SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
F O R M 10-K
ANNUAL REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For Fiscal Year Ended Commission File No. 0-8862
April 30, 1998 ------
FIRST HARTFORD CORPORATION
--------------------------
(Exact name of registrant as
specified in its charter)
Maine 01-0185800
- ------------------------ --------------------
(State of Incorporation) (I.R.S. Employer
Identification No.)
P.O. Box 1270, 149 Colonial Road, Manchester, Connecticut 06045-1270
- ---------------------------------------------------------- ----------
(Address of principal executive offices) (Zip Code)
(860) 646-6555
- --------------------------------------------------------------------------------
(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
NONE
Securities registered pursuant to Section 12(g) of the Act:
1. Common Stock, per value $1 per share
The registrant hereby indicates by checkmark whether it (1) has filed all
reports required to be filed by Section 11 or 10 (d) of the Securities Exchange
Act of 1934 during the preceding 12 months and (2) has been subject to such
filing requirements for the past 90 days.
YES |_| NO |x|
Based on the closing sales price of April 30, 1991, the aggregate market value
of the voting stock held by non-affiliates of the registrant was between 0 and
$350,000.00.
Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Section 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court.
YES |_| NO |x|
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the close of the period covered by this report: 3,089,985.
Total number of pages, including cover page 40.
<PAGE>
PART I
ITEM 1. DESCRIPTION OF BUSINESS
(a) General Development of Business
First Hartford Corporation (the "Registrant") which was incorporated in
Maine in 1909, is engaged in the purchase, development, ownership, management
and sale of real estate. As used herein, the term Registrant shall mean and
refer to First Hartford Corporation and its subsidiaries, unless the context
otherwise requires.
(b) Financial Information about Industry Segments
The Registrant is engaged in the purchase, development, ownership,
management and sale of real estate, therefore, segment information is not
applicable.
(c) Narrative Description of Business
The Registrant is engaged in the acquisition, development and management
of land and properties with the ultimate goals of selling such properties when
profitable opportunities arise or obtaining rental income therefrom.
The real estate, owned and managed by the Registrant through various
subsidiaries, is located in Connecticut, Rhode Island, New Jersey and North
Carolina. A subsidiary of the Registrant owns a 1% interest in a partnership
which owns a strip shopping center in Texas. Tenants are obtained through
brokers and employed representatives of the Registrant, by means of newspaper
advertisements, inquiries by potential tenants at the Registrant's on-site
offices, and direct contacts with retail stores, banks and other potential
commercial tenants.
The real estate business of the Registrant is diversified in terms of
geographical location, type of commercial property and form of ownership or
management. The commercial real estate business is not normally thought of as
being divided into significant separate classes of products or services.
Operation of the Registrant's real estate business requires construction
materials and suitable land. Construction materials can be obtained from many
sources, but supplies and construction are subject to strikes and delivery
delays which can greatly increase the cost of a project.
1
<PAGE>
Commercial properties are available in the states where the Registrant is
qualified to do business, but all real property, of course, is by its nature
finite and subject to fluctuations in cost and to unpredictable changes in local
zoning ordinances and to restrictions on planned construction.
All phases of the real estate business are inherently speculative and
intensely competitive with many enterprises, both large and small, engaged in
businesses similar to the Registrant's throughout the United States. The success
of the Registrant, to a large extent, depends upon factors which may be beyond
the control of management. Some of these factors are variable construction
costs, the mortgage market, real estate taxes, income tax laws, government
regulations, the commercial rental market and the economy. The ability of the
Registrant to meet its debt service obligations and to operate profitably is, of
course, also dependent on its ability to attract tenants and to compete
successfully with the numerous other commercial properties available to
prospective tenants. The ability to attract tenants is dependent upon the
changing character of the areas in which the Registrant's properties are
located, the rate of new construction in those areas and the extent of present
and future competition in those areas. The Registrant's holdings are diversified
both geographically and in use and types of occupancy. The Registrant believes
that it thereby increases stability and diminishes the affect of possible
adverse economic conditions in any particular geographic or economic area, but
the Registrant recognizes that diversification by itself will not assure
protection against risk and possible loss.
The real estate business does not experience "backlogs" as that term is
generally understood, nor is it seasonal.
To the Registrant's knowledge, its real estate business is not dependent
upon a single customer or a few customers, the loss of any one or more of which
would have a material adverse affect on this segment of its business.
The Registrant has no material patent, license, franchise or concession.
Research and development is not a part of the Registrant's business.
The Registrant anticipates that compliance with any applicable Federal,
state or local provisions regulating discharges into the
2
<PAGE>
environment or otherwise relating to the protection of the environment will not
have a material effect on its capital expenditures, earnings or competitive
position.
At April 30, 1998, the Registrant employed approximately 24 persons.
(d) Financial Information About Foreign And
Domestic Operations and Export Sales
The Registrant and its subsidiaries do not engage in operations in foreign
countries. No material part of their sales or revenues is derived from customers
in foreign countries.
ITEM 2. DESCRIPTION OF PROPERTY
The following table shows the location, general character and ownership
status of the materially important physical properties of the Registrant and its
subsidiaries:
<TABLE>
<CAPTION>
Available Space
or Facilities Ownership
Location Use and Major Tenants Status
- -------- --- ----------------- ------
Commercial Properties:
<S> <C> <C> <C>
Lubbock, Strip 162,404 sq. ft. Owned by a partnership
Texas Shopping Walmart 51%, 20 yrs. in which a subsidiary of the
Center TJ Maxx 15%, 10 yrs Registrant is the general
partner with a 1% interest.
Plainfield, Strip 60,150 sq. ft. Owned by a subsidiary of the
Connecticut Shopping Big Y 64%, 20 yrs. Registrant. There is an
Center CVS 14%, 10 yrs. outside equity interest in
connection with the financing
Putnam, Shopping 26,277 sq. ft. Owned by a subsidiary of the
Center T. J. Maxx Registrant and part of a
Shopping Center complex.
Residential Properties:
Westerly Condominiums 1 Two Bedroom Unit 3 Units Owned by a
Rhode Island 2 Three Bedroom Units subsidiary of the Registrant
to be sold to customers or
leased to tenants.
</TABLE>
3
<PAGE>
ITEM 3. LEGAL PROCEEDINGS
Waterville Industries, Inc. v. First Hartford Corporation and Finance Authority
of Maine, CV-89-311 (Kennebec County Superior Court, Maine) and 89-0209-B
(United States district Court, District of Maine). Actions commenced July 10,
1989.
These two lawsuits allege violation of environmental laws in connection
with property located in Waterville, Maine. Waterville Industries is the current
owner of property located in Waterville, Maine, which includes two waste
treatment lagoons; the Registrant, through an affiliate, formerly owned the
property, and the Maine Guarantee Authority, predecessor to the Financial
Authority of Maine (FAME) also owned the property prior to its transfer to
Waterville Industries.
Presidential Gardens Associates, Graham Village Associates, Park West
Associates, Briar Knoll Associates Limited Partnership, Sovereign Group 1984-2
Limited Partnership, Highridge Associates Limited Partnership, First Hartford
Realty Corporation, Neil Ellis, Parker Street Corporation, v. The United States
of America, on behalf of the Secretary of Housing and Urban Development, and
Ocwen Federal Bank, FSB, No. 3:96CV01526 (AVC) (United States District Court for
the District of Connecticut). Action commenced on March 15, 1996. Suit for
damages and for a permanent injunction against HUD for violations of the
Settlement Agreement dated February 22, 1994 among the parties to this action
and others ("Settlement Agreement"). The case concerns violations by HUD of the
Settlement Agreement and challenges the effectiveness and propriety of the
alleged assignment from HUD to Ocwen. The United States filed a Motion to
Dismiss and Ocwen filed a Motion for Summary Judgment which were allowed and the
District Court entered judgment for Defendants on July 24, 1997. Plaintiffs
filed a Notice of Appeal on August 22, 1997 giving notice that they appeal to
the United States Court of Appeals for the Second Circuit from the judgment
entered by the Court dismissing the action as well as from the Memorandum of
Decision Re United States' Motion to Dismiss entered July 1, 1997 and from the
Memorandum of Decision Re Ocwen's Motion For Summary Judgment entered July 22,
1997. The appeal is pending as: Presidential Gardens Associates, Graham Village
Associates Limited Partnership, Park West Associates Limited Partnership, First
Hartford Realty Corporation, Briar Knoll Associates Limited Partnership,
Sovereign Group 1984-2 Limited Partnership, Highridge Associates Limited
Partnership, Neil Ellis, as sole general partner o/b/o Park West Associates
Limited Partnership, Parker Street Corp., Plaintiffs-Appellants, v. United
States of America, o/b/o the Secretary of Housing & Urban Development, Ocwen
Federal Bank, FSB, Defendants-
4
<PAGE>
Appellees. No. 97-6201 (United States Court of Appeals for the Second Circuit).
Action commenced August 22, 1997.
Ocwen Federal Bank, FSB v. Sovereign Group 1984-2, Limited Partnership, et. al.
v. Briar Knoll Associates Limited Partnership, et.al. and v. Highridge
Associates Limited Partnership. Nos. 3:97CV00611, 3:97CV00612 and 3:97CV00613
(AVC), pending in the United States District Court for the District of
Connecticut. Action commenced April 2, 1997. These cases are related to the
Presidential Gardens case above against the United States and Ocwen and seek to
foreclose the mortgages they bought from HUD in the sealed bid auction the
plaintiffs in the above case are challenging.
OTHER PROCEEDINGS
For proceedings involving officers and directors, see Item 10(f). on page
27.
The Registrant is also involved in other legal proceedings which have
arisen during the normal course of its business, including disputes over tax
assessments, commercial contracts, lease agreements, construction contracts and
personal injuries, but the Registrant does not believe that any of these
proceedings will have a material impact on its consolidated financial condition.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
A Special Meeting of security holders was held on February 13, 1986. The
Registrant did not solicit proxies and the Board of Directors as previously
reported was re-elected in its entirety:
Neil H. Ellis
Leonard E. Seader
Stuart I. Greenwald
PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON STOCK
AND RELATED SECURITY HOLDER MATTERS
The Registrant's common stock, $l par value, is traded over-the-counter.
Any bids would be contained in the National Daily Quotation Service of the
National Association of Securities Dealers (pink sheets)
5
<PAGE>
The Registrant has paid no cash dividends in the last five years.
Although the Registrant is aware that small sales of the common stock have
occurred from time to time, we have no knowledge of the trading range of those
shares.
The Registrant has paid no cash dividends in the last five years.
The number of shareholders of record for the Registrant's common stock as
of December 12, 1997, is 931.
6
<PAGE>
ITEM 6. SELECTED FINANCIAL DATA (UNAUDITED)
<TABLE>
<CAPTION>
Years Ended April 30, 1998, 1997, 1996, 1995, and 1994
1998 1997 1996 1995 1994
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Revenues of the
Registrant $ 25,559,439 $ 16,447,667 $ 8,531,021 $ 13,880,594 $ 11,170,399
Income (Loss) from
continuing operations 12,192,561 (740,685) 2,169,856 6,823,182 474,090
Extraordinary
(Losses) Net - 0 - - 0 - - 0 - (3,500,000) - 0 -
Net Income (Loss) 12,192,561 (740,685) 2,169,856 3,323,182 474,090
Weighted Average Number
of Shares Outstanding 3,089,985 3,089,985 3,089,985 3,089,985 3,089,985
Income (Loss) Per Share
Income Before Extraordinary $ 3.95 (.24) $ .70 $ 2.21 $ .15
Extraordinary (Losses) -- -- -- (1.13) --
------------ ------------ ------------ ------------ ------------
Total $ 3.95 $ (.24) $ .70 $ 1.08 $ .15
============ ============ ============ ============ ============
Balance Sheet Data
Properties under Construction
and Investment in
Undeveloped
Properties $ 2,148,678 1,104,498 $ 5,602,287 $ 725,583 $ 1,293,011
Developed Properties Net 4,448,128 10,974,977 11,404,208 11,745,099 26,070,037
Total Assets 8,177,363 14,415,518 21,159,309 15,668,170 32,588,384
Construction Loans, Notes,
Mortgages Payable and
Finance Obligations 10,147,730 20,091,162 24,692,576 21,342,074 34,685,450
Accounts Payable and Accrued
Liabilities 3,152,503 10,832,085 12,381,880 11,519,713 14,117,581
Stockholders' Equity $ (6,168,372) $(18,360,933) $(17,620,248) $(19,790,004) $(23,113,186)
============ ============ ============ ============ ============
</TABLE>
7
<PAGE>
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
In the past four (4) years, the Registrant has pursued an aggressive path
to end litigation and pay down its debt. Management believes both of those
objectives were met, as there is no material litigation currently on the horizon
and debt has been reduced by over $35,000,000.00. To achieve this result,
virtually of all our partnership interests and most of our developed properties
had been sold. We are currently on a path to attempt to rebuild our asset base.
Shopping centers are under construction in Putnam, Connecticut and Mount Olive,
New Jersey. Other properties are held under option which hopefully will result
in additional developments.
In the fiscal year April 30, 1999, management does not foresee any
opportunities to sell any additional properties. With rental and management
income greatly reduced from previous year levels, the Registrant believes
operating losses will occur for the foreseeable future.
8
<PAGE>
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
I N D E X
Pages
-----
Statement in Lieu of Independent Auditors' Report 10
Consolidated Balance Sheets - April 30, 1998 and 1997 11-12
Consolidated Statements of Income (Loss) - Years Ended
April 30, 1998, 1997 and 1996 13
Consolidated Statements of Shareholders' Equity (Deficiency)
for the Years Ended April 30, 1998, 1997 and 1996 14
Consolidated Statement of Cash Flows for the Year Ended
April 30, 1998 and 1997 15-16
Notes to Consolidated Financial Statements 17-25
There are no Supplementary Data Schedules necessary.
9
<PAGE>
STATEMENT IN LIEU OF INDEPENDENT AUDITOR'S REPORT
Board of Directors
First Hartford Corporation
Manchester, CT 06040
Management has determined that the Registrant will not retain an outside auditor
and will use its limited resources in a more productive manner. We therefore
submit our financial statements unaudited. Please read all the footnotes
carefully as some of this information may normally be cited in the Independent
Auditor's disclaimer or subject to opinion.
/s/ Stuart Greenwald
-----------------------------------------
Stuart Greenwald
Treasurer
SG/gp
10
<PAGE>
FIRST HARTFORD CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS - APRIL 30, 1998 AND 1997
(UNAUDITED)
ASSETS (NOTE 1)
1998 1997
---- ----
Real estate and equipment
(Notes 1 and 9):
Developed properties
(Write down to Estimated Market Value
1998, $499,802; 1997, $6,390,802) $ 5,269,443 $14,740,768
Equipment and leasehold improvements 168,726 339,570
----------- -----------
$ 5,438,169 $15,080,338
Less accumulated depreciation
and amortization 938,132 3,906,929
----------- -----------
$ 4,500,037 $11,173,409
Properties under construction and
investment in undeveloped properties 2,148,678 1,104,498
----------- -----------
$ 6,648,715 $12,277,907
Cash 4,118 216,148
Accounts and notes receivable, less allowance
for doubtful accounts 144,115 154,786
Deposits, escrows and prepaid and
deferred expenses 757,939 813,265
Due from related parties and affiliates
(Notes 4 and 6) 622,476 953,412
----------- -----------
$ 8,177,363 $14,415,518
=========== ===========
(Continued)
11
<PAGE>
FIRST HARTFORD CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS - APRIL 30, 1998 AND 1997 (CONTINUED)
(UNAUDITED)
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIENCY)
1998 1997
---- ----
Liabilities:
Mortgages and notes payable
(Notes 2-4):
Construction Loan Payable $ 1,575,925 $ --
Mortgages payable 4,717,963 16,466,162
Notes payable:
Other 3,853,842 3,625,000
------------ ------------
$ 10,147,730 $ 20,091,162
Accounts payable 2,281,671 2,552,066
Accrued liabilities (Notes 5) 870,832 8,280,019
Due to related parties and affiliates
(Note 4) 1,045,502 1,853,204
------------ ------------
$ 14,345,735 $ 32,776,451
Commitments and contingencies
(Notes 3, 4, and 8)
Shareholders' equity (deficiency)
Common stock, $1 par; Authorized 6,000,000
shares; Issued 3,322,213 shares $ 3,322,213 $ 3,322,213
Capital in excess of par 4,857,645 4,857,645
Deficit (12,280,106) (24,472,667)
------------ ------------
$ (4,100,248) $(16,292,809)
Less 232,228 shares of common
stock held in treasury, at cost 2,068,124 2,068,124
------------ ------------
$ (6,168,372) $(18,360,933)
------------ ------------
$ 8,177,363 $ 14,415,518
============ ============
See notes to consolidated financial statements.
12
<PAGE>
FIRST HARTFORD CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME (LOSS)
YEARS ENDED APRIL 30, 1998, 1997 AND 1996
(UNAUDITED)
1998 1997 1996
---- ---- ----
Revenues, including related
party transactions
(1998, $162,954; 1997,
$2,117,810; 1996, $3,676,451)
(Note 4):
Sale of real estate $ 12,696,700 $ 11,100,000 $ --
Construction 197,081 243,643 306,463
Rental 2,261,985 2,610,505 2,531,566
Other 330,276 808,094 1,413,489
Non-Recurring Items
(Note 6) 10,073,397 1,685,425 4,279,503
------------ ------------ ------------
$ 25,559,439 $ 16,447,667 $ 8,531,021
------------ ------------ ------------
Cost and expenses:
Cost of sales,
real estate $ 7,909,043 $ 11,282,261 --
Construction 133,020 97,190 $ 150,562
Operating 2,398,474 1,973,488 2,266,768
Interest (Note 2) 1,254,142 1,712,077 1,667,969
Depreciation and
amortization 425,775 552,935 516,596
Selling, general and
administrative 1,029,945 1,218,019 1,366,386
Real estate taxes 71,510 325,069 322,884
------------ ------------ ------------
$ 13,221,909 $ 17,161,039 $ 6,291,165
------------ ------------ ------------
Income before income
taxes $ 12,337,530 $ (713,372) $ 2,239,856
Income taxes 144,969 27,313 70,000
------------ ------------ ------------
Net income (loss) $ 12,192,561 $ (740,685) $ 2,169,856
============ ============ ============
Net income (loss) per share $ 3.95 $ (.24) $ .70
============ ============ ============
Weighted average number of
shares outstanding 3,089,985 3,089,985 3,089,985
============ ============ ============
See notes to consolidated financial statements.
13
<PAGE>
FIRST HARTFORD CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (DEFICIENCY)
YEARS ENDED APRIL 30, 1998, 1997 AND 1996 (UNAUDITED)
<TABLE>
<CAPTION>
Capital Retained
in excess earnings Treasury
Common stock of par (deficit) stock Total
------------ ------ --------- ----- -----
<S> <C> <C> <C> <C> <C>
Balance, April 30, 1995 $ 3,322,213 $ 4,857,745 $(25,901,838) $ (2,068,124) $(19,790,004)
Net Income -- $ (100) $ 2,169,856 -- $ 2,169,756
Balance, April 30, 1996 $ 3,322,213 $ 4,857,645 $(23,731,982) $ (2,068,124) $(17,620,248)
Net Income -- -- $ (740,685) -- $ (740,685)
Balance, April 30, 1997 $ 3,322,213 $ 4,857,645 $(24,472,667) $ (2,068,124) $(18,360,933)
Net Income -- -- 12,192,561 -- 12,192,561
------------ ------------ ------------ ------------ ------------
Balance, April 30, 1998 $ 3,322,213 $ 4,857,645 $(12,280,106) $ (2,068,124) $ (6,168,372)
============ ============ ============ ============ ============
</TABLE>
See notes to consolidated financial statements.
14
<PAGE>
FIRST HARTFORD CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
YEAR ENDED APRIL 30, 1998 AND 1997
(UNAUDITED)
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
Cash flows from operating activities: 1998 1997
---- ----
Net Profit $ 12,192,561 $ (740,685)
Adjustments to reconcile net profit
to net cash used in operating activities:
Depreciation 421,303 548,462
Amortization 4,473 4,473
Changes in assets and liabilities:
Increase in:
Accounts and notes receivable, net 10,671 (12,633)
Deposits, escrows, prepaid and
deferred expenses 50,853 133,587
Accrued liabilities (7,409,189) (1,093,674)
Note Payable 668,659 --
Decrease in:
Accounts payable & cash overdrafts (270,393) (456,121)
------------ ------------
Net cash used in operating activities $ 5,668,938 $ (1,616,591)
------------ ------------
Cash flows from investing activities:
Purchase of Investments -- $ 2,098,211
Purchases of equipment and leasehold
improvements (65,196) (149,421)
Proceeds from sale of real estate net
of selling expenses 7,562,594 7,076,904
Payments for:
Additions to developed properties (2,289,509) (2,646,912)
------------ ------------
Net cash used in investing activities: $ 5,207,889 $ 6,378,782
============ ============
15
<PAGE>
FIRST HARTFORD CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS, CONTINUED
YEARS ENDED APRIL 30, 1998 AND 1997
(UNAUDITED)
Cash flows from financing activities: 1998 1997
---- ----
Proceeds from:
Construction Loan Payable $ 1,575,925 $ 2,129,177
Notes payable 819,046 770,100
Principal payments on:
Construction loans payable (5,848,315)
Mortgages payable (11,748,199) (145,778)
Notes payable (1,258,862) (1,506,600)
Advances from related parties and
affiliated partnerships (476,767) (47,400)
------------ ------------
Net cash provided by financing
activities $(11,088,857) $ (4,648,816)
------------ ------------
Net increase (decrease) in cash and cash
equivalents $ (212,030) $ 113,375
Cash and cash equivalents, beginning of year 216,148 102,773
------------ ------------
Cash and cash equivalents, end of year $ 4,118 $ 216,148
============ ============
Supplemental data:
Cash paid during the year for interest $ 477,144 $ 822,390
============ ============
16
<PAGE>
FIRST HARTFORD CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED APRIL 30, 1998, 1997 AND 1996
1. Description of business and summary of significant accounting policies:
Description of business:
First Hartford Corporation (the Registrant) was incorporated in Maine in
1909, and is engaged in the purchase, development, ownership, management and
sale of real estate.
Principles of consolidation:
The accompanying financial statements include the accounts of the
Registrant and its wholly-owned subsidiaries, including partnerships in which
the Registrant is a majority owner. All significant intercompany transactions
and accounts have been eliminated in the consolidated financial statements,
including construction revenues and costs of development for the Registrant's
own use (rental/future sale). The Registrant records at cost its investment in
partnerships in which it is not a majority owner.
Because the Registrant is engaged in the development and sale of real
estate in various stages of construction, the operating cycle may extend beyond
one year. Accordingly, following the usual practice of the real estate industry,
the accompanying consolidated balance sheets are unclassified.
Real estate and equipment:
Properties under construction and investment in undeveloped properties,
developed properties and equipment and leasehold improvements are recorded at
the lower of cost or net realizable value.
17
<PAGE>
FIRST HARTFORD CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED APRIL 30, 1998, 1997 AND 1996
1. Description of business and summary of significant accounting policies
(continued):
Real estate and equipment (continued):
Properties under construction amounted to $2,148,675, $1,104,498, and
$5,602,287 at April 30, 1998, 1997 and 1996, respectively.
Following accounting practices of the real estate industry, interest and
property taxes are capitalized for those projects which have a current
development plan. In addition, properties under construction include revenue and
operating expenses through substantial completion of the property. When property
is substantially completed, the costs of property constructed for the
Registrant's own use are transferred to developed properties and depreciation
commences.
The estimated useful lives of the various classes of assets are set forth
below:
Description Range in Years
Developed properties 40
Equipment and leasehold
improvements 3 - 10
18
<PAGE>
FIRST HARTFORD CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED APRIL 30, 1998, 1997 AND 1996
1. Description of business and summary of significant accounting policies
(continued):
Real estate and equipment (continued):
Leasing commissions and financing costs (included in deposits, escrows,
and prepaid and deferred expenses in the accompanying balance sheets) are
amortized using the straight-line method over the terms of the related leases
and mortgages, respectively.
Maintenance and repairs are charged to operations as incurred; renewals
and betterments are capitalized.
The cost of assets retired or otherwise disposed of and the related
accumulated depreciation is eliminated from the accounts. Income or loss
resulting from the disposal of properties and equipment is included in the
consolidated statements of income (loss).
Revenue recognition:
Since the Registrant is primarily involved in development for its own use
(rental/future sale), construction revenue is recorded only upon sale of the
property built for sale to third parties. Revenues from projects built for third
parties are recognized on the percentage-of-completion method of accounting
based on costs incurred to date in relation to total actual costs and estimated
costs to complete. Revisions in costs and profit estimates are reflected in
operations during the accounting period in which the facts become known. The
Registrant provides for estimated losses on contracts in the year such losses
become known.
Rental revenues are recognized as income under the operating method as the
rentals become due. Other income includes management and service fees and
interest income which is recognized over the period in which the service is
provided or the interest is earned.
19
<PAGE>
FIRST HARTFORD CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED APRIL 30, 1998, 1997 AND 1996
1. Description of business and summary of significant accounting policies
(continued):
Revenue Recognition (continued):
Deferred income arises from the receipt of fees, proceeds from property
sales and rental income in advance of the earnings period. This income is
generally recognized in the period which the service is provided.
Income (loss) per share:
Income (loss) per share is based on the weighted average number of common
shares.
Income taxes:
The Registrant and its subsidiaries file consolidated Federal income tax
returns. Income or loss of the consolidated partnerships is considered in the
income tax provision of the corporate partner. The Registrant's tax loss carry
forward is approximately $10,000,000 expiring at various dates through the year
2007. For alternative minimum tax purposes, the net operating loss utilized in
any one year is limited to 90% of alternative minimum taxable income. Investment
tax credits are insignificant.
20
<PAGE>
FIRST HARTFORD CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED APRIL 30, 1998, 1997 AND 1996
2. Construction loans, mortgages, and notes payable:
1998 1997
---- ----
Construction Loans and
Mortgage notes at rates varying from
1% to 1 1/2% over the prevailing
prime rate and fixed rates
ranging from 8% to 10%.
Maturities are at various dates through 2029. 6,293,888 16,466,162
Notes payable, at interest rates
varying from 1% to 1 1/2% over the
prevailing prime rate and fixed
rates ranging from 4% to 10%
maturing at various dates through
1997 or demand. 3,853,842 3,625,000
----------- -----------
$10,147,730 $20,091,162
=========== ===========
At April 30, 1997 approximately $11,600,000 of the mortgage amount was in
default. HUD, the former holder of the mortgages sold the debt to a third party
purchaser in a public auction on August 6, 1996. At the beginning of January,
1998, the Registrant purchased the mortgages at discount and sold the
properties. The result of those sales are included in operations for the current
year.
3. Pledge of stock of subsidiaries:
For the past ten years and probably longer, the Registrant had not been
able to obtain financing (secured or unsecured) without the personal guarantees
of Neil Ellis, the president of the Registrant. To some degree, the Registrant
recently has been able to do some borrowing without that guarantee but it
continues to be a necessary component to most loans. In the past, we have
disclosed stock pledges of subsidiaries to protect Mr. Ellis from personal
losses due to his guarantying loans. These pledges will stay in place until his
guarantees are eliminated.
21
<PAGE>
FIRST HARTFORD CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED APRIL 30, 1998, 1997 AND 1996
4. Related party transactions:
Amounts included in revenue resulting from transactions with companies
affiliated by common ownership and/or management are as follows:
1998 1997 1996
Rental Income 72,000 -- --
Management and
service fees 49,247 566,192 258,735
Maintenance/Repairs 13,555 -- 222,460
Interest income 28,152 28,160 32,060
Sale of Partnership
Interest -- 1,014,658 3,163,196
--------- ---------- ----------
$ 162,954 $2,117,810 $3,676,451
========= ========== ==========
Amounts due to/from affiliates and related parties represent transactions
between affiliated and related entities under common ownership and/or management
in line with business transactions which generate the revenues noted above. The
Registrant and its subsidiaries also have received cash advances from other
companies affiliated with Neil Ellis, President of the Registrant and performed
services for these companies.
5. Accrued liabilities:
1998 1997
Accrued:
Federal income taxes $ 188,162 $ 192,550
Taxes-other 199,282 385,685
Pension costs (Note 7) - 607,905
Interest 338,610 6,765,337
Other 144,778 328,542
--------- ----------
$ 870,832 $8,280,019
========= ==========
22
<PAGE>
FIRST HARTFORD CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED APRIL 30, 1998, 1997 AND 1996
6. Non-Recurring Items:
Income from non-recurring items are as follows:
1998 1997 1996
Income - Partnership
distributions from
sales of partnership
assets $ -- $ 1,014,658 $ 3,138,196
Gains on purchase of
mortgage 9,643,397 -- --
Intangible sales of
property -- -- 604,000
Recovery of bad debts -- -- 437,307
Settlements 430,000 508,800 --
Miscellaneous -- 161,967 100,000
----------- ----------- -----------
$10,073,397 $ 1,685,425 $ 4,279,503
=========== =========== ===========
Included in Partnership distributions (1997, and 1996) is approximately $1.8
million from the sale of partnership interests owned by Neil Ellis (the
President of the Registrant) and donated back to the Registrant per the
Settlement Agreement with HUD. Of the amount received approximately $1.8 million
was available after repaying debt to the partnerships and the debt of two D.I.P.
entities. These funds were used to reduce the debt to the Pension Fund.
23
<PAGE>
FIRST HARTFORD CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED APRIL 30, 1998, 1997 AND 1996
7. Employee Retirement Plan:
The Registrant has a single employer defined benefit non contributory
pension plan. As of January, 1986 the benefits of the plan have been frozen. The
Pension Benefit Guaranty Corporation (PBGC) had started to make the benefit
payments to the participants at January 1, 1994.
In June, 1997 the PBGC had become interim Trustee of the Plan and in July,
1997 notified participants that they would seek to terminate the Plan. The PBGC
had previously filed liens in excess of $3.1 million against the Registrant and
had made doing normal business all but impossible.
The Trust Fund has been turned over to the PBGC when they became Interim
Trustee. At the end of July, 1997, the fund had cash and investments of
approximately 2.3 million.
In January, 1997, the Registrant had come to settlement terms with the
Pension Benefit Guaranty Corporation (PBGC) and the Department of Labor (DOL).
Under the settlement, the Company has given the PBGC a 10 year Note of
approximately $670,000 (6% interest payable quarterly) which is guaranteed by a
Bond of an Insurance Company. The Registrant has given cash to the Insurance
Company which was then invested in a zero coupon bond to yield $670,000 at
maturity.
8. Commitment and Contingencies:
A. The Registrant does not believe that any legal proceeding to which it
is a party will have any material impact on its consolidated financial position.
B. The Registrant believes its computer system will be year 2000
compliant.
C. All Chapter 11 proceedings which involved any interest of the
Registrant have been concluded.
24
<PAGE>
FIRST HARTFORD CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED APRIL 30, 1998, 1997 AND 1996
9. Going concern:
Although the deficit in shareholder equity has been reduced by 73%
(approximately $17,000,000) in the past four years, there still remains a
deficit of $6,168,000. The improvements were a result of selling properties and
partnership interest. On a going forward basis, it is unrealistic to expect that
the Registrant can continue to generate sales of any magnitude on its existing
asset base. Unless cash flow can be generated from other services, conditions
raise substantial doubt about the Registrant's ability to continue as a going
concern and meet its obligations as they become due.
25
<PAGE>
ITEM 9. DISAGREEMENTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
There have been no disagreements on accounting and financial disclosure.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
(a) Identification of Directors
The directors of the corporation, their ages and positions and the periods
during which each has served as such are as follows:
Name Age Position Period of Service
Neil H. Ellis 70 President l966 - Present
Stuart I. Greenwald 56 Treasurer/Secretary 1980 - Present
There are no arrangements or understandings between any of the foregoing and any
other person pursuant to which such person was or is to be selected director or
officer.
(b) Identification of Executive Officers
The names and ages of all executive officers of the corporation, their
positions and the periods during which each has served as such are as follows:
Name Age Position Period of Service
Neil H. Ellis 70 President l968 - Present
Stuart I. Greenwald 56 Treasurer/Secretary 1978 - Present
There are no arrangements or understandings between any of the foregoing and any
other person pursuant to which such person was or is to be selected director or
officer.
Leonard E. Seader, a director since 1973, and an officer since 1976 died on
August 30, 1997.
26
<PAGE>
(c) Identification of Certain Significant Employees
There are no significant employees not already mentioned above.
(d) Family Relationships
There are no family relationships among any directors or executive
officers.
(e) Business Experience
1. The following is a brief description of the background of each director
or executive officer.
Mr. Ellis has been President of the Registrant for more than five years.
He is also President and director of Green Manor Corporation, a holding company,
owned by him and his wife.
Mr. Greenwald has been Treasurer of the Registrant for more than five
years and also holds the position of Secretary. He is also Secretary/Treasurer
of First Hartford Realty Corporation, a subsidiary of the Registrant, which
position he has held for more than five years.
2. Directorships
No directors hold any other directorships, except directorships in
subsidiaries of the Registrant and the aforementioned Green Manor Corporation.
(f) Involvement in Certain Legal Proceedings
No director or executive officer has been involved in any of the following
legal proceedings except as noted:
1. Federal Bankruptcy or State Insolvency Proceedings, except as and to
the extent they were involved as executive officers of the Registrant in its
1981 Reorganization proceedings, as executive officers of Parker Street Corp.
and Putnam Parkade, Inc. in their Chapter 11 proceedings, and as executive
officers of the general partner or managing agent of the following limited
partnerships in their Chapter 11 proceedings:
Allen Park Associates
Briar Knoll Associates Limited Partnership
27
<PAGE>
Graham Village Associates
Hartford-Lubbock Limited Partnership
Highridge Associates Limited Partnership
Park West Associates
Presidential Gardens Associates
Sovereign Group 1984-2 Limited Partnership
Springfield Associates
2. No director or executive officer has been involved in any criminal
proceedings in the last five years.
3. Temporary or permanent injunctions concerning securities dealings or
business practices, except for SEC v. First Hartford Corporation Civil Action
No. 89-3156-NHJ (D.DC. 1989) in which the Registrant consented to entry of Final
Judgment of Permanent Injunction requiring the Registrant to file its periodic
reports with the SEC on a timely basis, specifically, its Annual Report on form
10-K for its fiscal year ended April 30, 1989 and its Quarterly Reports on form
10-Q within 120 days from entry of the Judgment on November 30, 1989. Also see
ITEM 3. for other temporary or permanent injunctions.
4. Orders, judgments or decrees of State or Federal authority barring,
suspending or otherwise limiting any securities dealing or business practices or
barring association with persons engaged in such activities, except for the
action described in 3. above.
5. Any findings in a civil action or by the SEC that such person violated
any Federal or State securities law, except for the action described in 3.
above.
ITEM 11. REMUNERATION
There is set forth below information relating to all direct remuneration
paid by the Registrant during the year ended April 30, 1998 to each director and
each executive officer of the Registrant whose aggregate remuneration totaled
$60,000 and to all directors and officers of the Registrant as a group.
28
<PAGE>
Estimated Annual
Name or Number of Persons Other Pension Benefits
in Group and Capacity Salary Compensation(1) Under Plan(2)
- ------------------------- ------ ---------------- ----------------
All directors and officers
as a group (2 in number) $133,162.00
(1) To assist management of the Registrant in carrying out its responsibility
and to improve job performance, the Registrant provides certain of its
officers with automobiles. The Registrant cannot specifically or precisely
ascertain the amount of personal benefit, if any, derived by those
officers from such automobiles. However, after reasonable inquiry, the
Registrant has concluded that the amount of any such personal benefit is
immaterial and does not in any event exceed $10,000 as to all officers. No
provision has therefore been made for any such benefit.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
(a) Security Ownership of Certain Beneficial Owners
The following table sets forth information as of the date hereof with
respect to all persons known to the Registrant to be beneficial owners of more
than 5% of the Registrant's outstanding shares of common stock:
Title Name & Address of Amount and Nature
of Beneficial Owner or of Beneficial Percent
Class Identity of Group Ownerships of Class
----- ----------------- ---------- --------
Common Stock Neil H. Ellis 907,904 (1) 29.4%
43 Butternut Road
Manchester, CT 06040
Common Stock William J. Bellock 440,246 l4.3%
50 Emily Lane
Manchester, CT 06040
(1) Includes 17,693 shares owned beneficially and of record by Mr. Ellis'
wife; 53,412 shares held as Trustee for his daughters in which he disclaims
beneficial ownership. Excludes 14,250 shares held as Trustee for the Jonathan G.
Ellis Leukemia Foundation (a charitable foundation).
29
<PAGE>
(b) Security Ownership of Management
The following table sets forth information as of the date hereof with
respect to all shares beneficially owned by all directors and directors and
officers of the Registrant as a group:
Title Name & Address of Amount and Nature
of Beneficial Owner or of Beneficial Percent
Class Identity of Group Ownerships of Class
----- ----------------- ---------- --------
Common Neil H. Ellis 907,904 (1) 29.4%
43 Butternut Road
Manchester, CT 06040
Common All Directors 907,904 (1) 29.4%
and Officers
as a Group
(3 in number)
(1) Includes 17,693 shares owned beneficially and of record by Mr. Ellis'
wife; 53,412 shares held as Trustee for his daughters in which he disclaims
beneficial ownership. Excludes 14,250 shares held as Trustee for the Jonathan G.
Ellis Leukemia Foundation (a charitable foundation).
(c) Changes in Control
The Registrant is aware of no arrangements which may result at a
subsequent date in change in control of the Registrant.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
(a) Transactions with Management and Others
Since the filing of the Petition for Reorganization in February of 1981,
and due to the uncertainty surrounding the financial stability of the
Registrant, lenders, required by the Registrant to finance the purchase and
development of real estate, have required the personal guarantee of Neil H.
Ellis, President and Director of the Registrant, on any loans that they make. As
consideration for this personal guarantee, the Registrant has proceeded in its
real estate development by one of two methods. The first method involves having
the loans made to a corporation owned directly by Mr. Ellis. Mr. Ellis then
grants
30
<PAGE>
to the Registrant a free option to purchase the stock of the corporation
to which the loans have been made, at the lower of cost or market value. Unless
the transaction is beneficial to the Registrant, it need not exercise the
option. The second method involves lending the money directly to the
subsidiaries of the Registrant which develop the property, and pledging to Mr.
Ellis the stock of the subsidiaries until such time as the guaranteed loans are
satisfied.
The Registrant and its subsidiaries have received from or made cash
advances to other companies which are owned or controlled by Neil Ellis,
President of the Registrant. The Registrant has also purchased land from and
performed services for these companies.
(b) Certain Business Relationships
Refer to (a) above.
(c) Indebtedness of Management
There is none.
(d) Transactions with Promoters
There are none.
31
<PAGE>
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES,
AND REPORTS ON FORM 8-K
Pages
-----
(a) (1) The following financial statements are
included in Part II, Item 8:
Statement in lieu of Independent Auditors' Report 10
Financial Statements:
Consolidated Balance Sheets - April 30, 1998 and 1997 11-12
Consolidated Statements of Income (Loss) -
Years Ended April 30, 1998, 1997 and 1996 13
Consolidated Statements of Shareholders' Equity
(Deficit) for the years Ended April 30, 1998, 1997
and 1996 14
Consolidated Statement of Cash Flows for the years
ended April 30, 1998 and 1997 15-16
Notes to Consolidated Financial Statements 17-25
(2) The following financial statement schedules for the
year ended April 30, 1998 are submitted herewith:
Schedule IX - Short Term Borrowings 36
Schedule XI - Real Estate and Accumulated Depreciation 37
All other schedules are omitted because they are not required,
inapplicable, or the information is otherwise shown in the financial statements
or notes thereto.
(b) Reports on Form 8-K:
A report on Form 8-K dated January 22, 1991 was filed by the Registrant
reporting the bankruptcy filing of the Registrant's former Accountants,
Laventhol and Horwath.
32
<PAGE>
(c) Exhibits
Pages
-----
Exhibit Index 33
(3) Articles of Incorporation and by-laws.
Exhibit (3) to Form 10-K for the Fiscal Year ended April 30, 1984,
Pages 1-18 of Exhibits Binder, incorporated by reference to
Securities File Number 0-8862.
(4) Instruments defining the rights of security holders, including
Indentures.
Not Applicable
(9) Voting Trust Agreement.
Not Applicable
(10) Material Contracts.
Not Applicable
(ll) Statement regarding computation of per share earnings.
See Item 6 of this report.
(12) Statement regarding computation of ratios.
Not Applicable
(13) Annual Report to Security Holders, Form 10-Q or Quarterly
Report to Security Holders.
The annual report to security holders consists of this
report (Form 10-K) and the President's letter attached
as Exhibit 13. 38
(18) Letter regarding change in accounting principle.
Not Applicable
(19) Previously unfiled Documents.
Not Applicable
(22) Subsidiaries of the Registrant. 39
33
<PAGE>
(23) Published report regarding matters submitted to vote
of Security Holders.
Not Applicable
(24) Consents of experts and counsel.
Not Applicable
(25) Power of Attorney.
Not Applicable
(28) Additional Exhibits.
Not Applicable
(29) Information from Reports furnished to State Insurance
Regulatory Authorities.
Not Applicable
(d) Other Financial Statements
Individual financial statements of a 50% owned company have been omitted
because it does not constitute a significant subsidiary.
34
<PAGE>
S I G N A T U R E S
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, Registrant has duly caused this Annual Report to be signed on its
behalf by the undersigned, Thereunto Duly Authorized.
Dated: August 27, 1998
---------------
FIRST HARTFORD CORPORATION
By: /s/ Neil H. Ellis
-------------------------------
Neil H. Ellis
President
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the Registrant and
in the capacities and on the date indicated.
August 27, 1998 /s/ Neil H. Ellis
- --------------- -----------------------------------------
Neil H. Ellis
Principal Executive Officer
President and Director
August 27, 1998 /s/ Stuart I. Greenwald
- --------------- -----------------------------------------
Stuart I. Greenwald
Principal Financial Officer
Principal Accounting Officer
Secretary, Treasurer and Director
35
<PAGE>
FIRST HARTFORD CORPORATION AND SUBSIDIARIES
SCHEDULE IX
SHORT-TERM BORROWINGS
YEARS ENDED APRIL 30, 1998, 1997, 1996 AND 1995
<TABLE>
<CAPTION>
Weighted Maximum Amount Average Amount Weighted Average
Balance Average Outstanding Outstanding Interest Rate
Category of Aggregate End of Interest During the During the During the
Short-Term Borrowings(1) Period Rate Period Period(2) Period(3)
- ------------------------ ------ ---- ------ --------- ---------
<S> <C> <C> <C> <C> <C>
Year Ended April 30, 1998
Banks $2,448,756 10% $2,448,756 $1,051,097 10%
Year Ended April 30, 1997
Banks $ 150,000 9.77% $ 785,000 $2,531,134 9.47%
Year Ended April 30, 1996
Banks $ 361,500 9.25% $ 480,000 $ 239,708 9.9%
Year Ended April 30, 1995
Banks $ 525,000 9.1% $ 525,000 $ 525,000 9.1%
</TABLE>
(1) Notes payable to banks represent obligations payable under credit
agreements to various banks. Borrowings are arranged on an as needed basis at
various terms.
(2) The average amount outstanding during the year represents the average
daily principal balances outstanding during the year.
(3) The weighted average interest rates during the year were computed by
dividing the actual interest incurred on short-term borrowings by the average
short-term borrowings.
36
<PAGE>
First Hartford Corporation and Subsidiaries
Schedule XI
Real Estate and Accumulated Depreciation
April 30, 1998
(UNAUDITED)
<TABLE>
<CAPTION>
Initial Gross Amount at Which
Encumbrances Cost To Company Carried at Close of Period
------------ --------------- --------------------------
Bldgs. Bldgs.
Constr. Mortgage, Notes and and Accum. Date of
Loans Payable Land Imp. Land Imp. Total Depr. Constr.
----- --------------- ---- ---- ---- ---- ----- ----- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Property under constr.
Shopping Center - CT 1,575,925 2,148,678 2,148,678 2,148,678
--------- --------- ------- --------- -------- --------- ---------
1,575,925 2,148,678 2,148,678 2,148,678
Developed Properties
Shopping Ctr.
Connecticut 4,079,887 582,000 4,137,963 582,000 4,137,963 4,719,963 707,325 1990
Condominium - RI -- 463,072 112,500 936,772 112,500 436,970 549,480 117,097 1992
--------- --------- ------- --------- --------- --------- --------- -------
1,575,925 4,542,959 694,500 5,074,735 694,500 4,574,943 5,269,443 824,422
--------- --------- ------- --------- --------- --------- --------- -------
1,575,925 4,542,959 694,500 7,223,413 694,500 6,723,621 7,418,121 824,422
========= ========= ======= ========= ========= ========= ========= =======
<CAPTION>
Life On
Which Depr.
In Latest
Income
Date Statement
Acquired Is Computed
-------- -----------
<S> <C>
Property under constr.
Shopping Center - CT
Developed Properties
Shopping Ctr.
Connecticut 40 Years
Condominium - RI 40 Years
</TABLE>
37
Exhibit 13
FIRST HARTFORD CORPORATION ANNUAL REPORT
TO SHAREHOLDERS FOR THE YEAR ENDED APRIL 30, 1998
TO OUR SHAREHOLDERS:
Your company has made major progress in liability reduction. We have
settled all major litigation and have embarked on a program to increase our
assets and working capital.
We still show a negative net worth, although considerably less than last
year. Our efforts this year will be to return to profitability and elimination
of that deficit position.
Respectfully submitted,
FIRST HARTFORD CORPORATION
/s/ Neil H. Ellis
Neil H. Ellis
President
August 27, 1998
38
EXHIBIT 22
SUBSIDIARIES OF THE REGISTRANT
Name of Subsidiary State in which Incorporated
------------------ ---------------------------
Adeps, Inc. Connecticut
First Hartford Realty Corporation Delaware
Parker Street Corp. Connecticut
Lead Tech, Inc. Connecticut
Parkade Center, Inc. Texas
Parkade Corp. North Carolina
Hawthorn Management Services, Inc. Connecticut
Plainfield Parkade, Inc. Connecticut
Merchants Landing Condominium Corporation Rhode Island
Putnam Parkade, Inc. Connecticut
Waterford Parkade, Inc. Connecticut
New First Hartford Realty Corp. Delaware
DE 149 Corp. Delaware
EH&N Construction Company Delaware
New Hawthorn Management Services, Inc. Delaware
39
