FIRST HARTFORD CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. Business and Significant Accounting Policies:
Business
First Hartford Corporation, which was incorporated in Maine in 1909, and its subsidiaries (the Company), is engaged in two business segments: 1) the purchase, development, ownership, management and sale of real estate and 2) providing preferred developer services for two corporate franchise operators (i.e., “Fee for Service”).
Principles of Consolidation
The accompanying unaudited condensed consolidated financial statements include the accounts of the Company, its wholly owned subsidiaries, and all other entities in which the Company has a controlling financial interest, including those where the Company has been determined to be a primary beneficiary of a variable interest entity or meets certain criteria as a sole general partner or managing member in accordance with the consolidation guidance of the Financial Accounting Standards Board Accounting Standards Codification. As such, included in the unaudited condensed consolidated financial statements are the accounts of Rockland Place Apartments Limited Partnership and Clarendon Hill Somerville Limited Partnership, in which the Company is the sole general partner. The Company’s ownership percentage in these variable interest entity partnerships is nominal. All significant intercompany balances and transactions have been eliminated.
Basis of Presentation
The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Rule 8.03 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals and adjustments) considered necessary for a fair presentation have been included. Operating results for the interim periods are not necessarily indicative of the results that may be expected for the entire year. The condensed consolidated balance sheet as of April 30, 2016 was derived from the audited financial statements for the year then ended. For further information, refer to the consolidated financial statements and footnotes thereto included in the Company’s annual report on Form 10-K for the fiscal year ended April 30, 2016.
Because the Company is engaged in the development and sale of real estate at various stages of construction, the operating cycle may extend beyond one year. Accordingly, following the usual practice of the real estate industry, the accompanying condensed consolidated balance sheets are unclassified.
In February 2016, the FASB issued ASU No. 2016-02, Leases, (Topic 842), which is intended to improve financial reporting around leasing transactions. The ASU affects all companies and other organizations that engage in lease transactions (both lessee and lessor) that lease assets such as real estate and manufacturing equipment. This ASU will require organizations that lease assets—referred to as “leases”—to recognize on the balance sheet the assets and liabilities for the rights and obligations created by those leases. ASU No. 2016-02 is effective for fiscal years and interim periods within those years beginning January 1, 2019. The Company is in process of assessing the impact of the adoption of ASU No. 2016-02 on its financial position, results of operations and cash flows.
For further discussions on ASUs, refer to the Company’s annual report on Form 10-K for the fiscal year ended April 30, 2016.
FIRST HARTFORD CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. Business and Significant Accounting Policies (concluded):
Segment Information (concluded):
The only assets in the balance sheet belonging to the Fee for Service segment is restricted cash of $1,295,799 on July 31, 2016 and $1,664,214 on April 30, 2016 and receivables of $4,648,743 on July 31, 2016 and $5,956,103 on April 30, 2016.
2. Consolidated Variable Interest Entities and Investments in Affiliated Partnerships:
The Company has consolidated both Rockland and Clarendon based on the express legal rights and obligations provided to it by the underlying partnership agreements and its control of their business activity. The assets of these partnerships that can only be used to settle their obligations and their liabilities for which creditors (or beneficial interest holders) do not have recourse to the general credit of the Company are shown parenthetically in the line items of the consolidated balance sheets. A summary of the assets and liabilities of Rockland and Clarendon included in the Company’s condensed consolidated balance sheets follows:
| July 31, 2016 | | April 30, 2016 |
| | | |
Real estate and equipment, net | $65,801,139 | | $65,735,521 |
Other assets | 15,889,012 | | 8,195,007 |
Total assets | 81,690,151 | | 73,930,528 |
Intercompany profit elimination | (2,805,823) | | (2,863,451) |
Total assets | $78,884,328 | | $71,067,077 |
| | | |
Mortgages and other notes payable | $65,403,485 | | $57,132,998 |
Other liabilities | 4,505,307 | | 4,471,413 |
Total liabilities | $69,908,792 | | $61,604,411 |
The Company accounts for its 50% ownership interest in Dover Parkade, LLC under the equity method of accounting. A summary of the operating results for this entity follows:
| Three Months Ended |
| July 31, |
| 2016 | | 2015 |
Dover Parkade, LLC: | | | |
Revenue | $683,913 | | $668,169 |
Expenses | (509,662) | | (523,324) |
Net income (Loss) | $174,251 | | $144,845 |
FIRST HARTFORD CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
3. Income Taxes:
The Company files a Federal consolidated tax return to report all income and deductions for its subsidiaries. The Company and its subsidiaries file income tax returns in several states. The tax returns are filed by the entity that owns the real estate or provides services in such state. Some states do not allow a consolidated or combined tax filing. Therefore, in the quarter ended July 31, 2016, state income taxes are greater than expected as income for some subsidiaries cannot be offset by other subsidiaries with operating losses.
In the quarter ended July 31, 2015, the Company had taxable income but had sufficient loss carryforwards so income tax expense was minimal.
4. Litigation:
On September 7, 2016, the Company was notified it lost the first of two companion lawsuits against a former tenant for wrongful termination of its separate leases at two of the Company’s commercial shopping centers. As a result, the Company has accrued a liability of $198,000 as of July 31, 2016 to cover reimbursement of defendant’s claimed legal fees and costs. The Company is evaluating its options, including whether to appeal the decision, contest the claimed fee amounts, and/or whether to continue to proceed with the second companion lawsuit. There were no other changes in litigation since April 30, 2016.
5. Refinancings:
Rockland Place Apartments LP – Refinance: On June 3, 2016, Rockland Place Apartments LP executed a First Mortgage Note payable with the Massachusetts Housing Finance Agency in the amount of $14,300,000. The note is nonrecourse, has a 40-year term and requires monthly payments of principal and interest of $54,628. The interest rate is fixed at 3.41%. The proceeds of the note were used to repay its bridge mortgage note with a principal balance of $591,174, its Fourth Mortgage Note with a principal balance of $500,000, and its Flexible Subsidy Capital Improvement Loan with a principal balance of $4,268,539. The proceeds also funded closing costs and certain escrows that are being used to redevelop the complex.
6. Purchases of Real Estate:
Buda, TX Land Purchases: On April 29, 2016, the Company purchased a parcel of land in Buda, TX adjacent to another parcel owned by the Company for $686,167 including closing costs. On May 13, 2016, the Company purchased three additional parcels of land adjacent to these parcels for $1,051,034 including closing costs. These purchases were financed by a new land loan of $1,505,000 with the balance funded by working capital. Key terms of the loan are as follows:
| | Loan Amount: | $1,505,000 |
| | Maturity Date: | September 24, 2017 |
| | Interest Rate: | The lower of a) the Prime Rate per Wall Street Journal plus 1.00% or b) 4.25%. |
| | Payments: | Interest only payable monthly. At maturity, outstanding principal plus any accrued interest will be payable. |
| | Guarantors: | Both the Company (Corporate) and Chairman of the Company (Individual). |
FIRST HARTFORD CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
7. Subsequent Events:
The Company has evaluated for subsequent events through October 7, 2016, the date the financial statements were issued.
Edinburg, TX - Refinance: On September 7, 2016, the Company partially refinanced its loans on its shopping center property in Edinburg, TX. The new loan with Goldman Sachs is for $32,500,000 and is secured by the shopping center. Proceeds from this new loan were used to pay off $31,030,767 of existing debt with Protective Life and to establish a $1,100,000 Earnout Reserve Account (ERA), with the balance used to fund escrows and pay closing costs. The remainder of the existing debt of $15,926,740 is secured by vacant land of approximately 50 acres attached to the shopping center. The $1,100,000 ERA will be returned to the Company if, within two years, it can provide evidence that two significant named tenants have renewed their lease options for an additional five years (or the Company has entered into Approved Substitute Lease(s) for same) and the Earnout Debt Yield (EDY), as defined, is equal to or greater than 8.30%. If the Company fails to do so, a minimum of $1,000,000 of the ERA will be used to reduce the principal balance of the loan and up to $100,000 will be used to pay the applicable yield maintenance premium. The loan has a 30 year amortization and duration of 10 years (i.e., maturity date of September 6, 2026) with an interest rate of 4.604%. For the first year, interest only is paid monthly; beginning in October 2017, principal and interest are paid monthly. Prepayment of the loan is generally prohibited. The Company receives income directly to its operating account unless a “trigger event” occurs in which case the cash goes into a lockbox account controlled by the lender. Basic “trigger events” include:
Failure to maintain a 12 month-rolling Debt-Service Coverage Ratio (DSCR), as defined, of 1.1:1.0,
Failure to maintain a market-based Net Worth, as defined, of $20,000,000,
Failure to maintain Liquid Assets, as defined, of $2,000,000,
Loan default,
Various Rollover Trigger Events, which include certain significant named tenants vacating, terminating or not renewing their leases, or filing for bankruptcy and not replaced with an Approved Substitute Lease, as defined.
In addition, if a significant named tenant goes dark, vacates, or is not in occupancy of substantially all of its current space, the Company would have to deposit either a $2,000,000 reserve or letter of credit with the lender until such time as agreed upon lease conditions being met.
With respect to the remaining balance of $15,926,740 from the original loans with Protective Life now secured by vacant land of approximately 50 acres directly adjacent to the shopping center, the Company and the lender have agreed that if the Company repays $2,000,000 of the balance by November 7, 2016, the interest rate on the remaining balance will be reduced from 5.0% to 4.0%. The lender has also agreed that if the Company pays off the entire loan by September 6, 2017, its 50% Additional Interest Agreement (AIA) rights will terminate. This remaining loan is personally guaranteed by the Chairman of the Company.
Austin, TX – Land Sale: On September 20, 2016, the Company sold a parcel of land in Austin, TX for $6,100,000 (cost of approximately $4,150,000) that was previously ground leased. The Company continues to own land attached to the sold parcel and is currently overseeing construction of a single-tenant retail building of approximately 6,900 square feet on this property.
Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
The financial and business analysis below provides information which the Company believes is relevant to an assessment and understanding of the Company’s financial position, results of operations and cash flows. This analysis should be read in conjunction with the condensed consolidated financial statements and related notes.
The following discussion and certain other sections of this Report on Form 10-Q contain statements reflecting the Company’s views about its future performance and constitute “forward-looking statements” under the Private Securities Litigation Reform Act of 1995. These views may involve risk and uncertainties that are difficult to predict and may cause the Company’s actual results to differ materially from the results discussed in such forward-looking statements. Readers should consider how various factors including changes in general economic conditions, cost of materials, interest rates and availability of funds, and the nature of competition and relationship with key tenants may affect the Company’s performance. The Company undertakes no obligation to update publicly any forward-looking statements, whether as a result of new information, future events or other.
Critical Accounting Policies
There have been no significant changes in the Company’s critical accounting policies from those included in Item 7 of its Annual Report on Form 10-K for the year ended April 30, 2016 under the subheading “Critical Accounting Policies and Estimates”.
Results of Operations
Rental Income:
Rental income for the quarters ended July 31, by type of tenant, follows:
| Three Months Ended |
| July 31, |
| 2016 | | 2015 |
Residential | $3,073,023 | | $3,046,112 |
Commercial | 4,993,424 | | 4,372,447 |
| $8,066,447 | | $7,418,559 |
The slight increase in residential rental income was primarily caused by a decrease in vacancies at the Somerville, MA (i.e., Clarendon) property.
The increase in commercial rental income was primarily caused by rents received on the Company’s development properties (e.g., New Orleans, LA, Stanhope, NJ, Olathe, KS, etc.) and additional rents from new tenants at the West Springfield, MA and Edinburg, TX properties, partially offset by the impact of the voluntary foreclosure of the Putnam, CT property on June 5, 2015.
Service Income
Service income for the quarters ended July 31 follows:
| Three Months Ended |
| July 31, |
| 2016 | | 2015 |
Management fees | $154,605 | | $99,381 |
Preferred developer fees | 1,074,000 | | 1,532,655 |
| $1,228,605 | | $1,632,036 |
Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS (continued):
Results of Operations (continued):
Service Income (continued):
The decrease in preferred developer fees reflected lower fees received from both CVS and Cumberland Farms. The decrease in CVS fees was the result of a recent acquisition that has impacted in the slowing of their pipeline for new stores. The decrease in Cumberland Farms was the result of timing of closings based on the construction schedule.
Sales (and Cost of Sales) of Real Estate
Three months ended July 31, 2016:
On June 29, 2016, the Company sold a property in Stanhope, NJ for $10,000,051 (cost of $8,268,070). A construction loan with a balance of $6,329,667 was paid off with the proceeds.
On June 30, 2016, the Company sold a portion of its property in Edinburg, TX (i.e., Texas Roadhouse) for $2,210,000 (cost of $1,355,597). A mortgage loan with a balance of $1,279,136 was paid off with the proceeds.
Three months ended July 31, 2015:
On May 28, 2015, the Company sold a parcel of land in Pearland, TX for $1,104,161 (cost of $747,610).
There were also costs related to property sales that occurred in the fiscal year ended April 30, 2015 totaling $188,602 that were not anticipated as of the prior fiscal year end.
Other Revenues
The increase in other income was primarily at the liquor store, which obtained a liquor license in December 2014. The sales at the store have been increasing steadily as previously the store only sold beer and wine.
Operating Costs and Expenses:
Rental Expenses
Rental expenses for the quarters ended July 31, by type of tenant, follows:
| Three Months Ended |
| July 31, |
| 2016 | | 2015 |
Residential | $2,571,379 | | $2,522,162 |
Commercial | 2,528,333 | | 2,530,825 |
| $5,099,712 | | $5,052,987 |
The slight increase in residential rental expenses were mainly from increased repairs and painting expenses at the Somerville, MA (i.e., Clarendon) property.
Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS (continued):
Results of Operations (continued):
Operating Costs and Expenses (concluded):
Rental Expenses (concluded:
The slight decrease in commercial rental expenses were mainly due to prior year professional and legal expenses incurred as part of the initial effort to refinance the debt at the Cranston, RI shopping center, largely offset by a legal liability of $198,000 as a result of the Company losing the first of two companion lawsuits against a former tenant for wrongful termination of its separate leases at two of the Company’s commercial shopping centers (see Note 4 of the Financial Statements included within for discussion) and accelerated amortization expense of deferred commissions arising from the sale of a portion of its property in Edinburg, TX (i.e., Texas Roadhouse).
Service Expenses
Service expenses for the quarters ended July 31 follows:
| Three Months Ended |
| July 31, |
| 2016 | | 2015 |
Preferred Developer
Expenses and Fees | $1,158,345 | | $1,314,296 |
Construction and Other Cost | 34,981 | | 112,298 |
| $1,193,326 | | $1,426,594 |
The decrease in preferred developer expenses and fees primarily reflects lower commissions paid commensurate with the lower revenue, primarily at Cumberland Farms.
Selling, General and Administrative (“SG&A”)
There was a slight decrease in SG&A expenses; there were no individually significant items contributing to this decrease.
Non-Operating Income (Expense):
Interest Expense
Interest expense for the quarters ended July 31, by type of tenant, follows:
| Three Months Ended |
| July 31, |
| 2016 | | 2015 |
Commercial | $1,894,665 | | $1,783,361 |
Residential | 694,829 | | 612,616 |
| $2,589,494 | | $2,395,977 |
Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS (continued):
Non-Operating Income (Expense) (continued):
Interest Expense (concluded):
The increase in commercial interest expense was the result of expense related to loans for the Company’s development properties (e.g., New Orleans, LA, Stanhope, NJ, Olathe, KS, etc.), partially offset by savings from the prior year refinancings at Cranston and CP Associates.
The increase in residential interest expense was the result of the refinancing at Rockland as discussed in Note 5 of the Financial Statements included within. Note the loans paid off as part of this refinancing did not accrue interest.
Gain on Voluntary Foreclosure
Putnam, CT – Transfer to Lender: On November 1, 2014, a payment was due for the mortgage of the shopping center in Putnam, Connecticut in the amount of approximately $4,700,000. The rentable space of the shopping center is 57,529 square feet, 46% of which was leased to one store. That store informed the Company that they were not renewing their lease, which expired on January 31, 2015, and, as a result, the Company found it impossible to refinance the mortgage without finding a replacement tenant. Therefore, on June 5, 2015, the Company agreed to transfer title of the property to the lender. The Company recognized a gain of $2,649,850 since the mortgage was non-recourse and was in excess of the book value. Pre-tax income for this shopping center was $44,645 for the quarter ended July 31, 2015.
Other Income
Other income for the quarters ended July 31 follows:
| Three Months Ended |
| July 31, |
| 2016 | | 2015 |
Investment Income | $21,460 | | $106,705 |
The decrease in investment income reflected realized gains on sales of securities in the prior year that did not repeat in the current year.
Gain (Loss) on Derivatives (Non-Cash)
The Company, through its 50% owned consolidated subsidiaries, has entered into two separate floating-to-fixed interest rate swap agreements with banks that expire in May 2025 and July 2031. The Company has determined that these derivative instruments do not meet the requirements of hedge accounting and have therefore recorded the change in fair value of these derivative instruments through income. Note that the change in fair value recorded through income is a non-cash item.
Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS (continued):
Non-Operating Income (Expense) (concluded):
Equity in Earnings of Unconsolidated Subsidiary
The equity in earnings of unconsolidated subsidiary for the quarters ended July 31 follows:
| Three Months Ended |
| July 31, |
| 2016 | | 2015 |
Income from Operations | $87,126 | | $72,422 |
Distributions | 90,000 | | 90,000 |
| $177,126 | | $162,422 |
The Company has an investment in an affiliated limited liability entity Dover Parkade, LLC, (Dover). The Company has a 50% interest in Dover which owns a shopping center in Dover Township, NJ. The operating and financial policies of Dover are not controlled by the Company. For the years prior to May 1, 2009, the Company was committed to providing funding to this equity method investee. The Company’s investment was recorded at cost and subsequently adjusted for its share of their net income and losses and distributions. To 2009, losses and distributions from Dover exceeded the Company’s investment. Since then, distributions from Dover have been credited to income. The Company does not control the rate of distributions of Dover. Such distributions are in excess of Dover’s net assets since its accumulated net losses (including significant amounts for depreciation and amortization) have exceeded capital contributions.
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. Therefore, in the quarter ended July 31, 2016, state income taxes are greater than expected as income for some subsidiaries cannot be offset by other subsidiaries with operating losses.
In the quarter ended July 31, 2015, the Company had taxable income but had sufficient loss carryforwards so income tax expense was minimal.
Capital Resources and Liquidity
At July 31, 2016, the Company had $5,570,694 of unrestricted cash and cash equivalents. This includes $3,666,866 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 $1,295,799 and tenant security deposits held by VIEs of $406,029 are included in restricted cash and cash equivalents.
Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS (concluded):
Capital Resources and Liquidity (concluded):
At July 31, 2016, the Company had $1,470,491 of investments in marketable securities, all of which belongs to partner entities.
The sources of future borrowings that may be needed for new construction loans, property purchases, or balloon payments on existing loans are unclear at this time. On December 7, 2015, the Company entered into a $2,000,000 revolving demand loan agreement (“line of credit”) with a regional bank. The interest rate on this loan is Wall Street Journal Prime, with a floor of 3.25%. The loan is unsecured and there are no guarantors. Interest is to be paid monthly; principal is to be repaid within twelve months or on demand, at the bank’s discretion. There are no prepayment penalties. This line of credit will primarily be used from time to time to fund initial investments related to development opportunities. As of July 31, 2016, the Company had borrowings of $1,694,091 against this credit line. The Company also obtained another credit line as part of a purchase of land in Austin, TX as described in Note 17 to the Company’s financial statements included in the Company’s annual report on Form 10-K for the fiscal year ended April 30, 2016. This $2,760,000 line of credit will primarily be used from time to time to fund initial investments related to development opportunities. As of July 31, 2016, the Company had borrowings of $1,333,000 against this credit line.
Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Smaller reporting companies are not required to provide the information required by this item.
Item 4. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
We maintain “disclosure controls and procedures”, as such term is defined in Rule 13a-15(e) under the Securities Exchange Act of 1934 (the “Exchange Act”), that are designed to ensure that information required to be disclosed in our Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission rules and forms, and that such information is accumulated and communicated to our management, including our Chairman and Treasurer, as appropriate, to allow timely decisions regarding required disclosure. We conducted an evaluation (the “Evaluation”), under the supervision and with the participation of our Chairman and Treasurer, of the effectiveness of the design and operation of our disclosure controls and procedures (“Disclosure Controls”) as of the end of the period covered by this report pursuant to Rule 13a-15b of 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, 2016, 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.
PART II | OTHER INFORMATION |
| | |
Item 1. | LEGAL PROCEEDINGS |
| | |
| | On September 7, 2016, the Company was notified it lost the first of two companion lawsuits against a former tenant for wrongful termination of its separate leases at two of the Company’s commercial shopping centers. As a result, the Company has accrued a liability of $198,000 as of July 31, 2016 to cover reimbursement of defendant’s claimed legal fees and costs. The Company is evaluating its options, including whether to appeal the decision, contest the claimed fee amounts, and/or whether to continue to proceed with the second companion lawsuit. There were no other changes in litigation since April 30, 2016. |
| | |
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 |
| | |
| | 10b5-1 Private Repurchase Stock Plan: On March 29, 2016, the Company’s Board of Directors approved a 10b5-1 Private Repurchase Stock Plan for the repurchase of up to 150,000 shares of the Company's common stock in minimum blocks of 15,000 shares and maximum blocks of 70,000 shares. All eligible shareholders shall at all times during the transaction hold less than 5% of the issued and outstanding common stock of the Company. Repurchases may be made at management’s discretion from time-to-time only through privately negotiated transactions pursuant to the terms of the 10b5-1 plan to meet the requirements of Rule 10b5-1 under the Securities Exchange Act of 1934. The privately negotiated purchase price may not to exceed $5.00 per share. The program will be suspended for 15 days before the due date of each quarterly or annual report filing and will resume 15 days after the filing. The repurchase program may extend up to a maximum of 12 months and may be suspended for periods or discontinued at any time. Any shares acquired under this program will be retired. Please see the below table for information with respect to repurchases by the Company: |
Issuer Repurchases of its Equity Securities
Month of Transactions | Total number of shares purchased | Average price paid per share | Total number of shares purchased as part of publicly announced plans or programs | Maximum number of shares that may yet be purchased under the plans or programs |
| | | | |
May 1, 2016 – July 31, 2016a | 2,025 | $2.45 | 0 | 0 |
May 11, 2016 b | 25,000 | $3.00 | 25,000 | 125,000 |
| | | | |
TOTAL | 27,025 | $2.96 | 25,000 | 125,000 |
| | a: | The transactions comprised of the acquisition of the 2,025 shares were not conducted pursuant to a publicly announced program. |
| | | |
| | b: | The transactions comprised of the acquisition of the 25,000 shares required pursuant to the March 29, 2016 publicly announced 10b5-1 Private Repurchase Stock Plan. |
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 |
| | |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| First Hartford Corporation |
| (Registrant) |
| |
| |
October 7, 2016 | /s/ Neil H. Ellis |
| Neil H. Ellis, |
| Chairman of the Board |
| and Chief Executive Officer |
| |
| |
October 7, 2016 | /s/ Eric J. Harrington |
| Eric J. Harrington, Treasurer |
| and Chief Financial Officer |
