**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**Washington, D.C. 20549**

 

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**Form 10-QSB**

 

**QUARTERLY REPORT PURSUANT TO SECTION 13OR 15(d) OF THE**

**SECURITIES EXCHANGE ACT OF 1934**

 

**For the quarterly period ended March 31, 2002**

 

**Commission File Number:**

 

**0-25074**

 

**STONEHAVEN REALTY TRUST**

(Exact name of registrant asspecified in its charter)

 

| **Maryland**                                      |   | **39-6594066**                          |
|---------------------------------------------------|--------|-----------------------------------------|
| (State or other jurisdiction of incorporation)    |   | (I.R.S. Employer Identification Number) |
| **5620 Smetana  Road, Suite 330, Minnetonka, MN** |   | **55343**                               |
| (Address of principal executive offices)          |   | (Zip code)                              |

 

Issuer’s telephone number: **952-935-5411** Fax number: **952-935-5659**

 

Securities registered underSection 12(b) of the Act: **None**

 

Securities registered underSection 12(g) of the Act: **Common Shares,$0.01 par value**

 

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Check whether the issuer (1) filed allreports required to be filed by Section 13 or 15(d) of the Exchange Actduring the

past 12 months (or for such shorter periodthat the registrant was required to file such reports), and (2) has been

subject to the filing requirements for the past90 days. Yes  ý No  o

 

As of May 9, 2002, 4,517,524 shares of theissuer’s common shares were outstanding.

 

Transitional Small Business Disclosure Format(Check one): Yes  o  No  ý

(Added by Exch Act Rel No. 31905, eff4/26/93.)

 

**This report contains 20 pages. There are no exhibits.**

 

 

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**STONEHAVEN REALTY TRUST AND SUBSIDIARIES**

**FORM 10-QSB**

**INDEX**

 
| **PART I.  Financial Information**                                                                           |
|-------------------------------------------------------------------------------------------------------------------|
|                                                                                                              |
| **Consolidated  Balance Sheet—March 31, 2002 (unaudited)**                                                   |
|                                                                                                              |
| Consolidated  Statements of Operations**—**Three  months endedMarch 31, 2002 and March  31, 2001 (unaudited) |
|                                                                                                              |
| Consolidated  Statements of Cash Flows**—**Three  months endedMarch 31, 2002 and March  31, 2001 (unaudited) |
|                                                                                                              |
| Notes to  Consolidated Financial Statements                                                                       |
|                                                                                                              |
| Management’s  Discussion and Analysis of Financial Condition andPlan of Operation                            |
|                                                                                                              |
| **Part II.  Other Information**                                                                              |
|                                                                                                              |
| Other Information                                                                                                 |
|                                                                                                              |
| Exhibits and Reports  on Form 8-K                                                                                 |
|                                                                                                              |
| Signatures                                                                                                        |

 

2

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**Stonehaven Realty Trust andSubsidiaries**

**ConsolidatedBalance Sheet**

**March 31, 2002**

**(unaudited)**

 

 
| **ASSETS**                                                                                                                                                                       |   |        |       |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------|------------|
| Investments in  real estate:                                                                                                                                                     |   |        |       |
| Land                                                                                                                                                                             |   | $           | 2,195,034  |   |
| Buildings and  improvements                                                                                                                                                      |   | 8,832,019   |       |
| Computer  hardware, software and other fixed assets                                                                                                                              |   | 69,922      |       |
|                                                                                                                                                                             |   | 11,096,975  |       |
| Accumulated  depreciation and amortization                                                                                                                                       |   | (625,133    | )          |
| Net investments  in real estate                                                                                                                                                  |   | 10,471,842  |       |
| Cash and cash  equivalents                                                                                                                                                       |   | 2,567,207   |       |
| Marketable  securities, net                                                                                                                                                      |   | 385,200     |       |
| Restricted cash                                                                                                                                                                  |   | 259,594     |       |
| Other assets,  net                                                                                                                                                               |   | 156,814     |       |
| **TOTAL ASSETS**                                                                                                                                                                 |   | $           | 13,840,657 |   |
|                                                                                                                                                                             |   |        |       |
| **LIABILITIES  AND SHAREHOLDERS’ EQUITY**                                                                                                                                   |   |        |       |
| Liabilities:                                                                                                                                                                     |   |        |       |
| Mortgage loans and  notes payable                                                                                                                                                |   | $           | 6,509,297  |   |
| Related party  notes payable                                                                                                                                                     |   | 335,000     |       |
| Income taxes  payable                                                                                                                                                            |   | 29,000      |       |
| Accounts payable  and accrued expenses                                                                                                                                           |   | 791,027     |       |
| Security  deposits                                                                                                                                                               |   | 45,000      |       |
| Total  liabilities                                                                                                                                                               |   | 7,709,324   |       |
|                                                                                                                                                                             |   |        | ** ** |
| **Minority interest in consolidated  subsidiary**                                                                                                                                |   | **—**  | ** ** |
|                                                                                                                                                                             |   |        | ** ** |
| **COMMITMENTS  AND CONTINGENCIES:  (Note 8)**                                                                                                                               |   |        | ** ** |
|                                                                                                                                                                             |   |        | ** ** |
| Shareholders’  equity:                                                                                                                                                      |   |        | ** ** |
| Preferred Shares —  $0.01 par value, 10,000,000 authorized: 663,291 Class A cumulative  convertible shares issued and outstanding, $10.00 per share liquidation  preference |   | 6,633       |       |
| Common Shares — $0.01  par value, 100,000,000 authorized; 4,517,524 shares issued and outstanding                                                                           |   | 45,176      |       |
| Additional  paid-in capital                                                                                                                                                      |   | 25,595,216  |       |
| Accumulated other  comprehensive loss; net unrealized loss on marketable securities                                                                                              |   | (812,400    | )          |
| Accumulated  deficit                                                                                                                                                             |   | (18,663,523 | )          |
| Treasury stock,  at cost                                                                                                                                                         |   | (39,769     | )          |
| Total  shareholders’ equity                                                                                                                                                 |   | 6,131,333   |       |
| **TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY**                                                                                                                              |   | $           | 13,840,657 |   |

 

The accompanying notes are an integral part of theconsolidated financial statements.

 

3

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**StonehavenRealty Trust and Subsidiaries**

**Consolidated Statements of Operations**

**(unaudited)**

 
|                                                                           |   | **For the three months ended March 31,** |     |
|--------------------------------------------------------------------------------|--------|------------------------------------------|----------|
|                                                                           |   | **2002**                                 |     | **2001** |   |
|                                                                           |   |                                     |     |   |   |
| **Revenues**                                                                   |   |                                     |     |   |   |
| Rental revenue                                                                 |   | $                                        | 221,006  |   | $ | 471,481 |   |
| Tenant  recoveries                                                             |   | 80,181                                   |     | 313,570 |   |
| Professional  services and sales of hardware and software                      |   | —                                   |     | 802,314 |   |
| Interest and  other                                                            |   | 6,404                                    |     | 35,009 |   |
| Total revenues                                                                 |   | 307,591                                  |     | 1,622,374 |   |
| **Expenses**                                                                   |   |                                     |     |   |   |
| Property,  operating and maintenance                                           |   | 43,950                                   |     | 140,858 |   |
| Advertising and  promotion                                                     |   | 2,000                                    |     | 79,685 |   |
| Property taxes  and insurance                                                  |   | 87,792                                   |     | 140,689 |   |
| Depreciation and  amortization                                                 |   | 62,665                                   |     | 798,885 |   |
| Interest                                                                       |   | 125,957                                  |     | 341,023 |   |
| General and  administrative                                                    |   | 206,320                                  |     | 512,547 |   |
| Management fees                                                                |   | 14,606                                   |     | 36,898 |   |
| Costs related to  professional services and sales of hardware and software     |   | —                                   |     | 408,834 |   |
| Product  development                                                           |   | —                                   |     | 51,602 |   |
| Total expenses                                                                 |   | 543,290                                  |     | 2,511,021 |   |
| Loss from  operations before loss allocated to minority interest               |   | (235,699                                 | )        | (888,647 | ) |
| Loss allocated  to minority interest                                           |   | 6,950                                    |     | 40,757 |   |
| Loss from  operations                                                          |   | (228,749                                 | )        | (847,890 | ) |
| Loss on sale of  investments in real estate                                    |   | —                                   |     | (165,835 | ) |
| Gain on sale of  marketable securities                                         |   | 55,889                                   |     | — |   |
| Net loss  available to Common Shareholders                                     |   | $                                        | (172,860 | ) | $ | (1,013,725 | ) |
| Net loss  available to Common Shareholders per Common Share: Basic and Diluted |   | $                                        | (0.04    | ) | $ | (0.22 | ) |
| Weighted average  number of Common Shares outstanding                          |   | 4,517,524                                |     | 4,517,524 |   |
|                                                                           |   |                                     |     |   |   |
| Comprehensive  loss:                                                           |   |                                     |     |   |   |
| Net Loss                                                                       |   | $                                        | (172,860 | ) | $ | (1,013,725 | ) |
| Other  comprehensive loss:                                                     |   |                                     |     |   |   |
| Unrealized loss  on marketable securities                                      |   | (782,000                                 | )        | — |   |
| Comprehensive  loss                                                            |   | $                                        | (954,860 | ) | $ | (1,013,725 | ) |

 

The accompanying notesare an integral part of the consolidated financial statements.

 

4

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**Stonehaven Realty Trust and Subsidiaries**

**ConsolidatedStatements of Cash Flows**

**(unaudited)**
|                                                                         |   | **For the three months ended  March 31,** |      |
|------------------------------------------------------------------------------|--------|-------------------------------------------|-----------|
|                                                                         |   | **2002**                                  |      | **2001** |   |
| **Cash flows from operating  activities:**                                   |   |                                      |      |   |   |
| Net loss                                                                     |   | $                                         | (172,860  | ) | $ | (1,013,725 | ) |
| Adjustments to  reconcile net loss to net cash used in operating activities: |   |                                      |      |   |   |
| Depreciation and  amortization                                               |   | 62,665                                    |      | 798,885 |   |
| Loss allocated  to minority interest                                         |   | (6,950                                    | )         | (40,757 | ) |
| Loss on sales of  investment of real estate                                  |   | —                                    |      | 165,835 |   |
| Gain on sale of  marketable securities                                       |   | (55,889                                   | )         | — |   |
| Net change in  assets and liabilities:                                       |   |                                      |      |   |   |
| Accounts  receivable, net                                                    |   | —                                    |      | (47,514 | ) |
| Restricted cash                                                              |   | (30,291                                   | )         | (26,159 | ) |
| Other assets,  net                                                           |   | (5,635                                    | )         | 10,639 |   |
| Income taxes  payable                                                        |   | (11,000                                   | )         | — |   |
| Accounts payable  and accrued expenses                                       |   | 19,978                                    |      | (369,712 | ) |
| Deferred revenue  and security deposits                                      |   | 10,000                                    |      | 18,830 |   |
| Net cash used in  operating activities                                       |   | (189,982                                  | )         | (503,678 | ) |
|                                                                         |   |                                      |      |   |   |
| **Cash flows from investing  activities:**                                   |   |                                      |      |   |   |
| Additions to  real estate properties                                         |   | (8,572                                    | )         | — |   |
| Acquisition of  computer hardware, software and other fixed assets           |   | —                                    |      | (6,592 | ) |
| Cash proceeds  from disposition of real estate property                      |   | —                                    |      | 593,579 |   |
| Cash proceeds  from sale of marketable securities                            |   | 1,253,489                                 |      | — |   |
| Net  cash provided by investing activities                                   |   | 1,244,917                                 |      | 586,987 |   |
|                                                                         |   |                                      |      |   |   |
| **Cash flows from financing  activities:**                                   |   |                                      |      |   |   |
| Payments on  mortgage loans and notes payable                                |   | (28,494                                   | )         | (26,543 | ) |
| Net cash used in  financing activities                                       |   | (28,494                                   | )         | (26,543 | ) |
|                                                                         |   |                                      |      |   |   |
| Net increase in cash and cash equivalents                                    |   | 1,026,441                                 |      | 56,766 |   |
| Cash and cash  equivalents                                                   |   |                                      |      |   |   |
| Beginning of period                                                          |   | 1,540,766                                 |      | 1,635,916 |   |
| End of period                                                                |   | $                                         | 2,567,207 |   | $ | 1,692,682 |   |

 

The accompanying notes are an integral part of theconsolidated financial statements.

 

5

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**Stonehaven Realty Trust and Subsidiaries**

 

**Notes to Consolidated Financial Statements**

 

**Note 1—Organization**

 

Stonehaven Realty Trust (the “Company”) is a real estate company separated into two business segments: acommercial real estate segment which acquires, owns and operates commercialreal estate and a technology segment which through July 10, 2001,provided information technology consultingand document management solutions.  As of March 31, 2002, all assets related toour technology segment are written off.

 

The Company’s real estate investments are owned through its operatingpartnership, Wellington Properties Investments, L.P. (“OperatingPartnership”), of which the Company is the sole general partner and owns anapproximate 92.9% interest.  As of March31, 2002, the Company owned four commercial industrial properties that aggregateapproximately 129,000 rentable square feet.

 

**Note 2—Basisof Presentation and Summary of Significant Accounting Policies**

 

The Company has prepared the consolidated financial statements withoutaudit pursuant to the rules and regulations of the Securities and ExchangeCommission. Certain information and footnote disclosures normally included inthe financial statements prepared in accordance with generally acceptedaccounting principles have been condensed or omitted pursuant to such rules andregulations.  However, the Companybelieves that the included disclosures are adequate to make the informationpresented not misleading. In the opinion of the Company, all adjustments(consisting solely of normal recurring items) necessary for a fair presentationof the financial position of the Company as of March 31, 2002, the results oftheir operations for the three months ended March 31, 2002 and 2001, and theircash flows for the three month periods ended March 31, 2002 and 2001 have beenincluded. The results of operations for such interim periods are notnecessarily indicative of the results for a full year. For further information,refer to the Company’s consolidated financial statements and footnotes includedin the Annual Report of Form 10-KSB for the year ended December 31,2001.

 

**Use of Estimatesin the Preparation of Financial Statements**

 

In order to conform with generally accepted accounting principles,management, in preparation of the Company’s consolidated financial statements,is required to make estimates and assumptions that affect the reported amountsof assets and liabilities and disclosure of contingent assets and liabilitiesas of March 31, 2002, and the reported amounts of revenues and expenses for thethree months ended March 31, 2002 and 2001. Actual results could differ from thoseestimates.

# ** **

# **Other Assets**

 

As of March 31, 2002, other assets primarilyconsist of deferred financing costs incurred to obtain and secure mortgage debtfinancing.  Other assets are carried atcost, less accumulated amortization.

 

The deferred financing costs are being amortized over the life of therespective loans on a straight-line basis. Accumulated amortization related to deferred financing costs as of March31, 2002 was approximately $22,000.

 

6

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**RevenueRecognition**

 

Rental revenue from tenants is recognized on a straight-line basis overthe term of the lease agreements regardless of when payments are due.  Tenant recoveries include payments fromcommercial property tenants for reimbursement of the tenant’s share of realestate taxes and certain common area maintenance costs.  Such costs are recognized as revenue in theperiod the costs are incurred.

 

Revenue generated from professional services and sales of hardware andsoftware is recognized as services and goods are provided.  Services billed in advance are recorded asdeferred revenues and recognized when revenue is earned.

 

**SoftwareDevelopment Costs**

 

Costs related to development of the Company’s new software product arecharged to product development expense as incurred.  Software development costs are capitalized beginning when aproduct’s technological feasibility has been established, which to date hasbeen when the Company has a working model of the software, and ending, when aproduct is available for general release to customers.  Substantially all development costs areincurred prior to establishing a working model.  As a result, the Company has not capitalized any softwaredevelopment costs since costs have not been significant.

 

# **Income Taxes**

 

Becausethe Company is no longer a REIT for federal income tax purposes, the Companynow accounts for income taxes using the liability method under which deferredtax assets and liabilities are determined based on differences between thefinancial reporting and tax bases of assets and liabilities using enacted taxrates in effect for the period in which the differences are expected to affecttaxable income.  Valuation allowancesare established when necessary to reduce deferred tax assets to the amountexpected to be realized.  The Companywill be eligible to re-elect REIT status on January 1, 2005.

 

At March 31, 2002,the Company has net operating losses. As of December 31, 2001, the Company’s net operating losses wereapproximately $3,215,000.  While theselosses, as well as the marketable securities valuation allowance, created adeferred tax asset, a valuation allowance was applied against the asset becauseof the uncertainty of whether or not the Company will be able to use these losscarry forwards, which will expire in varying amounts through the year 2021.

 

The Company andcertain of its subsidiaries are also subject to certain state and local income,excise and franchise taxes.  Theprovision for such state and local taxes has been reflected in general andadministrative expense in the consolidated statements of operations and has notbeen separately stated due to its insignificance.

 

**SegmentDisclosure**

 

In June 1997, the FASB issued Statement of Financial AccountingStandards No. 131, “Disclosures about Segments of an Enterprise and RelatedInformation”.  This statement requiresthat a public company report financial and descriptive information about itsreportable operating segments. Generally, financial information is required to be reported on the basisthat it is used internally for evaluating segment performance and deciding howto allocate resources to segments. Management views the Company as two businesssegments: a commercial real estate segment which acquires, owns and operatescommercial real estate and a technology segment which through July 10,2001, provided information technologyconsulting and document management solutions and is currently evaluating othertechnology opportunities.

 

7

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**Recent Accounting Pronouncements**

 

In June 1998, the Financial Accounting Standards Board (“FASB”) issuedStatement of Financial Accounting Standards No. 133, “Accounting for DerivativeInstruments and Hedging Activities” (“FAS 133”) FAS 133, as amended,establishes methods of accounting for derivative financial instruments andhedging activities related to those instruments as well as other hedgingactivities.  The Company was required toadopt FAS 133 effective January 1, 2001. Because the Company does not use derivative financial instruments, theCompany’s adoption of FAS 133 effective January 1, 2001 did not have an effecton the Company’s consolidated financial position or results of operations.

 

In December 1999, the Securities and Exchange Commission (“SEC”) issuedSEC Staff Accounting Bulletin No. 101, “Revenue Recognition in FinancialStatements” (“SAB 101”).  SAB 101provides guidance on the recognition, presentation, and disclosure of revenuein financial statements.  In October2000, the SEC issued a “Frequently Asked Questions” document on SAB 101 toprovide further definitive guidance on the implementation of SAB 101.  SAB 101 is effective for years beginningafter December 15, 1999 and the Company was required to adopt SAB 101 in thequarter ended December 31, 2000, retroactive to the beginning of the year.  SAB 101 did not have an effect on theCompany’s results of operations, financial position or cash flows.

 

During fiscal 2001, the Financial AccountingStandards Board issued SFAS #142 Goodwill and Other Intangible Assets.  SFAS #142 will be effective for theCompany’s fiscal year beginning January 1, 2002 and will no longer permitgoodwill of the Company to be amortized. Instead, goodwill will be periodically tested for impairment and writtendown if impairment is determined to exist. Other intangible assets must be reviewed, and assessed at leastannually, in order to ascertain if their lives are deemed to be finite(amortized) or indefinite (not amortized). At March 31, 2002, the Company no longer has goodwill, but will evaluateany future goodwill or intangible assets with respect to the above.

 

In August 2001, the Financial Accounting Standards Board issued Financial Accounting Standard (SFAS) No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets.”  SFAS 144 establishes a model for measurement and reporting the impairment of assets to be disposed of by sale and addresses accounting for a segment of a business accounted for as a discontinued operation.  SFAS 144 is effective for fiscal years beginning after December 15, 2001. At March 31, 2002, SFAS 144 did not have an effect on the Company’s results of operations, financial position or cash flows.

 

**Note 3—MarketableSecurities**

 

The Company’s investments in marketable securities areavailable-for-sale and represent 40,000 shares of common stock of Stellent,Inc. (“Stellent”).  Such shares wereacquired in connection with the sale of certain assets of StonehavenTechnologies on July 10, 2001 and valued at $29.94 per share based on theNASDAQ closing quote per share on July 9, 2001.   As of March 31, 2002, the fair market value of these marketablesecurities aggregated approximately $385,000 (based upon the NASDAQ closingquote per share of common stock of Stellent of $9.63 on March 28, 2002) and,accordingly, the Company has recorded a gross unrealized loss of $812,400 witha related non-cash adjustment to accumulated other comprehensive loss.

 

During the quarter ended March 31, 2002, the Company sold 40,000Stellent Shares at an average price of $31.34 per share and recognized a gainon the sale of these shares totaling approximately $56,000.  The Company recognizes gain or loss on thesale of marketable securities based upon the first-in-first-out method.

 

8

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**Note 4—Pro Forma ConsolidatedFinancial Information (Unaudited)**

 

The following pro formacondensed consolidated financial information presented below is as if thedispositions of Cold Springs (closed March 31, 2001) and certain assets ofStonehaven Technologies (closed July 10, 2001) had occurred on January 1,2001.  The pro forma financialinformation is not necessarily indicative of the results, which actually wouldhave occurred if the acquisitions or dispositions had been consummated onJanuary 1, 2001, nor does the pro forma information purport to represent theresults of operations for future periods.

 
|                                               |   | **For the three months  endedMarch 31, 2001** |    |
|----------------------------------------------------|--------|-----------------------------------------------|---------|
| Pro forma total revenue                            |   | $                                             | 436,400 |   |
| Pro forma loss                                     |   | $                                             | 304,000 |   |
| Pro forma loss available to  Common Shareholders   |   | $                                             | 292,000 |   |
| Pro forma loss per Common Share  Basic and Diluted |   | $                                             | 0.06    |   |

 

**Note 5—MortgageLoans and Notes Payable**

 

The mortgage loansand notes payable relating to the Plymouth I, II & III properties of approximately$4.3 million mature on May 31, 2002.  Weanticipate refinancing this indebtedness pursuant to a term sheet from ourcurrent lender dated March 15, 2002. This term sheet provides for a refinance of the debt based upon athree-year term at an annual fixed rate of 7.25% with a cost of fifty basispoints.

 

**Note 6—Equity/Distributions**

 

On April 12, 2002, the Company declared a dividend of $0.475 per sharewith respect to the Class A Preferred Shares. The dividend with respect to the Class A Preferred Shares will be paidon May 15, 2002 to shareholders of record on May 1, 2002.

 

9

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**Note 7—LossPer Share**

 

The Company has adopted the Statement of Financial Accounting StandardsNo. 128, “Earnings Per Share” (“EPS”) for all periods presented herein.Net loss per weighted average Common Share outstanding—basic and net loss perweighted average Common Share outstanding—diluted is computed based on theweighted average number of Common Shares outstanding for the period. Theweighted average number of Common Shares outstanding for the three months endedMarch 31, 2002 and March 31, 2001 were 4,517,524. Common share equivalents ofapproximately 3.7 million include outstanding convertible preferred shares,warrants and stock options, and are not included in net loss per weightedaverage Common Share outstanding—diluted as they would be anti-dilutive.

 
|                                                                                                                     |   | **For the three months ended March 31,** |         |
|--------------------------------------------------------------------------------------------------------------------------|--------|------------------------------------------|--------------|
|                                                                                                                     |   | **2002**                                 |         | **2001** |   |
| **Numerator**                                                                                                            |   |                                     |         |   |   |
|                                                                                                                     |   |                                     | ** **   |   | ** ** |
| **Net loss available to Common  Shareholders**                                                                           |   | **$**                                    | **(172,860** | **)** | **$** | **(1,013,725** | **)** |
|                                                                                                                     |   |                                     |         |   |   |
| **Denominator**                                                                                                          |   |                                     | ** **   |   | ** ** |
| Weighted average  Common Shares outstanding at March 31, 2002 and March 31, 2001,  respectively:  Basic and Diluted |   | 4,517,524                                |         | 4,517,524 |   |
|                                                                                                                     |   |                                     |         |   |   |
| **Basic and Diluted EPS**                                                                                                |   |                                     |         |   |   |
| Net loss available to Common Shareholders from  operations                                                               |   | $                                        | (0.05        | ) | $ | (0.19 | ) |
| Loss on sale of investments in real estate                                                                               |   | —                                   |         | (0.03 | ) |
| Gain on sale of marketable securities                                                                                    |   | 0.01                                     |         | — |   |
| Net loss available to Common Shareholders  — Basic and Diluted                                                 |   | $                                        | (0.04        | ) | $ | (0.22 | ) |

 

#### **Note8—Commitments and Contingencies**

#### ** **

#### **Liquidity**

 

As of March 31, 2002, our unrestricted cash resources wereapproximately $2,567,000 and our marketable securities available for sale wereapproximately $385,000.  The Company’smarketable securities represented 40,000 shares of common stock of Stellent ata fair market value of $9.63 per share (based on the NASDAQ closing quote pershare on March 28, 2002).  Such shares were acquired on July 10, 2001,had a fair market value as of July 9, 2001 of $29.94 per share and wereregistered effective as of September 7, 2001 with the Securities and ExchangeCommission.  On May 8, 2002 the closingprice of Stellent’s common stock was $5.20 per share.  We believe our cash resources and marketable securities are sufficientto sustain the Company’s liquidity needs for the next twelve months.

 

In addition to our current cash resources and marketable securities,the Company may have additional borrowing capacity available based on our realestate investments subject to certain loan to value ratios and otherconditions.  Further, we believe thesale of our investments in real estate, if required, would generate additionalcash to meet our ongoing liquidity needs. There can be no assurance that the Company will pursue such additionalfinancing or disposition or that should the Company pursue such additionalfinancing or disposition, that such financing would be available to the Companyor that such disposition would occur or that either would be on termsacceptable to the Company.

 

10

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#### **Legal Proceedings**

### ** **

On December 29, 2000,Stonehaven notified Odeh Muhawesh, a former Trustee of the Company and currentChief Knowledge Officer of Stonehaven Technologies, that it was suspending itspayment to him under a promissory note assumed by Stonehaven Technologies.Stonehaven Technologies assumed the payment obligation in February 2000pursuant to the terms of the merger agreement between the Company, StonehavenTechnologies and NETLink International, Inc. (“NETLink”), a company founded andowned by Mr. Muhawesh whereby NETLink was merged into Stonehaven Technologies.Management of the Company believes Mr. Muhawesh is in default under the mergeragreement for, among other things, failure by him to cause to be transferred toStonehaven Technologies 5% of the issued and outstanding stock ofMyFreeDesk.com, Inc.

 

On January 8, 2001, Mr. Muhawesh filed a complaint against StonehavenTechnologies in the District Court of Hennepin County, Minnesota alleging thatStonehaven Technologies failed to pay him $350,000 on January 1, 2001 under theterms of a promissory note. The Company has filed a counterclaim against Mr.Muhawesh requesting, among other things, the repayment of amounts previously paidto him under the promissory note.  The matter is scheduled for trial in June2002.

 

#### **Legal Actions**

 

In the normal course ofbusiness, the Company is involved in legal actions arising from the ownershipand administration of its properties and its technology segment.  In management’s opinion, the liabilities, ifany, that may ultimately result from such legal actions are not expected tohave a materially adverse effect on the consolidated financial position,operations or liquidity of the Company.

 

**Note 9—RelatedParty Transactions**

 

**Management Fees**

 

TheCompany maintains a property management agreement with HoytProperties Inc. (“Hoyt”), an entity controlled by a Trustee of theCompany, to serve as Property Manager of the commercial properties owned by theCompany.  In connection with theagreement, Hoyt manages the day-to-day operations of properties owned by theCompany and receives a management fee for this service. Management fees paid toHoyt were approximately $15,000 and $37,000 for the three months ended March31, 2002 and March 31, 2001, respectively.

 

11

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**Note 10—Supplemental Information toStatements of Cash Flows**

 
|                                                                                                       |   | **For the three months ended March 31,** |    |
|------------------------------------------------------------------------------------------------------------|--------|------------------------------------------|---------|
|                                                                                                       |   | **2002**                                 |    | **2001** |   |
|                                                                                                       |   |                                     |    |   |   |
| Interest paid                                                                                              |   | $                                        | 122,210 |   | $ | 377,090 |   |
| Supplemental schedule of non-cash investing and financing activities:                                      |   |                                     |    |   |   |
| The following assets and liabilities were disposed of in connection  with the disposition of Cold Springs: |   |                                     |    |   |   |
| Disposition of real estate                                                                                 |   | $                                        | —  |   | $ | 8,184,686 |   |
| Deferred costs  and other assets                                                                           |   | —                                   |    | 26,552 |   |
| Mortgage note  payable                                                                                     |   | —                                   |    | (7,306,716 | ) |
| Accounts payable  and accrued liabilities                                                                  |   | —                                   |    | (140,997 | ) |
| Security  deposits                                                                                         |   | —                                   |    | (4,111 | ) |
| Loss on sale of  investment in real estate                                                                 |   | —                                   |    | (165,835 | ) |
| Cash proceeds from dispositions of real estate  properties                                                 |   | $                                        | —  |   | $ | 593,579 |   |
| Dividends and distributions payable                                                                        |   | $                                        | —  |   | $ | 709,139 |   |

 

**Note 11—Information by BusinessSegment**

 

In June 1997, the FASB issued Statement of FinancialAccounting Standards No. 131, “Disclosure about Segments of an Enterprise andRelated Information”.  This statementrequires that a public business enterprise report financial and descriptiveinformation about its reportable operating segments.  Generally, financial information is required to be reported onthe basis that it is used internally for evaluating segment performance anddeciding how to allocate resources to segments.  Management views the operations of its real estate properties andthe operations of Stonehaven Technologies as two segments.

 
|                                   |   | **Real  estate  Properties** |       | **Technology** |   | **Total** |   |
|----------------------------------------|--------|------------------------------|------------|----------------|--------|-----------|--------|
| **Three  months ended March 31, 2002** |   |                         |       |           |   |      |   |
| Revenues                               |   | $                            | 307,591    |           | $      | —    |   | $ | 307,591 |   |
| Operating  Expenses                    |   | 148,348                      |       | —         |   | 148,348   |   |
| Income from  operations                |   | $                            | 159,243    |           | $      | —    |   | $ | 159,243 |   |
| Segment assets  at March 31, 2002      |   | $                            | 13,840,657 |           | $      | —    |   | $ | 13,840,657 |   |
|                                   |   |                         |       |           |   |      |   |
| **Three  months ended March 31, 2001** |   |                         |       |           |   |      |   |
| Revenues                               |   | $                            | 814,701    |           | $      | 807,673   |   | $ | 1,622,374 |   |
| Operating  Expenses                    |   | 318,445                      |       | 488,519        |   | 806,964   |   |
| Income from  operations                |   | $                            | 496,256    |           | $      | 319,154   |   | $ | 815,410 |   |
| Segment assets  at March 31, 2001      |   | $                            | 17,680,662 |           | $      | 1,579,653 |   | $ | 19,260,315 |   |

 

12

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Thefollowing table reconciles income from operations for reportable segments toloss from operations as reported in the Consolidated Statements of Operations.

 

|                                           |   | **Three  months ended March 31,** |     |
|------------------------------------------------|--------|-----------------------------------|----------|
|                                           |   | **2002**                          |     | **2001** |   |
|                                           |   |                              |     |   |   |
| Income from operations for reportable segments |   | $                                 | 159,243  |   | $ | 815,410 |   |
| Add:                                           |   |                              |     |   |   |
| Minority interests                             |   | 6,950                             |     | 40,757 |   |
| Less:                                          |   |                              |     |   |   |
| General and administrative                     |   | (206,320                          | )        | (512,547 | ) |
| Interest                                       |   | (125,957                          | )        | (341,023 | ) |
| Product development                            |   | —                            |     | (51,602 | ) |
| Amortization                                   |   | (1,622                            | )        | (608,478 | ) |
| Depreciation                                   |   | (61,043                           | )        | (190,407 | ) |
| Loss from operations                           |   | $                                 | (228,749 | ) | $ | (847,890 | ) |

 

**Note 12—Subsequent Event**

 

On May 6, 2002, we filed a Registration Statement under the SecuritiesAct of 1933 on Form SB-2 (“Registration Statement”) registering 3,115,347Common Shares representing (a) 2,347,872 Common Shares currently outstandingand (b) 509,725 Common Shares issuable upon conversion of 147,832 Class APreferred Shares, 177,750 Common Shares isssuable upon conversion of CommonUnits of the Operating Partnership and 80,000 Common Shares issuable uponexercise of options.  As of May 9, 2002,this Registration Statement is not yet effective.

 

13

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**ITEM 2.  MANAGEMENT’S DISCUSSIONAND ANALYSIS AND PLAN OF OPERATION**

 

The following discussion should be read in conjunctionwith the financial statements and notes thereto included elsewhere herein.

 

This report on Form 10-QSB contains “forward-looking”statements within the meaning of Section 27A of the Securities Act of 1933, asamended, and Section 21E of the Securities Exchange Act of 1934, as amended.Forward—looking statements are based on certain assumptions and describe futureplans, strategies and expectations of the Company.  They are generally identifiable by use of the words “believe”,“expect”, “intend”, “anticipate”, “estimate”, “project” or similar expressions.These statements are not guarantees of future performance, events or resultsand involve potential risks and uncertainties. Accordingly, actual performance,events or results may differ materially from such forward-looking statements.Management undertakes no obligation to update publicly any forward-lookingstatements, whether as a result of new information, future events or otherwise.

 

Factors that could causeactual results to differ materially from current expectations include, but arenot limited to, changes in general economic conditions, changes in interestrates, legislative and regulatory changes, changes in monetary and fiscalpolicies of the U.S. government, including policies of the U.S. Treasury andthe Federal Reserve Board, changes in local real estate conditions (includingrental rates and competing properties), changes in industries in which theCompany’s principal tenants compete, the failure to timely lease unoccupiedspace, the failure to timely re-lease occupied spaced upon expiration of leases,the inability to generate sufficient revenues to meet debt service payments andoperating expenses, the unavailability of equity and debt financing,unanticipated costs associated with the Company’s acquisitions, potentialliability under environmental or other laws and regulations, expanding a newline of business, customer demand for online services and products, uncertaintyof emerging online services, ability to meet competition, loss of existing keypersonnel, ability to hire and retain future personnel, the failure of theCompany to manage its growth effectively and the other risks identified in  thisfiling or other reports of the Company filed with the Securities and ExchangeCommission. These risks and uncertainties should be considered in evaluatingforward—looking statements and undue reliance should not be placed on suchstatements. Further information concerning the Company and its business,including additional factors that could materially affect the Company’sfinancial results is included in other Company filings with the Securities andExchange Commission.

 

**Results of Operations**

 

TheCompany’s revenues include the following: rental revenues, tenant recoveries,revenues from technology consulting services, and revenues from sales of hardwareand software.

 

*Comparison of the Three Month Period Ended March 31, 2002and 2001:*  Rental revenue decreased byapproximately $250,000 or 53.1% for the three month period ended March 31, 2002compared to the three month period ended March 31, 2001.  Tenantrecoveries decreased by approximately $233,000 or 74.4% for the three monthperiod ended March 31, 2002 compared to the three month period ended March 31,2001.  Thedecreased rental revenue and tenant recoveries were primarily a result of theCompany’s disposition of the Cold Springs property.  Professional services and sales of hardware and softwaredecreased by approximately $802,000 or 100.0% for the three month period endedMarch 31, 2002 compared to the three month period ended March 31, 2001.  The decrease is the result of thedisposition of certain assets of Stonehaven Technologies on July 10, 2001.  Interest income and other income increasedby $29,000 during these same periods primarily a result the use of cash andcash equivalents.

 

Total expenses decreased from approximately $2,511,000for the three month period ended March 31, 2001 to $543,000 for the three monthperiod ended March 31, 2002, a net decrease of $1,968,000 described below.

•                  Decreased costs ofapproximately $78,000, $409,000 and $52,000, related to advertising and

 

14

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promotion, costs related to professional servicesand sales of hardware and software, and product development, respectively, wereprimarily a result of the disposition of certain assets of StonehavenTechnologies on July 10, 2001.

•                  Decreased costs ofapproximately $97,000, $53,000, $22,000, $306,000 and $215,000, related toproperty, operating and maintenance, property taxes and insurance, managementfees, general and administrative and interest expense, respectively, wereprimarily a result of the disposition of Cold Springs on March 30, 2001.

•                  Depreciationand amortization decreased from approximately $799,000 for the period endedMarch 31, 2001 to $63,000 for the comparable period in 2002, a decrease of$736,000 or 92.2%, primarily as a result of the elimination of goodwill androyalties and licensing agreements in connection with the Company’s sale ofcertain assets of Stonehaven Technologies, and reduced depreciation resultingfrom the disposition of Cold Springs.

 

As a result of the above factors, the loss fromoperations before loss allocated to minority interest decreased fromapproximately $889,000 for the three month period ended March 31, 2001 toapproximately $236,000 for the three month period ended March 31, 2002.  Additionally, the net loss available toCommon Shareholders decreased from approximately $1,014,000 for the three monthperiod ended March 31, 2001 to net loss available to Common Shareholders of$173,000 for the three month period ended March 31, 2002.

 

**Liquidity and Capital Resources**

*Short Term and Long Term Liquidity*

 

Cash provided by operations, equity transactions, andborrowings from affiliates and lending institutions have generally provided theprimary sources of liquidity to the Company. Historically, the Company has usedthese sources to fund operating expenses, satisfy its debt service obligationsand fund distributions to shareholders. For the quarter ended March 31, 2002 and March 31, 2001, our net cashused in operating activities totaled $190,000 and $504,000, respectively.

 

As of March 31, 2002, our unrestricted cash resources wereapproximately $2,567,000 and our marketable securities available for sale wereapproximately $385,000.  The Company’smarketable securities represented 40,000 shares of common stock of Stellent ata fair market value of $9.63 per share (based on the NASDAQ closing quote pershare on March 28, 2002).  Such shareswere acquired on July 10, 2001, had a fair market value as of July 9, 2001 of$29.94 per share and were registered effective as of September 7, 2001 with theSecurities and Exchange Commission.  OnMay 8, 2002 the closing price of Stellent’s common stock was $5.20 pershare.  We believe our cash resourcesand marketable securities are sufficient to sustain the Company’s liquidityneeds for the next twelve months.

 

In addition to our current cash resources and marketable securities,the Company may have additional borrowing capacity available based on our realestate investments subject to certain loan to value ratios and otherconditions.  Further, we believe thesale of our investments in real estate, if required, would generate additionalcash to meet our ongoing liquidity needs. There can be no assurance that the Company will pursue such additionalfinancing or disposition or that should the Company pursue such additionalfinancing or disposition, that such financing would be available to the Companyor that such disposition would occur or that either would be on termsacceptable to the Company.

 

The mortgage loansand notes payable relating to the Plymouth I, II & III properties ofapproximately $4.3 million mature on May 31, 2002.  We anticipate refinancing this indebtedness pursuant to a term sheetfrom our current lender dated March 15, 2002. This term sheet provides for a refinance of the debt based upon athree-year term at an annual fixed rate of 7.25% with a cost of fifty basispoints.

 

15

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**Cash Flows**

 

During the three month period ended March 31, 2002, theCompany generated $1,253,000 from sale of marketable securities, net ofcommissions.  These cash flows were usedprimarily for (i) cash used in operating activities of approximately$190,000; (ii) additions to real estate properties of approximately $9,000; and(iii) payments on mortgage loans and notes payable of approximately$28,000.  As a result, the Company’scash balance increased by approximately $1,026,000 from approximately $1,541,000at December 31, 2001 to approximately $2,567,000 at March 31, 2002.

 

**Business Objectives and Operating Strategies**

 

We intend to maintain and operate our remaining commercial properties,which were 87.0% leased at April 1,2002, due to the expected cash flow results.  However, the cash flow from our properties is not expected tofully fund our future liquid requirements, including among other factors, ourongoing general and administrative costs and our dividend commitment to holdersof our Class A Preferred Shares (the “Class A Preferred Shares”).

 

We further intend to continue to operate a technology segment, however,in a much more limited capacity. Since the sale of certain assets of StonehavenTechnologies on July 10, 2001, our ability to market our licensing agreementsand other related assets has been significantly impaired primarily due to thefact that Stellent has become an active competitor to our licensed technology.Stellent and other competitors have substantially greater resources, financialand otherwise, than we do.

 

We continue to explore and evaluate all available alternatives,including, among others, to buy or sell additional properties or assets, todevelop and sell future technology products or expand through the acquisitionof new technology products, to pursue additional or alternate financing,whether debt or equity, or to continue to meet the ongoing dividend requirementof our Class A Preferred Shares.****Therecan be no assurance that any of the alternatives will be adopted, or if adopted,will be successful.  Additionally, wemay determine not to adopt any additional business initiative.

 

On April 12, 2002, the Company declared a dividend of $0.475 per sharewith respect to the Class A Preferred Shares. The dividend with respect to the Class A Preferred Shares will be paidon May 15, 2002 to shareholders of record on May 1, 2002.

 

**Real Estate Segment**

 

TheCompany currently owns the following four commercial real estate propertiescontaining approximately 129,000 rentable square feet:

 

•                  A 26,186 square-foot light industrialfacility in Plymouth, Minnesota

 

•                  A 26,186 square-foot light industrialfacility in Plymouth, Minnesota 

 

•                  A 26,186 square-foot light industrialfacility in Plymouth, Minnesota 

 

•                  A 50,291 square-foot light industrialfacility in Burnsville, Minnesota 

 

The Company’s interest in the real properties is held throughWellington Properties Investments, LP (the “Operating Partnership”).  The Company is the sole general partner ofthe Operating Partnership and, as of March 31, 2002, held a 92.9% interest inthe Operating Partnership.

 

16

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**Technology Segment**

 

As of March 31, 2002, all assets related toour technology segment are written off.  We continue to explore and evaluate alternatives related to the sale ordevelopment of our current or future technology products or the acquisition ofnew technology products.  There can beno assurance that any of the alternatives will be pursued, or if pursued, willbe successful.

 

**Current Tax Status**

 

At March 31, 2002,the Company has net operating losses. As of December 31, 2001, the Company’s net operating losses wereapproximately $3,215,000.  While theselosses, as well as the marketable securities valuation allowance, created adeferred tax asset, a valuation allowance was applied against the asset becauseof the uncertainty of whether or not the Company will be able to use these losscarry forwards, which will expire in varying amounts through the year 2021.

 

TheCompany and certain of its subsidiaries are also subject to certain state andlocal income, excise and franchise taxes. The provision for such state and local taxes has been reflected ingeneral and administrative expense in the consolidated statements of operationsand has not been separately stated due to its insignificance.

 

17

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**PART II.  OTHER INFORMATION**

 

ITEM 1.  LEGALPROCEEDINGS

 

On December 29, 2000, Stonehaven notifiedOdeh Muhawesh, a former Trustee of the Company and current Chief KnowledgeOfficer of Stonehaven Technologies, that it was suspending its payment to himunder a promissory note assumed by Stonehaven Technologies. StonehavenTechnologies assumed the payment obligation in February 2000 pursuant to theterms of the merger agreement between Company, Stonehaven Technologies andNETLink International, Inc. (“NETLink”), a company founded and owned by Mr.Muhawesh whereby NETLink was merged into Stonehaven Technologies. Management ofthe Company believes Mr. Muhawesh is in default under the merger agreement for,among other things, failure by him to cause to be transferred to StonehavenTechnologies 5% of the issued and outstanding stock of MyFreeDesk.com, Inc.

 

Subsequently, on January 8, 2001, Mr. Muhaweshfiled a complaint against Stonehaven Technologies in the District Court ofHennepin County, Minnesota alleging that Stonehaven Technologies failed to payhim $350,000 on January 1, 2001 under the terms of a promissory note. TheCompany has filed a counterclaim against Mr. Muhawesh requesting, among otherthings, the repayment of amounts previously paid to him under the promissorynote.  The matter is scheduled for trialin June 2002.

 

ITEM 2.  CHANGESIN SECURITIES

 

a.        None

 

b.       None

 

c.        None

 

d.       None

 

ITEM 3.  DEFAULTSUPON SENIOR SECURITIES

 

None

 

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITYHOLDERS

 

None

 

ITEM 5.  OTHER INFORMATION

 

On May 2, 2002, the Board of Trustees elected Messrs. KimCulp and Edward Padilla to fill two vacancies on the Board effective as of May15, 2002.

 

18

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ITEM 6.  EXHIBITSAND REPORTS ON FORM 8-K

**(a)Exhibits**

 
| **Exhibit  Number** |   | **Exhibit Description**                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|---------------------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| 2.1                 |   | Amended and Restated  Contribution Agreement between the Company, the Operating Partnership, AREE  and other limited partnership Unit recipients dated as of August 31, 1998  (filed as Exhibit A with the Company’s Schedule 14A on November 6, 1998 and  incorporated herein by reference)                                                                                                                                                                                          |
|                |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| 2.2                 |   | Agreement and Plan of  Reorganization dated as of February 25, 2000, by and among the Company, NTLI  Acquisition Corporation, a Delaware corporation, NETLink International, Inc.,  a Minnesota corporation and Odeh A. Muhawesh, Mary Henschel, Alan Schmidt,  Ahmad Yassine, Patrick Archbold, Ann Wessels, Art Carruth, Patricia Hewitt,  Thomas walker and Sherry Ajax (filed as Exhibit 2.2 with the Company’s Form  8-K on March 17, 2000 and incorporated herein by reference) |
|                |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| 2.3                 |   | Contribution Agreement  between Wellington Partners, L.P., the Company and Plymouth Partners II, LLC  and other LP Unit Recipients dated as of February 29, 2000 (filed as Exhibit  2.3 with the Company’s Form 8-K on March 17, 2000 and incorporated herein by  reference)                                                                                                                                                                                                          |
|                |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| 3.1                 |   | Declaration of Trust  (filed with the Company’s Registration Statement on Form SB-2 (Commission  File No. 33-82888C) and incorporated herein by reference)                                                                                                                                                                                                                                                                                                                            |
|                |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| 3.2                 |   | Bylaws of the Company  (filed with the Company’s Registration Statement on Form SB-2 (Commission  file No. 33-82888C) and incorporated herein by reference)                                                                                                                                                                                                                                                                                                                           |
|                |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| 3.3                 |   | Articles of Amendment and  Restatement of the Declaration of Trust (filed as Exhibit E with the  Company’s Schedule 14A on November 6, 1998 and incorporated herein by  reference)                                                                                                                                                                                                                                                                                                    |
|                |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| 10.1                |   | Agreement of Limited  Partnership of the Operating Partnership dated as of August 31, 1998 (filed  as Exhibit C with the Company’s Schedule 14A on November 6, 1998 and  incorporated herein by reference)                                                                                                                                                                                                                                                                            |
|                |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| 10.3                |   | Master Registration Rights  Agreement dated as of August 31, 1998 (filed as Exhibit E of Exhibit C with  the Company’s Schedule 14A on November 6, 1998 and incorporated herein by  reference)                                                                                                                                                                                                                                                                                        |
|                |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| 10.6                |   | Common Stock Purchase  Warrant by the Company to Credit Suisse First Boston Mortgage Capital LLC,  dated March 5, 1998 (filed with the Company’s Current Report on Form 8-K on  August 31, 1998 and incorporated herein by reference)                                                                                                                                                                                                                                                 |
|                |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| 10.7                |   | Registration Rights  Agreement by and between the Company and Credit Suisse First Boston Mortgage  Capital, LLC dated March 5, 1998 (filed with the Company’s Current Report on  Form 8-K on August 31, 1998 and incorporated herein by reference)                                                                                                                                                                                                                                    |
|                |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| 10.9                |   | Stock Exchange Agreement  between the Company and Wellington Management Corporation effective June 30,  2000 (filed with the Company’s Current Report on Form 8-K on July 14, 2000  and incorporated herein by reference)                                                                                                                                                                                                                                                             |
|                |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| 10.10               |   | Warrant to Purchase Shares  of Stock dated March 28, 2000 between the Company and Venture One Real Estate  LLC (filed with the Company’s Quarterly Report for the period ended June 30,  2000 on Form 10-QSB filed on August 14, 2000 and incorporated herein by  reference)                                                                                                                                                                                                          |
|                |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| 10.11               |   | Call Agreement dated March 28, 2000 between  the Company and Venture One Real Estate LLC (filed with the Company’s  Quarterly Report for the period ended June 30, 2000 on Form 10-QSB filed on  August 14, 2000 and incorporated herein by reference)                                                                                                                                                                                                                                |
|                |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| 10.12               |   | Warrant to Purchase Shares  of Stock dated June 22, 2000 between the Company and Venture One Real Estate  LLC (filed with the Company’s Quarterly Report for the period June 30, 2000  on Form 10-QSB filed on August 14, 2000 and incorporated herein by reference)                                                                                                                                                                                                                  |
|                |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| 10.13               |   | Exclusive Agency and  Representation Agreement between RESoft, Inc. and Venture One Real Estate,  LLC (filed with the Company’s Quarterly Report for the period September 30,  2000 on Form 10-QSB filed on November 14, 2000 and incorporated herein by  reference)                                                                                                                                                                                                                  |
|                |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| 10.14               |   | Membership Unit Purchase  Agreement dated December 29, 2000, between the Company, Wellington Properties  Investments, L.P., and Steven B. Hoyt, Bruce K. Hoyt, Donald Ringrose, and  Richard Wolsfeld (filed with the Company’s Current Report as Exhibit 10.1 on  Form 8-K on January 16, 2001 and incorporated herein by reference)                                                                                                                                                 |

 

19

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**(b) Reports On Form 8-K**

 

None

 

**SIGNATURES**

 

In accordance with the requirements of the Exchange Act,the registrant caused this report to be signed on its behalf by theundersigned, thereunto duly authorized.

 
|              | STONEHAVEN REALTY TRUST |
|-------------------|-------------------------|
|              | By:                     | /s/ Duane H. Lund |
| Date: May 9, 2002 |                    | Duane H. Lund*Chief  Executive Officer  Chief Accounting Officer* |

 

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