10-Q

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.  20549

FORM 10-Q

(Mark One)

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

For the quarterly period ended July 31, 2017.

[  ]   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                                                         to                                                                           

Commission File Number:  0-8862

First Hartford Corporation                                                                 

(Exact name of registrant as specified in its charter)

Maine01-0185800

(State or other jurisdiction of incorporation or organization)                   (I.R.S. Employer Identification No.)

                           149 Colonial Road, Manchester, CT06042

(Address of principal executive offices)                                                    (Zip Code)

                                                                              (860) 646-6555                                                                            

(Registrant’s telephone number including area code)

(Former name, former address and former fiscal year if changed since last report)

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

                                                                                                                                                                                                                Yes  X       No
 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

                                                                                                                                                                                                                Yes          No  X 
 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company.  See the definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company”, and “emerging growth company” in Rule 12b-2 of the Exchange Act.
 

Large accelerated filer                                                                                                 Accelerated filer

Non-accelerated filer (Do not check if a smaller reporting company)                                Smaller reporting company  X  

Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act).

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

                                                                                                                                                                                                                Yes          No X 

Indicate the number of shares outstanding of each of the issuer’s classes of common stock as of the latest practicable date.

 2,315,799 as of October 6, 2017

FIRST HARTFORD CORPORATION AND SUBSIDIARIES

INDEX

PART I.	FINANCIAL INFORMATION	PAGE
Item 1.	Financial Statements (Unaudited)
	Condensed Consolidated Balance Sheets – July 31, 2017 and April 30, 2017	3 - 4
	Condensed Consolidated Statements of Income for the Three Months Ended July 31, 2017 and 2016	5
	Condensed Consolidated Statements of Comprehensive Income for the Three Months Ended July 31, 2017 and 2016	6
	Condensed Consolidated Statements of Cash Flows for the Three Months Ended July 31, 2017 and 2016	7 - 8
	Notes to Condensed Consolidated Financial Statements	9 - 13
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	14 - 19
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	19
Item 4.	Controls and Procedures	19
PART II.	OTHER INFORMATION
Item 1.	Legal Proceedings	20
Item 1A.	Risk Factors	20
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	20
Item 3.	Defaults Upon Senior Securities	20
Item 4.	Mine Safety Disclosures	20
Item 5.	Other Information	21
Item 6.	Exhibits	21
	Signatures	22

2

FIRST HARTFORD CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)

ASSETS

	July 31, 2017	April 30, 2017
Real estate and equipment:
Developed properties and property under construction (including $78,114,859 in July and $77,898,958 in April for VIEs)	$238,883,938	$236,865,867
Equipment and tenant improvements (including $2,446,428 in July and $2,424,964 in April for VIEs)	4,206,723	3,689,442
	243,090,661	240,555,309
Less accumulated depreciation and amortization (including $16,447,144 in July and $15,918,495 in April for VIEs)	(48,685,410)	(47,449,316)
	194,405,251	193,105,993
Property held for sale	2,209,034	11,389,591
Cash and cash equivalents (including $2,512,323 in July and $2,063,103 in April for VIEs)	7,145,794	6,250,757
Cash and cash equivalents – restricted (including $12,398 in July and $396,361 in April for VIEs)	287,683	526,012
Marketable securities (including $1,361,812 in July and $1,538,839 in April for VIEs)	1,361,812	1,538,839
Accounts and notes receivable, less allowance for doubtful accounts of $127,423 as of July 31, 2017 and $135,002 as of April 30, 2017 (including $100,583 in July and $66,543 in April for VIEs)	4,128,421	3,505,541
Other receivables	3,409,636	4,064,876
Deposits and escrow accounts (including $8,514,565 in July and $8,866,586 in April for VIEs)	15,819,894	15,930,999
Prepaid expenses (including $560,435 in July and $327,481 in April for VIEs)	2,109,974	1,644,320
Deferred expenses (including $163,058 in July and $167,273 in April for VIEs)	4,390,477	5,712,547
Investments in affiliates	100	100
Due from related parties and affiliates	2,972	152,776
Deferred tax asset	399,388	671,147
Total assets	$235,670,436	$244,493,498

See accompanying notes.

3

FIRST HARTFORD CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS (continued)
(Unaudited)

LIABILITIES AND SHAREHOLDERS’ EQUITY (DEFICIENCY)

	July 31, 2017	April 30, 2017
Liabilities:
Mortgages and notes payable:
Construction loans payable	$28,027,318	$26,929,537
Mortgages payable (including $64,352,785 in July and $64,598,997 in April for VIEs)	190,859,403	195,763,409
Notes payable (including $1,704,697 in July and $1,704,697 in April for VIEs)	1,704,697	1,704,697
Lines of credit	1,400,000	6,400,000
Less: Deferred debt issuance costs, net (including $1,558,752 in July and $1,575,494 in April for VIEs)	(3,134,493)	(3,067,098)
	218,856,925	227,730,545
Accounts payable (including $640,328 in July and $569,600 in April for VIEs)	2,860,120	2,915,400
Other payables	4,100,536	4,966,246
Accrued liabilities (including $3,369,771 in July and $3,382,307 in April for VIEs)	6,643,823	5,699,875
Derivative liability	2,227,698	2,023,793
Deferred income (including $226,276 in July and $227,936 in April for VIEs)	492,729	622,461
Other liabilities	1,256,050	1,328,909
Due to related parties and affiliates (including $448,457 in July and $446,990 in April for VIEs)	600,310	598,843
Total liabilities	237,038,191	245,886,072
Shareholders’ Equity (Deficiency):
First Hartford Corporation:
Preferred stock, $1 par value; $.50 cumulative and convertible; authorized 4,000,000 shares; no shares issued and outstanding	-0-	-0-
Common stock, $1 par value; authorized 6,000,000 shares; issued 3,211,843 and 3,236,843 shares and outstanding 2,315,799 and 2,340,799 shares as of July 31, 2017 and April 30, 2017	3,211,843	3,236,843
Capital in excess of par	5,043,779	5,093,779
Accumulated deficit	(5,370,001)	(5,612,263)
Accumulated other comprehensive income	-0-	-0-
Treasury stock, at cost, 896,044 and 896,044 shares as of July 31, 2017 and April 30, 2017	(4,989,384)	(4,989,384)
Total First Hartford Corporation	(2,103,763)	(2,271,025)
Noncontrolling interests	736,008	878,451
Total shareholders’ equity (deficiency)	(1,367,755)	(1,392,574)
Total liabilities and shareholders’ equity (deficiency)	$235,670,436	$244,493,498

See accompanying notes.

4

FIRST HARTFORD CORPORATION AND SUBSIDIARIES
 CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)

	Three Months Ended
	July 31, 2017	July 31, 2016
Operating revenues:
Rental income	$7,796,540	$8,066,447
Service income	640,563	1,228,605
Sales of real estate	21,360,000	12,210,051
Other revenues	1,222,265	993,554
	31,019,368	22,498,657
Operating costs and expenses:
Rental expenses	4,974,166	5,099,712
Service expenses	1,239,990	1,193,326
Cost of real estate sales	18,623,718	9,623,667
Selling, general and administrative expenses	2,924,064	1,843,825
	27,761,938	17,760,530
Income from operations	3,257,430	4,738,127
Non-operating income (expense):
Interest expense	(2,629,789)	(2,589,494)
Other income / (loss)	(83,418)	21,460
Loss on derivatives (non-cash)	(203,905)	(793,169)
Equity in earnings of unconsolidated subsidiaries	162,860	177,126
	(2,754,252)	(3,184,077)
Income before income taxes	503,178	1,554,050
Income tax expense	365,489	811,647
Consolidated net income	137,689	742,403
Net loss attributable to noncontrolling interests	104,573	84,451
Net income attributable to First Hartford Corporation	$242,262	$826,854
Net income per share – basic	$0.10	$0.35
Net income per share – diluted	$0.10	$0.35
Shares used in basic per share computation	2,328,299	2,391,078
Shares used in diluted per share computation	2,328,299	2,391,078

See accompanying notes.

5

FIRST HARTFORD CORPORATION AND SUBSIDIARIES
 CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited)

	Three Months Ended
	July 31, 2017	July 31, 2016
Consolidated net income	$137,689	$742,403
Other comprehensive income / (loss), net of taxes:
Unrealized gains / (losses) on marketable securities	100,386	(131,304)
Total comprehensive income	238,075	611,099
Amounts attributable to noncontrolling interests:
Net loss	104,573	84,451
Unrealized (gains) / losses on marketable securities	(100,386)	131,304
	4,187	215,755
Comprehensive income attributable to First Hartford Corporation	$242,262	$826,854

See accompanying notes.

6

FIRST HARTFORD CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)

	Three Months Ended
	July 31, 2017	July 31, 2016
Operating activities:
Consolidated net income	$137,689	$742,403
Adjustments to reconcile consolidated net income to net cash provided by /    (used in) operating activities:
Equity in earnings of unconsolidated subsidiaries, net of distributions of $90,000 in 2017 and $90,000 in 2016	(72,859)	(87,126)
Gain on sale of real estate	(2,736,282)	(2,586,384)
Depreciation of real estate and equipment	1,366,512	1,318,924
Amortization of deferred expenses	135,663	232,903
Deferred income taxes	271,759	505,819
Loss on derivatives	203,905	793,169
Changes in operating assets and liabilities:
Accounts, notes and other receivables	32,360	1,191,407
Deposits and escrow accounts	232,025	1,626,526
Prepaid expenses	(465,654)	(415,608)
Deferred expenses	1,119,012	(2,064,363)
Cash and cash equivalents – restricted	238,329	369,135
Accrued liabilities	943,948	(284,131)
Deferred income	(129,732)	583,011
Accounts and other payables	(920,990)	(2,738,244)
Net cash provided by / (used in) operating activities	355,685	(812,559)
Investing activities:
Investments in marketable securities	(96,946)	-0-
Proceeds from sale of marketable securities	374,359	-0-
Purchase of equipment and tenant improvements	(647,699)	(61,272)
Proceeds from sale of real estate	21,360,000	12,210,051
Additions to developed properties and properties under construction	(11,461,232)	(4,684,042)
Net cash provided by investing activities	9,528,482	7,464,737

See accompanying notes.

7

 FIRST HARTFORD CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (continued)
(Unaudited)

	Three Months Ended
	July 31, 2017	July 31, 2016
Financing activities:
Distributions to noncontrolling interests	$(138,256)	$(108,650)
Repurchase of common stock	(75,000)	(79,968)
Proceeds from:
Construction loans	7,793,353	1,785,458
Mortgage loans	2,876,407	920,310
Notes	-0-	-0-
Credit lines	-0-	375,000
Principal payments on:
Construction loans	(1,127,899)	(7,385,755)
Mortgage loans	(13,469,006)	(2,071,417)
Notes	-0-	-0-
Credit lines	(5,000,000)	-0-
Payments (to) / from related parties and affiliates, net	151,271	(498,968)
Net cash used in financing activities	(8,989,130)	(7,063,990)
Net change in cash and cash equivalents	895,037	(411,812)
Cash and cash equivalents, beginning of period	6,250,757	5,982,506
Cash and cash equivalents, end of period	$7,145,794	$5,570,694
Cash paid during the period for interest	$2,672,437	$2,497,810
Cash paid during the period for income taxes	$60,750	$249,148
Debt refinancing in 1st quarter: New mortgage loans	$8,565,000	$14,300,000
Debt reduced	(5,567,673)	(5,359,713)
Escrow funded	(120,920)	(8,019,977)
Net cash from refinancing in 1st quarter	$2,876,407	$920,310

See accompanying notes.

8

FIRST HARTFORD CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

1.   Business and Significant Accounting Policies:

Business

First Hartford Corporation, which was incorporated in Maine in 1909, and its subsidiaries (the Company), is engaged in two business segments: 1) the purchase, development, ownership, management and sale of real estate and 2) providing preferred developer services for two corporate franchise operators (i.e., “Fee for Service”).

Principles of Consolidation

The accompanying unaudited condensed consolidated financial statements include the accounts of the Company, its wholly owned subsidiaries, and all other entities in which the Company has a controlling financial interest, including those where the Company has been determined to be a primary beneficiary of a variable interest entity or meets certain criteria as a sole general partner or managing member in accordance with the consolidation guidance of the Financial Accounting Standards Board Accounting Standards Codification.  As such, included in the unaudited condensed consolidated financial statements are the accounts of Rockland Place Apartments Limited Partnership and Clarendon Hill Somerville Limited Partnership, in which the Company is the sole general partner.  The Company’s ownership percentage in these variable interest entity partnerships is nominal.  All significant intercompany balances and transactions have been eliminated.

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Rule 8.03 of Regulation S-X.  Accordingly, they do not include all of the information and footnotes required by U.S. generally accepted accounting principles for complete financial statements.  In the opinion of management, all adjustments (consisting of normal recurring accruals and adjustments) considered necessary for a fair presentation have been included.  Operating results for the interim periods are not necessarily indicative of the results that may be expected for the entire year.  The condensed consolidated balance sheet as of April 30, 2017 was derived from the audited financial statements for the year then ended.  For further information, refer to the consolidated financial statements and footnotes thereto included in the Company’s annual report on Form 10-K for the fiscal year ended April 30, 2017.

Because the Company is engaged in the development and sale of real estate at various stages of construction, the operating cycle may extend beyond one year.  Accordingly, following the usual practice of the real estate industry, the accompanying condensed consolidated balance sheets are unclassified.

Currently, there are no Accounting Standards Updates (ASUs) that the Company is required to adopt that are likely to have a material effect on its financial statements that have not been previously discussed in the Company’s annual report on Form 10-K for the fiscal year ended April 30, 2017.

9

FIRST HARTFORD CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

1.   Business and Significant Accounting Policies (continued):

Net Income (Loss) Per Common Share

Basic income (loss) per share is computed by dividing the net income (loss) attributable to the common stockholders (the numerator) by the weighted average number of shares of common stock outstanding (the denominator) during the reporting periods.  Diluted income (loss) per share is computed by increasing the denominator by the weighted average number of additional shares that could have been outstanding from securities convertible into common stock, such as stock options and warrants (using the “treasury stock” method).

There were no common stock equivalents outstanding at July 31, 2017 or July 31, 2016.   

Financial Instruments and Fair Value

The Company’s financial instruments include cash and cash equivalents, accounts receivable, marketable securities, accounts payable, accrued expenses, and debt.  The fair values of accounts receivable, accounts payable and accrued expenses are estimated to approximate their carrying amounts because of their relative short-term nature.  In general, the carrying amount of variable rate debt approximates its fair value.  Further, the carrying amount of fixed rate debt approximates fair value since the interest rates on the debt approximates the Company’s current incremental borrowing rate.  Marketable securities consist of equity securities and are stated at fair value based on the last sale of the period obtained from recognized stock exchanges (i.e. Level 1). Accumulated other comprehensive (loss) income consists solely of unrealized gains (losses) on marketable securities.

Segment Information

The factors used by the Company to identify reportable segments include differences in products and services and segregated operations within the Company. The first segment, “Real Estate Operations” participates in the purchase, development, management, ownership and sale of real estate. Within its second segment, “Fee for Service”, the Company provides preferred developer services to CVS and Cumberland Farms Inc. in certain geographic areas.  Summary financial information for the two reportable segments is as follows:

	Three Months Ended
	July 31,
	2017	2016
Revenues:
Real Estate Operations	$30,506,118	$21,424,657
Fee for Service	513,250	1,074,000
Total	$31,019,368	$22,498,657
Operating Costs & Expenses:
Real Estate Operations	$23,961,465	$14,758,360
Fee for Service	876,409	1,158,345
Administrative Expenses	2,924,064	1,843,825
Total	$27,761,938	$17,760,530

All costs after operating expenses are costs of the real estate operation.

10

FIRST HARTFORD CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

1.   Business and Significant Accounting Policies (concluded):

Segment Information (concluded):

The only assets in the balance sheet belonging to the Fee for Service segment is restricted cash of $275,285 on July 31, 2017 and $129,651 on April 30, 2017 and receivables of $3,458,604 on July 31, 2017 and $4,262,302 on April 30, 2017.

2.   Consolidated Variable Interest Entities and Investments in Affiliated Partnerships:

The Company has consolidated both Rockland and Clarendon based on the express legal rights and obligations provided to it by the underlying partnership agreements and its control of their business activity.  The assets of these partnerships that can only be used to settle their obligations and their liabilities for which creditors (or beneficial interest holders) do not have recourse to the general credit of the Company are shown parenthetically in the line items of the consolidated balance sheets.  A summary of the assets and liabilities of Rockland and Clarendon included in the Company’s condensed consolidated balance sheets follows:

	July 31, 2017	April 30, 2017
Real estate and equipment, net	$66,412,486	$66,732,664
Other assets	13,223,182	13,417,929
Total assets	79,635,668	80,150,593
Intercompany profit elimination	(2,690,250)	(2,719,143)
	$76,945,418	$77,431,450
Mortgages and other notes payable	$64,498,730	$64,728,200
Other liabilities	4,234,460	4,179,842
Total liabilities	$68,733,190	$68,908,042

The Company accounts for its 50% ownership interest in Dover Parkade, LLC under the equity method of accounting.  A summary of the operating results for this entity follows:

	Three Months Ended
	July 31,
	2017	2016
Dover Parkade, LLC:
Revenue	$701,909	$683,913
Expenses	(556,190)	(509,662)
Net income	$145,719	$174,251

11

FIRST HARTFORD CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

3.   Income Taxes:

The Company files a Federal consolidated tax return to report all income and deductions for its subsidiaries. The Company and its subsidiaries file income tax returns in several states. The tax returns are filed by the entity that owns the real estate or provides services in such state. Some states do not allow a consolidated or combined tax filing. This sometimes creates income taxes to be greater than expected as income for some subsidiaries cannot be offset by other subsidiaries with operating losses.

4.   Litigation:

Following a site inspection of asbestos abatement activities being conducted at the Spring Gate Apartments in Rockland, Massachusetts (Facility) on April 14, 2017, the Massachusetts Department of Environmental Protection (MassDEP) by letter dated April 21, 2017 requested that Rockland Place Apartments, LP (Company) temporarily cease and desist from any additional asbestos removal, abatement and/or handling activities at the Facility.  Upon receipt of the MassDEP letter, the Company engaged MassDEP in discussions regarding the abatement project.  Following submission to and approval by MassDEP of a work plan addressing the issues raised in MassDEP’s April 21 letter, MassDEP permitted the asbestos abatement work to go forward.  There have been no further enforcement actions taken by MassDEP.

By letters dated May 15, May 16 and May 30, 2017, three attorneys representing tenants in three units at the Facility notified the Company and/or its management company, FHRC Management Corporation, of claims related to environmental conditions at the Facility.  The first of these letters alleges that the tenant and her family have been exposed to and have been living in an apartment containing asbestos for many years.  The second letter claims that the tenant and her three minor children have suffered injuries believed to be caused by the presence of mold and asbestos in the apartment.  The final letter asserts claims with respect to the tenant and her three minor children involving the presence and remediation of asbestos including violation of a tenant’s quiet enjoyment, breach of the warranty of habitability, causation of emotional distress and the use of unfair and deceptive practices under M.G.L. c. 93A.  The first two letters made no specific monetary demand; the third letter demanded $312,600.  All three claims were tendered to the Company’s insurer, which agreed to respond under a reservation of rights.  On July 14, 2017, counsel retained by the insurer provided a timely response to the third letter, adamantly denying the Company’s liability pursuant to M.G.L. c. 93A or for any of the other claims.  By letter dated July 27, 2017, the insurer acknowledged receipt of the three claims, at the same time stating however that as no lawsuit had arisen, it did not have a duty to defend, but nonetheless would continue to investigate. 

At this time, the Company cannot assess the likelihood of an unfavorable outcome or provide any estimate of the amount or range of any potential loss.  There has been no other change in litigation since April 30, 2017.

5.   Refinancings:

New Orleans, LA – Refinance: On June 30, 2017, the Company refinanced its construction loan on its shopping center property in New Orleans, LA.  The construction loan, which had a principal balance of $5,567,673, was replaced by a mortgage loan of $8,565,000.  The new mortgage loan has an interest rate of 4.75%.  The loan is interest-only until July 1, 2020; thereafter, monthly payments of $44,576 inclusive of principal and interest are due and payable until the maturity date of July 1, 2027, at which time the remaining principal balance must be repaid in full.

12

FIRST HARTFORD CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

6.   Purchases of Real Estate:

Houston, TX – Land Purchase: On May 12, 2017, the Company completed its purchase of a parcel of land in Houston, TX for $8,583,235 including closing costs.  This purchase was financed with proceeds from a construction loan of $5,158,210, utilization of the Company’s lines of credit of $2,400,000, and working capital of $1,025,025. Key terms of the construction loan are as follows:  

Loan Amount:         $8,600,000

Maturity Date:         November 15, 2018

Interest Rate:          2.50% plus One Month ICE LIBOR rate, as defined, up to maturity date and 12.0% thereafter.

Payments:              Interest only payable monthly with principal due at maturity.

Guarantee:             The Company (Corporate).

7.   Subsequent Events:

The Company has evaluated for subsequent events through October 10, 2017, the date the financial statements were issued.

Montgomery, TX – Land Purchase: On August 16, 2017, the Company completed its purchase of a 26.43 acre parcel of land in Montgomery, TX for $6,672,754 including closing costs.  This purchase was financed with proceeds from a land loan of $4,150,000, utilization of the Company’s lines of credit of $2,360,000, and working capital of $162,754. Key terms of the construction loan are as follows:  

Loan Amount:          $4,150,000

Maturity Date:          February 16, 2019

Interest Rate:           3.50% plus One Month ICE LIBOR rate, as defined, up to maturity date and 12.0% thereafter.

Payments:               Interest only payable monthly with principal due at maturity.

Guarantee:              The Company (Corporate).

East Providence, RI – Sale of Property: On September 7, 2017, the Company sold its property held for sale in East Providence, RI for $830,000 (cost of approximately $566,672).

13

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

The financial and business analysis below provides information which the Company believes is relevant to an assessment and understanding of the Company’s financial position, results of operations and cash flows.  This analysis should be read in conjunction with the condensed consolidated financial statements and related notes.

The following discussion and certain other sections of this Report on Form 10-Q contain statements reflecting the Company’s views about its future performance and constitute “forward-looking statements” under the Private Securities Litigation Reform Act of 1995.  These views may involve risk and uncertainties that are difficult to predict and may cause the Company’s actual results to differ materially from the results discussed in such forward-looking statements.  Readers should consider how various factors including changes in general economic conditions, cost of materials, interest rates and availability of funds, and the nature of competition and relationship with key tenants may affect the Company’s performance.  The Company undertakes no obligation to update publicly any forward-looking statements, whether as a result of new information, future events or other.

Critical Accounting Policies

There have been no significant changes in the Company’s critical accounting policies from those included in Item 7 of its Annual Report on Form 10-K for the year ended April 30, 2017 under the subheading “Critical Accounting Policies and Estimates”. 

Results of Operations

Rental Income:

Rental income for the quarters ended July 31, by type of tenant, follows:

	Three Months Ended
	July 31,
	2017	2016
Residential	$3,037,106	$3,073,023
Commercial	4,759,434	4,993,424
	$7,796,540	$8,066,447

The slight decrease in residential rental income was primarily caused by lower revenue at the Rockland, MA property due to vacancies from converted apartments needed for the ongoing renovation project.

The decrease in commercial rental income was primarily caused by lower common area maintenance (CAM) billings to tenants resulting from lower associated expenses.

Service Income

Service income for the quarters ended July 31 follows:

	Three Months Ended
	July 31,
	2017	2016
Management fees	$127,313	$154,605
Preferred developer fees	513,250	1,074,000
	$640,563	$1,228,605

14

Item 2.  MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued):

Service Income (continued):

The decrease in preferred developer fees reflected lower fees received from both CVS and Cumberland Farms.  The decrease in CVS fees, which continues a trend over the past several years, was the result of a recent acquisition that has impacted in the slowing of their pipeline for new stores.  The decrease in Cumberland Farms was the result of timing of closings based on the construction schedule.

Sales (and Cost of Sales) of Real Estate

Three months ended July 31, 2017:

St. Louis, MO – Sale of Property: On May 30, 2017, the Company sold its single-tenant property in St. Louis, MO for $6,800,000 (cost of $6,567,195).  A loan with a balance of $5,120,000 and a credit line of $1,000,000 were paid off with the proceeds.

New Orleans, LA – Sale of Property: On June 7, 2017, the Company sold a parcel of its property in New Orleans, LA for $11,350,000 (cost of $9,002,022).  A loan with a balance of $7,436,745 was paid off with the proceeds.  The Company continues to hold the parcel of the property that includes the shopping center.

Austin, TX – Sale of Property: On June 15, 2017, the Company sold its single-tenant property in Austin, TX for $3,210,000 (cost of $2,968,692).  A loan with a balance of $1,102,899 was paid off with the proceeds. 

There were also costs incurred in fiscal year 2018 related to property sales that occurred in the fiscal year ended April 30, 2017 totaling $85,809 that were not anticipated as of the prior fiscal year end.

Three months ended July 31, 2016:

On June 29, 2016, the Company sold a property in Stanhope, NJ for $10,000,051 (cost of $8,268,070).  A construction loan with a balance of $6,329,667 was paid off with the proceeds.

On June 30, 2016, the Company sold a portion of its property in Edinburg, TX (i.e., Texas Roadhouse) for $2,210,000 (cost of $1,355,597).  A mortgage loan with a balance of $1,279,136 was paid off with the proceeds.

Other Revenues

The increase in other income was primarily due to sales by the Company’s new restaurant it built and owns at its Edinburg, TX property.  This store was opened on July 14, 2017. 

Operating Costs and Expenses:

Rental Expenses

Rental expenses for the quarters ended July 31, by type of tenant, follows:

	Three Months Ended
	July 31,
	2017	2016
Residential	$2,562,745	$2,571,379
Commercial	2,411,421	2,528,333
	$4,974,166	$5,099,712

15

Item 2.  MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued):

Rental Expenses (continued):

The slight decrease in residential rental expenses were mainly from lower repairs and maintenance expenses at the Somerville, MA (i.e., Clarendon) property, partially offset by higher legal fees incurred at the Rockland, MA property resulting from a temporary cease and desist order from the Massachusetts Department of Environmental Protection (MassDEP).  See Part II, Item 1, Legal Proceedings, on page 20 for more information.     

The decrease in commercial rental expenses was mainly due to a prior year legal liability of $198,000 recorded as a result of the Company losing the first of two companion lawsuits against a former tenant for wrongful termination of its separate leases at two of the Company’s commercial shopping centers and prior year accelerated amortization expense of deferred commissions arising from the sale of a portion of its property in Edinburg, TX (i.e., Texas Roadhouse).  These factors were partially offset by a fee paid to a tenant at its Edinburg, TX shopping center to allow the Company to lease to another tenant and higher expenses related to the Company’s New Orleans, LA shopping center, which was completed and refinanced in the first quarter of fiscal 2018. 

Service Expenses

Service expenses for the quarters ended July 31 follows:

	Three Months Ended
	July 31,
	2017	2016
Preferred Developer Expenses and Fees	$876,409	$1,158,345
Construction and Other Cost	363,581	34,981
	$1,239,990	$1,193,326

The decrease in preferred developer expenses and fees primarily reflects lower commissions paid commensurate with the lower revenue, primarily at CVS. 

The increase in construction expenses relates to unbudgeted costs (i.e., overruns) incurred at the renovation project at the Company’s Rockland, MA property resulting from a temporary cease and desist order from the Massachusetts Department of Environmental Protection (MassDEP).  See Part II, Item 1, Legal Proceedings, on page 20 for more information.    

Selling, General and Administrative (“SG&A”)

The increase in SG&A expenses relates primarily to expenses relating to its new restaurant it built and owns at its Edinburg, TX property and costs incurred to resolve the Rockland, MA matter discussed above, including providing hotels and meals to displaced tenants and legal and professional fees.  See Part II, Item 1, Legal Proceedings, on page 20 for more information.

16

Item 2.  MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued):

Non-Operating Income (Expense):

Interest Expense

Interest expense for the quarters ended July 31, by type of tenant, follows:

	Three Months Ended
	July 31,
	2017	2016
Commercial	$1,900,783	$1,894,665
Residential	729,006	694,829
	$2,629,789	$2,589,494

The change in commercial interest expense was minimal; there were no individually significant changes.

The increase in residential interest expense was the result of the prior year refinancing at Rockland.  Note the loans paid off as part of this refinancing did not accrue interest.

Other Income / (Loss)

Other income / (loss) for the quarters ended July 31 follows:

	Three Months Ended
	July 31,
	2017	2016
Investment Income (loss)	$(83,418)	$21,460

The decrease in investment income reflected realized losses on sales of securities in the current year.

Gain / (Loss) on Derivatives (Non-Cash)

The Company, through its 50% owned consolidated subsidiaries, has entered into two separate floating-to-fixed interest rate swap agreements with banks that expire in May 2025 and July 2031.  The Company has determined that these derivative instruments do not meet the requirements of hedge accounting and have therefore recorded the change in fair value of these derivative instruments through income.  Note that the change in fair value recorded through income is a non-cash item.

17

Item 2.  MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued):

Equity in Earnings of Unconsolidated Subsidiary

The equity in earnings of unconsolidated subsidiary for the quarters ended July 31 follows:

	Three Months Ended
	July 31,
	2017	2016
Income from Operations	$72,860	$87,126
Distributions	90,000	90,000
	$162,860	$177,126

The Company has an investment in an affiliated limited liability entity Dover Parkade, LLC, (Dover).  The Company has a 50% interest in Dover, which owns a shopping center in Dover Township, NJ.  The operating and financial policies of Dover are not controlled by the Company.  For years prior to May 1, 2009, the Company was committed to provide funding to this equity method investee.  The Company’s investment was recorded at cost and subsequently adjusted for its share of their net income and losses and distributions.  Through April 30, 2009, losses and distributions from Dover exceeded the Company’s investment and the Company’s investment balance was reduced below $0 and recorded as a liability.  Beginning May 1, 2009, distributions from Dover have been credited to income and any additional losses have not been allowed to further reduce the investment balance.  The Company does not control the rate of distributions of Dover.  Such distributions are in excess of Dover’s net assets since its accumulated net losses (including significant amounts for depreciation and amortization) have exceeded capital contributions.

Income Taxes

The Company files a Federal consolidated tax return to report all income and deductions for its subsidiaries. The Company and its subsidiaries file income tax returns in several states. The tax returns are filed by the entity that owns the real estate or provides services in such state. Some states do not allow a consolidated or combined tax filing. This sometimes creates income taxes to be greater than expected as income for some subsidiaries cannot be offset by other subsidiaries with operating losses.

Capital Resources and Liquidity

At July 31, 2017, the Company had $7,145,794 of unrestricted cash and cash equivalents. This includes $4,948,976 belonging to partnership entities in which the Company’s financial interests range from .01% (VIEs) to 50%.  Funds received from CVS, which are to be paid out in connection with CVS developments, amounted to $275,285 and tenant security deposits held by VIEs of $12,398 are included in restricted cash and cash equivalents.

At July 31, 2017, the Company had $1,361,812 of investments in marketable securities, all of which belongs to partner entities.

The Company has three separate credit lines that allows for borrowings up to $6,760,000.  At July 31, 2017, the Company had borrowings of $1,400,000 against these credit lines.

18

Item 2.  MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued):

Capital Resources and Liquidity (continued):

The sources of future borrowings that may be needed for new construction loans, property purchases, or balloon payments on existing loans are unclear at this time.  As a result of the decreasing CVS fee-for-service business and the increasingly difficult environment surrounding commercial real estate, the Company has become more dependent on its ability to buy, develop, and sell real estate at a profit.  Failure to do so would have an adverse impact on the Company’s liquidity.  The Company’s liquidity could also be adversely impacted if the Company’s new restaurant in Edinburg, TX does not meet its financial projections or if the Rockland, MA matter discussed in Part II, Item 1, Legal Proceedings, on page 20, has an unfavorable outcome.

Item 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Smaller reporting companies are not required to provide the information required by this item.

Item 4.  CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

We maintain “disclosure controls and procedures”, as such term is defined in Rule 13a-15(e) under the Securities Exchange Act of 1934 (the “Exchange Act”), that are designed to ensure that information required to be disclosed in our Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission rules and forms, and that such information is accumulated and communicated to our management, including our Chairman and Treasurer, as appropriate, to allow timely decisions regarding required disclosure.  We conducted an evaluation (the “Evaluation”), under the supervision and with the participation of our Chairman and Treasurer, of the effectiveness of the design and operation of our disclosure controls and procedures (“Disclosure Controls”) as of the end of the period covered by this report pursuant to Rule 13a-15(b) of the Exchange Act.  Based on the Evaluation, our Chairman and Treasurer concluded that because of weaknesses in our control environment, our disclosure controls were not effective as of the end of the period covered by this report.  Notwithstanding weaknesses in our control environment, as of July 31, 2017, we believe that the condensed consolidated financial statements contained in this report present fairly the Company’s financial condition, results of operations and cash flows for the periods presented.

Changes in Internal Control over Financial Reporting

As of the end of the period covered by this report, there have been no changes in internal control over financial reporting (as defined in Rule 13a-15(f) of the Exchange Act) during the period covered by this report, that materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

19

PART II             OTHER INFORMATION

Item 1.              LEGAL PROCEEDINGS

Following a site inspection of asbestos abatement activities being conducted at the Spring Gate Apartments in Rockland, Massachusetts (Facility) on April 14, 2017, the Massachusetts Department of Environmental Protection (MassDEP) by letter dated April 21, 2017 requested that Rockland Place Apartments, LP (Company) temporarily cease and desist from any additional asbestos removal, abatement and/or handling activities at the Facility.  Upon receipt of the MassDEP letter, the Company engaged MassDEP in discussions regarding the abatement project.  Following submission to and approval by MassDEP of a work plan addressing the issues raised in MassDEP’s April 21 letter, MassDEP permitted the asbestos abatement work to go forward.  There have been no further enforcement actions taken by MassDEP.

By letters dated May 15, May 16 and May 30, 2017, three attorneys representing tenants in three units at the Facility notified the Company and/or its management company, FHRC Management Corporation, of claims related to environmental conditions at the Facility.  The first of these letters alleges that the tenant and her family have been exposed to and have been living in an apartment containing asbestos for many years.  The second letter claims that the tenant and her three minor children have suffered injuries believed to be caused by the presence of mold and asbestos in the apartment.  The final letter asserts claims with respect to the tenant and her three minor children involving the presence and remediation of asbestos including violation of a tenant’s quiet enjoyment, breach of the warranty of habitability, causation of emotional distress and the use of unfair and deceptive practices under M.G.L. c. 93A.  The first two letters made no specific monetary demand; the third letter demanded $312,600.  All three claims were tendered to the Company’s insurer, which agreed to respond under a reservation of rights.  On July 14, 2017, counsel retained by the insurer provided a timely response to the third letter, adamantly denying the Company’s liability pursuant to M.G.L. c. 93A or for any of the other claims.  By letter dated July 27, 2017, the insurer acknowledged receipt of the three claims, at the same time stating however that as no lawsuit had arisen, it did not have a duty to defend, but nonetheless would continue to investigate. 

At this time, the Company cannot assess the likelihood of an unfavorable outcome or provide any estimate of the amount or range of any potential loss.

Item 1A.RISK FACTORS

                        Smaller reporting companies are not required to provide the information required by this item.

Item 2.             UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

None

Item 3.             DEFAULTS UPON SENIOR SECURITIES

                        None

Item 4.             MINE SAFETY DISCLOSURES

                        Not applicable

20

Item 5.             OTHER INFORMATION

None

SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

                        None

Item 6.             EXHIBITS

a)   Exhibits:
Exhibit 31.1	Certification of Chief Executive Officer, pursuant to Rule 13a-14(c) under the Securities Exchange Act of 1934.
Exhibit 31.2	Certification of Chief Financial Officer, pursuant to Rule 13a-14(c) under the Securities Exchange Act of 1934.
Exhibit 32.1	Certification of Chief Executive Officer and Chief Financial Officer, pursuant to 18 U.S.C. Section 1350.

21

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	First Hartford Corporation
	(Registrant)
October 10, 2017	/s/ Neil H. Ellis
Date	Neil H. Ellis,
	Chairman of the Board
	and Chief Executive Officer
October 10, 2017	/s/ Eric J. Harrington
Date	Eric J. Harrington, Treasurer
	and Chief Financial Officer

22

EX-31.1

Exhibit 31.1
CERTIFICATIONS

Certification Pursuant to Rule 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Amended.

I, Neil H. Ellis, certify that:

1.I have reviewed this quarterly report on Form 10-Q of First Hartford Corporation.

2.Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a.Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared:

b.Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c.Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d.Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a.All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b.Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:      October 10, 2017

By:          /s/ Neil H. Ellis
                Neil H. Ellis
                Chief Executive Officer

EX-31.2

Exhibit 31.2
CERTIFICATIONS

Certification Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Amended.

I, Eric J. Harrington, certify that:

1.I have reviewed this quarterly report on Form 10-Q of First Hartford Corporation.

2.Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods present in this report;

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a.Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b.Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c.Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d.Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a.All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b.Any fraud, whether or not material, that involves management or other employees who has a significant role in the registrant’s internal control over financial reporting.

Date:      October 10, 2017

By:          /s/ Eric J. Harrington

                Eric J. Harrington

                Chief Financial Officer

EX-32

EXHIBIT 32.1

FIRST HARTFORD CORPORATION

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the quarterly report of First Hartford Corporation (the “Company”) on Form 10-Q for the period ended July 31, 2017 (the “Report”), I, Neil H. Ellis, Chairman and Chief Executive Officer of the Company and I, Eric J. Harrington, Treasurer and Chief Financial Officer of the Company, each certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

1.   to my knowledge, the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2.   the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Neil H. Ellis

    Neil H. Ellis

Chairman of the Board and Chief Executive Officer

Date:  October 10, 2017

/s/ Eric J. Harrington

    Eric J. Harrington

Treasurer and Chief Financial Officer

Date:  October 10, 2017

XML

Document and Entity Information - shares	3 Months Ended
	Jul. 31, 2017	Oct. 06, 2017
Document And Entity Information [Abstract]
Entity Registrant Name	FIRST HARTFORD CORP
Entity Central Index Key	0000036369
Document Type	10-Q
Document Period End Date	Jul. 31, 2017
Amendment Flag	false
Current Fiscal Year End Date	--04-30
Is Entity a Well-known Seasoned Issuer?	No
Is Entity a Voluntary Filer?	No
Is Entity's Reporting Status Current?	Yes
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		2,315,799
Document Fiscal Period Focus	Q1
Document Fiscal Year Focus	2018

XML

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($)	Jul. 31, 2017	Apr. 30, 2017
Real estate and equipment:
Developed properties and property under construction (including $78,114,859 in July and $77,898,958 in April for VIEs)	$ 238,883,938	$ 236,865,867
Equipment and tenant improvements (including $2,446,428 in July and $2,424,964 in April for VIEs)	4,206,723	3,689,442
Total Real estate and equipment, Gross	243,090,661	240,555,309
Less accumulated depreciation and amortization (including $16,447,144 in July and $15,918,495 in April for VIEs)	(48,685,410)	(47,449,316)
Net Real estate and equipment	194,405,251	193,105,993
Property held for sale	2,209,034	11,389,591
Cash and cash equivalents (including $2,512,323 in July and $2,063,103 in April for VIEs)	7,145,794	6,250,757
Cash and cash equivalents - restricted (including $12,398 in July and $396,361 in April for VIEs)	287,683	526,012
Marketable securities (including $1,361,812 in July and $1,538,839 in April for VIEs)	1,361,812	1,538,839
Accounts and notes receivable, less allowance for doubtful accounts of $127,423 as of July 31, 2017 and $135,002 as of April 30, 2017 (including $100,583 in July and $66,543 in April for VIEs)	4,128,421	3,505,541
Other receivables	3,409,636	4,064,876
Deposits and escrow accounts (including $8,514,565 in July and $8,866,586 in April for VIEs)	15,819,894	15,930,999
Prepaid expenses (including $560,435 in July and $327,481 in April for VIEs)	2,109,974	1,644,320
Deferred expenses (including $163,058 in July and $167,273 in April for VIEs)	4,390,477	5,712,547
Investments in affiliates	100	100
Due from related parties and affiliates	2,972	152,776
Deferred tax asset	399,388	671,147
Total assets	235,670,436	244,493,498
Mortgages and notes payable:
Construction loans payable	28,027,318	26,929,537
Mortgages payable (including $64,352,785 in July and $64,598,997 in April for VIEs)	190,859,403	195,763,409
Notes payable (including $1,704,697 in July and $1,704,697 in April for VIEs)	1,704,697	1,704,697
Lines of credit	1,400,000	6,400,000
Less: Deferred debt issuance costs, net (including $1,558,752 in July and $1,575,494 in April for VIEs)	(3,134,493)	(3,067,098)
Total Mortgages and other notes payable	218,856,925	227,730,545
Accounts payable (including $640,328 in July and $569,600 in April for VIEs)	2,860,120	2,915,400
Other payables	4,100,536	4,966,246
Accrued liabilities (including $3,369,771 in July and $3,382,307 in April for VIEs)	6,643,823	5,699,875
Derivative liability	2,227,698	2,023,793
Deferred income (including $226,276 in July and $227,936 in April for VIEs)	492,729	622,461
Other liabilities	1,256,050	1,328,909
Due to related parties and affiliates (including $448,457 in July and $446,990 in April for VIEs)	600,310	598,843
Total liabilities	237,038,191	245,886,072
First Hartford Corporation:
Preferred stock, $1 par value; $.50 cumulative and convertible; authorized 4,000,000 shares; no shares issued and outstanding	0	0
Common stock, $1 par value; authorized 6,000,000 shares; issued 3,211,843 and 3,236,843 shares and outstanding 2,315,799 and 2,340,799 shares as of July 31, 2017 and April 30, 2017	3,211,843	3,236,843
Capital in excess of par	5,043,779	5,093,779
Accumulated deficit	(5,370,001)	(5,612,263)
Accumulated other comprehensive income	0	0
Treasury stock, at cost, 896,044 and 896,044 shares as of July 31, 2017 and April 30, 2017	(4,989,384)	(4,989,384)
Total First Hartford Corporation	(2,103,763)	(2,271,025)
Noncontrolling interests	736,008	878,451
Total shareholders' equity (deficiency)	(1,367,755)	(1,392,574)
Total liabilities and shareholders' equity (deficiency)	$ 235,670,436	$ 244,493,498

XML

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($)	Jul. 31, 2017	Apr. 30, 2017
Developed properties and property under construction	$ 238,883,938	$ 236,865,867
Equipment and tenant improvements	4,206,723	3,689,442
Real estate investment property, Accumulated depreciation and amortization	48,685,410	47,449,316
Cash and cash equivalents, at Carrying Value	7,145,794	6,250,757
Restricted Cash and cash equivalents	287,683	526,012
Marketable securities	1,361,812	1,538,839
Accounts and notes receivable, net	4,128,421	3,505,541
Deposits and escrow accounts	15,819,894	15,930,999
Prepaid expenses	2,109,974	1,644,320
Deferred expenses	4,390,477	5,712,547
Mortgages payable	190,859,403	195,763,409
Notes payable	1,704,697	1,704,697
Deferred debt issuance costs	(3,134,493)	(3,067,098)
Accounts payable	2,860,120	2,915,400
Accrued liabilities	6,643,823	5,699,875
Deferred income	492,729	622,461
Due to related parties and affiliates	$ 600,310	$ 598,843
Preferred Stock par value (in dollars per share)	$ 1.00	$ 1.00
Preferred stock, cumulative and convertible par value (in dollars per share)	$ 0.50	$ .50
Preferred Stock, shares authorized (in shares)	4,000,000	4,000,000
Preferred Stock, shares issued (in shares)	0	0
Preferred Stock, shares outstanding (in shares)	0	0
Common Stock, par value (in dollars per share)	$ 1.00	$ 1.00
Common Stock, shares authorized (in shares)	6,000,000	6,000,000
Common Stock, shares issued (in shares)	3,211,843	3,236,843
Common Stock, shares outstanding (in shares)	2,315,799	2,340,799
Treasury stock, at cost, shares (in shares)	896,044	896,044
Variable Interest Entity, Primary Beneficiary [Member]
Developed properties and property under construction	$ 78,114,859	$ 77,898,958
Equipment and tenant improvements	2,446,428	2,424,964
Real estate investment property, Accumulated depreciation and amortization	16,447,144	15,918,495
Cash and cash equivalents, at Carrying Value	2,512,323	2,063,103
Restricted Cash and cash equivalents	12,398	396,361
Marketable securities	1,361,812	1,538,839
Accounts and notes receivable, net	100,583	66,543
Allowance for doubtful accounts	127,423	135,002
Deposits and escrow accounts	8,514,565	8,866,586
Prepaid expenses	560,435	327,481
Deferred expenses	163,058	167,273
Mortgages payable	64,352,785	64,598,997
Notes payable	1,704,697	1,704,697
Deferred debt issuance costs	(1,558,752)	(1,575,494)
Accounts payable	640,328	569,600
Accrued liabilities	3,369,771	3,382,307
Deferred income	226,276	227,936
Due to related parties and affiliates	$ 448,457	$ 446,990
Preferred Stock par value (in dollars per share)	$ 1.00	$ 1.00
Preferred stock, cumulative and convertible par value (in dollars per share)	$ 0.50	$ 0.50
Preferred Stock, shares authorized (in shares)	4,000,000	4,000,000
Preferred Stock, shares issued (in shares)	0	0
Preferred Stock, shares outstanding (in shares)	0	0
Common Stock, par value (in dollars per share)	$ 1.00	$ 1.00
Common Stock, shares authorized (in shares)	6,000,000	6,000,000
Common Stock, shares issued (in shares)	3,211,843	3,236,843
Common Stock, shares outstanding (in shares)	2,315,799	2,340,799
Treasury stock, at cost, shares (in shares)	896,044	896,044

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CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($)	3 Months Ended
	Jul. 31, 2017	Jul. 31, 2016
Operating revenues:
Rental income	$ 7,796,540	$ 8,066,447
Service income	640,563	1,228,605
Sales of real estate	21,360,000	12,210,051
Other revenues	1,222,265	993,554
Total Operating revenues	31,019,368	22,498,657
Operating costs and expenses:
Rental expenses	4,974,166	5,099,712
Service expenses	1,239,990	1,193,326
Cost of real estate sales	18,623,718	9,623,667
Selling, general and administrative expenses	2,924,064	1,843,825
Total Operating costs and expenses	27,761,938	17,760,530
Income from operations	3,257,430	4,738,127
Non-operating income (expense):
Interest expense	(2,629,789)	(2,589,494)
Other income/ (loss)	(83,418)	21,460
Loss on derivatives (non-cash)	(203,905)	(793,169)
Equity in earnings of unconsolidated subsidiaries	162,860	177,126
Total Non-operating income (expense)	(2,754,252)	(3,184,077)
Income before income taxes	503,178	1,554,050
Income tax expense	365,489	811,647
Consolidated net income	137,689	742,403
Net income attributable to noncontrolling interests	104,573	84,451
Net income attributable to First Hartford Corporation	$ 242,262	$ 826,854
Net income per share - basic	$ 0.10	$ 0.35
Net income per share - diluted	$ 0.10	$ 0.35
Shares used in basic per share computation	2,328,299	2,391,078
Shares used in diluted per share computation	2,328,299	2,391,078

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CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Unaudited) - USD ($)	3 Months Ended
	Jul. 31, 2017	Jul. 31, 2016
Statement of Comprehensive Income [Abstract]
Consolidated net income	$ 137,689	$ 742,403
Other comprehensive income / (loss), net of taxes:
Unrealized gains / (losses) on marketable securities	100,386	(131,304)
Total comprehensive income	238,075	611,099
Amounts attributable to noncontrolling interests:
Net (income)	104,573	84,451
Unrealized (gains) / losses on marketable securities	(100,386)	131,304
Total amounts attributable to noncontrolling interests	4,187	215,755
Comprehensive income attributable to First Hartford Corporation	$ 242,262	$ 826,854

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($)	3 Months Ended
	Jul. 31, 2017	Jul. 31, 2016
Operating activities:
Consolidated net income	$ 137,689	$ 742,403
Adjustments to reconcile consolidated net income to net cash provided by / (used in) operating activities:
Equity in earnings of unconsolidated subsidiaries, net of distributions of $90,000 in 2017 and $90,000 in 2016	(72,859)	(87,126)
Gain on sale of real estate	(2,736,282)	(2,586,384)
Depreciation of real estate and equipment	1,366,512	1,318,924
Amortization of deferred expenses	135,663	232,903
Deferred income taxes	271,759	505,819
Loss on derivatives	203,905	793,169
Changes in operating assets and liabilities:
Accounts, notes and other receivables	32,360	1,191,407
Deposits and escrow accounts	232,025	1,626,526
Prepaid expenses	(465,654)	(415,608)
Deferred expenses	1,119,012	(2,064,363)
Cash and cash equivalents - restricted	238,329	369,135
Accrued liabilities	943,948	(284,131)
Deferred income	(129,732)	583,011
Accounts and other payables	(920,990)	(2,738,244)
Net cash provided by / (used in) operating activities	355,685	(812,559)
Investing activities:
Investments in marketable securities	(96,946)	0
Proceeds from sale of marketable securities	374,359	0
Purchase of equipment and tenant improvements	(647,699)	(61,272)
Proceeds from sale of real estate	21,360,000	12,210,051
Additions to developed properties and properties under construction	(11,461,232)	(4,684,042)
Net cash provided by investing activities	9,528,482	7,464,737
Financing activities:
Distributions to noncontrolling interests	(138,256)	(108,650)
Repurchase of common stock	(75,000)	(79,968)
Proceeds from:
Construction loans	7,793,353	1,785,458
Mortgage loans	2,876,407	920,310
Notes	0	0
Credit lines	0	375,000
Principal payments on:
Construction loans	(1,127,899)	(7,385,755)
Mortgage loans	(13,469,006)	(2,071,417)
Notes	0	0
Credit lines	(5,000,000)	0
Payments (to) / from related parties and affiliates, net	151,271	(498,968)
Net cash used in financing activities	(8,989,130)	(7,063,990)
Net change in cash and cash equivalents	895,037	(411,812)
Cash and cash equivalents, beginning of period	6,250,757	5,982,506
Cash and cash equivalents, end of period	7,145,794	5,570,694
Cash paid during the period for interest	2,672,437	2,497,810
Cash paid during the period for income taxes	60,750	249,148
Debt refinancing in 1st quarter:
New mortgage loans	8,565,000	14,300,000
Debt reduced	(5,567,673)	(5,359,713)
Escrow funded	(120,920)	(8,019,977)
Net cash from refinancing in 1st quarter	$ 2,876,407	$ 920,310

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Parenthetical) - USD ($)	3 Months Ended
	Jul. 31, 2017	Jul. 31, 2016
Statement of Cash Flows [Abstract]
Distributions from unconsolidated subsidiaries	$ 90,000	$ 90,000

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1. Business and Significant Accounting Policies

3 Months Ended

Jul. 31, 2017

Accounting Policies [Abstract]

Business and Significant Accounting Policies

Business

First Hartford Corporation, which was incorporated in Maine in 1909, and its subsidiaries (the Company), is engaged in two business segments: 1) the purchase, development, ownership, management and sale of real estate and 2) providing preferred developer services for two corporate franchise operators (i.e., “Fee for Service”).

Principles of Consolidation

The accompanying unaudited condensed consolidated financial statements include the accounts of the Company, its wholly owned subsidiaries, and all other entities in which the Company has a controlling financial interest, including those where the Company has been determined to be a primary beneficiary of a variable interest entity or meets certain criteria as a sole general partner or managing member in accordance with the consolidation guidance of the Financial Accounting Standards Board Accounting Standards Codification.  As such, included in the unaudited condensed consolidated financial statements are the accounts of Rockland Place Apartments Limited Partnership and Clarendon Hill Somerville Limited Partnership, in which the Company is the sole general partner.  The Company’s ownership percentage in these variable interest entity partnerships is nominal.  All significant intercompany balances and transactions have been eliminated.

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Rule 8.03 of Regulation S-X.  Accordingly, they do not include all of the information and footnotes required by U.S. generally accepted accounting principles for complete financial statements.  In the opinion of management, all adjustments (consisting of normal recurring accruals and adjustments) considered necessary for a fair presentation have been included.  Operating results for the interim periods are not necessarily indicative of the results that may be expected for the entire year.  The condensed consolidated balance sheet as of April 30, 2017 was derived from the audited financial statements for the year then ended.  For further information, refer to the consolidated financial statements and footnotes thereto included in the Company’s annual report on Form 10-K for the fiscal year ended April 30, 2017.

Because the Company is engaged in the development and sale of real estate at various stages of construction, the operating cycle may extend beyond one year.  Accordingly, following the usual practice of the real estate industry, the accompanying condensed consolidated balance sheets are unclassified.

Currently, there are no Accounting Standards Updates (ASUs) that the Company is required to adopt that are likely to have a material effect on its financial statements that have not been previously discussed in the Company’s annual report on Form 10-K for the fiscal year ended April 30, 2017.

Net Income (Loss) Per Common Share

Basic income (loss) per share is computed by dividing the net income (loss) attributable to the common stockholders (the numerator) by the weighted average number of shares of common stock outstanding (the denominator) during the reporting periods. Diluted income (loss) per share is computed by increasing the denominator by the weighted average number of additional shares that could have been outstanding from securities convertible into common stock, such as stock options and warrants (using the “treasury stock” method).

There were no common stock equivalents outstanding at July 31, 2017 or July 31, 2016.

Financial Instruments and Fair Value

The Company’s financial instruments include cash and cash equivalents, accounts receivable, marketable securities, accounts payable, accrued expenses, and debt.  The fair values of accounts receivable, accounts payable and accrued expenses are estimated to approximate their carrying amounts because of their relative short-term nature.  In general, the carrying amount of variable rate debt approximates its fair value.  Further, the carrying amount of fixed rate debt approximates fair value since the interest rates on the debt approximates the Company’s current incremental borrowing rate.  Marketable securities consist of equity securities and are stated at fair value based on the last sale of the period obtained from recognized stock exchanges (i.e. Level 1). Accumulated other comprehensive (loss) income consists solely of unrealized gains (losses) on marketable securities.

Segment Information

The factors used by the Company to identify reportable segments include differences in products and services and segregated operations within the Company. The first segment, “Real Estate Operations” participates in the purchase, development, management, ownership and sale of real estate. Within its second segment, “Fee for Service”, the Company provides preferred developer services to CVS and Cumberland Farms Inc. in certain geographic areas.  Summary financial information for the two reportable segments is as follows:

	Three Months Ended
	July 31,
	2017		2016
Revenues:
Real Estate Operations	$	30,506,118	$	21,424,657
Fee for Service		513,250		1,074,000
Total	$	31,019,368	$	22,498,657
Operating Costs & Expenses:
Real Estate Operations	$	23,961,465	$	14,758,360
Fee for Service		876,409		1,158,345
Administrative Expenses		2,924,064		1,843,825
Total	$	27,761,938	$	17,760,530

All costs after operating expenses are costs of the real estate operation.

The only assets in the balance sheet belonging to the Fee for Service segment is restricted cash of $275,285 on July 31, 2017 and $129,651 on April 30, 2017 and receivables of $3,458,604 on July 31, 2017 and $4,262,302 on April 30, 2017.

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2. Consolidated Variable Interest Entities and Investments in Affiliated Partnerships

3 Months Ended

Jul. 31, 2017

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Consolidated Variable Interest Entities and Investments in Affiliated Partnerships

The Company has consolidated both Rockland and Clarendon based on the express legal rights and obligations provided to it by the underlying partnership agreements and its control of their business activity.  The assets of these partnerships that can only be used to settle their obligations and their liabilities for which creditors (or beneficial interest holders) do not have recourse to the general credit of the Company are shown parenthetically in the line items of the consolidated balance sheets.  A summary of the assets and liabilities of Rockland and Clarendon included in the Company’s condensed consolidated balance sheets follows:

	July 31, 2017			April 30, 2017
Real estate and equipment, net	$	66,412,486		$	66,732,664
Other assets		13,223,182			13,417,929
Total assets		79,635,668			80,150,593
Intercompany profit elimination		(2,690,250	)		(2,719,143	)
	$	76,945,418		$	77,431,450
Mortgages and other notes payable	$	64,498,730		$	64,728,200
Other liabilities		4,234,460			4,179,842
Total liabilities	$	68,733,190		$	68,908,042

The Company accounts for its 50% ownership interest in Dover Parkade, LLC under the equity method of accounting.  A summary of the operating results for this entity follows:

	Three Months Ended
	July 31,
	2017			2016
Dover Parkade, LLC:
Revenue	$	701,909		$	683,913
Expenses		(556,190	)		(509,662	)
Net income	$	145,719		$	174,251

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3. Income Taxes

3 Months Ended

Jul. 31, 2017

Income Tax Disclosure [Abstract]

Income Taxes

The Company files a Federal consolidated tax return to report all income and deductions for its subsidiaries. The Company and its subsidiaries file income tax returns in several states. The tax returns are filed by the entity that owns the real estate or provides services in such state. Some states do not allow a consolidated or combined tax filing. This sometimes creates income taxes to be greater than expected as income for some subsidiaries cannot be offset by other subsidiaries with operating losses.

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4. Litigation

3 Months Ended

Jul. 31, 2017

Litigation

Litigation

Following a site inspection of asbestos abatement activities being conducted at the Spring Gate Apartments in Rockland, Massachusetts (Facility) on April 14, 2017, the Massachusetts Department of Environmental Protection (MassDEP) by letter dated April 21, 2017 requested that Rockland Place Apartments, LP (Company) temporarily cease and desist from any additional asbestos removal, abatement and/or handling activities at the Facility.  Upon receipt of the MassDEP letter, the Company engaged MassDEP in discussions regarding the abatement project.  Following submission to and approval by MassDEP of a work plan addressing the issues raised in MassDEP’s April 21 letter, MassDEP permitted the asbestos abatement work to go forward.  There have been no further enforcement actions taken by MassDEP.

By letters dated May 15, May 16 and May 30, 2017, three attorneys representing tenants in three units at the Facility notified the Company and/or its management company, FHRC Management Corporation, of claims related to environmental conditions at the Facility.  The first of these letters alleges that the tenant and her family have been exposed to and have been living in an apartment containing asbestos for many years.  The second letter claims that the tenant and her three minor children have suffered injuries believed to be caused by the presence of mold and asbestos in the apartment.  The final letter asserts claims with respect to the tenant and her three minor children involving the presence and remediation of asbestos including violation of a tenant’s quiet enjoyment, breach of the warranty of habitability, causation of emotional distress and the use of unfair and deceptive practices under M.G.L. c. 93A.  The first two letters made no specific monetary demand; the third letter demanded $312,600.  All three claims were tendered to the Company’s insurer, which agreed to respond under a reservation of rights.  On July 14, 2017, counsel retained by the insurer provided a timely response to the third letter, adamantly denying the Company’s liability pursuant to M.G.L. c. 93A or for any of the other claims.  By letter dated July 27, 2017, the insurer acknowledged receipt of the three claims, at the same time stating however that as no lawsuit had arisen, it did not have a duty to defend, but nonetheless would continue to investigate. 

At this time, the Company cannot assess the likelihood of an unfavorable outcome or provide any estimate of the amount or range of any potential loss.  There has been no other change in litigation since April 30, 2017.

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5. Refinancings	3 Months Ended
	Jul. 31, 2017
Debt Disclosure [Abstract]
Refinancings	New Orleans, LA – Refinance: On June 30, 2017, the Company refinanced its construction loan on its shopping center property in New Orleans, LA.  The construction loan, which had a principal balance of $5,567,673, was replaced by a mortgage loan of $8,565,000.  The new mortgage loan has an interest rate of 4.75%.  The loan is interest-only until July 1, 2020; thereafter, monthly payments of $44,576 inclusive of principal and interest are due and payable until the maturity date of July 1, 2027, at which time the remaining principal balance must be repaid in full.

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6. Purchases of Real Estate

3 Months Ended

Jul. 31, 2017

Real Estate [Abstract]

Purchases of Real Estate

Houston, TX – Land Purchase: On May 12, 2017, the Company completed its purchase of a parcel of land in Houston, TX for $8,583,235 including closing costs.  This purchase was financed with proceeds from a construction loan of $5,158,210, utilization of the Company’s lines of credit of $2,400,000, and working capital of $1,025,025. Key terms of the construction loan are as follows:  

Loan Amount:	$8,600,000
Maturity Date:	November 15, 2018
Interest Rate:	2.50% plus One Month ICE LIBOR rate, as defined, up to maturity date and 12.0% thereafter.
Payments:	Interest only payable monthly with principal due at maturity.
Guarantee:	The Company (Corporate).

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7. Subsequent Events

3 Months Ended

Jul. 31, 2017

Subsequent Events [Abstract]

Subsequent Events

The Company has evaluated for subsequent events through October 10, 2017, the date the financial statements were issued.

Montgomery, TX – Land Purchase: On August 16, 2017, the Company completed its purchase of a 26.43 acre parcel of land in Montgomery, TX for $6,672,754 including closing costs.  This purchase was financed with proceeds from a land loan of $4,150,000, utilization of the Company’s lines of credit of $2,360,000, and working capital of $162,754. Key terms of the construction loan are as follows:  

Loan Amount:	$4,150,000
Maturity Date:	February 16, 2019
Interest Rate:	3.50% plus One Month ICE LIBOR rate, as defined, up to maturity date and 12.0% thereafter.
Payments:	Interest only payable monthly with principal due at maturity.
Guarantee:	The Company (Corporate).

East Providence, RI – Sale of Property: On September 7, 2017, the Company sold its property held for sale in East Providence, RI for $830,000 (cost of approximately $566,672).

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1. Business and Significant Accounting Policies (Policies)

3 Months Ended

Jul. 31, 2017

Accounting Policies [Abstract]

Business

Business

First Hartford Corporation, which was incorporated in Maine in 1909, and its subsidiaries (the Company), is engaged in two business segments: 1) the purchase, development, ownership, management and sale of real estate and 2) providing preferred developer services for two corporate franchise operators (i.e., “Fee for Service”).

Principles of Consolidation

Principles of Consolidation

The accompanying unaudited condensed consolidated financial statements include the accounts of the Company, its wholly owned subsidiaries, and all other entities in which the Company has a controlling financial interest, including those where the Company has been determined to be a primary beneficiary of a variable interest entity or meets certain criteria as a sole general partner or managing member in accordance with the consolidation guidance of the Financial Accounting Standards Board Accounting Standards Codification.  As such, included in the unaudited condensed consolidated financial statements are the accounts of Rockland Place Apartments Limited Partnership and Clarendon Hill Somerville Limited Partnership, in which the Company is the sole general partner. The Company’s ownership percentage in these variable interest entity partnerships is nominal.  All significant intercompany balances and transactions have been eliminated.

Basis of Presentation

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Rule 8.03 of Regulation S-X.  Accordingly, they do not include all of the information and footnotes required by U.S. generally accepted accounting principles for complete financial statements.  In the opinion of management, all adjustments (consisting of normal recurring accruals and adjustments) considered necessary for a fair presentation have been included.  Operating results for the interim periods are not necessarily indicative of the results that may be expected for the entire year.  The condensed consolidated balance sheet as of April 30, 2017 was derived from the audited financial statements for the year then ended.  For further information, refer to the consolidated financial statements and footnotes thereto included in the Company’s annual report on Form 10-K for the fiscal year ended April 30, 2017.

Because the Company is engaged in the development and sale of real estate at various stages of construction, the operating cycle may extend beyond one year.  Accordingly, following the usual practice of the real estate industry, the accompanying condensed consolidated balance sheets are unclassified.

Currently, there are no Accounting Standards Updates (ASUs) that the Company is required to adopt that are likely to have a material effect on its financial statements that have not been previously discussed in the Company’s annual report on Form 10-K for the fiscal year ended April 30, 2017.

Net Income (Loss) Per Common Share

Net Income (Loss) Per Common Share

Basic income (loss) per share is computed by dividing the net income (loss) attributable to the common stockholders (the numerator) by the weighted average number of shares of common stock outstanding (the denominator) during the reporting periods. Diluted income (loss) per share is computed by increasing the denominator by the weighted average number of additional shares that could have been outstanding from securities convertible into common stock, such as stock options and warrants (using the “treasury stock” method).

There were no common stock equivalents outstanding at July 31, 2017 or July 31, 2016.

Financial Instruments and Fair Value

Financial Instruments and Fair Value

The Company’s financial instruments include cash and cash equivalents, accounts receivable, marketable securities, accounts payable, accrued expenses, and debt.  The fair values of accounts receivable, accounts payable and accrued expenses are estimated to approximate their carrying amounts because of their relative short-term nature.  In general, the carrying amount of variable rate debt approximates its fair value.  Further, the carrying amount of fixed rate debt approximates fair value since the interest rates on the debt approximates the Company’s current incremental borrowing rate.  Marketable securities consist of equity securities and are stated at fair value based on the last sale of the period obtained from recognized stock exchanges (i.e. Level 1). Accumulated other comprehensive (loss) income consists solely of unrealized gains (losses) on marketable securities.

Segment Information

Segment Information

The factors used by the Company to identify reportable segments include differences in products and services and segregated operations within the Company. The first segment, “Real Estate Operations” participates in the purchase, development, management, ownership and sale of real estate. Within its second segment, “Fee for Service”, the Company provides preferred developer services to CVS and Cumberland Farms Inc. in certain geographic areas.  Summary financial information for the two reportable segments is as follows:

	Three Months Ended
	July 31,
	2017		2016
Revenues:
Real Estate Operations	$	30,506,118	$	21,424,657
Fee for Service		513,250		1,074,000
Total	$	31,019,368	$	22,498,657
Operating Costs & Expenses:
Real Estate Operations	$	23,961,465	$	14,758,360
Fee for Service		876,409		1,158,345
Administrative Expenses		2,924,064		1,843,825
Total	$	27,761,938	$	17,760,530

All costs after operating expenses are costs of the real estate operation.

The only assets in the balance sheet belonging to the Fee for Service segment is restricted cash of $275,285 on July 31, 2017 and $129,651 on April 30, 2017 and receivables of $3,458,604 on July 31, 2017 and $4,262,302 on April 30, 2017.

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1. Business and Significant Accounting Policies (Tables)

3 Months Ended

Jul. 31, 2017

Accounting Policies [Abstract]

Schedule of Segment Reporting Information, by Segment

	Three Months Ended
	July 31,
	2017		2016
Revenues:
Real Estate Operations	$	30,506,118	$	21,424,657
Fee for Service		513,250		1,074,000
Total	$	31,019,368	$	22,498,657
Operating Costs & Expenses:
Real Estate Operations	$	23,961,465	$	14,758,360
Fee for Service		876,409		1,158,345
Administrative Expenses		2,924,064		1,843,825
Total	$	27,761,938	$	17,760,530

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2. Consolidated Variable Interest Entities and Investments in Affiliated Partnerships (Tables)

3 Months Ended

Jul. 31, 2017

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Summary of assets and liabilities of Rockland and Clarendon

	July 31, 2017			April 30, 2017
Real estate and equipment, net	$	66,412,486		$	66,732,664
Other assets		13,223,182			13,417,929
Total assets		79,635,668			80,150,593
Intercompany profit elimination		(2,690,250	)		(2,719,143	)
	$	76,945,418		$	77,431,450
Mortgages and other notes payable	$	64,498,730		$	64,728,200
Other liabilities		4,234,460			4,179,842
Total liabilities	$	68,733,190		$	68,908,042

Schedule of the operating results of Dover Parkade, LLC

	Three Months Ended
	July 31,
	2017			2016
Dover Parkade, LLC:
Revenue	$	701,909		$	683,913
Expenses		(556,190	)		(509,662	)
Net income	$	145,719		$	174,251

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6. Purchases of Real Estate (Tables)

3 Months Ended

Jul. 31, 2017

Real Estate [Abstract]

Real estate purchase details

Loan Amount:	$8,600,000
Maturity Date:	November 15, 2018
Interest Rate:	2.50% plus One Month ICE LIBOR rate, as defined, up to maturity date and 12.0% thereafter.
Payments:	Interest only payable monthly with principal due at maturity.
Guarantee:	The Company (Corporate).

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1. Business and Significant Accounting Policies (Details-Segment) - USD ($)	3 Months Ended
	Jul. 31, 2017	Jul. 31, 2016
Revenues:
TOTAL	$ 31,019,368	$ 22,498,657
Operating Costs & Expenses:
TOTAL	27,761,938	17,760,530
Real Estate Operations [Member]
Revenues:
TOTAL	30,506,118	21,424,657
Operating Costs & Expenses:
TOTAL	23,961,465	14,758,360
Fee for Service [Member]
Revenues:
TOTAL	513,250	1,074,000
Operating Costs & Expenses:
TOTAL	876,409	1,158,345
Administrative Expense [Member]
Operating Costs & Expenses:
TOTAL	$ 2,924,064	$ 1,843,825

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1. Business and Significant Accounting Policies (Details Narrative) - USD ($)	3 Months Ended
	Jul. 31, 2017	Jul. 31, 2016	Apr. 30, 2017
Accounting Policies [Line Items]
Common stock equivalents	0	0
Restricted cash	$ 287,683		$ 526,012
Receivables	3,409,636		4,064,876
Fee for Service [Member]
Accounting Policies [Line Items]
Restricted cash	275,285		129,651
Receivables	$ 3,458,604		$ 4,262,302

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2. Consolidated Variable Interest Entities and Investments in Affiliated Partnerships (Details-Assets and Liabilities) - USD ($)	Jul. 31, 2017	Apr. 30, 2017
Segment Reporting, Asset Reconciling Item [Line Items]
Real estate and equipment, net	$ 194,405,251	$ 193,105,993
Total assets	235,670,436	244,493,498
Mortgages and other notes payable	218,856,925	227,730,545
Other liabilities	1,256,050	1,328,909
Total liabilities	237,038,191	245,886,072
Rockland and Clarendon [Member]
Segment Reporting, Asset Reconciling Item [Line Items]
Real estate and equipment, net	66,412,486	66,732,664
Other assets	13,223,182	13,417,929
Total assets	79,635,668	80,150,593
Intercompany profit elimination	(2,690,250)	(2,719,143)
Total assets	76,945,418	77,431,450
Mortgages and other notes payable	64,498,730	64,728,200
Other liabilities	4,234,460	4,179,842
Total liabilities	$ 68,733,190	$ 68,908,042

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2. Consolidated Variable Interest Entities and Investments in Affiliated Partnerships (Details-operating results) - Dover Parkade, LLC [Member] - USD ($)	3 Months Ended
	Jul. 31, 2017	Jul. 31, 2016
Revenue	$ 701,909	$ 683,913
Expenses	(556,190)	(509,662)
Net Income	$ 145,719	$ 174,251

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2. Consolidated Variable Interest Entities and Investments in Affiliated Partnerships (Details Narrative)	Jul. 31, 2017
Dover Parkade, LLC [Member]
Schedule of Equity Method Investments [Line Items]
Equity Method Investment, Ownership Percentage	50.00%

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5. Refinancings (Details Narrative) - New Orleans [Member]	3 Months Ended
	Jul. 31, 2017 USD ($)
Construction Loan [Member]
Construction loan refinanced	$ 5,567,673
Mortgage Loan [Member]
Mortgage loan, periodic payment terms	$44,576 monthly
Mortgage loan payable	$ 8,565,000
Debt maturity date	Jul. 01, 2027
Debt stated interest rate	4.75%

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6. Purchases of Real Estate (Details) - Houston, Texas [Member]	3 Months Ended
	Jul. 31, 2017 USD ($)
Loan amount	$ 8,600,000
Debt maturity date	Nov. 15, 2018
Debt interest rate	2.50% plus One Month ICE LIBOR rate, as defined, up to maturity date and 12.0% thereafter.
Debt payment terms	Interest only payable monthly with principal due at maturity.
Debt guarantors	The Company (Corporate).

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6. Purchases of Real Estate (Details Narrative) - USD ($)	Jul. 31, 2017	May 12, 2017	Apr. 30, 2017
Construction loans payable	$ 28,027,318		$ 26,929,537
Lines of credit	$ 1,400,000		$ 6,400,000
Houston, Texas [Member]
Land cost		$ 8,583,235
Construction loans payable		5,158,210
Lines of credit		2,400,000
Working capital		$ 1,025,025