FIRST HARTFORD CORP - 10-Q Quarterly Report

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934

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 __________________________________________________________

First Hartford Corporation and Subsidiaries
(Address of principal executive offices)
(Zip Codes)

N/A
(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the Company (1) has filed all reports required to be filed by Section 13 or 15 (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 x No ___
Amendment _____________________________________________________________________

Amended effective November 15, 2002; compliance and phase-in details in Release No. 33-8128
(¶ 86,724), 67 F.R. 58480
Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act):
Yes No x
End of Amendment _______________________________________________________________

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 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 x No ____

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. 3,089,648 shares of common stock as of January 31, 2005.

			PAGE
Item 1.	Financial Statements

	Consolidated Balance Sheets -
		January 31, 2005 (unaudited) and April 30, 2004 (audited)	3 & 4

	Consolidated Statements of Operations and Comprehensive Loss
		For the Three Months and Nine Months
		Ended January 31, 2005 and 2004 (unaudited)	5

	Consolidated Statements of Cash Flows
		For the Three Months and Nine Months
		Ended January 31, 2005 and 2004 (unaudited)	6 - 7

	Notes to Consolidated Financial Statements		8 - 10

Item 2.	Management's Discussion and Analysis		11 - 14

Item 3.	Quantitative and Qualitative Disclosures
		About Market Risk	14

Item 4.	Controls and Procedures		15


PART II	OTHER INFORMATION

Item 1.	Legal Proceedings		16

Item 2.	Changes in Securities, use of Proceeds And Issuer Purchases of
	Equity Securities		16

Item 3.	Defaults Upon Senior Executives		17

Item 4.	Submission of Matters to a Vote Of Security Holders		17

Item 5.	Other Information		18

Item 6.	Exhibits and Reports on Form 8-K		18

	Signatures		19, 20

	Jan. 31, 2005	April 30, 2004
	(unaudited)	(audited)

Real Estate and equipment:
Developed properties	25,738,318	24,274,133
Equipment and leasehold improvements	216,345	120,931
	25,954,663	24,395,064

Less accumulated depreciation	2,430,212	1,933,189
	23,524,451	22,461,875

Properties under construction	6,800,609	0
	30,325,060	22,461,875

Cash	993,832	1,500,030

Investment in marketable securities	26,781	676,680

Accounts and notes receivable, less allowance for doubtful accounts of $31,600	328,709	911,901

Deposits, escrows and prepaid and deferred expenses	3,278,932	2,489,014

Investment in affiliates	450,322	239,519

Due from related parties and affiliates	553,398	966,105

Deferred tax assets	900,000	900,000
	36,857,034	30,145,124
	========	========

The accompanying notes are an integral part of these consolidated financial statements

PART I - FINANCIAL INFORMATION
FIRST HARTFORD CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS

	January 31, 2005	April 30, 2004
Liabilities:	(unaudited)	(audited)

Mortgages, notes payable;
Construction loans	2,621,929	5,563,476
Mortgages payable	31,855,800	21,053,453
Notes payable - other	2,109,324	1,586,601
	36,587,053	28,203,530

Accounts payable	1,449,716	1,737,212
Accrued liabilities	243,724	571,828
Accrued cost of derivatives	0	179,059
Minority interest	(112,537)	19,179
Deferred income	155,099	78,654
Other liabilities	574,055	560,998
Due to related parties and affiliated	105,951	95,786
	39,003,061	31,446,246

Shareholder's Equity (deficiency):

Common Stock, $1 par; authorized 6,000,000 Shares; issued 3,322,213 shares	3,298,337	3,322,213
Capital in excess of par	5,206,521	5,182,645
Deficit	(8,412,656)	(7,450,371)
Unearned stock compensation	(169,271)	(291,146)
Accumulated comprehensive income	0	3,661
	(77,069)	767,002

Less 232,228 shares at January 31, 2005 and 232,228 shares at April 30, 2004 of common stock held in Treasury, at cost.	2,068,958	2,068,124
	(2,146,027)	(1,301,122)
	36,857,034	30,145,124
	=========	=========

The accompanying notes are an integral part of these consolidated financial statements


	Three Months Ended		Nine Months Ended
	January 31, 2005	January 31, 2004	January 31, 2005	January 31, 2004
		(Restated)		(Restated)
Revenues:
Sale of real estate	0	0	128,500	73,096
Construction	39,420	9,428	167,267	114,375
Rental income	1,280,515	458,870	3,536,150	1,220,991
Gain on derivatives	0	0	29,059	0
Other/Service Income	191,738	172,069	626,436	307,287
Equity/loss in earnings of affiliates	161,865	95,011	339,414	313,473
Non-recurring items	0	67,221	0	200,367
	1,673,538	802,599	4,826,826	2,229,589

Cost and Expenses:
Cost of sales, real estate	0	0	15,304	15,771
Construction	(17,933)	7,116	13,006	28,492
Operating	653,053	634,007	1,430,383	1,057,602
Interest	445,160	201,494	1,141,043	580,208
Loss on derivatives	0	0
Depreciation and amortization	261,128	137,513	669,334	253,289
General and administrative	572,388	291,812	1,615,638	1,086,330
Property taxes	198,427	51,040	536,149	123,946
Non-recurring expense	188,443	0	188,443	0
	2,300,666	1,322,982	5,609,300	3,145,638

Loss before discontinued operation	(627,128)	(520,383)	(782,474)	(916,049)

Discontinued Operation:
Gain on operations of shopping center sold	0	6,198,982	0	6,368,350

Net income (loss) before income tax	(627,128)	5,678,599	(782,474)	5,452,301

State income tax provision	(30,219)	59,703	(21,224)	63,854
Deferred federal income tax	0	800,000	0	800,000
	(30,219)	859,703	(21,224)	863,854

Net income (loss) before minority interest	(596,909)	4,818,896	(761,250)	4,588,447

Minority interest	(39,963)	0	(201,034)	0
Net income (loss)	(636,872)	4,818,896	(962,284)	4,588,447

Other comprehensive loss, net of taxes	21,805	0	0	0

Net income (loss)	(615,067)	4,818,896	(962,284)	4,588,447

Net income (Loss) per Share	(0.20)	1.56	(0.31)	1.48

Weighted Average Number of Shares Outstanding	3,089,648	3,089,985	3,089,648	3,089,985

The accompanying notes are an integral part of these consolidated financial statements

FIRST HARTFORD CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS AND NINE MONTHS ENDED JANUARY 31, 2005 AND 2004

	Three Months Ended		Nine Months Ended
	January 31, 2005	January 31, 2004	January 31, 2005	January 31, 2004
		(Restated)		(Restated)
Cash Flows from operating activites:
Net Profit (loss)	($636,872)	$4,818,896	($962,284)	$4,588,447

Adjustments to reconcile net loss to net cash used in operating activities:
Gain on sale of property	0	6,743,222	0	6,685,897
Depreciation	171,596	120,332	497,023	356,733
Amortization	89,532	91,967	172,311	116,161
Deferred Tax Asset	0	800,000	0	800,000
Adjustment of potential cost of derivatives	0	0	(179,059)	0
Amortized unearned stock compensation	40,625	0	121,875	0

Changes in assets and liabilities:
(Increase) decrease in:
Accounts and notes receivable, net	8,859	394,345	583,192	398,884
Deposits, escrows, prepaid and deferred expense	(229,768)	(229,958)	(962,229)	(628,611)
Increase (decrease) in:
Accrued liabilities	(93,925)	319,950	(328,104)	190,980
Undistributed Minority Interest	(42,537)	0	(131,716)	0
Other liabilities	(1,097)	87,937	13,057	124,001
Deferred Income	(83,202)	0	76,445	0
Accounts payable	161,649	(782,486)	(287,496)	(331,707)
Net cash used in operating activities	(615,140)	12,364,205	(1,386,985)	12,300,785

Cash flows from investing activities:
Investment in affiliates	(96,212)	155,800	(210,803)	926,739
Investment in Marketable Securities	531,737	0	649,899	0
Purchase of equipment and leasehold improvements	(54,906)	(4,982)	(95,414)	(9,004)
Reduction in prior development cost	0	98,251	0	98,251
Payments for:
Other Comprehensive Income	(3,661)	0	(3,661)	0
Treasury Stock	0	0	(834)	0
Additions to properties under construction	(4,128,644)	(4,836,829)	(8,264,794)	(4,879,200)
Net cash used in investing activities	(3,751,686)	(4,587,760)	(7,925,607)	(3,863,214)

Cash flows from financing activities:
Proceeds from:
Construction loan payable	2,621,929	3,701,657	4,963,953	4,146,791
Mortgage payable	5,300,000	0	20,150,000	0
Notes payable	700,000	0	700,000	0

Principal payments on:
Construction loan payables	0	0	(7,905,500)	0
Mortgage payable	(3,847,164)	(13,296,126)	(9,347,654)	(13,867,293)
Notes payable	(35,289)	(258,241)	(177,277)	(588,706)
Gross proceeds on sale of real estate	0	5,456,964	0	5,530,060

The accompanying notes are an integral part of these consolidated financial statements

FIRST HARTFORD CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS AND NINE MONTHS ENDED JANUARY 31, 2005 AND 2004
(continued)

	Three Months Ended		Nine Months Ended
	January 31, 2005	January 31, 2004	January 31, 2005	January 31, 2004
		(Restated)		(Restated)
Advance from/repayment to related parties and affiliated partnerships	131,737	134,917	422,872	(167,223)

Net cash provided by financing activities	4,871,213	(4,260,829)	8,806,394	(4,946,371)

Net decrease in cash and cash equivalent	504,387	3,515,616	(506,198)	3,491,200

Cash and cash equivalents, beginning of period	489,445	4,635	1,500,030	29,051

Cash and cash equivalents at end of period	$993,832	$3,520,251	$993,832	$3,520,251
	======	======	======	======

The accompanying notes are an integral part of these consolidated financial statements

First Hartford Corporation and subsidiaries (the "Company") was incorporated in Maine in 1909, and is engaged in the purchase, development, ownership, management and sale of real estate.

The accompanying financial statements include the accounts of the Company, and its wholly owned subsidiaries. All significant intercompany transactions and accounts have been eliminated in the consolidated financial statements, including construction revenues and costs of development for the Company's own use (rental/future sale). Construction revenue from contracts between the Company and its investment partnerships are shown net of the related construction costs.

Because the Company is engaged in the development and sale of real estate in various states 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.

Since the Company is primarily involved in the development of property for its own use, construction revenue is recorded upon the sale of a property built for 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 period in which the facts become known. The Company provides for estimated losses on contracts in the period such losses become known. There were no properties built for sale to third parties during the period covered by this report.

A subsidiary, Lead Tech, Inc., does lead and asbestos inspections and remediation and recognizes revenue as services are provided.

Rental Revenue - Rental revenue is comprised of base rent, reimbursements for certain costs as provided in the lease agreements such as real estate taxes, utilities, insurance, common area maintenance charges and other recoverable costs. There are no contingent rents during the period covered by this report.

The Company leases certain real estate to tenants under leases that may include renewal options. In most cases, management expects that in the normal course of business, leases will be renewed. In accordance with Statement of Financial Accounting Standards No. 13 "Accounting for Leases", rental revenue is recognized on a straight-line basis over the terms of the respective leases.

FIRST HARTFORD CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

During the reporting period, the Company had an amount in excess of $100,000 in a single bank. Amounts over $100,000 are not insured by the Federal Deposit Insurance Corporation. These balances fluctuate during the year and will usually exceed this $100,000 limit. Management regularly monitors the financial institution, together with its cash balances, and seeks to minimize this potential risk.

In accordance with ARB51, investments in entities in which the Company owns less than a 20% interest are carried at cost. Distributions incurred from those entities are included in income. Investments in entities in which the Company has a 20-50% interest are carried at cost adjusted for the Company's proportionate share of their undistributed earnings or losses. Distributions received in excess of the Company's proportionate share of capital are applied as a reduction of the cost of the investment.

The Company currently has two unconsolidated operating partnerships: The Shopping Center in Cranston, RI in which the Company owns a 25% interest and the Shopping Center in Dover Township, NJ in which the Company owns a 50% interest. Although the Company exercises significant influence, the Company does not control the operating and financial policies of these partnerships and, therefore, are not consolidated in the financial statements. These investments were recorded at cost and subsequently adjusted for gains, losses and distributions. If the carrying value of the investment is less than zero, the amount is recorded in other liabilities.

In the normal course of business, the Company is exposed to the effects of interest rate changes. The Company limits its exposure with the use of derivatives. To mitigate the exposure to unexpected changes in interest rates, derivatives are used primarily to hedge against rate movements on some of the Company's related debt. Interest rate swap contracts that have been designated and qualify as fair value hedging instruments are reported at fair value. The gain or loss on the derivative instrument as well as the offsetting gain or loss on the hedged item attributable to the hedged risk are recognized in earnings in the current period.

The Company has adopted Statement of Financial Accounting Standards (SFAS) No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets", which established a single accounting model for the impairment or disposal of long-lived assets including discontinued operations. SFAS No. 144 requires that the operations related to properties that have been sold or properties that are intended to be sold be presented as discontinued operations in the Consolidated Statement of Operations and Comprehensive Loss for all periods presented, and properties intended to be sold to be designated as "held for sale" on the Consolidated Balance Sheet.

FIRST HARTFORD CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amount of assets and liabilities, and the disclosure of contingent assets and liabilities as of the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

In accordance with SFAS No. 115 "Accounting for Certain Investments in Debt and Equity Securities" the Company determines the appropriate classification of its investments in debt and equity securities at the time of purchase and re-evaluates such determination at each Balance Sheet date. Debt securities for which the Company does not have the intent to hold to maturity are classified as available-for-sale, along with the Company's investment in equity securities. Securities available-for-sale are carried at fair value, with the unrealized gains and losses reported in other comprehensive income (loss).

The Company applies Accounting Principles Board Opinion 25, "Accounting for Stock Issued to Employees" ("APB 25") and related interpretations in accounting for its stock awards, and complies with the disclosure provisions of SFAS No. 123, "Accounting for Stock Based Compensation". Under APB 25, compensation expense is recognized over the vesting period to the extent that the fair market value of the underlying common stock on the measurement date exceeds the exercise price of the employee stock award.

The Company has adopted SFAS No. 144 "Accounting for the Impairment or Disposal of Long-Lived Assets". As a result, there is a requirement to restate the 2003 financial statements to properly present discontinued operations. There is no effect to net income.

In the current year, in accordance with SFAS No. 13 "Accounting for Leases"; the Company recognized lease rental revenue on a straight-line basis over the terms of the respective leases. For the quarter and nine months ended January 31, 2004 the financial statements have been restated to reflect an increase of $10,071, and $30,213 respectively to rental earnings. The income for earnings from affiliated has also increased $26,731 and $80,193 for the same application of SFAS No. 13.

On January 22, 2004, the shareholders approved a stock-option plan. In February 2004, 250,000 options were granted to five employees, two of which are directors. The options have a two-year vesting period which were granted at $1.10 per share, representing the highest bid price prior to the issuance of the options. The option gives the employee the right to sell the shares back to the Company for $2.40 at the end of the vesting period. The Company expensed $40,625 related to the options for the quarter and $121,875 for the nine months ended January 31, 2005.

The financial and business analysis below provides information which the Company believes is relevant to an assessment and understanding of the Company's consolidated financial position and results of operations. This financial and business analysis should be read in conjunction with the 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 risks 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 relationships with key customers 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.

The discussion and analysis of financial condition and results of operations is based upon the Consolidated Financial Statements contained in Item 1 in this Quarterly Report. The Consolidated Financial Statements include the accounts of the Company and its controlled affiliates. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses for the reporting period. Actual results could differ from those estimates.

The estimates used in the preparation of the Consolidated Financial Statements are described in Note 1 to the Consolidated Financial Statements for the periods ended January 31, 2005 and 2004. Certain significant accounting policies are considered critical accounting policies due to the increased level of assumptions used or estimates made in determining their impact on the Consolidated Financial Statements. Management has reviewed the critical accounting policies and estimates with the Company's Board of Directors.

FIRST HARTFORD CORPORATION AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS

The three and nine months ending January 31, 2005 result in a loss of $615,067 and $962,284 respectively. Compared to a loss before discontinued items of $520,383 and $916,049 for three and nine months ended January 31, 2004. Nonrecurring income of $67,221 and $200,367 were included in the January 31, 2004 period.

Rental income has increased $821,645 and $2,315,159 for the three and nine months ended January 31, 2005 in comparison to the periods ended January 31, 2004. The increase in rental income is reflective of rents, real estate taxes, insurance and common area charges for Gibbs College, Texas Roadhouse and the West Springfield Shopping Center. Only the West Springfield center had any income prior to January 2004 and that was under $100,000.

Service income was approximately $173,000 and $532,000 for the three and nine months ended January 31, 2005. The West Springfield shopping center was charged $185,000 for the six months ended October 31, 2004 and was completed by that date. The Bangor shopping center was started approximately August 1, 2004 and was charged $171,000 and $342,000 for the three and nine months ended January 31, 2005. Service income represents allocations of salary and associated costs representing an estimate of work for the Bangor and West Springfield projects plus miscellaneous billings. These costs are in operating as well as general and administrative cost.

Cost and Expenses are in line with additional revenue from Gibbs College and the West Springfield Shopping Center except for:

1. $188,000 write off of deferred financing due to a refinancing of the property in the three month period ended January 31, 2005.

2. Due to a lawsuit filed by a dissident shareholder, the Company has suffered legal expenses of $119,000 and $209,000 for the three and nine month period ended January 31, 2005.

3. The Company has expensed $40,625 and $121,875 for the three and nine month period ended January 31, 2005, for expensing of employee stock options.

As reported in Form 8-K filed on August 9, 2004, the Company has started construction of a new 233,000 s.f. shopping center in Bangor, Maine and obtained a construction loan of $19,350,000. The Company has paid approximately $3,500,000 of cost on this project prior to the construction loan $700,000 of which came from a $750,000 line of credit obtained October 29, 2004. It is not anticipated at this time that any of these funds will be drawn from the construction loan. As reported in Form 8K filed on December 15, 2004, the Company has entered into an agreement with a non-affiliated company providing for the sale of the Shopping Center in Bangor, Maine. Consummation of the sale is subject to numerous conditions and contingencies. The Company expects a closing in the quarter ending January 31, 2006, with the probability of a final closing within 18 months of the initial closing. At the initial closing the Company anticipates the return of any funds invested plus a portion of the profit which is dependant upon stores being open and paying rent.

As reported in Form 8-K filed on November 1, 2004, the Company completed a refinancing of a mortgage for the Plainfield shopping center. The Company paid a prepayment premium of $159,084 to the original lender. Proceeds from this refinancing (approximately $1,400,000) were used by the Company to invest in various projects and to provide working capital for the Bangor Parkade project.

FIRST HARTFORD CORPORATION AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS

The following schedule outlines our long-term obligations as of January 31, 2005.

(1) Shopping center in Bangor, Maine to be built on property leased until January 31, 2104. Only payments prior to February 1, 2006 are on this schedule. Thereafter, the annual rent is $400,000 with a .075% increase every 5 years.

Although wary of rising interest rates, the possibilities of problems with major tenants, and major construction cost overruns, we feel our liquidity and capital resources are adequate to meet our needs.

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 Company's throughout the United States. The success of the Company, 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 Company to meet its debt service obligations and to operate profitably is 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 Company's properties are located, the rate of new construction in those areas and the extent of present and future competition in those areas. The Company's holdings are becoming less diversified both geographically and in use and types of occupancy.

The Company's assets are concentrated mostly in the Northeast which creates a geographic diversification risk. The Company presently has properties from Southern New Jersey to Maine.

The real estate business does not experience "backlogs" as that term is generally understood, nor is it seasonal.

To the Company's knowledge, its real estate business is not dependent upon a single customer but there is a dependency on supermarkets for strip malls. The Company has Stop & Shop, Price Rite and Big Y as such tenants.

FIRST HARTFORD CORPORATION AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS

Our management, including our chief executive officer and chief financial officer carried out an evaluation of the effectiveness of our disclosure controls and procedures as of January 31, 2005, pursuant to Exchange Act Rules 13(a)-15(e) and 15(d)-15(e). Based upon that evaluation our chief executive officer and chief financial officer have concluded that as of such date, our disclosure controls and procedures in place are adequate to ensure material information and other information requiring disclosure is identified and communicated on a timely basis. There were no significant changes in the registrant's internal controls or in other factors that could significantly affect these controls subsequent to the date of their evaluation.

On January 29, 2004, a shareholder filed a Form 13D with the Securities and Exchange Commission indicating that he controls over 19% of the Company shares. That shareholder was Richard E. Kaplan, purportedly a resident of the Commonwealth of Massachusetts. By Complaint dated February 27, 2004, Mr. Kaplan, filed suit against the Company as case No. 04 10402 RCL in the United States District Court in the District of Massachusetts. The Company was served with the complaint on March 2, 2004. The complaint alleges that the proxy solicitation materials issued by the Company as a prelude to its annual meeting on January 22, 2004, were false and/or misleading in certain respects and also omitted certain material information. As a result thereof, the plaintiff seeks to void the shareholder votes taken at the January 22, 2004 shareholder meeting of the Company and have a new vote ordered based upon revised proxy material which would be required to be issued by the Company. The only shareholder votes taken at the annual meeting were to re-elect the same Board of Directors which had been serving the Company and to approve an Employee Stock Option Plan.

During discovery in this case, Mr. Kaplan sought, among other things, disclosure from the Company of its shareholder list. Subsequently, on October 28, 2004, Mr. Kaplan simultaneously filed related lawsuits in both the United States District Court for the District of Maine and the Superior Court for Kennebec County in the State of Maine also seeking disclosure from the Company of its shareholder list. After certain rulings in these cases, the Company agreed to allow Mr. Kaplan to inspect its shareholder list. As a result, except for a pending motion for attorneys fees by Mr. Kaplan, the sole purpose of the Maine lawsuit(s) has been addressed.

The Company believes strongly that information in its proxy materials was neither false nor misleading and that the lawsuit is without merit.

The Company is not aware of any other material legal proceedings which would need to be cited herein.

The 2004 Annual Meeting was held on February 25, 2005. The management nominated board was re-elected for another term. The Kaplan proposal for a board comprised of 80% independent directors was defeated. Mr. Kaplan (through his counsel) claimed at the shareholder meeting that the votes cast by Neil Ellis should be voided because of an alleged violation of SEC Rule 13D-1 (alleged by Mr. Kaplan). Management does not consider that claim credible.

Item 2. CHANGES IN SECURITIES USE OF PROCEEDS AND ISSUER PURCHASES OF EQUITY SECURITIES

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.

/s/ Stuart Greenwald
Stuart Greenwald
Treasurer
Chief Financial
(Duly Authorized Officer, Principal
Financial and Accounting Officer)

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.

Contractual Obligations	Total	Less Than 1 Year	1 - 3 Years	3-5 Years	More Than 5 Years
Long Term Debt	33,068,269	1,425,732	1,608,336	11,253,621	18,780,579
Operating Lease	203,333 (1)	170,000	33,333
Purchase Obligation	2,038,949 (2)	2,038,949	__________	__________	___________
	$35,310,551	$3,634,681	$1,641,669	$11,253,621	$18,780,579

a)	Exhibits:

	Exhibit 31.1	Certification of Chief Executive Officer, pursuant to Rule 13a-14(c) under the Securities Exchange Act of 1934.

	Exhibit 31.1	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, pursuant to 18 U.S.C. Section 1350.

	Exhibit 32.1	Certification of Chief Financial Officers, pursuant to 18 U.S.C. Section 1350.

b)	Form 8-K	Regulation FD Disclosures Re: Construction of Police Station in
		Cranston, RI.

	Form 8-K	Regulations FD Disclosure RE: Shopping Center in Bangor,
		Maine.

	Form 8-K	Item 2.03 Creation of a Financial Obligation - Re: $9,250,000
		Mortgage.

	Form 8-K	Item 5.03 Amendment to By-Laws

	Form 8-K	Item 2.03 Creation of a Financial Obligation - Re: $5,600,000
		Mortgage.

	Form 8-K	Item 2.03 Creation of a Financial Obligation - Re: $5,300,000
		Mortgage.