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 ~~January~~July 31, 2018.

[ ] 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)

Indicate by check mark whether the registrant (1) has filed all reports to be filed by Section 13 or 15(~~Former~~d) ~~name,~~of ~~former~~the ~~address~~Securities ~~and~~Exchange ~~former~~Act ~~fiscal~~of ~~year~~1934 ifduring ~~changed~~the ~~since~~preceding 12 months (or ~~last~~for ~~report~~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.

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~~

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~~

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~~599 as of ~~March 29~~September 28, 2018

FIRST HARTFORD CORPORATION AND SUBSIDIARIES

INDEX

PART I.	FINANCIAL INFORMATION	PAGE
Item 1.	Financial Statements (Unaudited)
	Condensed Consolidated Balance Sheets – January 31, 2018 and April 30, 2017	3 - 4
	Condensed Consolidated Balance Sheets – July 31, 2018 and April 30, 2018	3 - 4
	Condensed Consolidated Statements of Income (Loss) for the Three and Nine Months Ended January 31, 2018 and 2017	5
	Condensed Consolidated Statements of Income for the Three Months Ended July 31, 2018 and 2017	5
	Condensed Consolidated Statements of Comprehensive Income (Loss) for the Three and Nine Months Ended January 31, 2018 and 2017	6
	Condensed Consolidated Statements of Comprehensive Income for the Three Months Ended July 31, 2018 and 2017	6
	Condensed Consolidated Statements of Cash Flows for the Three and Nine Months Ended January 31, 2018 and 2017	7 - 8
	Condensed Consolidated Statements of Cash Flows for the Three Months Ended July 31, 2018 and 2017	7 - 8
	Notes to Condensed Consolidated Financial Statements	9 – 1618
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	1719 - 2224
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	2224
Item 4.	Controls and Procedures	2324
PART II.	OTHER INFORMATION
Item 1.	Legal Proceedings	2425
Item 1A.	Risk Factors	2425
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	2425
Item 3.	Defaults Upon Senior Securities	2425
Item 4.	Mine Safety Disclosures	2425
Item 5.	Other Information	25
Item 6.	Exhibits	25
	Signatures	26
	Exhibits	27 - 29

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

ASSETS

	January 31, 2018	April 30, 2017
	July 31, 2018	April 30, 2018 (As Adjusted)
Real estate and equipment:
Developed properties and property under construction (including $79,359,489 in January and $77,898,958 in April for VIEs)	$246,740,814	$236,865,867
Developed properties and property under construction (including $80,163,881 in July and $79,969,791 in April for VIEs)	$259,992,927	$251,892,715
Equipment and tenant improvements (including $2,522,591 in January and $2,424,964 in April for VIEs)	4,300,989	3,689,442
Equipment and tenant improvements (including $2,558,471 in July and $2,551,778 in April for VIEs)	4,285,110	4,274,824
	251,041,803	240,555,309
	264,278,037	256,167,539
Less accumulated depreciation and amortization (including $17,500,627 in January and $15,918,495 in April for VIEs)	(51,435,113)	(47,449,316)
Less accumulated depreciation and amortization (including $18,573,141 in July and $18,042,184 in April for VIEs)	(54,060,738)	(52,650,839)
	199,606,690	193,105,993
	210,217,299	203,516,700
Property held for sale	~~12,261,143~~-0-	117,~~389~~465,~~591~~163
Cash and cash equivalents (including $2,444,000 in January and $2,063,103 in April for VIEs)	6,958,982	6,250,757
Cash and cash equivalents (including $2,939,223 in July and $2,689,207 in April for VIEs)	7,688,661	7,206,445
Cash and cash equivalents – restricted (including $378,929 in January and $396,361 in April for VIEs)	652,599	526,012
Cash and cash equivalents – restricted (including $388,892 in July and $386,505 in April for VIEs)	1,150,691	992,923
Marketable securities (including $816,575 in January and $1,538,839 in April for VIEs)	816,575	1,538,839
Marketable securities (including $620,280 in July and $619,432 in April for VIEs)	620,280	619,432
Accounts and notes receivable, less allowance for doubtful accounts of $70,419 as of January 31, 2018 and $135,002 as of April 30, 2017 (including $142,312 in January and $66,543 in April for VIEs)	3,278,121	3,505,541
Accounts and notes receivable (including $92,546 in July and $49,668 in April for VIEs), less allowance for doubtful accounts of $58,525 as of July 31, 2018 and $56,930 as of April 30, 2018	5,349,987	3,041,624
Other receivables	23,~~319~~304,~~665~~699	4,~~064~~494,~~876~~150
Deposits and escrow accounts (including $7,679,909 in January and $8,866,586 in April for VIEs)	14,914,468	15,930,999
Deposits and escrow accounts (including $6,541,790 in July and $7,356,807 in April for VIEs)	14,094,425	15,284,884
Prepaid expenses (including $311,029 in January and $327,481 in April for VIEs)	1,998,252	1,644,320
Prepaid expenses (including $624,404 in July and $361,206 in April for VIEs)	2,426,387	1,726,281
Deferred expenses (including $154,627 in January and $167,273 in April for VIEs)	5,266,655	5,712,547
Deferred expenses (including $146,197 in July and $150,412 in April for VIEs)	3,385,512	3,242,200
Investments in affiliates	~~379~~429,~~747~~847	~~100~~429,847
Due from related parties and affiliates	2,~~672~~997	~~152~~199,~~776~~101
Deferred tax asset	~~706,627~~-0-	~~671,147~~-0-
Total assets	$~~249~~248,~~162~~670,~~196~~785	$~~244~~248,~~493~~218,~~498~~750

See accompanying notes.

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

LIABILITIES AND SHAREHOLDERS’ EQUITY (DEFICIENCY)

	January 31, 2018	April 30, 2017
	July 31, 2018	April 30, 2018 (As Adjusted)
Liabilities:
Mortgages and notes payable:
Construction loans payable	$3631,~~981~~308,~~466~~826	$2632,~~929~~168,~~537~~786
Mortgages payable (including $63,852,897 in January and $64,598,997 in April for VIEs)	192,932,566	195,763,409
Mortgages payable (including $63,418,412 in July and $63,617,980 in April for VIEs)	187,909,346	191,597,383
Notes payable (including $1,704,697 in January and $1,704,697 in April for VIEs)	1,704,697	1,704,697
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	65,~~760~~283,~~000~~330	64,~~400~~760,000
Less: Deferred debt issuance costs, net (including $1,529,700 in January and $1,575,494 in April for VIEs)	(3,069,646)	(3,067,098)
Less: Deferred debt issuance costs, net (including $1,503,684 in July and $1,515,252 in April for VIEs)	(2,937,606)	(2,975,038)
	235,309,083	227,730,545
	223,268,593	227,255,828
Accounts payable (including $730,129 in January and $569,600 in April for VIEs)	4,403,062	2,915,400
Accounts payable (including $919,779 in July and $1,017,870 in April for VIEs)	3,922,441	3,295,223
Other payables	35,~~413~~221,~~573~~825	46,~~966~~556,~~246~~675
Accrued liabilities (including $3,468,365 in January and $3,382,307 in April for VIEs)	5,512,452	5,699,875
Accrued liabilities (including $3,533,231 in July and $3,557,776 in April for VIEs)	8,370,459	7,456,930
Derivative liability	1222,~~551,002~~394	2659,~~023,793~~780
Deferred income (including $222,956 in January and $227,936 in April for VIEs)	534,584	622,461
Deferred income (including $219,636 in July and $221,296 in April for VIEs)	1,145,024	1,235,635
Other liabilities	1880,~~037,871~~470	1,~~328~~007,~~909~~642
Due to related parties and affiliates (including $459,875 in January and $446,990 in April for VIEs)	611,728	598,843
Due to related parties and affiliates (including $467,762 in July and $464,608 in April for VIEs)	619,840	616,516
Total liabilities	252,373,355	245,886,072
Deferred tax liability	805,114	210,215
Total liabilities	244,456,160	248,294,444
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 January 31, 2018 and April 30, 2017	3,211,843	3,236,843
Common stock, $1 par value; authorized 6,000,000 shares; issued 3,211,843 shares and outstanding 2,315,799 shares	3,211,843	3,211,843
Capital in excess of par	5,043,779	5,~~093~~043,779
Accumulated deficit	(6,943,846)	(5,612,263)
Accumulated earnings (deficit)	119,671	(4,166,755)
Accumulated other comprehensive income	-0-	-0-
Treasury stock, at cost, 896,044 and 896,044 shares as of January 31, 2018 and April 30, 2017	(4,989,384)	(4,989,384)
Treasury stock, at cost, 896,044 shares	(4,989,384)	(4,989,384)
Total First Hartford Corporation	(3,~~677~~385,~~608)~~909	(2900,~~271,025~~517)
Noncontrolling interests	~~466~~828,~~449~~716	~~878~~824,~~451~~823
Total shareholders’ equity (deficiency)	(34,~~211~~214,~~159)~~625	(175,~~392,574~~694)
Total liabilities and shareholders’ equity (deficiency)	$~~249~~248,~~162~~670,~~196~~785	$~~244~~248,~~493~~218,~~498~~750

See accompanying notes.

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

	Three Months Ended		~~Nine Months Ended~~
	Jan. 31, 2018	Jan. 31, 2017	Jan. 31, 2018	Jan. 31, 2017
	July 31, 2018	July 31, 2017
Operating revenues:
Rental income	$7,~~812~~824,~~600~~876	$87,~~095~~796,~~209~~540	~~$23,355,145~~	~~$24,023,744~~
Service income	14,~~019~~876,~~805~~640	1640,~~099,684~~563	~~3,264,005~~	~~3,928,067~~
Sales of real estate	113,~~629~~662,~~504~~078	1521,~~778~~360,~~442~~000	~~23,819,504~~	~~34,373,493~~
Other revenues	1,~~740~~451,~~702~~925	1,~~077~~222,~~452~~265	~~4,601,747~~	~~2,984,212~~
	12,202,611	26,050,787	55,040,401	65,309,516
	27,815,519	31,019,368
Operating costs and expenses:
Rental expenses	54,~~563~~996,~~034~~126	4,~~949~~974,~~847~~166	~~15,555,914~~	~~15,115,039~~
Service expenses	14,~~215~~001,~~882~~806	1,~~333~~239,~~691~~990	~~4,151,167~~	~~3,863,958~~
Cost of real estate sales	~~653~~7,~~812~~702,061	1318,~~589~~623,~~022~~718	~~19,941,842~~	~~27,692,903~~
Selling, general and administrative expenses	3,146,547	2,460,473	9,951,570	6,907,319
Other expenses	1,649,927	1,363,102
	10,579,275	22,333,033	49,600,493	53,579,219
Selling, general and administrative expenses	1,192,441	1,560,962
Income from operations	1,623,336	3,717,754	5,439,908	11,730,297
	19,542,361	27,761,938
Non-operating income (expense):
Income from operations	8,273,158	3,257,430
Interest expense	(2,619,516)	(2,524,603)	(7,833,720)	(7,707,422)
Non-operating income (expense):
Other income / (loss)	70,023	30,745	195,249	69,850
Interest expense	(2,632,510)	(2,629,789)
Loss on impairment	(40,000)	-0-	(40,000)	-0-
Other income (loss)	18,481	(83,418)
Gain (loss) on derivatives (non-cash)	598,688	2,883,917	472,791	2,427,052
Gain (loss) on derivatives	437,385	(203,905)
Loss on defeasance	-0-	(437,776)	-0-	(437,776)
Equity in earnings of unconsolidated subsidiaries	217,172	162,860
Equity in earnings of unconsolidated subsidiaries	203,506	182,654	561,038	546,016
	(1,959,472)	(2,754,252)
	(1,787,299)	134,937	(6,644,642)	(5,102,280)
Income before income taxes	6,313,686	503,178
Income / (loss) before income taxes	(163,963)	3,852,691	(1,204,734)	6,628,017
Income tax expense	1,791,385	365,489
Income tax expense	40,563	565,065	69,168	1,617,159
Consolidated net income	4,522,301	137,689
Consolidated net income (loss)	(204,526)	3,287,626	(1,273,902)	5,010,858
Net (income) loss attributable to noncontrolling interests	(235,875)	104,573
Net (income) loss attributable to noncontrolling interests	(111,495)	(1,202,072)	(57,681)	(1,191,218)
Net income attributable to First Hartford Corporation	$4,286,426	$242,262
Net income (loss) attributable to First Hartford Corporation	$(316,021)	$2,085,554	$(1,331,583)	$3,819,640
Net income per share – basic	$1.85	$0.10
Net income (loss) per share – basic	$(0.14)	$0.88	$(0.57)	$1.60
Net income per share – diluted	$1.85	$0.10
Net income (loss) per share – diluted	$(0.14)	$0.88	$(0.57)	$1.60
Shares used in basic per share computation	2,315,799	2,328,299
Shares used in basic per share computation	2,315,799	2,377,565	2,322,049	2,384,321
Shares used in diluted per share computation	2,315,799	2,328,299
Shares used in diluted per share computation	2,315,799	2,377,565	2,322,049	2,384,321

See accompanying notes.

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

	Three Months Ended		~~Nine Months Ended~~
	Jan. 31, 2018	Jan. 31, 2017	Jan. 31, 2018	Jan. 31, 2017
	July 31, 2018	July 31, 2017
Consolidated net income (loss)	$(204,526)	$3,287,626	$(1,273,902)	$5,010,858
Consolidated net income	$4,522,301	$137,689
Other comprehensive income (loss), net of taxes:
Unrealized gains (losses) on marketable securities	~~(91,871)~~848	~~160~~100,~~436~~386	~~3,820~~	~~77,517~~
Total comprehensive income (loss)	(296,397)	3,448,062	(1,270,082)	5,088,375
Total comprehensive income	4,523,149	238,075
Amounts attributable to noncontrolling interests:
Net (income) loss	(~~111~~235,~~495~~875)	(1104,~~202,072)~~573	~~(57,681)~~	~~(1,191,218)~~
Unrealized (gains) losses on marketable securities	~~91,871~~(848)	(~~160~~100,~~436~~386)	~~(3,820)~~	~~(77,517)~~
	(19,624)	(1,362,508)	(61,501)	(1,268,735)
	(236,723)	4,187
Comprehensive income (loss) attributable to First Hartford Corporation	$(316,021)	$2,085,554	$(1,331,583)	$3,819,640
Comprehensive income attributable to First Hartford Corporation	$4,286,426	$242,262

See accompanying notes.

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

	Nine Months Ended
	Three Months Ended
	January 31, 2018	January 31, 2017
	July 31, 2018	July 31, 2017
Operating activities:
Consolidated net income / (loss)	$(1,273,902)	$5,010,858
Consolidated net income	$4,522,301	$137,689
Adjustments to reconcile consolidated net income (loss) to net cash provided by / (used in) operating activities:
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 2018 and $270,000 in 2017	(291,038)	(276,016)
Equity in earnings of unconsolidated subsidiaries, net of distributions of $90,000 in 2018 and $90,000 in 2017	(127,172)	(72,859)
Gain on sale of real estate	(35,~~877~~960,~~662~~017)	(62,~~680~~736,~~590~~282)
Depreciation of real estate and equipment	41,~~204~~431,~~507~~091	41,~~064~~366,~~791~~512
Amortization of deferred expenses	~~419~~147,~~301~~915	~~541~~135,~~234~~663
Deferred income taxes	~~(35~~594,~~480)~~899	1271,~~240,005~~759
Loss on impairment	40,000	-0-
(Gain) loss on derivatives	(437,386)	203,905
Loss / (gain) on derivatives	(472,791)	(2,427,052)
Changes in operating assets and liabilities:
Accounts, notes and other receivables	(1,~~972~~118,~~631~~912)	~~799~~32,~~770~~360
Deposits and escrow accounts	1,~~137~~190,~~451~~459	3232,~~705,133~~025
Prepaid expenses	(~~353~~700,~~932~~106)	(~~213~~465,~~589~~654)
Deferred expenses	24(253,~~043~~795)	(41,~~711~~119,~~238)~~012
Cash and cash equivalents – restricted	(126,587)	1,335,563
Accrued liabilities	913,529	943,948
Accrued liabilities	(187,423)	(1,621,513)
Deferred income	(90,611)	(129,732)
Deferred income	(87,877)	(134,402)
Accounts and other payables	(707,632)	(920,990)
Accounts and other payables	(65,011)	(2,224,997)
Net cash provided by (used in) operating activities	(595,437)	117,356
Net cash provided by / (used in) operating activities	1,026,230	(1,592,043)
Investing activities:
Investments in marketable securities	~~(151,864)~~-0-	~~-0-~~(96,946)
Proceeds from sale of marketable securities	~~877,947~~-0-	~~642~~374,~~596~~359
Purchase of equipment and tenant improvements	(~~900~~31,~~545~~478)	(~~125~~647,~~762~~699)
Investments in affiliated companies	(379,647)	-0-
Proceeds from sale of real estate	13,662,078	21,360,000
Proceeds from sale of real estate	23,819,504	34,373,493
Additions to developed properties and properties under construction	(8,337,110)	(11,461,232)
Additions to developed properties and properties under construction	(30,658,053)	(25,253,629)
Net cash provided by investing activities	5,293,490	9,528,482
Net cash provided by / (used in) investing activities	(7,392,658)	9,636,698

See accompanying notes.

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

	Nine Months Ended
	Three Months Ended
	January 31, 2018	January 31, 2017
	July 31, 2018	July 31, 2017
Financing activities:
Distributions to noncontrolling interests	$(~~473~~232,~~502~~830)	$(1138,~~087,469~~256)
Repurchase of common stock	~~(75,000)~~-0-	(7975,~~968~~000)
Proceeds from:
Construction loans	177,~~385~~040,~~201~~812	107,~~086~~793,~~324~~353
Mortgage loans	~~7,526,407~~-0-	102,~~564~~876,~~657~~407
Notes	-0-	-0-
Credit lines	53,~~360~~000,000	~~1,625,000~~-0-
Principal payments on:
Construction loans	(17,~~765~~900,~~599~~772)	(131,~~051~~127,~~475~~899)
Mortgage loans	(163,~~045~~688,~~843~~037)	(1213,~~720~~469,~~675~~006)
Notes	-0-	~~(40,000)~~-0-
Credit lines	(52,~~000~~476,~~000~~670)	(25,~~027~~000,~~091~~000)
Payments (to) / from related parties and affiliates, net	162,989	150,207
Payments (to) from related parties and affiliates, net	199,428	151,271
Net cash provided by / (used in) financing activities	7,074,653	(6,580,490)
Net cash used in financing activities	(4,058,069)	(8,989,130)
Net change in cash and cash equivalents	708,225	1,464,165
Net change in cash and cash equivalents and restricted cash	639,984	656,708
Cash and cash equivalents, beginning of period	6,250,757	5,982,506
Cash and cash equivalents and restricted cash, beginning of period	8,199,368	6,776,769
Cash and cash equivalents, end of period	$6,958,982	$7,446,671
Cash and cash equivalents and restricted cash, end of period	$8,839,352	$7,433,477
Cash paid during the period for interest	$72,~~662~~632,~~401~~510	$72,~~532~~672,~~799~~437
Cash paid during the period for income taxes	$~~147~~44,~~410~~540	$~~346~~60,~~316~~750
Debt refinancing in 1st quarter:
New mortgage loans	$~~8,565,000~~-0-	$148,~~300~~565,000
Debt reduced	(~~5,567,673~~0)	(5,~~359~~567,~~713~~673)
Escrow funded	(~~120,920~~0)	(8120,~~019,977~~920)
Net cash from refinancing in 1st quarter	$~~2,876,407~~-0-	$~~920~~2,~~310~~876,407
Debt refinancing in 2nd quarter:
New mortgage loan	$-0-	$32,500,000
Debt reduced	(0)	(31,030,767)
Escrow funded	(0)	(1,100,000)
Net cash from refinancing in 2nd quarter	$-0-	$369,233
Debt refinancing in 3rdrd quarter:
New mortgage loan	$-0-	$21,186,745
Debt reduced	(0)	(18,139,103)
Escrow funded	(0)	(1,392,528)
Net cash from refinancing in 3rd quarter	$-0-	$1,655,114

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, ~~2017 was~~2018 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, ~~2017~~2018.

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.

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

1. Business and Significant Accounting Policies (continued):

Revenue Recognition

We account for revenue in accordance with Accounting Standards Codification (ASC) Topic 606, “Revenue from Contracts with Customers” (Topic 606). We adopted new revenue recognition guidance on May 1, 2018, using the full retrospective method (see Note 2). Revenue is recognized when or as control of the promised services or goods is transferred to our customers, in an amount that reflects the consideration we expect to be entitled to in exchange for those services.

The following is a description of our revenue recognition policies, updated for the effects of Topic 606, for the Company’s principal activities, separated by our reportable segments as discussed further within this Note 1.

Real Estate Operations Segment

Rental Income – Rental income is recognized on a straight-line basis over the terms of the respective leases and consists of base rent and reimbursements for certain costs such as real estate taxes, utilities, insurance, common maintenance and other recoverable costs as provided in the lease agreements. There are no contingent rents. If conditions of rent are not met, certain tenants may have rights to pay percentage rent not to exceed stated rent. Currently, there are a very limited number of tenants on percentage rent.

Management Services – The Company provides management and maintenance services to third parties, primarily the Company’s unconsolidated Claymont, DE and Bronx, NY properties. The Company is compensated for such services through a monthly management fee earned based on a specified percentage of the monthly rental income generated from the property under management. Property management services represent a series of distinct daily services rendered over time.

Sales of Real Estate – The Company recognizes sales of real estate as revenue at a point in time when control is transferred and the Company has satisfied its performance obligation.

Development Services – The Company typically satisfies its performance obligation as services are rendered over time, measured by the ratio of costs incurred up to a given date to estimated total costs for each contract. This cost to cost measure is used because management considers it to be the best available measure of progress on these contracts.

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

1. Business and Significant Accounting Policies (continued):

Construction Income – Construction revenues are recognized as performance obligations are satisfied over time (formerly known as percentage-of-completion method), measured by the ratio of costs incurred up to a given date to estimated total costs for each contract. This cost to cost measure is used because management considers it to be the best available measure of progress on these contracts.

Other Revenues – Other revenues represents retail sales at the Company’s three retail establishments it owns at its shopping centers. The Company recognizes these revenues at a point in time when control of the goods is transferred to its customers.

Fee for Service Segment:

Preferred Developer Services – The Company is party to preferred developer agreements with CVS and Cumberland Farms. Under these agreements, the Company satisfies its performance obligation over time as services are provided. Fees are typically payable upon contractually defined events, like project milestones.

Accounts Receivable and Allowance for Doubtful Accounts

We record accounts receivable for our unconditional rights to consideration arising from our performance under contracts with customers. The carrying value of such receivables, net of the allowance for doubtful accounts, represents their estimated net realizable value. We estimate our allowance for doubtful accounts for specific accounts receivable balances based on historical collection trends, the age of outstanding accounts receivables and existing economic conditions associated with the receivables. Past-due accounts receivable balances are written off when our internal collection efforts have been unsuccessful. As a practical expedient, we do not adjust the promised amount of consideration for the effects of a significant financing component when we expect, at contract inception, that the period between our transfer of a promised service to a customer and when the customer pays for that service will be one year or less. We do not typically include extended payment terms in our contracts with customers.

Remaining Performance Obligations

Remaining performance obligations represent the aggregate transaction prices for contracts where our performance obligations have not yet been satisfied. On July 31, 2018, we had $4,950,557 of remaining performance obligations relating to construction projects. We expect to recognize approximately 100% of our remaining performance obligation as revenue during the remainder of fiscal 2019.

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

1. Business and Significant Accounting Policies (continued):

Contract Assets and Contract Liabilities

Contract assets represent assets for revenue that has been recognized in advance of billing the customer and for which the right to bill is contingent upon something other than the passage of time. Included in contract assets are costs and estimated earnings in excess of billings, uninstalled materials, and other costs related to long-term construction contracts.

When we receive consideration, or such consideration is unconditionally due, from a customer prior to transferring services to the customer under the terms of the services contract, we record a contract liability. Included in contract liabilities are billings in excess of costs and estimated earnings and deferred revenue. Such deferred revenue typically results from milestone payments pertaining to future services not yet rendered. We recognize the contract liability as revenue once we have transferred control of service to the customer and all revenue recognition criteria are met.

Contract assets and contract liabilities are determined for each contract on a net basis. As of July 31, 2018, contract liabilities of $343,050 are included in deferred income in the accompanying consolidated balance sheets.

Contract Costs

Contract costs include all direct material, direct labor and benefits, materials unique to or installed in the project, subcontract costs and allocations of indirect construction costs. Provisions for estimated losses on contracts in progress are made in the period in which such losses are determined.

As long-term contracts extend over one or more years, revisions in estimates of costs and earnings during the course of the contract are reflected in the accounting period in which the facts, which require the revision, become known.

Applying the contract cost practical expedient, we recognize the incremental costs of obtaining contracts as an expense when incurred if the amortization period of the assets that we otherwise would have recognized is one year or less.

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, 2018 or ~~January~~July 31, 2017.

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

1. Business and Significant Accounting Policies (concluded):

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		~~Nine Months Ended~~
	January 31		January 31
	July 31,
	2018	2017	~~2018~~	~~2017~~
Revenues:
Real Estate Operations	$1126,~~467~~848,~~236~~019	$2530,~~115~~506,~~037~~118	~~$52,389,651~~	~~$61,809,016~~
Fee for Service	~~735~~967,~~375~~500	~~935~~513,~~750~~250	~~2,650,750~~	~~3,500,500~~
Total	$1227,~~202~~815,~~611~~519	$2631,~~050~~019,~~787~~368	~~$55,040,401~~	~~$65,309,516~~
Operating Costs & Expenses:
Real Estate Operations	$617,~~522~~321,~~259~~517	$1825,~~534~~324,~~933~~567	~~$36,758,328~~	~~$42,844,271~~
Fee for Service	~~910~~1,~~469~~028,403	1876,~~337,627~~409	~~2,890,595~~	~~3,827,629~~
Administrative Expenses	31,~~146~~192,~~547~~441	21,~~460~~560,~~473~~962	~~9,951,570~~	~~6,907,319~~
Total	$1019,~~579~~542,~~275~~361	$2227,~~333~~761,~~033~~938	~~$49,600,493~~	~~$53,579,219~~

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

The 10only assets in the balance sheet belonging to the Fee for Service segment is restricted cash of $334,147 on July 31, 2018 and $375,501 on April 30, 2018 and receivables of $3,319,079 on July 31, 2018 and $4,516,807 on April 30, 2018.

FIRST HARTFORD CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

2. New Accounting Pronouncements

The FASB previously issued five ASUs related to revenue recognition (“new revenue recognition guidance”). The ASUs issued were: (1) in May 2014, ASU 2014-09, “Revenue from Contracts with Customers (Topic 606);” (2) in March 2016, ASU 2016-08, “Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net);” (3) in April 2016, ASU 2016-10, “Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing;” (4) in May 2016, ASU 2016-12, “Revenue from Contracts with Customers (Topic 606): Narrow-scope Improvements and Practical Expedients;” and (5) in December 2016, ASU 2016-20, “Technical Corrections and Improvements to Topic 606, Revenue From Contracts with Customers.” As mentioned in Note 1, we adopted the new revenue recognition guidance in the first quarter of fiscal 2019 using the full retrospective transition method. This resulted in a cumulative adjustment of $129,097 to the accumulated deficit balance reflected in the accompanying consolidated balance sheet at April 30, 2018, which represents the impact from restating the statement of operations for the year ended April 30, 2018. There was no impact on the Company’s consolidated balance sheet as of April 30, 2017. The impact of the application of the new revenue recognition guidance resulted in a deceleration of revenues and a corresponding deferral of project costs related to an agreement that did not meet the criteria for a contract under the scope of Topic 606. Under the new revenue guidance, because this agreement does not meet the criteria for a contract, revenue cannot be recognized until the Company has satisfied all performance obligations. In addition, the deceleration of these revenues and expenses resulted in an increase in total assets and liabilities to reflect contract assets and liabilities.

The following table presents the effects of the adoption of the new revenue recognition guidance on our consolidated balance sheet as of April 30, 2018:

	As Reported	Adoption of New Revenue Recognition Guidance	As Adjusted

Deferred Expenses	$3,064,329	$177,871	$3,242,200
Total Assets	248,040,879	177,871	248,218,750
Deferred Revenue	885,635	350,000	1,235,635
Total Liabilities	247,944,444	350,000	248,294,444
Accumulated Deficit	4,037,658	129,097	4,166,755
Noncontrolling Interests	867,855	(43,032)	824,823
Total Liabilities and Equity	248,040,879	177,871	248,218,750

The adoption of the new revenue recognition guidance did not have an effect on the Company’s condensed consolidated statements of income or cash flows for the three months ended July 31, 2017.

In August 2016, the FASB issued ASU 2016-15, “Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments.” This ASU addressed eight specific cash flow issues with the objective of reducing the existing diversity in practice. We adopted ASU 2016-15 in the first quarter of fiscal 2019.

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

12. ~~Business~~ New ~~and Significant~~ Accounting ~~Policies~~Pronouncements (concluded):

~~Segment~~In ~~Information~~November 2016, the FASB issued ASU 2016-18, “Statement of Cash Flows (~~concluded~~Topic 230): Restricted Cash.” This ASU requires that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash. We adopted ASU 2016-18 in the first quarter of fiscal 2019 and, as a result, restricted cash has been included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows.

~~The only assets in the balance~~Recent ~~sheet~~Accounting ~~belonging~~Pronouncements toPending ~~the Fee for Service segment is restricted cash of $273,670 on January 31, 2018 and $129,651 on April 30, 2017 and receivables of $2,340,854 on January 31, 2018 and $4,262,302 on April 30, 2017.~~Adoption

~~2. Consolidated~~Currently, ~~Variable~~there ~~Interest~~are ~~Entities~~no ~~and~~Accounting ~~Investments~~Standards Updates 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 ~~Affiliated~~annual ~~Partnerships:~~report on Form 10-K for the fiscal year ended April 30, 2018.

3. 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, 2018	April 30, 2017
	July 31, 2018	April 30, 2018
Real estate and equipment, net	$6667,~~622~~172,~~012~~393	$66,~~732~~691,~~664~~049
Other assets	11,~~912~~330,~~971~~457	1311,~~417~~607,~~929~~936
Total assets	78,~~534~~502,~~983~~850	8078,~~150~~298,~~593~~985
Intercompany profit elimination	(23,~~632~~415,~~463~~086)	(2,~~719~~603,~~143~~570)
	$75,902,520	$77,431,450
	$75,087,764	$75,695,415
Mortgages and other notes payable	$6463,~~027~~619,~~894~~425	$6463,~~728~~807,~~200~~424
Other liabilities	4,~~415~~650,~~581~~112	4,~~179~~796,~~842~~289
Total liabilities	$68,~~443~~269,~~475~~537	$68,~~908~~603,~~042~~713

FIRST HARTFORD CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

3. Consolidated Variable Interest Entities and Investments in Affiliated Partnerships (concluded):

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, 2018	January 31, 2017	January 31, 2018	January 31, 2017
	July 31,
Dover Parkade, LLC:
	2018	2017
Revenue	$715,049	$673,655	$2,125,677	$2,069,918
Dover Parkade, LLC:
Expenses	488,039	488,348	1,543,602	1,517,886
Revenue	$721,528	$701,909
Net income	$227,010	$185,307	$582,075	$552,032
Expenses	(467,184)	(556,190)
Net income	$254,344	$145,719

11In August 2017, the Company finalized an agreement to invest in an affiliated limited liability company called Ware Seguin 1518, LLC. The Company accounts for its 50% interest in Ware Seguin 1518, LLC under the equity method of accounting. Ware Seguin 1518, LLC owns property in Schertz, TX that it plans to develop into approximately 285 single family residential lots and approximately 15 acres of commercial or other uses. The operating and financial policies of Ware Seguin 1518, LLC are not controlled by the Company. The Company’s initial investment was $326,498 and the Company committed to invest an additional amount up to $500,000, of which an additional $103,149 was made as of July 31, 2018. Additional future investments may be required if agreed by the Members. The Company is also a guarantor of 50% of a $1,000,000 bank loan obtained by Ware Sequin 1518, LLC that was used to purchase the property. There has been no income statement activity as of July 31, 2018.

4. Revenue from Contracts with Customers:

Disaggregated Revenue:

The following tables represent a disaggregation of revenue from contracts with customers for the three months ended July 31, 2018 and 2017 by type of service:

Three Months Ended July 31, 2018	Real Estate Operations Segment	Fee for Service Segment	Total
Topic 606 Revenue:
Rental Income	$7,824,876	$-0-	$7,824,876
Management Services	518,943	-0-	518,943
Preferred Developer Services	-0-	967,500	967,500
Construction Income	3,390,197	-0-	3,390,197
Sales of Real Estate	13,662,078	-0-	13,662,078
Other Revenues	1,451,925	-0-	1,451,925
Total Revenues	$26,848,019	$967,500	$27,815,519

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

24. ~~Consolidated~~ Revenue from ~~Variable~~Contracts ~~Interest~~with ~~Entities~~Customers ~~and Investments in Affiliated Partnerships~~ (~~continued~~concluded):

InDisaggregated ~~August~~Revenue 2017, the Company finalized an agreement to invest in an affiliated limited liability company called Ware Seguin 1518, LLC. The Company accounts for its 50% interest in Ware Seguin 1518, LLC under the equity method of accounting. Ware Seguin 1518, LLC owns property in Schertz, TX that it plans to develop for approximately 285 single family residential lots and approximately 15 acres of commercial or other uses. The operating and financial policies of Ware Seguin 1518, LLC are not controlled by the Company. The Company’s initial investment was $326,498 and the Company committed to invest an additional amount up to $500,000, of which an additional $53,149 was made as of January 31, 2018. Additional future investments may be required if agreed by the Members. The Company is also a guarantor of 50% of a $1,000,000 bank loan obtained by Ware Sequin 1518, LLC that was used to purchase the property. There has been no income statement activity as of January 31, 2018.(concluded):

3. Income Taxes:

Three Months Ended July 31, 2017	Real Estate Operations Segment	Fee for Service Segment	Total
Topic 606 Revenue:
Rental Income	$7,796,540	$-0-	$7,796,540
Management Services	127,313	-0-	127,313
Preferred Developer Services	-0-	513,250	513,250
Construction Income	-0-	-0-	-0-
Sales of Real Estate	21,360,000	-0-	21,360,000
Other Revenues	1,222,265	-0-	1,222,265
Total Revenues	$30,506,118	$513,250	$31,019,368

The adoption of the new revenue recognition guidance did not have an effect on the Company’s condensed consolidated statements of income for the three months ended July 31, 2017.

5. 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.

On December 22, 2017, the Tax Cuts and Jobs Act of 2017 (the Tax Act) was signed into law. The Tax Act makes significant changes to the Internal Revenue Code, including but not limited to, decreasing the statutory corporate tax rate from 35% to 21% effective January 1, 2018 and repealing AMT tax treatment. The Company calculated its best estimate of the impact of the Tax Act in its income tax provision and re-measured its deferred tax assets and liabilities at the enacted corporate tax rate of 21% in accordance with its understanding of the Tax Act and available guidance. The primary impact of this re-measurement was a reduction in deferred tax assets and liabilities in connection with the reduction of the U.S. corporate income tax rate and resulted in the Company recording approximately $200,000 of additional income tax expense during the three and nine month periods ended January 31, 2018.

On October 26, 2017, the Company was informed that its fiscal year 2016 Federal tax return was selected for examination. This examination is currently in process.

46. Litigation:

~~Following~~There ahave ~~site~~been ~~inspection~~no ofsignificant ~~asbestos~~changes ~~abatement activities being conducted at the Spring Gate Apartments~~ in ~~Rockland, Massachusetts~~litigation ~~(Facility) on April 14, 2017, the Massachusetts Department of~~since ~~Environmental Protection (MassDEP) by letter dated~~ April 2130, ~~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~~2018. 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.

12 17

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

47. ~~Litigation (continued)~~ Construction Loan:

ByEdinburg, ~~letters~~TX ~~dated~~– ~~May~~Construction ~~15,~~Loan: On May ~~16 and May 30~~1, ~~2017~~2018, ~~three attorneys representing tenants in three units at~~ the ~~Facility notified the~~ Company ~~and/or~~obtained ~~its~~a ~~management company~~$3,233,937 ~~FHRC~~construction ~~Management~~loan ~~Corporation,~~to ~~of claims~~finance ~~related~~construction toof ~~environmental~~a ~~conditions~~commercial building at ~~the~~its ~~Facility~~Edinburg, TX property. The ~~first of these~~ ~~letters~~initial ~~alleges~~construction ~~that~~draw ~~the~~was ~~tenant~~for ~~and~~$2,818,156 ~~her~~with ~~family~~another ~~have~~$415,781 ~~been~~available ~~exposed~~ to ~~and have~~ ~~been~~draw ~~living~~as inconstruction anis ~~apartment containing asbestos for many years~~completed. The ~~second letter~~net ~~claims~~cash ~~that~~received ~~the tenant and her three minor children have suffered injuries believed to be caused~~ by the ~~presence~~Company ofat closing ~~mold~~was ~~and asbestos in the apartment~~$455,737. ~~The~~Of ~~final letter asserts claims with respect to~~ the ~~tenant~~initial ~~and~~construction ~~her three~~draw, ~~minor~~$2,310,000 ~~children~~was ~~involving~~used ~~the presence and remediation of asbestos~~to ~~including~~repay ~~violation~~Protective ofLife aagainst ~~tenant’s~~their ~~quiet~~remaining ~~enjoyment,~~loan ~~breach~~to ofrelease the ~~warranty~~lot ~~of habitability, causation of emotional distress and~~ the ~~use of unfair and~~ ~~deceptive~~building ~~practices~~is ~~under~~being ~~M.G.L.~~constructed con. ~~93A.~~ The ~~first~~interest ~~two~~rate ~~letters~~on ~~made~~the ~~no specific~~loan ~~monetary~~is ~~demand;~~ the ~~third~~Prime Rate ~~letter~~per ~~demanded~~Wall ~~$312,600. All~~Street ~~three~~Journal ~~claims were~~plus ~~tendered~~1.25% towith ~~the~~a ~~Company’s~~floor ~~insurer,~~of ~~which~~6.00% ~~agreed~~and ~~to respond under~~ a ~~reservation~~ ofceiling ~~rights~~of 9.00%. OnThe ~~July~~monthly ~~14,~~loan ~~2017,~~payments ~~counsel~~are ~~retained~~interest byonly ~~the~~for ~~insurer provided a timely response to~~ the ~~third~~first ~~letter,~~twelve ~~adamantly denying the Company’s~~months ~~liability~~then ~~pursuant~~convert to ~~M.G.L.~~monthly c.principal ~~93A~~and orinterest ~~for~~payments ~~any~~calculated ofusing ~~the~~a ~~other claims. By letter~~20 ~~dated~~year ~~July~~amortization ~~27,~~period ~~2017,~~with ~~the~~a ~~insurer~~final ~~acknowledged~~balloon ~~receipt~~payment ofdue ~~the~~on ~~three~~April ~~claims~~30, at2023. ~~the~~The ~~same~~Company ~~time~~is ~~stating~~also ~~however that as no lawsuit had arisen, it did not have~~ a ~~duty~~ toguarantor ~~defend,~~on ~~but~~this ~~nonetheless would continue to investigate~~loan.

~~At this time, the Company~~8. ~~cannot assess the likelihood of an unfavorable outcome or provide any estimate~~ Purchases of ~~the~~Real ~~amount or range of any potential loss.~~ Estate:

5Katy, TX: On May 3, 2018, the Company purchased a parcel of land in Katy, TX for $2,386,648 including closing costs. ~~Refinancings~~ This purchase was financed with proceeds from a construction loan of $1,487,973, cash of $823,496, and working capital of $75,179. Key terms of the construction loan are as follows:

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.

Maximum Loan Amount:	$4,325,000
Maturity Date:	May 3, 2022
Interest Rate:	2.50% plus One Month ICE LIBOR rate, as defined, for first year and 6.5% through the maturity date; 12.0% thereafter.
Payments:	Interest only payable monthly during the first year. Thereafter, principal and interest payable monthly using a 25-year amortization.
Guarantee:	The Company (Corporate).

6Katy, TX (Cane Island): On July 25, 2018, the Company purchased a 5. ~~Purchase~~32 acre parcel of land in Katy, TX for $2,977,851 including closing costs. This purchase was primarily financed through utilization of ~~Real~~the ~~Estate:~~Company’s credit lines. The Company expects to obtain a construction loan for this property in the near future.

~~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~~9. ~~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~~Subsequent ~~loan are as follows~~Events:

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).

The Company has evaluated for subsequent events through September 28, 2018, the date the financial statements were issued.

Wethersfield, CT – Sale of Condominium: On 13August 28, 2018, the Company sold its final condominium in Wethersfield, CT for $260,000 (cost of approximately $254,718).

~~FIRST~~Houma, ~~HARTFORD~~LA ~~CORPORATION~~– ~~AND~~Sale ~~SUBSIDIARIES~~of Property: On September ~~NOTES~~20, TO2018, ~~CONDENSED~~the ~~CONSOLIDATED~~Company ~~FINANCIAL~~sold ~~STATEMENTS~~its single tenant property in Houma, LA for $7,895,000 (~~Unaudited~~cost of approximately $6,405,114). A construction loan with a balance of $4,563,084 and a line of credit with a balance of $285,695 were paid off with the proceeds.

~~6. Purchase~~ ~~of Real Estate (continued):~~ 18

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).

Houma, LA – Land Purchase: On January 5, 2018, the Company purchased a parcel of land in Houma, LA for $2,514,644 including closing costs. This purchase was financed with proceeds from a construction loan of $1,417,217, utilization of the Company’s lines of credit of $1,000,000, and working capital of $97,427. Key terms of the construction loan are as follows:

Loan Amount:	$5,065,000
Maturity Date:	January 5, 2019
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).

Pearland, TX – Land Purchase: On January 11, 2018, the Company purchased a parcel of land in Pearland, TX for $1,038,306 including closing costs. This purchase was financed with proceeds from a construction loan of $500,000, utilization of the Company’s lines of credit of $400,000, and working capital of $138,306. Key terms of the construction loan are as follows:

Loan Amount:	$500,000
Maturity Date:	January 5, 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).

Spring, TX – Land Purchase: On January 30, 2018, the Company purchased three adjacent parcels of land in Spring, TX for $1,161,240 including closing costs. Simultaneously, one of these parcels was sold to another party for $1,404,504 (cost of $459,611). The purchase was financed by working capital and the proceeds from the sale. The Company netted $27,807 of cash for these two transactions, which was received on February 2, 2018. The remaining two parcels will be marketed to retail establishments.

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

7. Subsequent Events:

Little Ferry, NJ – Land Purchase: On February 8, 2018, the Company purchased a parcel of land in Little Ferry, NJ for $3,131,000 which, along with closing costs and a deposit into a Remediation Trust Fund of $439,425, were financed by proceeds from a construction loan of $3,774,340 plus working capital. Key terms of the construction loan are as follows:

Loan Amount:	$8,800,000
Maturity Date:	February 1, 2029
Interest Rate:	One month LIBOR, as defined, plus 2.50% through February 1, 2019 (the “Construction Phase”); thereafter, one month LIBOR plus 1.90% (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:	Prior to February 1, 2019, 0.50% of the principal balance prepaid; from February 1, 2019 – January 31, 2021, 1.00% of the principal balance prepaid.

Wethersfield, CT – Sale of Condominium: On February 28, 2018, the Company sold a condominium in Wethersfield, CT for $255,000 (cost of approximately $254,182). The Company owns one more condominium on this site after this sale.

The Company has evaluated for subsequent events through March 29, 2018, the date the financial statements were issued.

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~~ critical accounting policies from those included in Item 7 of its Annual Report on Form 10-K for the year ended April 30, ~~2017~~2018 under the subheading “Critical Accounting Policies and Estimates”.

Results of Operations:

Rental Income:

Rental income for the ~~three~~ ~~and nine~~ three months ended ~~January~~July 31, ~~2018 and 2017,~~ by type of tenant, follows:

	Three Months Ended		~~Nine Months Ended~~
	January 31,		January 31,
	July 31,
	2018	2017	~~2018~~	~~2017~~
Residential	$3,~~072~~090,~~065~~437	$3,~~084~~037,~~436~~106	~~$9,176,045~~	~~$9,171,804~~
Commercial	4,~~740~~734,~~535~~439	54,~~010~~759,~~773~~434	~~14,179,100~~	~~14,851,940~~
	$7,812,600	$8,095,209	$23,355,145	$24,023,744
	$7,824,876	$7,796,540

The slight ~~changes~~increase in residential rental income was primarily ~~caused by rent increases at~~ the ~~Somerville,~~result MAof ~~property (i.e., Clarendon), partially offset by~~ lower ~~revenue~~vacancies at the Rockland, MA property due to substantial ~~vacancies~~completion ~~from~~of ~~converted~~the ~~apartments~~renovation ~~needed~~project ~~for~~in the ~~ongoing~~first ~~renovation~~quarter of the ~~project~~current year.

The slight decrease in commercial rental income was ~~primarily~~ primarily caused by ~~lower~~the ~~common~~partial ~~area~~sale ~~maintenance~~of ~~(CAM)~~the ~~billings~~New toOrleans, ~~tenants~~LA ~~resulting from~~late ~~lower~~in ~~associated~~the ~~expenses and~~ prior year ~~rents~~first ~~on some of the Company’s development properties that have since been sold (e.g.~~quarter, ~~Olathe,~~largely ~~KS; Conroe, TX; Stanhope, NJ), partially~~ offset by ~~additional~~normal ~~rents~~recurring ~~from~~rent ~~a new tenant at the Company’s Lubbock, TX property~~increases.

16Service Income

~~Item~~ Service 2.income ~~MANAGEMENT’S~~for ~~DISCUSSION~~the ~~AND~~three months ~~ANALYSIS~~ended OFJuly ~~FINANCIAL~~31 ~~CONDITION AND RESULTS OF OPERATIONS (continued)~~follows:

Service Income

	Three Months Ended
	July 31,
	2018	2017
Management and other fees	$518,943	$127,313
Construction	3,390,197	-0-
Preferred developer fees	967,500	513,250
	$4,876,640	$640,563

~~Service income for the three and nine months ended January 31, 2018 and 2017 follows:~~ 19

	Three Months Ended		Nine Months Ended
	January 31,		January 31,
	2018	2017	2018	2017
Management fees	$284,430	$163,934	$613,255	$427,567
Preferred developer fees	735,375	935,750	2,650,750	3,500,500
	$1,019,805	$1,099,684	$3,264,005	$3,928,067

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

~~The~~Service ~~increase~~Income ~~in management fees was due to higher fees received from the Company’s unconsolidated Claymont, DE property.~~(concluded):

~~The~~Management ~~third quarter and full year decrease in preferred developer~~ fees ~~primarily~~are ~~reflected lower fees~~ received primarily from ~~CVS,~~the ~~partially~~Company’s ~~offset~~unconsolidated byClaymont, ~~higher~~DE ~~fees~~and ~~received~~Bronx, ~~from~~NY ~~Cumberland Farms~~properties. ~~The~~In ~~decrease in CVS fees, which continues a trend over~~ the ~~past~~first ~~several~~quarter ~~years, was the result~~ of a ~~recent~~fiscal ~~acquisition~~2019, ~~that has impacted in~~ the ~~slowing~~Company ofalso ~~their~~received ~~pipeline~~commissions, ~~for~~finders ~~new stores. The~~and ~~increase~~other infees ~~Cumberland Farms was the result of timing of closings~~not ~~based~~received ~~on the construction schedule~~previously.

~~Sales~~Construction ~~(and~~revenue ~~Cost~~was ofgenerated from the Company’s ~~Sales)~~unconsolidated ofBronx, ~~Real~~NY ~~Estate~~affordable housing development project.

~~Nine~~The ~~months~~increase ~~ended~~in ~~January~~preferred developer fees reflected higher fees ~~31,~~received ~~2018:~~from both CVS and Cumberland Farms. The increase in CVS fees was largely due to timing; the Company still anticipates this revenue stream to decrease over the next few years as a result of an acquisition that has impacted in the slowing of their pipeline for new stores. The increase in Cumberland Farms was the result of timing of closings based on the construction schedule; this revenue stream is expected to remain steady.

~~St.~~Sales ~~Louis,~~(and MOCost ~~– 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~~Sales)~~. A~~ ~~loan with a balance~~ of ~~$5,120,000~~Real ~~and a credit line of $1,000,000 were paid off with the proceeds.~~Estate

~~New~~Three ~~Orleans,~~months LAended ~~– Sale~~July ~~of Property: On June 7~~31, 2017, the Company sold a parcel of its property in New Orleans, LA for $11,350,000 (cost of $9,027,022). 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.2018:

~~Austin~~Montgomery, TX – ~~Sale of~~Partial Property Sale: On ~~June~~May 1523, ~~2017~~2018, the Company sold ~~its~~a single-tenant ~~property~~ property in ~~Austin~~Montgomery, TX for $32,~~210~~930,~~000~~499 (cost of $2856,~~993,692~~510). AThe ~~loan~~Company continues ~~with~~to aown ~~balance~~22.70 acres of land attached to this sold parcel that can ~~$1,102,899~~support ~~was~~approximately ~~paid~~130,000 ~~off~~square ~~with~~feet ~~the~~of ~~proceeds~~additional development.

~~East Providence~~Cedar Park, RI TX – ~~Sale of~~ Property Sale: On ~~September~~June 714, ~~2017~~2018, the Company sold ~~its~~a ~~property~~single-tenant ~~held~~property ~~for sale~~ in ~~East~~Cedar ~~Providence~~Park, RITX for $~~830~~2,~~000~~631,579 (cost of $~~664~~1,~~312~~979,963). A mortgage loan with a balance of $1,353,974 was paid off with the proceeds.

~~Wethersfield~~Houston, TX CT – ~~Sale~~ ofPartial ~~Condominium~~Property Sale: On ~~November~~June 14, ~~2017~~2018, the Company sold a ~~condominium~~ single-tenant property in ~~Wethersfield~~Houston, CTTX for $~~225~~8,100,000 (cost of $~~271~~5,~~802~~047,464). The ~~net proceeds were~~ ~~used~~Company continues to ~~pay~~own ~~off a mortgage loan on this property~~18. ~~The~~58 ~~Company~~acres ~~owned~~of ~~another two~~land ~~condominiums~~attached onto this ~~site~~sold ~~after~~parcel ~~this~~that can ~~sale.~~support ~~The~~approximately ~~loss~~100,000 onsquare ~~the~~feet ~~sale~~ of ~~this property~~additional ~~resulted in the Company recording an impairment on the remaining properties~~development.

~~Spring,~~There TXwere ~~– Partial~~also ~~Sale~~favorable ofadjustments ~~Property: On January 30, 2018, the Company purchased three adjacent parcels~~ of ~~land in Spring, TX for~~ $1181,~~161,240~~876 ~~including~~made ~~closing costs.~~ in ~~Simultaneously,~~fiscal ~~one~~year of2019 ~~these~~related ~~parcels was sold~~ to ~~another~~property ~~party~~sales ~~for~~that ~~$1,404,504 (cost~~occurred ofin ~~$459,611). The~~previous ~~purchase was financed by working capital and the~~fiscal ~~proceeds~~years ~~from~~as ~~the~~actual ~~sale. The~~costs ~~Company~~came ~~netted~~in ~~$27,807~~slightly oflower ~~cash~~than ~~for these two transactions, which was received on February 2, 2018~~expected. ~~The remaining two parcels will be marketed to retail establishments.~~

17Three months ended July 31, 2017:

~~Item 2~~St. ~~MANAGEMENT’S~~Louis, ~~DISCUSSION~~MO ~~AND~~– ~~ANALYSIS~~Sale OFof ~~FINANCIAL~~Property: ~~CONDITION~~On ~~AND~~May ~~RESULTS OF~~30, 2017, the Company sold its ~~OPERATIONS~~ single-tenant property in St. Louis, MO for $6,800,000 (~~continued~~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.

~~Sales~~New Orleans, ~~(and~~LA ~~Cost~~– Sale of ~~Sales)~~ Property: On June 7, 2017, the Company sold a parcel of ~~Real~~its ~~Estate~~property in New Orleans, LA for $11,350,000 (~~continued~~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.

~~In fiscal year 2018~~Austin, ~~there~~ ~~were~~TX ~~also~~– ~~adjustments~~Sale of ~~costs~~Property: ~~incurred~~On ~~related~~June to15, ~~property~~2017, ~~sales~~the ~~that~~Company ~~occurred~~sold its single-tenant property in ~~prior~~Austin, ~~fiscal~~TX ~~years. The~~for ~~net~~$3,210,000 ~~amount~~(cost of ~~these~~$2,968,692). A ~~adjustments~~loan ~~resulted~~with in a balance of $411,~~792~~102,899 ~~reduction~~was ofpaid ~~costs~~off with the proceeds.

~~Nine~~There were also costs incurred in fiscal year 2018 related ~~months~~to property sales that occurred in the fiscal year ended ~~January~~April 3130, 2017: totaling $85,809 that were not anticipated as of the prior fiscal year end.

OnOther ~~June~~Revenues ~~29, 2016, the Company sold a property in Stanhope, NJ for $10,000,051~~ (~~cost~~and ~~of $8,280,570~~Expenses)~~. A construction loan with a balance of $6,329,667 was paid off with the proceeds.~~

OnThe ~~June~~increase ~~30,~~in ~~2016,~~other ~~the~~income ~~Company~~was ~~sold~~due to ahigher ~~portion~~sales ofby ~~its property~~the inCompany’s ~~Edinburg,~~new TXrestaurant ~~(i.e.,~~it ~~Texas~~built ~~Roadhouse)~~and ~~for~~owns ~~$2,210,000~~at ~~(cost of~~its $1Edinburg,~~355,597)~~ TX property. AThis ~~mortgage~~store ~~loan~~was ~~with~~opened alate ~~balance~~in ofthe ~~$1,279,136~~prior ~~was~~year ~~paid off with~~first ~~the proceeds~~quarter.

~~On 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.~~ 20

OnItem ~~September~~2. MANAGEMENT’S ~~20,~~DISCUSSION ~~2016,~~AND ~~the~~ANALYSIS ~~Company~~OF FINANCIAL ~~sold~~CONDITION aAND ~~parcel~~RESULTS ofOF ~~land in~~ ~~Austin, TX for $6,100,000~~ OPERATIONS (~~cost of $4,190,523~~continued) ~~that was previously ground leased.~~ :

OnOperating ~~December~~Costs ~~14, 2016, the Company~~and ~~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.~~Expenses:

OnRental ~~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.~~Expenses

~~Other~~Rental ~~Revenues~~expenses for the three months ended July 31, by type of tenant, follows:

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.

	Three Months Ended
	July 31,
	2018	2017
Residential	$2,663,072	$2,562,745
Commercial	2,333,054	2,411,421
	$4,996,126	$4,974,166

~~Operating~~The ~~Costs~~increase in residential rental expenses were mainly from higher expenses at the Somerville, MA (i.e., Clarendon) property for health insurance, repairs and maintenance and higher expenses at the Rockland, ~~Expenses:~~MA facility to make the units rental-ready (e.g., painting of decks), partially offset by lower asbestos remediation and related legal fees as the renovation project was substantially completed in FY 2019 Q1.

~~Rental~~The ~~Expenses~~decrease in commercial rental expenses was mainly due to a fee paid to a tenant in the prior year first quarter at its Edinburg, TX shopping center to allow the Company to lease to another tenant.

~~Rental~~Service ~~expenses for the three and nine months ended January 31, 2018 and 2017, by type of tenant, follows:~~Expenses

	Three Months Ended		Nine Months Ended
	January 31,		January 31,
	2018	2017	2018	2017
Residential	$2,893,012	$2,723,486	$8,056,033	$7,836,393
Commercial	2,670,022	2,226,361	7,499,881	7,278,646
	$5,563,034	$4,949,847	$15,555,914	$15,115,039

Service expenses for the three months ended July 31 follows:

The slight increase in residential rental expenses were mainly from 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 22 for more information. This was partially offset by lower repairs and maintenance expenses at the Somerville, MA (i.e., Clarendon) property.

	Three Months Ended
	July 31,
	2018	2017
Preferred Developer Expenses and Fees	$1,028,403	$876,409
Construction and Other Cost	2,973,403	363,581
	$4,001,806	$1,239,990

18The increase in preferred developer expenses and fees primarily reflects lower commissions paid commensurate with the higher revenue.

~~Item~~The ~~2. MANAGEMENT~~increase in construction expenses is from the Company’Ss ~~DISCUSSION~~unconsolidated ~~AND~~Bronx, ~~ANALYSIS~~NY OFaffordable ~~FINANCIAL~~housing ~~CONDITION~~development ~~AND~~project. This ~~RESULTS~~is partially OFoffset ~~OPERATIONS~~ by unbudgeted costs (~~continued~~i.e., overruns): incurred in the prior year at the renovation project at the Company’s Rockland, MA property.

~~The increase in commercial rental expenses were primarily related~~ ~~to the Company’s New Orleans, LA shopping center, which was completed and~~ refinanced in the first quarter of fiscal 2018, and higher expenses at the Edinburg, TX shopping center, including higher property taxes and a fee paid to a tenant to allow the Company to lease to another tenant. Partially offsetting these increases were expenses incurred in the prior year related to a lawsuit against a former tenant, including a legal settlement of $200,000. Also, in the prior year there was accelerated amortization expense of deferred commissions arising from the sale of a portion of its property in Edinburg, TX (i.e., Texas Roadhouse) and accelerated depreciation of tenant improvements at the Lubbock, TX properties upon the departure of two tenants. 21

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

~~Service expenses for the three and nine months ended January 31~~Selling, ~~2018~~General and Administrative ~~2017~~(“SG&A”) ~~follows:~~

	Three Months Ended		Nine Months Ended
	January 31,		January 31,
	2018	2017	2018	2017
Preferred Developer Expenses and Fees	$910,469	$1,337,627	$2,890,595	$3,827,629
Construction and Other Costs	305,413	(3,936)	1,260,572	36,329
	$1,215,882	$1,333,691	$4,151,167	$3,863,958

The decrease in SG&A expenses relates primarily to costs incurred in the prior year first quarter to resolve issues with the renovation project at the Company’s Rockland, MA property, as well as lower salaries due to attrition.

~~The~~Non-Operating ~~decrease in preferred developer expenses and fees~~Income ~~primarily reflects lower commissions paid commensurate with the lower revenue, primarily at CVS.~~ (Expense):

~~The~~Interest 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 24 for more information. Expense

~~Selling,~~Interest ~~General~~expense ~~and~~for ~~Administrative~~the ~~(“SG&A”)~~ three months ended July 31, by type of tenant, follows:

The increase in SG&A expenses relates primarily to expenses relating to its new restaurant it built and owns at its Edinburg, TX property, legal and professional expenses related to a potential residential housing deal in the Bronx, NY, and costs incurred related to 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 24 for more information).

	Three Months Ended
	July 31,
	2018	2017
Commercial	$1,861,182	$1,900,783
Residential	771,328	729,006
	$2,632,510	$2,629,789

19The change in commercial interest expense was minimal; there were no individually significant changes.

~~Item~~The 2. increase in residential interest expense was the result ~~MANAGEMENT’S DISCUSSION~~of ~~AND~~the ~~ANALYSIS~~end OFof ~~FINANCIAL~~monthly ~~CONDITION~~interest ~~AND~~subsidy ~~RESULTS~~payments OFupon a loan payoff in March ~~OPERATIONS (continued):~~2018.

~~Non-Operating~~Other Income / (~~Expense~~Loss):

~~Interest~~Other ~~Expense~~income / (loss) for the three months ended July 31 follows:

Interest expense for the three and nine months ended January 31, 2018 and 2017, by type of tenant, follows:

	Three Months Ended
	July 31,
	2018	2017
Investment Income (loss)	$18,481	$(83,418)

	Three Months Ended		Nine Months Ended
	January 31,		January 31,
	2018	2017	2018	2017
Commercial	$1,898,562	$1,793,277	$5,657,300	$5,546,685
Residential	720,954	731,326	2,176,420	2,160,737
	$2,619,516	$2,524,603	$7,833,720	$7,707,422

The change in investment income reflected realized losses on sales of securities in the prior year.

~~The~~Gain ~~increase~~/ in(Loss) ~~commercial interest expense was the result of interest~~ on ~~loans related to the Company’s development properties and the Company’s~~ ~~new~~Derivatives ~~restaurant it built and owns at its Edinburg, TX property.~~(Non-Cash)

The ~~change~~Company, inthrough ~~residential~~its ~~commercial~~50% owned consolidated subsidiaries, has entered into two separate floating-to-fixed interest ~~expense~~rate swap ~~was~~agreements with banks that expire in May 2025 and July 2031. The Company ~~minimal;~~has ~~the~~determined ~~nine~~that ~~month~~these ~~increase~~derivative ~~was~~instruments ~~the~~do ~~result~~not meet the requirements of hedge accounting and have therefore recorded the ~~prior~~change ~~year~~in ~~first~~fair ~~quarter~~value of ~~refinancing~~these atderivative ~~Rockland~~instruments through income. Note that the ~~loans~~change ~~paid~~in ~~off~~fair value asrecorded ~~part~~through ofincome ~~this~~is ~~refinancing did~~a ~~not~~non-cash ~~accrue interest~~item.

~~Other~~The ~~Income~~aggregate /fair ~~(Loss)~~value of the Company’s interest rate swap agreements as of July 31, 2018 and April 30, 2018 were liabilities of $222,394 and $659,780, respectively.

~~Other income / (loss) for the three and nine months ended January~~ ~~31, 2018 and 2017 follows:~~ 22

	Three Months Ended		Nine Months Ended
	January 31,		January 31,
	2018	2017	2018	2017
Proceeds from lawsuit	$-0-	$-0-	$200,000	$-0-
Investment income	70,023	30,745	(4,751)	69,850
	$70,023	$30,745	$195,249	$69,850

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

~~The~~Equity ~~decrease~~ in ~~investment~~Earnings ~~income for the first nine months~~of ~~reflected~~Unconsolidated ~~realized~~Subsidiary ~~losses on sales of securities in the current year first quarter.~~

~~During~~The ~~the~~equity ~~nine~~in ~~months ended January 31, 2018, the Company~~earnings ~~received $200,000 from a settlement~~ of aunconsolidated ~~lawsuit~~subsidiary ~~filed against another party~~ for ~~breach (relating to an alleged wrongful termination) of a contract to purchase a commercial shopping center owned by~~ the ~~Company~~three ~~and~~months ~~located~~ended inJuly ~~New Orleans,~~31 ~~LA. As a result, the sale did not go through and the Company retains~~follows: ~~ownership of the shopping center.~~

Loss on Impairment

	Three Months Ended
	July 31,
	2018	2017
Income from Operations	$127,172	$72,860
Distributions	90,000	90,000
	$217,172	$162,860

InThe ~~the~~Company ~~third~~has ~~quarter,~~an ~~the~~investment ~~Company~~in ~~recorded~~ an ~~impairment~~affiliated limited ~~loss~~liability ofentity ~~$40~~Dover Parkade,~~000~~ onLLC, ~~its~~(Dover). The ~~two~~Company ~~remaining~~has ~~condominiums~~a it50% interest in Dover, which owns a shopping center in ~~Wethersfield~~Dover Township, CTNJ. The ~~amount~~operating and financial policies of Dover are not controlled by the ~~impairment~~Company. For ~~loss~~years prior ~~represents~~to May 1, 2009, the ~~excess~~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 ~~cost~~Company’s ~~over~~investment and the Company’s investment balance was ~~estimated~~reduced ~~sales~~below ~~proceeds~~$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 ~~condominiums~~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.

20Income Taxes

~~Item~~The 2Company files a Federal consolidated tax return to report all income and deductions for its subsidiaries. The Company and its ~~MANAGEMENT’S~~subsidiaries file income tax returns in several states. The tax returns are ~~DISCUSSION~~filed ~~AND~~by ~~ANALYSIS~~the OFentity ~~FINANCIAL~~that ~~CONDITION~~owns ~~AND~~the ~~RESULTS~~real OFestate or provides services in such state. Some states do not allow a consolidated or combined tax filing. This ~~OPERATIONS~~sometimes creates income taxes to be greater than expected as income for some ~~(continued):~~subsidiaries cannot be offset by other subsidiaries with operating losses.

~~Gain~~On ~~(Loss)~~October on26, 2017, the Company was informed that its ~~Derivatives~~fiscal year 2016 Federal tax return was selected for examination. This examination is currently in process.

OnCapital ~~January~~Resources 1,and 2018, the Company entered into three interest rate swap agreements to fix the interest rate on its outstanding debt on its Brentwood, NY property at 4.42%. The swap agreements expire on December 2027, which corresponds to the maturity date of the underlying debt. Liquidity

~~The~~At July 31, 2018, the Company had $7,688,661 ~~through~~of ~~its~~unrestricted cash and cash equivalents. This includes $5,008,354 belonging to partner entities in which the Company’s financial interests range from .01% (VIEs) to 50%. Funds ~~owned~~received ~~consolidated~~from CVS, which are to be paid out in connection with CVS ~~subsidiaries~~developments, ~~has~~of ~~two~~$334,147, ~~additional~~tenant ~~floating~~security deposits held by VIEs of $388,892, and cash held in a lender-~~to-fixed~~controlled ~~interest~~lockbox ~~rate~~account ~~swap~~for our Edinburg, TX ~~agreements~~property ~~with~~of ~~banks~~$427,652 ~~that~~are ~~expire~~included in ~~May~~restricted ~~2025~~cash and ~~July~~cash ~~2031~~equivalents.

~~The~~At ~~aggregate~~July ~~fair~~31, ~~value~~2018, of the Company’s ~~interest~~had ~~rate swap~~$620,820 ~~agreements as~~ of ~~January~~investments in 31marketable securities, ~~2018~~all isof awhich ~~$1,551,002~~belongs ~~liability~~to partner entities.

The Company has ~~determined~~three ~~that these derivative~~separate ~~instruments~~credit dolines ~~not~~that ~~meet~~allows ~~the~~for ~~requirements~~borrowings ofup ~~hedge~~to ~~accounting~~$9,760,000. At ~~and~~July ~~have~~31, ~~therefore~~2018, ~~recorded~~ the ~~change~~Company inhad ~~fair~~borrowings ~~value~~ of ~~these~~$5,283,330 ~~derivative~~against ~~instruments~~these ~~through income. Note~~credit ~~that the change in fair value recorded through income is a non-cash item~~lines.

~~Loss on Defeasance~~ 23

~~During~~Item ~~the three and nine months ended January 31, 2017,~~2. ~~the~~ MANAGEMENT’S ~~Company~~DISCUSSION ~~paid~~AND aANALYSIS ~~defeasance premium of $437,776 when refinancing its mortgage~~OF ~~loan~~FINANCIAL onCONDITION ~~its~~AND ~~shopping~~RESULTS ~~center~~OF ~~in Lubbock, TX.~~ OPERATIONS (concluded):

~~Equity~~Capital inResources ~~Earnings of~~and ~~Unconsolidated~~Liquidity ~~Subsidiary~~ (concluded):

The ~~equity~~sources inof ~~earnings~~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 ~~unconsolidated~~the ~~subsidiary~~decreasing CVS fee-for-service business and the ~~three~~increasingly difficult environment surrounding commercial real estate, the Company has become more dependent on its ability to buy, develop, and ~~nine~~sell ~~months~~real ~~ended~~estate ~~January~~at 31a profit. Failure to do so would have an adverse impact on the Company’s liquidity. The Company’s liquidity could also be adversely impacted by higher interest rates, regulatory changes in Federal ~~2018~~affordable housing programs, and ~~2017~~lack ~~follows:~~of improvement in the financial performance of the Company’s new restaurant in Edinburg, TX.

	Three Months Ended		Nine Months Ended
	January 31,		January 31,
	2018	2017	2018	2017
Income from Operations	$113,506	$92,654	$291,038	$276,016
Distributions	90,000	90,000	270,000	270,000
	$203,506	$182,654	$561,038	$546,016

Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

~~The~~Smaller ~~Company has an investment in an affiliated limited~~reporting ~~liability~~companies ~~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~~required ~~by the Company. For years prior~~ to ~~May~~provide ~~1, 2009,~~ the ~~Company~~information ~~was~~required ~~committed~~by ~~to provide funding to~~ this ~~equity~~ ~~method investee~~item. 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.

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

Income Taxes

On October 26, 2017, the Company was informed that its fiscal year 2016 Federal tax return was selected for examination. This examination is currently in process.

Capital Resource and Liquidity

At January 31, 2018, the Company had $6,958,982 of unrestricted cash and cash equivalents. This includes $4,836,027 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 $273,670 and tenant security deposits held by VIEs of $378,929 are included in restricted cash and cash equivalents.

At January 31, 2018, the Company had $816,575 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 January 31, 2018, the Company had borrowings of $6,760,000 against these credit lines.

The sources of future borrowings that may be needed for new construction operations, 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 24, 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, 2018, 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.

~~Exchange~~Changes ~~Act reports is recorded, processed, summarized and reported within the time periods specified~~ in ~~the Securities and Exchange~~Internal ~~Commission~~Control ~~rules~~over ~~and~~Financial 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 the Exchange Act. Reporting

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 31, 2018, 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.

23 24

PART II OTHER INFORMATION

PART II	OTHER INFORMATION

Item 1.	LEGAL PROCEEDINGS

	There have been no significant changes in litigation since April 30, 2018.

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

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.

~~Item 1. LEGAL PROCEEDINGS~~ 25

~~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.SIGNATURES

ByPursuant 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~~requirements 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~~Securities ~~final~~Exchange ~~letter~~Act ~~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~~1934, ~~breach of~~ the ~~warranty~~Registrant ofhas ~~habitability,~~duly ~~causation~~caused ofthis ~~emotional~~report 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~~be ~~insurer,~~signed ~~which~~on ~~agreed~~its tobehalf ~~respond under a reservation of rights. On July 14, 2017, counsel retained~~ by the ~~insurer~~undersigned ~~provided~~thereunto ~~a timely response to~~duly ~~the third letter, adamantly denying the Company’s liability pursuant to M~~authorized.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.


	First Hartford Corporation
	(Registrant)


September 28, 2018	/s/ Neil H. Ellis
Date	Neil H. Ellis,
	Chairman of the Board
	and Chief Executive Officer


September 28, 2018	/s/ Eric J. Harrington
Date	Eric J. Harrington, Treasurer
	and Chief Financial Officer

~~Item 1A. RISK FACTORS~~ 26

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

Item 5. OTHER INFORMATION

None

SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

The Company’s annual meeting of shareholders was held on January 17, 2018 in Hartford, CT. The following nominees were elected as directors by vote indicated:

	For	Against
Neil Ellis	2,009,782	14,708
John Toic	2,009,782	14,708
Jeff Carlson	2,009,782	14,708
William Connolly	2,009,782	14,708
Jonathan Bellock	2,009,782	14,708

Also, the shareholders voted to approve the Company suspending or terminating its filing obligations with the U.S. Securities and Exchange Commission, also called “Going Dark”, once the Company is eligible. The vote was 2,006,379 in favor, 16,481 against, and 1,830 abstaining.

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.
	101.INS	XBRL Instance Document
	101.SCH	XBRL Taxonomy Extension Schema Document
	101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document
	101.DEF	XBRL Taxonomy Definition Linkbase Document
	101.LAB	XBRL Taxonomy Extension Label Linkbase Document
	101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document

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
March 29, 2018
Date	Neil H. Ellis,
	Chairman of the Board
	and Chief Executive Officer
	/s/ Eric J. Harrington
March 29, 2018
Date	Eric J. Harrington, Treasurer
	and Chief Financial Officer

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