First Hartford Corporation
was incorporated in Maine in 1909 and is engaged in the purchase, development, ownership, management and sales of real estate.
Principles of Consolidation
The accompanying condensed
consolidated financial statements include the accounts of First Hartford Corporation (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 condensed consolidated financial statements are the accounts of Rockland Place Apartments
Limited Partnership and Clarendon Hill Somerville Limited Partnership. The Companys 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 10-01 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 to previously
accrued loss provisions) 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, 2012 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 Companys annual report
on Form 10-K for the fiscal year ended April 30, 2012.
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
Currently, there are no
Accounting Standards Update (ASUs) that the Company is required to adopt which are likely to have a material effect on its financial
Net Loss Per Common Share
Basic net income (loss) per share amounts are determined
using the weighted average number of shares of common stock outstanding during the reporting
period. Diluted earnings (loss) per share amounts include the weighted average outstanding common shares as well as dilutive common
stock options of 104,193 and 75,236 shares for the three and six month periods ended October 31, 2012. Common stock options of
7,258 and 92,858 for three and six month periods ended October 31, 2011 were anti-dilutive.
Financial Instruments and Fair Value
The Companys 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 Companys
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). Net unrealized gains of $51,847 and
$83,887 for the three and six month periods ended October 31, 2012 are included in accumulated other comprehensive income.