UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
 
FORM 8-K
 
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): August 3, 2020
CorEnergy Infrastructure Trust, Inc.
(Exact Name of Registrant as Specified in Its Charter)

	
			
Maryland	 	20-3431375	
(State or other jurisdiction of incorporation or organization)	 	(IRS Employer Identification No.)	

					
1100 Walnut, Ste. 3350	Kansas City,	MO	64106	
(Address of Registrant's Principal Executive Offices)	(Zip Code)	

			
(816)	 	875-3705	
(Registrant's telephone number, including area code)	

			
Not Applicable	
(Former Name or Former Address, if Changed Since Last Report)	

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

		
☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)	

		
☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)	

		
☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))	

		
☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))	

	
					
Securities registered pursuant to Section 12(b) of the Act:	
Title of Each Class	 	Trading Symbol(s)	 	Name of Each Exchange On Which Registered	
Common Stock, par value $0.001 per share	 	CORR	 	New York Stock Exchange	
7.375% Series A Cumulative Redeemable Preferred Stock	 	CORRPrA	 	New York Stock Exchange	

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter). 
Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

	
		
Item 2.02	Results of Operations and Financial Condition.	

On August 3, 2020, CorEnergy Infrastructure Trust, Inc. (the “Company”) issued a press release announcing its financial results for the second quarter ended June 30, 2020.  A copy of the press release is attached as Exhibit 99.1 to this Form 8-K.

The information in this Item 2.02, and Exhibit 99.1 to this Current Report on Form 8-K, shall not be deemed “filed” for the purposes of or otherwise subject to the liabilities under Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), nor shall it be deemed incorporated by reference in any filing of the Company under the Securities Act of 1933 or the Exchange Act, except as expressly set forth by specific reference in such a filing.

	
		
Item 9.01	Financial Statements and Exhibits.	

		
(d)	EXHIBITS.	
 	 	
Exhibit No.	Description	
99.1	Press Release dated August 3, 2020	
104	Cover Page Interactive Data File (embedded within the Inline XBRL document).	

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	
				
 	CORENERGY INFRASTRUCTURE TRUST, INC.	 	
 	 	 	 	
Dated: August 3, 2020	By:	/s/ Rebecca M. Sandring	 	
 	 	Rebecca M. Sandring	 	
 	 	Secretary	 	

 

CorEnergy Announces Second Quarter 2020 Results, Dividends
KANSAS CITY, MO - August 3, 2020 - CorEnergy Infrastructure Trust, Inc. ("CorEnergy" or the "Company") today announced financial results for the second quarter, ended June 30, 2020.
Second Quarter Performance Summary
Second quarter financial highlights, including the impact of the net loss from events surrounding the sale of the Pinedale Liquids Gathering System (LGS) asset, are as follows:

												
 	For the Three Months Ended	
 	June 30, 2020	
 	 	 	Per Share	
 	Total	 	Basic	 	Diluted	
Net Income (Loss) (Attributable to Common Stockholders)1	$	(139,744,105	)	 	$	(10.24	)	 	$	(10.24	)	
NAREIT Funds from Operations (NAREIT FFO)1	$	10,775,168		 	$	0.79		 	$	0.79		
Funds From Operations (FFO)1	$	10,775,168		 	$	0.79		 	$	0.79		
Adjusted Funds From Operations (AFFO)1	$	(291,172	)	 	$	(0.02	)	 	$	(0.02	)	
Dividends Declared to Common Stockholders	 	 	$	0.05		 	 	
1 Management uses AFFO as a measure of long-term sustainable operational performance. NAREIT FFO, FFO, and AFFO are non-GAAP measures. Reconciliations of NAREIT FFO, FFO and AFFO, as presented, to Net Income (Loss) Attributable to CorEnergy Stockholders are included at the end of this press release. See Note 1 for additional information.
Management Commentary
"Following a challenging second quarter that included the sale of our Pinedale LGS asset, we are now endeavoring to acquire new assets by the end of the year to rebuild CorEnergy's dividend paying capabilities. These opportunities may include assets where we can leverage our Private Letter Ruling (PLR) to both own and operate infrastructure assets," said CorEnergy Chief Executive Officer Dave Schulte. "Regarding our asset portfolio, we have seen an improvement in the situation at our Grand Isle Gathering System (GIGS) asset amid rising oil prices and a restart of production by our tenant, from which we continue to seek resolution of the nonpayment of rent. Our MoGas and Omega systems are delivering steady financial performance in keeping with their status as transportation and distribution assets less subject to the impact of commodity price swings. We recently executed agreements with key MoGas shippers that will drive increased revenue beginning in the fourth quarter. Based on these developments, we declared payment of the regular preferred dividend and a common dividend of $0.05 per share for the second quarter."
Dividend Declaration
Common Stock: A second quarter 2020 dividend of $0.05 per share was declared for CorEnergy's common stock. The dividend will be paid on August 31, 2020, to stockholders of record on August 17, 2020.

1

Preferred Stock: For the Company's 7.375% Series A Cumulative Redeemable Preferred Stock, a cash dividend of $0.4609375 per depositary share was declared. The preferred stock dividend, which equates to an annual dividend payment of $1.84375 per depositary share, will be paid on August 31, 2020, to stockholders of record on August 17, 2020.
Second Quarter Results Call
CorEnergy will host a conference call on Tuesday, August 4, 2020, at 1:00 p.m. Central Time to discuss its financial results. Please dial into the call at +1-201-689-8035 at least five minutes prior to the scheduled start time. The call will also be webcast in a listen-only format. A link to the webcast will be accessible at corenergy.reit.
A replay of the call will be available until 1:00 p.m. Central Time on September 4, 2020, by dialing +1-919-882-2331. The Conference ID is 58663. A webcast replay of the conference call will also be available on the Company’s website, corenergy.reit.
About CorEnergy Infrastructure Trust, Inc.
CorEnergy Infrastructure Trust, Inc. (NYSE: CORR, CORRPrA), is a real estate investment trust (REIT) that owns critical energy assets, such as pipelines, storage terminals, and transmission and distribution assets. We receive long-term contracted revenue from customers and operators of our assets, including triple-net participating leases and from long term customer contracts. For more information, please visit corenergy.reit.
Forward-Looking Statements
This press release contains certain statements that may include "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements, other than statements of historical fact, included herein are "forward-looking statements." Although CorEnergy believes that the expectations reflected in these forward-looking statements are reasonable, they do involve assumptions, risks and uncertainties, and these expectations may prove to be incorrect. Actual results could differ materially from those anticipated in these forward-looking statements as a result of a variety of factors, including those discussed in CorEnergy’s reports that are filed with the Securities and Exchange Commission. You should not place undue reliance on these forward-looking statements, which speak only as of the date of this press release. Other than as required by law, CorEnergy does not assume a duty to update any forward-looking statement. In particular, any distribution paid in the future to our stockholders will depend on the actual performance of CorEnergy, its costs of leverage and other operating expenses and will be subject to the approval of CorEnergy’s Board of Directors and compliance with leverage covenants.

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Notes
1NAREIT FFO represents net income (loss) (computed in accordance with GAAP), excluding gains (or losses) from sales of depreciable operating property, impairment losses of depreciable properties, real estate-related depreciation and amortization (excluding amortization of deferred financing costs or loan origination costs) and other adjustments for unconsolidated partnerships and non-controlling interests. Adjustments for non-controlling interests are calculated on the same basis. FFO as we have presented it here, is derived by further adjusting NAREIT FFO for distributions received from investment securities, income tax expense (benefit) from investment securities, net distributions and other income and net realized and unrealized gain or loss on other equity securities. CorEnergy defines AFFO as FFO Adjusted for Securities Investment plus deferred rent receivable write-off, (gain) loss on extinguishment of debt, provision for loan (gain) loss, net of tax, transaction costs, amortization of debt issuance costs, amortization of deferred lease costs, accretion of asset retirement obligation, non-cash costs associated with derivative instruments, and certain costs of a nonrecurring nature, less maintenance, capital expenditures (if any), income tax (expense) benefit unrelated to securities investments, amortization of debt premium, and other adjustments as deemed appropriate by Management. Reconciliations of NAREIT FFO, FFO Adjusted for Securities Investments and AFFO to Net Income (Loss) Attributable to CorEnergy Stockholders are included in the additional financial information attached to this press release.

Contact Information:
CorEnergy Infrastructure Trust, Inc.
Investor Relations
Debbie Hagen or Matt Kreps
877-699-CORR (2677)
info@corenergy.reit

Source: CorEnergy Infrastructure Trust, Inc.

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Consolidated Balance Sheets	
 	 	 	 	
 	June 30, 2020	 	December 31, 2019	
Assets	(Unaudited)	 	 	
Leased property, net of accumulated depreciation of $4,430,269 and $105,825,816	$	67,315,379		 	$	379,211,399		
Property and equipment, net of accumulated depreciation of $20,970,190 and $19,304,610	105,358,280		 	106,855,677		
Financing notes and related accrued interest receivable, net of reserve of $600,000 and $600,000	1,196,338		 	1,235,000		
Cash and cash equivalents	113,713,646		 	120,863,643		
Deferred rent receivable	—		 	29,858,102		
Accounts and other receivables	2,926,765		 	4,143,234		
Deferred costs, net of accumulated amortization of $1,827,781 and $1,956,710	1,380,436		 	2,171,969		
Prepaid expenses and other assets	719,094		 	804,341		
Deferred tax asset, net	4,295,036		 	4,593,561		
Goodwill	1,718,868		 	1,718,868		
Total Assets	$	298,623,842		 	$	651,455,794		
Liabilities and Equity	 	 	 	
Secured credit facilities, net of debt issuance costs of $0 and $158,070	$	—		 	$	33,785,930		
Unsecured convertible senior notes, net of discount and debt issuance costs of $3,370,720 and $3,768,504	114,679,280		 	118,323,496		
Asset retirement obligation	8,529,551		 	8,044,200		
Accounts payable and other accrued liabilities	5,494,411		 	6,000,981		
Management fees payable	1,661,651		 	1,669,950		
Unearned revenue	6,283,847		 	6,891,798		
Total Liabilities	$	136,648,740		 	$	174,716,355		
Equity	 	 	 	
Series A Cumulative Redeemable Preferred Stock 7.375%, $125,270,350 and $125,493,175 liquidation preference ($2,500 per share, $0.001 par value), 10,000,000 authorized; 50,108 and 50,197 issued and outstanding at June 30, 2020 and December 31, 2019, respectively	$	125,270,350		 	$	125,493,175		
Capital stock, non-convertible, $0.001 par value; 13,651,521 and 13,638,916 shares issued and outstanding at June 30, 2020 and December 31, 2019 (100,000,000 shares authorized)	13,652		 	13,639		
Additional paid-in capital	345,726,877		 	360,844,497		
Retained deficit	(309,035,777	)	 	(9,611,872	)	
Total Equity	161,975,102		 	476,739,439		
Total Liabilities and Equity	$	298,623,842		 	$	651,455,794		

4

	
																
Consolidated Statements of Operations (Unaudited)	
 	 	 	 	 	 	 	 	
 	For the Three Months Ended	 	For the Six Months Ended	
 	June 30, 2020	 	June 30, 2019	 	June 30, 2020	 	June 30, 2019	
Revenue	 	 	 	 	 	 	 	
Lease revenue	$	5,554,368		 	$	16,635,876		 	$	21,300,872		 	$	33,353,586		
Deferred rent receivable write-off	—		 	—		 	(30,105,820	)	 	—		
Transportation and distribution revenue	4,382,706		 	4,868,144		 	9,583,206		 	9,739,726		
Financing revenue	29,913		 	27,989		 	56,220		 	61,529		
Total Revenue	9,966,987		 	21,532,009		 	834,478		 	43,154,841		
Expenses	 	 	 	 	 	 	 	
Transportation and distribution expenses	1,222,135		 	1,246,755		 	2,597,364		 	2,749,898		
General and administrative	4,325,924		 	2,739,855		 	7,402,067		 	5,610,262		
Depreciation, amortization and ARO accretion expense	3,662,926		 	5,645,250		 	9,309,993		 	11,290,346		
Loss on impairment of leased property	—		 	—		 	140,268,379		 	—		
Loss on impairment and disposal of leased property	146,537,547		 	—		 	146,537,547		 	—		
Loss on termination of lease	458,297		 	—		 	458,297		 	—		
Total Expenses	156,206,829		 	9,631,860		 	306,573,647		 	19,650,506		
Operating Income (Loss)	$	(146,239,842	)	 	$	11,900,149		 	$	(305,739,169	)	 	$	23,504,335		
Other Income (Expense)	 	 	 	 	 	 	 	
Net distributions and other income	$	102,038		 	$	285,259		 	$	419,858		 	$	541,874		
Interest expense	(2,920,424	)	 	(2,297,783	)	 	(5,806,007	)	 	(4,805,077	)	
Gain (loss) on extinguishment of debt	11,549,968		 	—		 	11,549,968		 	(5,039,731	)	
Total Other Income (Expense)	8,731,582		 	(2,012,524	)	 	6,163,819		 	(9,302,934	)	
Income (Loss) before income taxes	(137,508,260	)	 	9,887,625		 	(299,575,350	)	 	14,201,401		
Taxes	 	 	 	 	 	 	 	
Current tax expense (benefit)	(2,431	)	 	—		 	(397,074	)	 	353,744		
Deferred tax expense (benefit)	(71,396	)	 	62,699		 	298,525		 	156,290		
Income tax expense (benefit), net	(73,827	)	 	62,699		 	(98,549	)	 	510,034		
Net Income (Loss) attributable to CorEnergy Stockholders	(137,434,433	)	 	9,824,926		 	(299,476,801	)	 	13,691,367		
Preferred dividend requirements	2,309,672		 	2,313,780		 	4,570,465		 	4,627,908		
Net Income (Loss) attributable to Common Stockholders	$	(139,744,105	)	 	$	7,511,146		 	$	(304,047,266	)	 	$	9,063,459		
 	 	 	 	 	 	 	 	
Earnings (Loss) Per Common Share:	 	 	 	 	 	 	 	
Basic	$	(10.24	)	 	$	0.59		 	$	(22.27	)	 	$	0.71		
Diluted	$	(10.24	)	 	$	0.59		 	$	(22.27	)	 	$	0.71		
Weighted Average Shares of Common Stock Outstanding:	 	 	 	 	 	 	 	
Basic	13,651,521		 	12,811,171		 	13,649,907		 	12,708,626		
Diluted	13,651,521		 	12,811,171		 	13,649,907		 	12,708,626		
Dividends declared per share	$	0.050		 	$	0.750		 	$	0.800		 	$	1.500		

5

	
								
Consolidated Statements of Cash Flows (Unaudited)	
 	 	 	 	
 	For the Six Months Ended	
 	June 30, 2020	 	June 30, 2019	
Operating Activities	 	 	 	
Net income (loss)	$	(299,476,801	)	 	$	13,691,367		
Adjustments to reconcile net income (loss) to net cash provided by operating activities:	 	 	 	
Deferred income tax, net	298,525		 	156,290		
Depreciation, amortization and ARO accretion	9,963,908		 	11,870,408		
Loss on impairment of leased property	140,268,379		 	—		
Loss on impairment and disposal of leased property	146,537,547		 	—		
Loss on termination of lease	458,297		 	—		
Deferred rent receivable write-off, noncash	30,105,820		 	—		
(Gain) loss on extinguishment of debt	(11,549,968	)	 	5,039,731		
Gain on disposal of equipment	(3,542	)	 	—		
Changes in assets and liabilities:	 	 	 	
Increase in deferred rent receivable	(247,718	)	 	(3,163,726	)	
Decrease in accounts and other receivables	1,216,469		 	550,126		
Increase in financing note accrued interest receivable	(4,671	)	 	(9,217	)	
(Increase) decrease in prepaid expenses and other assets	85,197		 	(196,684	)	
Decrease in management fee payable	(8,299	)	 	(65,749	)	
Increase (decrease) in accounts payable and other accrued liabilities	(613,391	)	 	1,541,221		
Decrease in unearned revenue	(607,951	)	 	(98,244	)	
Net cash provided by operating activities	$	16,421,801		 	$	29,315,523		
Investing Activities	 	 	 	
Purchases of property and equipment, net	(85,144	)	 	(26,553	)	
Proceeds from sale of property and equipment	7,500		 	—		
Principal payment on note receivable	—		 	5,000,000		
Principal payment on financing note receivable	43,333		 	—		
Net cash provided by (used in) investing activities	$	(34,311	)	 	$	4,973,447		
Financing Activities	 	 	 	
Repurchases of preferred stock	(161,997	)	 	(60,550	)	
Dividends paid on Series A preferred stock	(4,623,452	)	 	(4,627,560	)	
Dividends paid on common stock	(10,921,216	)	 	(18,800,372	)	
Cash paid for extinguishment of convertible notes	(1,316,250	)	 	(19,516,234	)	
Cash paid for maturity of convertible notes	(1,676,000	)	 	—		
Cash paid for settlement of Pinedale Secured Credit Facility	(3,074,572	)	 	—		
Principal payments on secured credit facilities	(1,764,000	)	 	(1,764,000	)	
Net cash used in financing activities	$	(23,537,487	)	 	$	(44,768,716	)	
Net Change in Cash and Cash Equivalents	$	(7,149,997	)	 	$	(10,479,746	)	
Cash and Cash Equivalents at beginning of period	120,863,643		 	69,287,177		
Cash and Cash Equivalents at end of period	$	113,713,646		 	$	58,807,431		
 	 	 	 	
Supplemental Disclosure of Cash Flow Information	 	 	 	
Interest paid	$	5,392,894		 	$	4,361,760		
Income taxes paid (net of refunds)	(466,407	)	 	282,786		
 	 	 	 	
Non-Cash Investing Activities	 	 	 	
Proceeds from sale of leased property provided directly to secured lender	$	18,000,000		 	$	—		
Purchases of property, plant and equipment in accounts payable and other accrued liabilities	110,000		 	—		
 	 	 	 	
Non-Cash Financing Activities	 	 	 	
Reinvestment of distributions by common stockholders in additional common shares	$	—		 	$	403,831		
Common stock issued upon exchange and conversion of convertible notes	419,129		 	29,457,711		
Proceeds from sale of leased property used in settlement of Pinedale Secured Credit Facility	(18,000,000	)	 	—		

6

	
																
NAREIT FFO, FFO Adjusted for Securities Investment and AFFO Reconciliation (Unaudited)	
 	For the Three Months Ended	 	For the Six Months Ended	
 	June 30, 2020	 	June 30, 2019	 	June 30, 2020	 	June 30, 2019	
Net Income (loss) attributable to CorEnergy Stockholders	$	(137,434,433	)	 	$	9,824,926		 	$	(299,476,801	)	 	$	13,691,367		
Less:	 	 	 	 	 	 	 	
Preferred Dividend Requirements	2,309,672		 	2,313,780		 	4,570,465		 	4,627,908		
Net Income (loss) attributable to Common Stockholders	$	(139,744,105	)	 	$	7,511,146		 	$	(304,047,266	)	 	$	9,063,459		
Add:	 	 	 	 	 	 	 	
Depreciation	3,523,429		 	5,511,274		 	9,035,342		 	11,022,395		
Loss on impairment of leased property	—		 	—		 	140,268,379		 	—		
Loss on impairment and disposal of leased property	146,537,547		 	—		 	146,537,547		 	—		
Loss on termination of lease	458,297		 	—		 	458,297		 	—		
NAREIT funds from operations (NAREIT FFO)	$	10,775,168		 	$	13,022,420		 	$	(7,747,701	)	 	$	20,085,854		
Less:	 	 	 	 	 	 	 	
Income tax (expense) benefit from investment securities	—		 	(6,912	)	 	149,585		 	(158,705	)	
Funds from operations adjusted for securities investments (FFO)	$	10,775,168		 	$	13,029,332		 	$	(7,897,286	)	 	$	20,244,559		
Add:	 	 	 	 	 	 	 	
Deferred rent receivable write-off	—		 	—		 	30,105,820		 	—		
(Gain) loss on extinguishment of debt	(11,549,968	)	 	—		 	(11,549,968	)	 	5,039,731		
Transaction costs	92,293		 	88,611		 	198,990		 	142,581		
Amortization of debt issuance costs	325,665		 	281,630		 	653,914		 	580,062		
Amortization of deferred lease costs	22,983		 	22,983		 	45,966		 	45,966		
Accretion of asset retirement obligation	116,514		 	110,993		 	228,685		 	221,985		
Income tax expense (benefit)	(73,827	)	 	55,787		 	51,036		 	351,329		
Adjusted funds from operations (AFFO)	$	(291,172	)	 	$	13,589,336		 	$	11,837,157		 	$	26,626,213		
 	 	 	 	 	 	 	 	
Weighted Average Shares of Common Stock Outstanding:	 	 	 	 	 	 	 	
Basic	13,651,521		 	12,811,171		 	13,649,907		 	12,708,626		
Diluted	13,651,521		 	14,934,886		 	13,649,907		 	14,988,429		
NAREIT FFO attributable to Common Stockholders	 	 	 	 	 	 	 	
Basic	$	0.79		 	$	1.02		 	$	(0.57	)	 	$	1.58		
Diluted (1)	$	0.79		 	$	0.96		 	$	(0.57	)	 	$	1.53		
FFO attributable to Common Stockholders	 	 	 	 	 	 	 	
Basic	$	0.79		 	$	1.02		 	$	(0.58	)	 	$	1.59		
Diluted (1)	$	0.79		 	$	0.96		 	$	(0.58	)	 	$	1.54		
AFFO attributable to Common Stockholders	 	 	 	 	 	 	 	
Basic	$	(0.02	)	 	$	1.06		 	$	0.87		 	$	2.10		
Diluted (2)	$	(0.02	)	 	$	0.99		 	$	0.87		 	$	1.95		
(1) For the three and six months ended June 30, 2019, diluted per share calculations include dilutive adjustments for convertible note interest expense, discount amortization and deferred debt issuance amortization.	
(2) For the three and six months ended June 30, 2019, diluted per share calculations include a dilutive adjustment for convertible note interest expense.	

7