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

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 ~~January~~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)
Maine	01-0185800
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
149 Colonial Road, Manchester, CT	06042
(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)

First Hartford Corporation

(Exact name of registrant as specified in its charter)

Maine 01-0185800

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

149 Colonial Road, Manchester, CT 06042

(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~~

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,~~340~~315,799 as of ~~April~~October 246, 2017

FIRST HARTFORD CORPORATION AND SUBSIDIARIES

INDEX

PART I.	FINANCIAL INFORMATION	PAGE
Item 1.	Financial Statements (Unaudited)
	Condensed Consolidated Balance Sheets –January 31, 2017 and April 30, 2016	3 - 4
	Condensed Consolidated Balance Sheets – July 31, 2017 and April 30, 2017	3 - 4
	Condensed Consolidated Statements of Income (Loss) for the Three and Nine Months Ended January 31, 2017 and 2016	5
	Condensed Consolidated Statements of Income for the Three Months Ended July 31, 2017 and 2016	5
	Condensed Consolidated Statements of Comprehensive Income (Loss) for the Three and Nine Months Ended January 31, 2017 and 2016	6
	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 and Nine Months Ended January 31, 2017 and 2016	7 - 8
	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 - 1613
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	1714 - 2219
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	2219
Item 4.	Controls and Procedures	2319
PART II.	OTHER INFORMATION
Item 1.	Legal Proceedings	2420
Item 1A.	Risk Factors	2420
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	~~24 - 25~~20
Item 3.	Defaults Upon Senior Securities	2520
Item 4.	Mine Safety Disclosures	2520
Item 5.	Other Information	2521
Item 6.	Exhibits	2621
	Signatures	2722
	Exhibits	28 - 30

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

ASSETS

	January 31, 2017	April 30, 2016
	July 31, 2017	April 30, 2017
Real estate and equipment:
Developed properties and property under construction (including $77,145,096 in January and $74,693,823 in April for VIEs)	$234,316,115	$228,733,956
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 $2,368,733 in January and $2,425,896 in April for VIEs)	3,697,988	3,763,420
Equipment and tenant improvements (including $2,446,428 in July and $2,424,964 in April for VIEs)	4,206,723	3,689,442
	238,014,103	232,497,376
	243,090,661	240,555,309
Less accumulated depreciation and amortization (including $15,395,079 in January and $13,827,009 in April for VIEs)	46,112,211	42,654,076
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)
	191,901,892	189,843,300
	194,405,251	193,105,993
Property held for sale	62,~~985~~209,~~417~~034	1511,~~422~~389,~~312~~591
Cash and cash equivalents (including $2,554,151 in January and $1,507,163 in April for VIEs)	7,446,671	5,982,506
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 $398,274 in January and $406,749 in April for VIEs)	735,400	2,070,963
Cash and cash equivalents – restricted (including $12,398 in July and $396,361 in April for VIEs)	287,683	526,012
Marketable securities (including $1,036,716 in January and $1,601,795 in April for VIEs)	1,036,716	1,601,795
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 $132,359 as of January 31, 2017 and $769,961 as of April 30, 2016 (including $94,725 in January and $27,651 in April for VIEs)	3,309,520	3,959,574
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	53,~~806~~409,~~387~~636	54,~~956~~064,~~103~~876
Deposits and escrow accounts (including $9,884,346 in January and $4,137,450 in April for VIEs)	16,744,960	9,937,588
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 $313,811 in January and $306,547 in April for VIEs)	1,652,348	1,438,759
Prepaid expenses (including $560,435 in July and $327,481 in April for VIEs)	2,109,974	1,644,320
Deferred expenses (including $171,488 in January and $184,722 in April for VIEs)	5,712,564	2,952,630
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	762,~~731~~972	~~159~~152,~~954~~776
Deferred tax asset	~~890~~399,~~771~~388	2671,~~130,776~~147
Total assets	$~~242~~235,~~299~~670,~~477~~436	$~~241~~244,~~456~~493,~~360~~498

See accompanying notes.

~~FIRST HARTFORD CORPORATION AND SUBSIDIARIESCONDENSED CONSOLIDATED BALANCE SHEETS (continued)(Unaudited)~~ 3

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

LIABILITIES AND SHAREHOLDERS’ EQUITY (DEFICIENCY)

	January 31, 2017	April 30, 2016
	July 31, 2017	April 30, 2017
Liabilities:
Mortgages and notes payable:
Construction loans payable	$2628,~~733~~027,~~781~~318	$6826,~~031~~929,~~502~~537
Mortgages payable (including $64,842,756 in January and $56,580,047 in April for VIEs)	195,808,687	149,119,630
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 January and $1,704,697 in April for VIEs)	1,704,697	1,744,697
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	21,~~250~~400,000	26,~~652~~400,~~091~~000
Less: Deferred debt issuance costs, net (including $1,592,205 in January and $1,151,746 in April for VIEs)	(3,247,153)	(1,837,083)
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)
	223,250,012	219,710,837
	218,856,925	227,730,545
Accounts payable (including $1,030,302 in January and $961,884 in April for VIEs)	3,473,489	3,701,702
Accounts payable (including $640,328 in July and $569,600 in April for VIEs)	2,860,120	2,915,400
Other payables	64,~~846~~100,~~231~~536	84,~~843~~966,~~015~~246
Accrued liabilities (including $3,275,643 in January and $3,254,953 in April for VIEs)	4,503,417	6,124,930
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,~~266~~227,~~157~~698	42,~~693~~023,~~209~~793
Deferred income (including $229,596 in January and $254,576 in April for VIEs)	543,292	677,694
Deferred income (including $226,276 in July and $227,936 in April for VIEs)	492,729	622,461
Other liabilities	1,~~378~~256,~~345~~050	1,~~654~~328,~~361~~909
Due to related parties and affiliates (including $466,421 in January and $430,269 in April for VIEs)	669,105	602,121
Due to related parties and affiliates (including $448,457 in July and $446,990 in April for VIEs)	600,310	598,843
	242,930,048	246,007,869
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 3,273,609 and 3,298,609 shares and outstanding 2,377,565 and 2,404,590 shares as of January 31, 2017 and April 30, 2016	3,273,609	3,298,609
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,~~148~~043,~~928~~779	5,~~198~~093,~~928~~779
Accumulated deficit	(45,~~780~~370,~~855~~001)	(85,~~600~~612,~~495~~263)
Accumulated other comprehensive income	-0-	-0-
Treasury stock, at cost, 896,044 and 894,019 shares as of January 31, 2017 and April 30, 2016	(4,989,384)	(4,984,416)
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	(12,~~347~~103,~~702~~763)	(52,~~087~~271,~~374~~025)
Noncontrolling interests	~~717~~736,~~131~~008	~~535~~878,~~865~~451
Total shareholders’ equity (deficiency)	(~~630~~1,~~571~~367,755)	(41,~~551~~392,~~509~~574)
Total liabilities and shareholders’ equity (deficiency)	$~~242~~235,~~299~~670,~~477~~436	$~~241~~244,~~456~~493,~~360~~498

See accompanying notes.

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

	Three Months Ended		~~Nine Months Ended~~
	Jan. 31, 2017	Jan. 31, 2016	Jan. 31, 2017	Jan. 31, 2016
	July 31, 2017	July 31, 2016
Operating revenues:
Rental income	$87,~~095~~796,~~209~~540	$78,~~696~~066,~~324~~447	~~$24,023,744~~	~~$22,686,977~~
Service income	1640,~~099,684~~563	1,~~123~~228,~~763~~605	~~3,928,067~~	~~4,693,656~~
Sales of real estate	1521,~~778~~360,~~442~~000	~~-0-~~12,210,051	~~34,373,493~~	~~11,350,182~~
Other revenues	1,~~077~~222,~~452~~265	1993,~~013,047~~554	~~2,984,212~~	~~2,721,605~~
	26,050,787	9,833,134	65,309,516	41,452,420
	31,019,368	22,498,657
Operating costs and expenses:
Rental expenses	4,~~949~~974,~~847~~166	5,~~383~~099,~~445~~712	~~15,115,039~~	~~15,858,695~~
Service expenses	1,~~333~~239,~~691~~990	~~955~~1,~~683~~193,326	~~3,863,958~~	~~4,033,933~~
Cost of real estate sales	1318,~~589~~623,~~022~~718	339,~~246~~623,667	~~27,692,903~~	~~8,708,136~~
Selling, general and administrative expenses	2,~~460~~924,~~473~~064	1,~~895~~843,~~622~~825	~~6,907,319~~	~~5,274,167~~
	22,333,033	8,267,996	53,579,219	33,874,931
	27,761,938	17,760,530
Income from operations	3,~~717~~257,~~754~~430	14,~~565~~738,~~138~~127	~~11,730,297~~	~~7,577,489~~
Non-operating income (expense):
Interest expense	(2,~~524~~629,~~603~~789)	(2,~~201~~589,~~569~~494)	~~(7,707,422)~~	~~(6,853,324)~~
Gain on voluntary foreclosure	-0-	-0-	-0-	2,649,850
Other income / (loss)	(83,418)	21,460
Other income	30,745	216,746	69,850	597,962
Loss on derivatives (non-cash)	(203,905)	(793,169)
Gain (loss) on derivatives (non-cash)	2,883,917	606,601	2,427,052	(545,078)
Equity in earnings of unconsolidated subsidiaries	162,860	177,126
Loss on impairment	-0-	(330,700)	-0-	(330,700)
	(2,754,252)	(3,184,077)
Loss on defeasance	(437,776)	-0-	(437,776)	-0-
Income before income taxes	503,178	1,554,050
Equity in earnings of unconsolidated subsidiaries	182,654	195,538	546,016	552,666
Income tax expense	365,489	811,647
	134,937	(1,513,384)	(5,102,280)	(3,928,624)
Consolidated net income	137,689	742,403
Income before income taxes	3,852,691	51,754	6,628,017	3,648,865
Net loss attributable to noncontrolling interests	104,573	84,451
Income tax expense (benefit)	565,065	(526,893)	1,617,159	1,067,218
Net income attributable to First Hartford Corporation	$242,262	$826,854
Consolidated net income	3,287,626	578,647	5,010,858	2,581,647
Net income per share – basic	$0.10	$0.35
Net (income) attributable to noncontrolling interests	(1,202,072)	(706,132)	(1,191,218)	(561,725)
Net income per share – diluted	$0.10	$0.35
Net income (loss) attributable to First Hartford Corporation	$2,085,554	$(127,485)	$3,819,640	$2,019,922
Shares used in basic per share computation	2,328,299	2,391,078
Net income (loss) per share – basic	$0.88	$(0.05)	$1.60	$0.84
Shares used in diluted per share computation	2,328,299	2,391,078
Net income (loss) per share – diluted	$0.88	$(0.05)	$1.60	$0.84
Shares used in basic per share computation	2,377,565	2,406,679	2,384,321	2,408,260
Shares used in diluted per share computation	2,377,565	2,406,679	2,384,321	2,408,260

See accompanying notes.

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

	Three Months Ended		~~Nine Months Ended~~
	Jan. 31, 2017	Jan. 31, 2016	Jan. 31, 2017	Jan. 31, 2016
	July 31, 2017	July 31, 2016
Consolidated net income	$3137,~~287,626~~689	$~~578~~742,~~647~~403	~~$5,010,858~~	~~$2,581,647~~
Other comprehensive income (loss), net of taxes:
Other comprehensive income / (loss), net of taxes:
Unrealized gains (losses) on marketable securities	160,436	(416,087)	77,517	(572,347)
Unrealized gains / (losses) on marketable securities	100,386	(131,304)
Consolidated comprehensive income	3,448,062	162,560	5,088,375	2,009,300
Total comprehensive income	238,075	611,099
Amounts attributable to noncontrolling interests:
Net (income)	(1,202,072)	(706,132)	(1,191,218)	(561,725)
Net loss	104,573	84,451
Unrealized (gains) losses on marketable securities	(160,436)	317,497	(77,517)	476,532
Unrealized (gains) / losses on marketable securities	(100,386)	131,304
	(1,362,508)	(388,635)	(1,268,735)	(85,193)
	4,187	215,755
Comprehensive income (loss) attributable to First Hartford Corporation	$2,085,554	$(226,075)	$3,819,640	$1,924,107
Comprehensive income attributable to First Hartford Corporation	$242,262	$826,854

See accompanying notes.

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

	Nine Months Ended
	Three Months Ended
	January 31, 2017	January 31, 2016
	July 31, 2017	July 31, 2016
Operating activities:
Consolidated net income	$5137,~~010,858~~689	$2742,~~581,647~~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 $270,000 in 2017 and $270,000 in 2016	(276,016)	(282,666)
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 voluntary foreclosure	-0-	(2,649,850)
Gain on sale of real estate	(2,736,282)	(2,586,384)
Gain on sale of real estate	(6,680,590)	(2,642,046)
Depreciation of real estate and equipment	1,366,512	1,318,924
Loss on impairment	-0-	330,700
Amortization of deferred expenses	135,663	232,903
Depreciation of real estate and equipment	4,064,791	3,918,524
Deferred income taxes	271,759	505,819
Amortization of deferred expenses	541,234	280,963
Loss on derivatives	203,905	793,169
Deferred income taxes	1,240,005	751,835
Loss / (gain) on derivatives	(2,427,052)	545,078
Changes in operating assets and liabilities:
Accounts, notes and other receivables	~~799~~32,~~770~~360	81,~~062~~191,~~456~~407
Deposits and escrow accounts	3232,~~705,133~~025	~~658~~1,~~663~~626,526
Prepaid expenses	(~~213~~465,~~589~~654)	(~~342~~415,~~823~~608)
Deferred expenses	(41,~~711~~119,~~238)~~012	~~860~~(2,~~782~~064,363)
Cash and cash equivalents – restricted	1238,~~335,563~~329	(1369,~~610,716)~~135
Accrued liabilities	(1943,~~621,513)~~948	(~~580~~284,~~280~~131)
Deferred income	(~~134~~129,~~402~~732)	61583,~~767~~011
Accounts and other payables	(2920,~~224,997~~990)	(32,~~978~~738,~~261~~244)
Net cash provided by / (used in) operating activities	(1355,~~592,043)~~685	5(812,~~965,773~~559)
Investing activities:
Investments in marketable securities	~~-0-~~(96,946)	~~(3,059,611)~~-0-
Proceeds from sale of marketable securities	~~642~~374,~~596~~359	~~5,084,737~~-0-
Purchase of equipment and tenant improvements	(~~125~~647,~~762~~699)	(7061,~~894~~272)
Proceeds from sale of real estate	3421,~~373~~360,~~493~~000	1112,~~350~~210,~~182~~051
Additions to developed properties and properties under construction	(2511,~~253~~461,~~629~~232)	(364,~~662~~684,~~700~~042)
Net cash provided by / (used in) investing activities	9,636,698	(23,358,286)
Net cash provided by investing activities	9,528,482	7,464,737

See accompanying notes.

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

	Nine Months Ended
	Three Months Ended
	January 31, 2017	January 31, 2016
	July 31, 2017	July 31, 2016
Financing activities:
Distributions to noncontrolling interests	$(1138,~~087,469~~256)	$(1108,~~388,895~~650)
Repurchase of common stock	(7975,~~968~~000)	(1379,~~084~~968)
Proceeds from:
Construction loans	107,~~086~~793,~~324~~353	191,~~552~~785,~~513~~458
Mortgage loans	102,~~564~~876,~~657~~407	1920,~~312,500~~310
Notes	-0-	-0-
Credit lines	~~1,625,000~~-0-	1375,~~682,928~~000
Principal payments on:
Construction loans	(131,~~051~~127,~~475~~899)	(67,~~106~~385,~~437~~755)
Mortgage loans	(1213,~~720~~469,~~675~~006)	(2,~~497~~071,~~505~~417)
Notes	~~(40,000)~~-0-	-0-
Credit lines	(25,~~027~~000,~~091~~000)	-0-
Payments (to) / from related parties and affiliates, net	~~150~~151,~~207~~271	~~616~~(498,~~838~~968)
Net cash provided by / (used in) financing activities	(6,580,490)	13,158,858
Net cash used in financing activities	(8,989,130)	(7,063,990)
Net change in cash and cash equivalents	1895,~~464,165~~037	(4411,~~233,655~~812)
Cash and cash equivalents, beginning of period	56,~~982~~250,~~506~~757	95,~~698~~982,~~341~~506
Cash and cash equivalents, end of period	$7,~~446~~145,~~671~~794	$5,~~464~~570,~~686~~694
Cash paid during the period for interest	$72,~~532~~672,~~799~~437	$62,~~689~~497,~~475~~810
Cash paid during the period for income taxes	$~~346~~60,~~316~~750	$~~727~~249,~~223~~148
Debt refinancing in 1st quarter:	$14,300,000	$39,000,000
Debt refinancing in 1st quarter: New mortgage loans	$8,565,000	$14,300,000
New mortgage loans	(5,359,713)	(39,723,828)
Debt reduced	(5,567,673)	(5,359,713)
Debt reduced	(8,019,977)	-0-
Escrow funded	(120,920)	(8,019,977)
Escrow funded	$920,310	$(723,828)
Net cash from refinancing in 1st quarter	$2,876,407	$920,310
Net cash from refinancing in 1st quarter
Debt refinancing in 2nd quarter:
New mortgage loan	$32,500,000	$-0-
Debt reduced	(31,030,767)	(-0-)
Escrow funded	(1,100,000)	(-0-)
Net cash from refinancing in 2nd quarter	$369,233	$-0-
Debt refinancing in 3rd quarter:
New mortgage loan	$21,186,745	$-0-
Debt reduced	(18,139,103)	(-0-)
Escrow funded	(1,392,528)	(-0-)
Net cash from refinancing in 3rd quarter	$1,655,114	$-0-

See accompanying notes.

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~~ required by U.S. generally accepted accounting principles for complete ~~financial~~ 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, ~~2016 was~~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~~ fiscal year ended April 30, ~~2016~~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.

~~In February 2016~~Currently, ~~the FASB~~there ~~issued~~are no Accounting Standards ~~Update~~Updates (~~ASU~~ASUs) ~~No. 2016-02, Leases, (Topic~~ ~~842),~~that ~~which~~the Company is ~~intended~~required to ~~improve~~adopt ~~financial reporting around leasing transactions. The ASU affects all companies and other organizations~~ that ~~engage in~~are ~~lease~~likely ~~transactions~~to ~~(both~~have ~~lessee~~a ~~and~~material ~~lessor) that lease assets such as real~~effect ~~estate~~on ~~and~~its ~~manufacturing~~financial ~~equipment.~~statements ~~This ASU will require organizations~~ that ~~lease~~ ~~assets—referred~~have tonot asbeen ~~“leases”—to~~previously ~~recognize~~discussed onin the ~~balance sheet the~~ ~~assets~~Company’s ~~and~~annual ~~liabilities~~report ~~for~~on ~~the~~Form ~~rights and obligations created by those leases. ASU No. 2016~~10-02K ~~is effective~~ for ~~fiscal years and interim periods within those years beginning January 1, 2019. The Company is in process of assessing~~ the ~~impact~~fiscal ofyear ~~the~~ended ~~adoption~~April ~~of ASU No. 2016-02 on its financial position~~30, ~~results of operations and cash flows~~2017.

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

1. Business and Significant Accounting Policies (continued):

Basis of Presentation (concluded)

In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments. The ASU provides guidance on how certain cash receipts and cash payments are to be presented and classified in the statement of cash flows. For public entities, ASU 2016-15 is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. Early adoption is permitted. The Company is currently evaluating the potential impact of adopting this guidance on its consolidated financial statements.

For further discussions on Accounting Standard Updates, refer to the Company’s annual report on Form 10-K for the fiscal year ended April 30, 2016.

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 ~~January~~July 31, 2017 or ~~January~~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.

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

1. Business and Significant Accounting Policies (concluded):

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		~~Nine Months Ended~~
	January 31		January 31
	July 31,
	2017	2016	~~2017~~	~~2016~~
Revenues:
Real Estate Operations	$2530,~~115~~506,~~037~~118	$821,~~864~~424,~~634~~657	~~$61,809,016~~	~~$37,141,920~~
Fee for Service	~~935~~513,~~750~~250	~~968~~1,~~500~~074,000	~~3,500,500~~	~~4,310,500~~
Total	$2631,~~050~~019,~~787~~368	$922,~~833~~498,~~134~~657	~~$65,309,516~~	~~$41,452,420~~
Operating Costs & Expenses:
Real Estate Operations	$1823,~~534~~961,~~933~~465	$514,~~235~~758,~~185~~360	~~$42,844,271~~	~~$24,626,681~~
Fee for Service	1876,~~337,627~~409	1,~~137~~158,~~189~~345	~~3,827,629~~	~~3,974,083~~
Administrative Expenses	2,~~460~~924,~~473~~064	1,~~895~~843,~~622~~825	~~6,907,319~~	~~5,274,167~~
Total	$2227,~~333~~761,~~033~~938	$817,~~267~~760,~~996~~530	~~$53,579,219~~	~~$33,874,931~~

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 $337,126 on January 31, 2017 and $1,664,214 on April 30, 2016 and receivables of $5,806,387 on January 31, 2017 and $5,956,103 on April 30, 2016. 10

11FIRST HARTFORD CORPORATION AND SUBSIDIARIES

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

(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:

	January 31, 2017	April 30, 2016
	July 31, 2017	April 30, 2017
Real estate and equipment, net	$66,~~474~~412,~~882~~486	$6566,~~735~~732,~~521~~664
Other assets	1413,~~436~~223,~~390~~182	813,~~195~~417,~~007~~929
Total assets	8079,~~911~~635,~~272~~668	7380,~~930~~150,~~528~~593
Intercompany profit elimination	(2,~~748~~690,~~037~~250)	(2,~~863~~719,~~451~~143)
Total assets	$78,163,235	$71,067,077
	$76,945,418	$77,431,450
Mortgages and other notes payable	$64,~~955~~498,~~248~~730	$5764,~~132~~728,~~998~~200
Other liabilities	4,~~529~~234,~~199~~460	4,~~471~~179,~~413~~842
Total liabilities	$6968,~~484~~733,~~447~~190	$6168,~~604~~908,~~411~~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		~~Nine Months Ended~~
	January 31, 2017	January 31, 2016	January 31, 2017	January 31, 2016
	July 31,
Dover Parkade, LLC:
	2017	2016
Revenue	$673,655	$639,762	$2,069,918	$1,964,558
Dover Parkade, LLC:
Expenses	488,348	428,685	1,517,886	1,399,226
Revenue	$701,909	$683,913
Net income	$185,307	$211,077	$552,032	$565,332
Expenses	(556,190)	(509,662)
Net income	$145,719	$174,251

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.

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

4. Litigation:

OnFollowing ~~September~~a 7,site ~~2016,~~inspection of asbestos abatement activities being conducted at the Spring Gate Apartments in Rockland, Massachusetts ~~Company~~(Facility) ~~was~~on ~~notified~~April it14, ~~lost~~2017, the ~~first~~Massachusetts Department of ~~two~~Environmental Protection ~~companion~~(MassDEP) ~~lawsuits~~by ~~against~~letter ~~a former~~dated ~~tenant~~April ~~for~~21, ~~wrongful~~2017 ~~termination~~requested ofthat ~~its~~Rockland Place ~~separate~~Apartments, ~~leases~~LP at(Company) ~~two~~temporarily ofcease ~~the~~and desist from any additional ~~Company’s~~asbestos ~~commercial~~removal, ~~shopping~~abatement ~~centers~~and/or handling activities at the Facility. ~~After~~Upon receipt ~~evaluating~~of ~~its~~the ~~options~~MassDEP letter, the Company ~~settled~~engaged ~~both~~MassDEP ~~lawsuits~~in ~~with~~discussions regarding the ~~plaintiff~~abatement byproject. Following ~~agreeing~~submission to ~~pay~~and ~~$200,000~~approval toby ~~cover~~MassDEP ~~all~~of ~~claims,~~a ~~including~~work ~~reimbursement~~plan ofaddressing ~~defendant’s~~the ~~claimed~~issues ~~legal~~raised ~~fees~~in ~~and~~MassDEP’s April 21 ~~costs. The~~letter, ~~parties~~MassDEP ~~mutually~~permitted ~~released~~the ~~each~~asbestos ~~other~~abatement ~~from~~work ~~any~~to ~~other~~go ~~liability~~forward. There ~~relating~~have tobeen ~~this~~no ~~case~~further enforcement actions taken by MassDEP.

~~There~~By ~~were~~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 ~~changes~~claims. By inletter ~~litigation~~dated ~~since~~July ~~April~~27, 302017, ~~2016~~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:

~~Rockland~~New ~~Place~~Orleans, ~~Apartments LP~~LA – Refinance: On June 3 30, ~~2016~~2017, ~~Rockland~~the ~~Place~~Company ~~Apartments~~refinanced LPits ~~executed~~construction ~~a First~~loan ~~Mortgage~~on ~~Note~~its ~~payable~~shopping ~~with~~center property ~~the Massachusetts Housing Finance Agency~~ in ~~the~~ ~~amount~~New ~~of $14~~Orleans,~~300,000~~ LA. The ~~note~~construction ~~is nonrecourse~~loan, ~~has~~which had a ~~40-year term and~~principal ~~requires~~balance ~~monthly~~of ~~payments~~$5,567,673, ofwas ~~principal~~replaced ~~and~~by ~~interest~~a mortgage loan of $548,~~628~~565,000. The ~~interest rate~~new ismortgage ~~fixed~~loan athas 3an interest rate of 4.4175%. The ~~proceeds~~loan is ofinterest-only ~~the~~until ~~note~~July ~~were~~1, ~~used~~2020; tothereafter, ~~repay~~monthly ~~its~~payments ~~bridge mortgage note with a principal balance~~ of $~~591~~44,~~174, its Fourth Mortgage Note~~576 ~~with~~inclusive aof principal ~~balance of $500,000,~~ and ~~it’s~~interest ~~Flexible~~are ~~Subsidy~~due ~~Capital Improvement~~and ~~Loan~~payable ~~with~~until athe ~~principal~~maturity ~~balance~~ date of $4July 1,~~268~~ 2027,~~539. The~~ ~~proceeds~~at ~~also funded~~which ~~closing~~time ~~costs~~the ~~and~~remaining ~~certain~~principal ~~escrows~~balance ~~that~~must ~~are~~be ~~being used to redevelop the~~repaid ~~complex.~~in full.

Edinburg, TX - Refinance: On September 7, 2016, the Company partially refinanced its loans on its shopping center property in Edinburg, TX. The new loan with Goldman Sachs is for $32,500,000 and is secured by the shopping center. Proceeds from this new loan were used to pay off $31,030,767 of existing debt with Protective Life and to establish a $1,100,000 Earnout Reserve Account (ERA), with the balance used to fund escrows and pay closing costs. The remainder of the existing debt of $15,926,740 is secured by vacant land of approximately 50 acres attached to the shopping center. The $1,100,000 ERA will be returned to the Company if, within two years, it can provide evidence that two significant named tenants have renewed their lease options for an additional five years (or the Company has entered into Approved Substitute Lease(s) for same) and the Earnout Debt Yield (EDY), as defined, is equal to or greater than 8.30%. If the Company fails to do so, a minimum of $1,000,000 of the ERA will be used to reduce the principal balance of the loan and up to $100,000 will be used to pay the applicable yield maintenance premium. The loan has a 30 year amortization and duration of 10 years (i.e., maturity date of September 6, 2026) with an interest rate of 4.604%. For the first year, interest only is paid monthly; beginning in October 2017, principal and interest are paid monthly. Prepayment of the loan is generally prohibited. The Company receives income directly to its operating account unless a “trigger event” occurs in which case the cash goes into a lockbox account controlled by the lender. Basic “trigger events” include: 12

Failure to maintain a 12 month-rolling Debt-Service Coverage Ratio (DSCR), as defined, of 1.1:1.0, Failure to maintain a market-based Net Worth, as defined, of $20,000,000, Failure to maintain Liquid Assets, as defined, of $2,000,000, Loan default, Various Rollover Trigger Events, which include certain significant named tenants vacating, terminating or not renewing their leases, or filing for bankruptcy and not replaced with an Approved Substitute Lease, as defined.

In addition, if a significant named tenant goes dark, vacates, or is not in occupancy of substantially all of its current space, the Company would have to deposit either a $2,000,000 reserve or letter of credit with the lender until such time as agreed upon lease conditions being met.

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

56. Purchases ~~Refinancings (concluded)~~of Real Estate:

~~With~~Houston, ~~respect~~TX to– ~~the~~Land ~~remaining balance~~Purchase: ofOn ~~$15~~May 12,~~926~~ 2017,~~740~~ ~~from~~ the Company ~~original~~completed ~~loans~~its ~~with~~purchase ~~Protective~~of ~~Life~~a ~~now~~parcel ~~secured by~~of ~~vacant~~ land ofin ~~approximately 50 acres directly adjacent to the shopping center~~Houston, ~~the~~TX ~~Company and the lender have agreed that once the Company repays~~for $28,~~000~~583,~~000~~235 ofincluding ~~the~~closing ~~balance,~~costs. This ~~the~~purchase ~~interest~~was ~~rate~~financed onwith ~~the remaining balance will be~~proceeds ~~reduced~~ from ~~5.0%~~a toconstruction ~~4.0%. The~~loan ~~lender~~of ~~has~~$5,158,210, ~~also~~utilization ~~agreed~~of ~~that if~~ the Company’s ~~pays~~lines of ~~off~~credit ~~the~~of ~~entire loan by September 6~~$2, ~~2017~~400,000, ~~its~~and ~~50%~~working ~~Additional~~capital ~~Interest~~of ~~Agreement (AIA) rights will terminate~~$1,025,025. ~~This~~ ~~remaining~~Key ~~loan~~terms isof ~~personally guaranteed by~~ the construction ~~Chairman~~loan ofare ~~the~~as ~~Company.~~follows:

~~New~~Loan ~~Orleans, LA – Refinance~~Amount: ~~On November 18, 2016, the Company refinanced one of its construction loans on its shopping center property in New Orleans, LA. The construction loan, which had a principal balance of~~ $78,~~301~~600,803, was replaced by a mortgage loan of $7,436,745. The new mortgage loan has an interest rate of One Month ICE LIBOR, as defined, plus 2.50% and an initial maturity date of November 18, 2017 with an option to extend the maturity to November 18, 2018 at an interest rate of 5.0% if it meets certain requirements. The loan is interest-only until November 18, 2017; if the loan is extended an additional year, principal payments will be made using a 25-year amortization. 000

~~Lubbock,~~Maturity ~~TX – Refinance~~Date: On November ~~21,~~ ~~2016~~15, the Company refinanced its mortgage loan on its shopping center in Lubbock, TX. The new mortgage loan has a principal balance of $13,750,000, which was used to pay off the previous mortgage loan balance of $10,837,300, pay a defeasance premium of $432,776, pay closing costs, and fund escrows. The new mortgage loan has an interest rate of 4.974%, monthly payments of $76,540 based on a 27.5-year amortization, and a ten year term expiring on December 6, 2026. Prepayment is not permitted until six months before the maturity date.2018

6Interest Rate: 2. 50% plus One Month ICE LIBOR ~~Purchase of~~rate, ~~Real~~as ~~Estate:~~defined, up to maturity date and 12.0% thereafter.

~~Buda, TX Land Purchases~~Payments: Interest Ononly ~~April 29,~~payable ~~2016, the Company purchased a parcel of land in Buda, TX adjacent to~~monthly another parcel owned by the Company for $686,167 including closing costs. On May 13, 2016, the Company purchased three additional parcels of land adjacent to these parcels for $1,051,034 including closing costs. These purchases were financed by a new land loan of $1,505,000 with ~~the~~principal ~~balance~~due ~~funded~~at ~~by working capital~~maturity. ~~Key terms of the loan are as follows:~~

Loan Amount:	$1,505,000
Maturity Date:	September 24, 2017
Interest Rate:	The lower of a) the Prime Rate per Wall Street Journal plus 1.00% or b) 4.25%.
Payments:	Interest only payable monthly. At maturity, outstanding principal plus any accrued interest will be payable.
Guarantors:	Both the Company (Corporate) and Chairman of the Company (Individual).

Guarantee: The Company (Corporate).

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

6. Purchase of Real Estate (concluded):

Austin, TX – Land Purchase: On December 19, 2016, the Company purchased a parcel of land in Austin, TX for $3,732,223. This purchase, along with related closing costs, was financed by an existing line of credit of $1,250,000 and a new land loan of $2,500,000. This land is being held for potential future development. Key terms of the loan are as follows:

Loan Amount:	$2,500,000
Maturity Date:	December 19, 2018
Interest Rate:	The greater of a) the Prime Rate per Wall Street Journal plus 0.75% or b) 4.25%.
Payments:	Interest only payable monthly. At maturity, outstanding principal plus any accrued interest will be payable.
Guarantors:	Both the Company (Corporate) and Chairman of the Company (Individual).

Brentwood, NY – Land Purchase: On December 23, 2016, the Company purchased a parcel of land in Brentwood, NY for $5,000,000, which along with closing costs was financed by a new acquisition mortgage loan of $5,000,000 and working capital. The Company is going to build a single entity build-to-suit on this land. This construction will be financed by a building mortgage loan of $4,775,000 and a project mortgage loan of $875,000. The total amount of these three loans is $10,650,000. Key terms of the loans are as follows:

Loan Amount:	$10,650,000
Maturity Date:	December 1, 2027
Interest Rate:	One month LIBOR, as defined, plus 2.75% through December 1, 2017 (the “Construction Phase”); thereafter, one month LIBOR plus 1.95% (the “Permanent Phase”).
Payments:	Interest only payable monthly during the Construction Phase. Thereafter, principal and interest payable monthly using a 30-year amortization.
Guarantor:	The Company (Corporate).
Prepayment Penalties:	Prior to December 1, 2017, 0.50% of the principal balance prepaid; from January 1, 2018 – December 1, 2019, 1.00% of the principal balance prepaid.

St. Louis, MO – Property Purchase: On January 20, 2017, the Company purchased a property with a single retail tenant in St. Louis, MO for $6,444,768 including closing costs. The Company plans to resell it by the end of the calendar year. This purchase, along with closing costs, was financed with a new loan of $5,120,000, advances from one of the Company’s line of credit of $1,000,000, and working capital of $324,768. Key terms of the loan are as follows:

Loan Amount:	$5,120,000
Maturity Date:	October 20, 2017
Interest Rate:	One month LIBOR, as defined, plus 2.20%.
Payments:	Interest only payable monthly with full principal payment due at maturity. Principal prepayments are permitted.

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

7. Subsequent Events:

~~Austin,~~The ~~TX – Financing: On February 28, 2017, the~~ Company ~~modified~~has anevaluated ~~existing~~for ~~line of credit loan to $4,000,000~~subsequent ofevents ~~which~~through upOctober ~~to $1~~10,~~600,000~~ ~~is available to finance construction of a building on a parcel of land it owns in Austin~~2017, ~~TX. This loan has an interest rate of 1.50% plus~~ the ~~Prime Rate, as defined, with a Floor Rate of 5.00% and has a maturity~~ date ofthe ~~December~~financial ~~27,~~statements ~~2017~~were ~~with an option to extend for six months if certain criteria are met~~issued.

~~Cedar Park~~Montgomery, TX – ~~Property~~Land Purchase: On ~~March~~August 2916, 2017, the Company ~~purchased~~completed aits ~~property~~purchase ~~with~~of a ~~single~~26.43 ~~retail~~acre ~~tenant~~parcel inof ~~Cedar~~land ~~Park,~~in TXMontgomery, TX for $16,~~625~~672,~~000~~754 including closing costs. ~~The~~This ~~Company~~purchase ~~plans~~was tofinanced ~~resell it by the~~with ~~end~~proceeds offrom ~~the~~a ~~fiscal~~land ~~year~~loan ~~ending~~of ~~April 30~~$4,150,000, ~~2018. This~~utilization ~~purchase~~of ~~was~~the ~~financed~~Company’s ~~with~~lines ~~proceeds~~of ~~from~~credit ~~a new loan~~ of $12,~~365~~360,000, and working capital of $~~260~~162,~~000~~754. Key terms of the construction loan are as follows:

Loan Amount:	$1,365,000
Maturity Date:	March 29, 2022
Interest Rate:	The greater of a) the Prime Rate per Wall Street Journal plus 0.75% or b) 4.50%.
Payments:	Interest only payable monthly through September 2017, followed by monthly principal and interest payments using a 25 year amortization period with a final balloon payment at maturity.
Guarantors:	Both the Company (Corporate) and Chairman of the Company (Individual).

Loan Amount: $4,150,000

~~New~~Maturity ~~Unsecured Credit Line~~Date: On February ~~April 19~~16, ~~2017, the Company entered into a $2,000,000 unsecured line of credit with a regional bank. Terms of the line of credit are as follows:~~2019

Term:	3 years
Rate:	LIBOR + 3.25%
Fee:	0.50% (One Time)
Unused Fee:	0.25% annually on the unused line
Guarantee:	Full guarantee by the Chairman of the Company (Individual)
Deposits:	Must maintain a minimum of $500,000 at bank
Other:	Each funding request to be at the sole discretion of the bank and only to acquire credit tenanted properties.
Clean Up:	Borrower to be out of debt once each year for at least 30 days.

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

16Payments: 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).

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, ~~2016~~2017 under the subheading “Critical Accounting Policies and Estimates”.

Results of Operations:

Rental Income:

Rental income for the ~~three~~quarters ~~and nine months~~ ended ~~January~~July 31, ~~2017 and 2016,~~ by type of tenant, follows:

	Three Months Ended		~~Nine Months Ended~~
	January 31,		January 31,
	July 31,
	2017	2016	~~2017~~	~~2016~~
Residential	$3,~~084~~037,~~436~~106	$3,~~128~~073,~~168~~023	~~$9,171,804~~	~~$9,130,176~~
Commercial	54,~~010~~759,~~773~~434	4,~~568~~993,~~156~~424	~~14,851,940~~	~~13,556,801~~
	$8,095,209	$7,696,324	$24,023,744	$22,686,977
	$7,796,540	$8,066,447

~~Residential~~The ~~rental~~slight ~~income~~decrease ~~was~~in ~~flat~~residential ~~compared~~rental toincome ~~the prior~~was ~~year~~primarily ~~comparable~~caused ~~periods. An~~by ~~increase~~lower ofrevenue ~~vacancies~~ at the Rockland, MA property ~~needed~~ asdue ~~part~~to ofvacancies from ~~the~~converted ~~renovation~~apartments ~~project~~needed ~~taking~~for ~~place there were offset by a decrease in vacancies at~~ the ~~Somerville,~~ongoing MArenovation (iproject.~~e., Clarendon) property.~~

The ~~increase~~decrease in commercial rental income was primarily caused by ~~rents received~~lower oncommon ~~the~~area ~~Company’s~~maintenance ~~development properties~~ (~~e.g., New Orleans, LA; Stanhope, NJ; Olathe, KS; Conroe, TX; etc.~~CAM) ~~and~~billings ~~additional~~to ~~rents from new~~ tenants ~~at the West Springfield, MA and Edinburg, TX properties, partially~~resulting ~~offset~~from bylower ~~the~~associated ~~impact of the voluntary foreclosure of the Putnam, CT property on June 5, 2015~~expenses.

17Service 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

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

Service Income (continued):

~~Service~~The ~~income~~decrease ~~for~~in ~~the~~preferred developer fees reflected lower ~~three~~fees received from both CVS and ~~nine~~Cumberland ~~months~~Farms. The ~~ended~~decrease ~~January~~in 31CVS fees, which ~~2017~~continues ~~and~~a ~~2016~~trend ~~follows:~~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.

	Three Months Ended		Nine Months Ended
	January 31,		January 31,
	2017	2016	2017	2016
Management fees	$163,934	$155,263	$427,567	$383,156
Preferred developer fees	935,750	968,500	3,500,500	4,310,500
	$1,099,684	$1,123,763	$3,928,067	$4,693,656

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

Sales (and Cost of Sales) of Real Estate

~~Nine~~Three months ended ~~January~~July 31, 2017:

St. Louis, MO – Sale of Property: On ~~June~~May 2930, ~~2016~~2017, the Company sold aits single-tenant property in ~~Stanhope~~St. Louis, NJ MO for $106,~~000~~800,~~051~~ 000 (cost of $86,~~280~~567,~~570~~195). A ~~construction~~ loan with a balance of $5,120,000 and a credit line of $61,~~329~~000,~~667~~000 ~~was~~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.

OnOther August 16, 2016, the Company sold a condominium in Wethersfield, CT for $285,000 (cost of $277,191). The net proceeds were used to reduce a mortgage loan on this property. The Company currently owns three other condominiums at this site.Revenues

OnThe ~~September~~increase ~~20, 2016, the Company sold a parcel of land~~ in ~~Austin,~~ TXother ~~for~~income ~~$6,100,000~~was ~~(cost~~primarily ofdue ~~$4,190,523)~~to ~~that~~sales ~~was previously ground~~by ~~leased. The~~the Company’s ~~continues~~new torestaurant ~~own~~it ~~land~~built ~~attached to the sold parcel~~ and ~~is currently~~owns ~~overseeing~~at ~~construction~~its ofEdinburg, aTX ~~single-tenant retail building of~~property. ~~approximately~~This ~~6,900~~store ~~square~~was ~~feet~~opened on ~~this~~July ~~property~~14, 2017.

On December 14, 2016, the Company sold a property in Conroe, TX for $8,778,442 (cost of $6,721,794). A mortgage loan with a balance of $5,363,913 was paid off with the proceeds.

On December 28, 2016, the Company sold a property in Olathe, KS for $7,000,000 (cost of $6,867,228). A mortgage loan with a balance of $5,335,000 was paid off with the proceeds.

Nine months ended January 31, 2016: On May 28, 2015, the Company sold a parcel of land in Pearland, TX for $1,104,161 (cost of $747,610).

On August 6, 2015, the Company sold a property in Austin, TX for $10,246,021 (cost of $7,761,449). A construction loan with a balance of $6,106,437 was paid off with the proceeds.

There were also costs related to property sales that occurred in the fiscal year ended April 30, 2015 totaling $199,077 that were not anticipated as of the prior fiscal year end.

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

Other Income

The increase in other income was primarily at the liquor store, which obtained a liquor license in December 2014. The sales at the store have been increasing steadily as previously the store only sold beer and wine.

Operating Costs and Expenses:

Rental Expenses

Rental expenses for the ~~three~~quarters ~~and nine months~~ ended ~~January~~July 31, ~~2017 and 2016,~~ by type of tenant, follows:

	Three Months Ended		~~Nine Months Ended~~
	January 31,		January 31,
	July 31,
	2017	2016	~~2017~~	~~2016~~
Residential	$2,~~723~~562,~~486~~745	$2,~~624~~571,~~714~~379	~~$7,836,393~~	~~$7,961,559~~
Commercial	2,~~226~~411,~~361~~421	2,~~758~~528,~~731~~333	~~7,278,646~~	~~7,897,136~~
	$4,949,847	$5,383,445	$15,115,039	$15,858,695
	$4,974,166	$5,099,712

Residential rental expenses were slightly higher for the three months and slightly lower for the nine months compared to the prior year. The most notable year-over-year items were voucher incentive payments made to tenants at the Rockland, MA property in the prior year that did not re-occur this year and some higher expenses at the Somerville, MA (i.e., Clarendon) property (e.g., higher insurance, utility, elevator repairs, and decorating expenses). 15

~~The~~Item ~~decrease in commercial rental expenses was mainly due to higher costs related to the initial expansion of our shopping center in Edinburg, TX in the prior year~~2. ~~Also impacting the nine month comparison were prior~~ ~~year~~MANAGEMENT’S ~~professional~~DISCUSSION ~~and~~AND ~~legal~~ANALYSIS ~~expenses incurred as part of the initial effort to~~OF ~~refinance~~FINANCIAL ~~the~~CONDITION ~~debt~~AND atRESULTS ~~the~~OF ~~Cranston, RI shopping center, largely offset by a~~OPERATIONS ~~legal settlement of $200,000 with a former tenant~~ (~~see Note 4 of the Financial Statements included within for discussion~~continued) ~~and accelerated amortization expense of deferred commissions arising from the sale of a portion of its property in Edinburg, TX (i.e., Texas Roadhouse).~~ :

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 ~~were higher~~ for ~~the three months and lower~~ ~~for~~ the ~~nine~~quarters ~~months~~ended ~~compared~~July to31 ~~the prior year. These variances reflect lower commissions paid commensurate with the lower service revenue offset by higher compensation expense.~~ 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 ~~was~~relates primarily ~~due~~ to ~~writing-off~~expenses ~~costs~~ relating to ~~abandoned~~its ~~projects,~~new ~~higher~~restaurant ~~expenses~~it atbuilt ~~the~~and ~~liquor store~~owns ~~commensurate~~at ~~with~~its ~~the~~Edinburg, ~~higher~~TX property ~~volume,~~and ~~expenses~~costs ~~related~~incurred to resolve the ~~Company’s development~~Rockland, ~~properties~~MA ~~(e.g.,~~matter ~~New~~discussed ~~Orleans~~above, including ~~LA,~~providing ~~Stanhope,~~hotels ~~NJ,~~and ~~Olathe,~~meals ~~KS,~~to ~~Conroe, TX,~~displaced ~~etc.),~~tenants and ~~higher~~ legal and professional fees. See Part II, Item 1, Legal Proceedings, on page 20 for more information.

1916

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 ~~three~~quarters ~~and nine months~~ ended ~~January~~ July 31, ~~2017 and 2016,~~ by type of tenant, follows:

	Three Months Ended		~~Nine Months Ended~~
	January 31,		January 31,
	July 31,
	2017	2016	~~2017~~	~~2016~~
Commercial	$1,~~793~~900,~~277~~783	$1,~~589~~894,~~866~~665	~~$5,546,685~~	~~$5,020,149~~
Residential	~~731~~729,~~326~~006	~~611~~694,~~703~~829	~~2,160,737~~	~~1,833,175~~
	$2,524,603	$2,201,569	$7,707,422	$6,853,324
	$2,629,789	$2,589,494

The ~~increase~~change in commercial interest expense was ~~the~~minimal; ~~result~~there ofwere ~~expense~~no ~~related~~individually tosignificant ~~loans for the Company’s development properties (e~~changes.~~g., New Orleans, LA, Stanhope, NJ, Olathe, KS, etc.), partially offset by savings from the prior year refinancings at Cranston and CP Associates.~~

The increase in residential interest expense was the result of the prior year refinancing at Rockland ~~as discussed in Note 5 of the Financial Statements included within~~. Note the loans paid off as part of ~~this~~ this refinancing did not accrue interest.

~~Gain~~Other onIncome ~~Voluntary~~/ ~~Foreclosure~~(Loss)

~~Putnam,~~Other CTincome –/ ~~Transfer to Lender: On November 1,~~(loss) ~~2014, a payment was due~~ for the ~~mortgage~~quarters ofended ~~the~~July shopping center in Putnam, Connecticut in the amount of approximately $4,700,000. The rentable space of the shopping center is 57,529 square feet, 46% of which was leased to one store. That store informed the Company that they were not renewing their lease, which expired on January 31, 2015, and, as a result, the Company found it impossible to refinance the mortgage without finding a replacement tenant. Therefore, on June 5, 2015, the Company agreed to transfer title of the property to the lender. The Company recognized a gain of $2,649,850 since the mortgage was non-recourse and was in excess of the book value. Pre-tax income for this shopping center was $44,645 for the three and nine months ended January 31, 2016.follows:

Other Income

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

~~Other~~The ~~income~~decrease ~~for~~in ~~the~~investment ~~three~~income ~~and~~reflected ~~nine~~realized ~~months~~losses on ~~ended~~sales ~~January 31,~~of ~~2017~~securities ~~and~~in ~~2016~~the ~~follows:~~current year.

	Three Months Ended		Nine Months Ended
	January 31,		January 31,
	2017	2016	2017	2016
Clarendon residual funds	$-0-	$-0-	$-0-	$189,912
Investment income	30,745	216,746	69,850	408,050
	$30,745	$216,746	$69,850	$597,962

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

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

The decrease in investment income reflected realized gains on sales of securities in the prior year that did not repeat in the current year.

During the three and nine months ended January 31, 2016, the Company received $189,912 of residual funds that remained in a reserve account after payoff of the underlying bondholders securitized by the mortgage that was refinanced at Clarendon in February 2015.

Gain (Loss) on Derivatives

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.

~~Loss on Impairment~~ 17

During the three and nine months ended January 31, 2016, the Company recorded an impairment loss of $330,700 on a non-core property it owns in Wethersfield, CT. The amount of the impairment loss represented the excess of the cost over the estimated net sales proceeds from the property.

Loss on Defeasance

During the three and nine months ended January 31, 2017, the Company paid a defeasance premium of $437,776 when refinancing its mortgage loan on its shopping center in Lubbock, TX as discussed in Note 5 of the Financial Statements included within.

Equity in Earnings of Unconsolidated Subsidiary

The equity in earnings of unconsolidated subsidiary for the three and nine months ended January 31, 2017 and 2016 follows:

	Three Months Ended		Nine Months Ended
	January 31,		January 31,
	2017	2016	2017	2016
Income from Operations	$92,654	$105,538	$276,016	$282,666
Distributions	90,000	90,000	270,000	270,000
	$182,654	$195,538	$546,016	$552,666

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 the years prior to May 1, 2009, the Company was committed to providing 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. To 2009, losses and distributions from Dover exceeded the Company’s investment. Since then, distributions from Dover have been credited to income. 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.

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

Capital ~~Resource~~Resources and Liquidity

At ~~January~~July 31, 2017, the Company had $7,~~446~~145,~~671~~794 of unrestricted cash and cash equivalents. This includes $54,~~449~~948,~~571~~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 $~~337~~275,~~126~~285 and tenant security deposits held by VIEs of $~~398~~12,~~274~~398 are included in restricted cash and cash equivalents.

At ~~January~~July 31, 2017, the Company had $1,~~036~~361,~~716~~812 of ~~investments~~ investments in marketable securities, all of which belongs to partner entities.

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. On December 7, 2015, the~~ Company ~~entered~~has ~~into~~three ~~a $2,000,000~~separate ~~revolving demand loan agreement (“line of~~ credit”) ~~with~~lines athat ~~regional bank. The~~allows ~~interest rate on this loan is Wall Street Journal Prime, with a~~for floor of 3.25%. The loan is unsecured and there are no guarantors. Interest is to be paid monthly; principal is to be repaid within twelve months or on demand, at the bank’s discretion. There are no prepayment penalties. This line of credit will primarily be used from time to time to fund initial investments related to development opportunities. As of January 31, 2017, the Company had borrowings ofup ~~$1,000,000 against this credit line. The Company also obtained another credit line as part of a purchase of land in Austin, TX as described in Note 17~~ to ~~the Company’s financial statements included in the Company’s annual report on Form 10-K for the fiscal year ended April 30, 2016. This~~ $26,760,000 ~~line of credit will primarily be used from time to time to fund initial investments related to development opportunities~~. AsAt ofJuly ~~January~~ 31, 2017, the Company had borrowings of $1,~~250~~400,000 against ~~this~~these credit ~~line~~lines.

2218

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-~~15b of~~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 ~~January~~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~~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.

2319

PART II	OTHER INFORMATION
Item 1.	LEGAL PROCEEDINGS

PART II OTHER INFORMATION

~~On September~~Item 7, 2016, the Company was notified it lost 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 centers1. ~~After~~ ~~evaluating its~~LEGAL options, the Company settled both lawsuits with the plaintiff by agreeing to pay $200,000 to cover all claims, including reimbursement of defendant’s claimed legal fees and costs. The parties mutually released each other from any other liability relating to this case.PROCEEDINGS

~~There~~Following a ~~were~~site noinspection ~~other~~of ~~changes~~asbestos abatement activities being conducted at the Spring Gate Apartments in Rockland, Massachusetts (Facility) on April 14, 2017, ~~litigation~~the ~~since~~Massachusetts Department of Environmental Protection (MassDEP) by letter dated April 3021, ~~2016~~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.

~~Item~~ By 1Aletters 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 ~~RISK~~first ~~FACTORS~~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.

~~Smaller~~At this time, the Company ~~reporting~~cannot ~~companies~~assess ~~are~~the ~~not~~likelihood ~~required~~of toan unfavorable outcome or provide any estimate of the ~~information~~amount ~~required~~or ~~by this~~range ~~item~~of any potential loss.

Item 21A. ~~UNREGISTERED~~RISK ~~SALES OF EQUITY SECURITIES AND USE OF PROCEEDS~~FACTORS

~~10b5-1 Private Repurchase Stock Plan: On January 5, 2017,~~ Smaller ~~the~~reporting ~~Company’s~~companies ~~Board~~are ofnot ~~Directors~~required amended and approved the Amended and Restated 10b5-1 Private Repurchase Stock Plan (the “Repurchase Plan”), which was initially adopted on March 29, 2016. The Company found less demand under the Repurchase Plan than expected and desired to ~~broaden~~provide the ~~eligibility requirements~~information torequired ~~increase participation in the Repurchase Plan. The Company~~by desires to amend the Repurchase Plan in order to permit shareholders holding five (5%) percent or more of the issued and outstanding common stock of the Company the ability to participate in the Repurchase Plan. The Repurchase Plan provides for the repurchase of up to 150,000 shares of the Company's common stock in minimum blocks of 15,000 shares and maximum blocks of 25,000 shares. Eligible shareholders will be those holding blocks of common stock of the Company in excess of fifteen thousand (15,000) shares and less than three hundred fifty thousand (350,000) shares. Repurchases may be made at management’s discretion from time-to-time only through privately negotiated transactions pursuant to the terms of the 10b5-1 plan to meet the requirements of Rule 10b5-1 under the Securities Exchange Act of 1934. The privately negotiated purchase price may not exceed 1.5 times the highest independent bid or the last independent transaction price and in no event be higher than five ($5.00) dollars per share. The purchases and negotiations may resume 15 days after filing of this ~~quarterly report; the program will be suspended for 15 days before the due date of each next quarterly or annual report filing and will resume 15 days after the filing~~item. The repurchase program may continue up to a maximum of 12 months and may be suspended for periods or discontinued at any time. Any shares acquired under this program will be returned as authorized but unissued; however, the Company in its discretion may retire such shares.

~~There~~Item ~~were~~2. noUNREGISTERED ~~stock~~SALES ~~repurchases~~OF byEQUITY ~~the~~SECURITIES ~~Company~~AND ~~under~~USE ~~the Repurchase~~OF ~~Plan in the fiscal quarter covered by this report.~~PROCEEDS

24 None

Item 23. ~~UNREGISTERED~~DEFAULTS ~~SALES~~UPON OFSENIOR ~~EQUITY~~ SECURITIES ~~AND USE OF PROCEEDS (concluded)~~

~~Please see the below table for information with respect to repurchases by the Company during the fiscal year-to-date covered by this report:~~ None

~~Issuer Repurchases~~Item of4. ~~its~~MINE ~~Equity~~SAFETY ~~Securities~~DISCLOSURES

Month of Transactions	Total number of shares purchased	Average price paid per share	Total number of shares purchased as part of publicly announced plans or programs	Maximum number of shares that may yet be purchased under the plans or programs
May 1, 2016 – July 31, 2016a	2,025	$2.45	0	0
May 11, 2016 b	25,000	$3.00	25,000	125,000
TOTAL	27,025	$2.96	25,000	125,000

Not applicable

a:	The transactions comprised of the acquisition of the 2,025 shares were not conducted pursuant to a publicly announced program.
b:	The transactions comprised of the acquisition of the 25,000 shares were made pursuant to the March 29, 2016 publicly announced 10b5-1 Private Repurchase Stock Plan.

Item 35. ~~DEFAULTS~~OTHER ~~UPON SENIOR SECURITIES~~INFORMATION

None

~~Item~~ SUBMISSION OF 4.MATTERS ~~MINE~~TO ~~SAFETY~~A ~~DISCLOSURES~~VOTE OF SECURITY HOLDERS

~~Not applicable~~ None

Item 56. ~~OTHER INFORMATION~~EXHIBITS

None

	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.

~~SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS~~ 21

~~The Company’s annual meeting of shareholders was held on January 18, 2017 in Hartford, CT. The following nominees were elected as directors by vote indicated:~~SIGNATURES

	For	Against
Neil Ellis	2,011,135	10,045
David Harding	2,011,235	9,945
Jeff Carlson	2,011,335	9,845
John Toic	2,011,335	9,845
William Connolly	2,011,335	9,845

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

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.

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)
	/s/ Neil H. Ellis
April 24, 2017
Date	Neil H. Ellis,
	Chairman of the Board
	and Chief Executive Officer
	/s/ Eric J. Harrington
April 24, 2017
Date	Eric J. Harrington, Treasurer
	and Chief Financial Officer

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