for this case. There can be no assurance, however,
that the Company will not be required to pay the entire amount of the judgment.

In fiscal 1995, the Company was successful in a real estate appeal against
the Township of Vernon which covered the calendar years 1991 through 1995 for an
aggregate refund/adjustment of $1,055,853. Of the total sum due on the appeal,
$153,515 is attributed to the current fiscal year of the Company, and $902,338
was attributed to prior fiscal years and was recorded as an unusual item.

13. GOING CONCERN

The Company's consolidated financial statements are prepared in conformity
with generally accepted accounting principles, which contemplates continuation
of the Company as a going concern. The Company has incurred a net loss for the
year ended April 30, 1995 of $38,568,811, of which $37,448,566 represents
unusual items (Note 12). In addition, a foreclosure action was commenced by
First Fidelity on May 17, 1995, alleging the Company and substantially all of
its subsidiaries are in default on indebtedness owing First Fidelity and is
seeking to foreclose on certain real and personal assets which are collateral
for the obligations of the Company and its subsidiaries. First Fidelity claims
the Company and its subsidiaries owe it, as of May 15, 1995, an aggregate of
approximately $16,240,000, plus interest, counsel fees and other costs as
permitted by the relevant loan documents, and that Princeton, and its
subsidiaries, owe it as of May 15, 1995, an aggregate of approximately
$2,378,000, plus interest, counsel fees, and other costs as permitted by the
relevant loan documents. Many of the Company's debt instruments also contain
cross-default provisions whereby a default by the Company, or any of its
subsidiaries, constitutes a default of the related debt instrument. On August
7, 1995, American Stock Transfer and Trust Company, a trustee under a Debenture
Indenture dated as of June 12, 1991 under which there is outstanding $6,288,659
principal amount of subordinated debentures due May 31, 2006, commenced a
lawsuit in the United States District Court for the District of New York
alleging that the Company had defaulted in the payment of interest due on the
debentures, that the entire principal amount and accrued interest is now due and
payable and seeking to recover a judgment for such amount. The Company has
filed an answer in this litigation which, among other things, alleges that the
plaintiff is disqualified from so acting by reason of conflicts of interest in
fulfilling its duties to the debentureholders and is thereby barred from
maintaining this

13. GOING CONCERN (continued)

lawsuit. There can be no assurance that the Company will be successful in its
defense of this litigation or that as a result of the institution of this
litigation that the Company will not be compelled to commence a proceeding under
Chapter XI of the Federal Bankruptcy laws.

These factors create uncertainty whether the Company can continue as a
going concern. The Company's plans to mitigate the effects of the uncertainties
of the Company's continued existence are: 1) to seek to replace First
Fidelity's debt with other long-term debt financing with more favorable
repayment terms; 2) to improve profitability by reducing operating costs in
fiscal 1996; 3) to substantially reduce the Company's capital spending in fiscal
1996; 4) to offer the current bondholders incentives to convert their interest
bearing bonds for entitlements to the Company's amenities, shares of stock in
the Company and non-interest bearing bonds of the Company; and 5) to continue to
seek additional funding through private sources to supplement the Company's cash
needs. Management believes that these plans can be effectively implemented in
the next twelve month period. The Company's ability to continue as a going
concern is dependent on the implementation and success of these plans. The
financial statements do not include any adjustments in the event the Company is
unable to continue as a going concern.

14. SUBSEQUENT EVENTS (Unaudited) NOT COVERED BY INDEPENDENT AUDITORS REPORT

On May 17, 1995 First Fidelity commenced (the Foreclosure Action) against
the Company, substantially all of its subsidiaries, Princeton and its
subsidiaries and others alleging that the indebtedness owing to First Fidelity
by the Company and Princeton is in default and seeking to foreclose on certain
real and personal assets which are collateral for the obligations of the Company
and its subsidiaries and Princeton and its subsidiaries. First Fidelity is also
seeking certain other relief in the action. The assets involved in the
Foreclosure Action constitute substantially all of the assets of the Company
and its subsidiaries as well as of Princeton and its subsidiaries. A director
of the Company is also an officer, Director and principal shareholder of
Princeton and the agreements and other instruments evidencing the obligations of
the Company and its subsidiaries and Princeton and its subsidiaries to First
Fidelity contain cross-default provisions whereby a default by the Company, any
of its subsidiaries, Princeton or any of its subsidiaries under any of their
obligations to First Fidelity constitutes a default by each of the other
obligors under their obligations to First Fidelity. In addition, each of the
Company and Princeton have guaranteed the obligations of the other and their
respective subsidiaries to First Fidelity. First Fidelity claims the Company
and its subsidiaries owe it, as of May 15, 1995, an aggregate of approximately
$16,240,000 plus interest, counsel fees and other costs as permitted by the
relevant loan documents and that Princeton and its subsidiaries owe it, as of
May 15, 1995, an aggregate of approximately $2,738,000 plus interest, counsel
fees and other costs as permitted by the relevant loan documents. The Company
claims that the principal amount owing by the Company at April 30, 1995 was
$14,900,000 and by Princeton on that date was $2,330,520.

The Company and Princeton and their subsidiaries have filed an answer
denying the material allegations of the Complaint and setting forth a
counterclaim asserting, among other things, that First Fidelity engaged in bad
faith and misconduct and breached its fiduciary duties to the defendants in
failing to provide certain construction financing relating to a condominium
project of a subsidiary of Princeton, refused to grant non-disturbance
agreements to the Company and a subsidiary of Princeton in connection with the
sale of campsites and of long-term contractual rights to use amenities on the
property

14. SUBSEQUENT EVENTS (Unaudited) NOT COVERED BY INDEPENDENT AUDITORS REPORT
(continued)

by a joint venture between the Company and Princeton all of which were critical
to the defendants' ability to perform under their obligations to First Fidelity
and to meet the Company's other obligations.

If First Fidelity is successful in the Foreclosure Action it will succeed
to the ownership of substantially all of the Company's assets without any
assumption of the Company's liabilities. The Company believes that its equity
in the assets which are the subject of the Foreclosure Action exceeds the amount
First Fidelity claims it is owed by both the Company and Princeton. However,
there can be no assurance as to the outcome of the Foreclosure Action (or any of
the other legal proceedings to which the Company is a party) and thereby there
can be no assurance that the Company will not be forced to commence a
reorganization proceeding under the Federal Bankruptcy Laws or may not be forced
into liquidation by its creditors. Under such circumstances there can be no
assurance that after paying all outstanding secured and other indebtedness
ranking senior there will be any assets available for distribution to the
Company's holders of its outstanding subordinated debentures or shareholders or
that such holders will retain any equity or subordinated debt interest in the
Company following any reorganization proceeding. A consent order has been
entered into in the litigation whereby the Company has agreed not to disburse
any monies other than for the payment of ordinary business expenses without the
consent of First Fidelity and further provides that the Company cannot enter
into any agreement pursuant to which it or a subsidiary would incur any payment
obligation outside of the ordinary course of business.

On June 23, 1995, First Fidelity commenced an action (the "Guaranty
Action") in the Superior Court of New Jersey, Law Division - Morris County
against the Company, its subsidiaries, Princeton, its subsidiaries, Mr. Gene
Mulvihill, a Director of the Company, and others seeking to obtain a judgment
against such persons arising out of their guarantees of the indebtedness of the
Company and Princeton described above owing to First Fidelity.

On September 13, 1995, a non-affiliated person entered into an option
agreement with First Fidelity to acquire from First Fidelity the indebtedness of
the Company and its affiliates owing to First Fidelity, the related collateral
and First Fidelity's interest in the Foreclosure Action. The non-affiliated
person paid approximately $1,627,000 for the option which provides for a final
closing date of October 27, 1995. The consummation of the option agreement is
subject to the fulfillment of numerous conditions and the delivery of various
documents, including releases and indemnification agreements from the Company
and its affiliates in favor of First Fidelity. There can be no assurance that
the First Fidelity indebtedness, and the related collateral and Foreclosure
Action will be acquired by the non-affiliated person, that such person will not
pursue the Foreclosure Action or that the Company will be able to obtain from
the non-affiliated person any agreements favorable to the Company and its future
activities.

14. SUBSEQUENT EVENTS (Unaudited) NOT COVERED BY INDEPENDENT AUDITORS REPORT
(continued)

On August 7, 1995, American Stock Transfer and Trust Company, a trustee
under a Debenture Indenture dated as of June 12, 1991 under which there is
outstanding $6,288,659 principal amount of subordinated debentures due May 31,
2006, commenced a lawsuit in the United States District Court for the District
of New York alleging that the Company had defaulted in the payment of interest
due on the debentures, that the entire principal amount and accrued interest is
now due and payable and seeking to recover a judgment for such amount. The
Company has filed an answer in this litigation which, among other things,
alleges that the plaintiff is disqualified from so acting by reason of conflicts
of interest in fulfilling its duties to the debentureholders and is thereby
barred from maintaining this lawsuit. There can be no assurance that the
Company will be successful in its defense of this litigation or that as a result
of the institution of this litigation that the Company will not be compelled to
commence a proceeding under Chapter XI of the Federal Bankruptcy laws.

<ARTICLE> 5

<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> APR-30-1995
<PERIOD-END> APR-30-1995
<CASH> 137586
<SECURITIES> 0
<RECEIVABLES> 3824164
<ALLOWANCES> 1966820
<INVENTORY> 0
<CURRENT-ASSETS> 2294155
<PP&E> 52813287
<DEPRECIATION> 2223352
<TOTAL-ASSETS> 66427465
<CURRENT-LIABILITIES> 53252498
<BONDS> 5490760
<COMMON> 544204
2172352
613904
<OTHER-SE> 4353747
<TOTAL-LIABILITY-AND-EQUITY> 66427465
<SALES> 20192705
<TOTAL-REVENUES> 20192705
<CGS> 15633195
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<OTHER-EXPENSES> 3975806
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 2068492
<INCOME-PRETAX> (1120245)
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<INCOME-CONTINUING> (1120245)
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<EXTRAORDINARY> (37448566)
<CHANGES> 0
<NET-INCOME> (38568811)
<EPS-PRIMARY> (.77)
<EPS-DILUTED> (.77)

</TABLE>