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): November 2, 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 November 2, 2020, CorEnergy Infrastructure Trust, Inc. (the “Company”) issued a press release announcing its financial results for the third quarter ended September 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 November 2, 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: November 2, 2020	By:	/s/ Rebecca M. Sandring	 	
 	 	Rebecca M. Sandring	 	
 	 	Secretary	 	

	

 

			

CorEnergy Announces Third Quarter 2020 Results, Dividends
KANSAS CITY, MO - November 2, 2020 - CorEnergy Infrastructure Trust, Inc. ("CorEnergy" or the "Company") today announced financial results for the third quarter, ended September 30, 2020.
Third Quarter Performance Summary
Third quarter financial highlights are as follows:

	For the Three Months Ended	
	September 30, 2020	
			Per Share	
	Total		Basic		Diluted	
Net Loss (Attributable to Common Stockholders)1	$	(6,228,770)			$	(0.46)			$	(0.46)		
NAREIT Funds from Operations (NAREIT FFO)1	$	(4,175,478)			$	(0.31)			$	(0.31)		
Funds From Operations (FFO)1	$	(4,175,478)			$	(0.31)			$	(0.31)		
Adjusted Funds From Operations (AFFO)1	$	(2,879,414)			$	(0.21)			$	(0.21)		
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 Loss Attributable to CorEnergy Stockholders are included at the end of this press release. See Note 1 for additional information.
Management Commentary
"Within CorEnergy's existing asset portfolio, our MoGas and Omega assets are generating steady, predictable results, even as we implemented multiple expansion projects with customers on these lines," said Dave Schulte, Chairman and Chief Executive Officer. "We expect the most recent of our MoGas expansion projects to come online by the beginning of December, driving incremental revenue generating capabilities under a new 10-year contract with Spire, in addition to a recent 10-year expansion agreement signed with Ameren. Our Omega pipeline is providing increased support as the Department of Defense constructs additional natural gas using facilities at Fort Leonard Wood, a 30,000 person Army post. Finally, we are working toward resolution of the rents due at our GIGS asset, which the tenant is using on a daily basis. Rents continue to accrue uninterrupted under the lease agreement, and we intend to enforce our full claim if resolution is not reached."
"CorEnergy has completed substantial diligence, and we are evaluating funding options for an acquisition as part of our goal to announce a transaction before year end," continued Schulte. "We believe our stakeholders are best served by using our resources to acquire critical assets serving credit-worthy counterparties, enabling CorEnergy to provide a stable dividend in 2021, with long term prospects for growth. Of course, there is no assurance that any particular acquisition will be completed, due to a number of factors including market conditions."
Dividend Declaration
Common Stock: A third quarter 2020 dividend of $0.05 per share was declared for CorEnergy's common stock. The dividend will be paid on November 30, 2020, to stockholders of record on November 16, 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 November 30, 2020, to stockholders of record on November 16, 2020.
Third Quarter Results Call
CorEnergy will host a conference call on Tuesday, November 3, 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 December 3, 2020, by dialing +1-919-882-2331. The Conference ID is 58666. 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.
2

Notes
1NAREIT FFO represents net 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, 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 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	
				
	September 30, 2020		December 31, 2019	
Assets	(Unaudited)			
Leased property, net of accumulated depreciation of $5,631,017 and $105,825,816	$	66,121,507 			$	379,211,399 		
	
Property and equipment, net of accumulated depreciation of $21,815,093 and $19,304,610	105,510,927 			106,855,677 		
Financing notes and related accrued interest receivable, net of reserve of $600,000 and $600,000	1,202,960 			1,235,000 		

Cash and cash equivalents	104,221,404 			120,863,643 		
Deferred rent receivable	— 			29,858,102 		
Accounts and other receivables	3,103,170 			4,143,234 		

Deferred costs, net of accumulated amortization of $1,979,058 and $1,956,710	1,229,159 			2,171,969 		

	
	
Prepaid expenses and other assets	1,861,017 			804,341 		
Deferred tax asset, net	4,367,933 			4,593,561 		
Goodwill	1,718,868 			1,718,868 		
Total Assets	$	289,336,945 			$	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 $3,206,295 and $3,768,504	114,843,705 			118,323,496 		
Asset retirement obligation	8,646,065 			8,044,200 		
Accounts payable and other accrued liabilities	3,760,287 			6,000,981 		
Management fees payable	969,756 			1,669,950 		

	
Unearned revenue	6,053,376 			6,891,798 		
Total Liabilities	$	134,273,189 			$	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 September 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 September 30, 2020 and December 31, 2019 (100,000,000 shares authorized)	13,652 			13,639 		
Additional paid-in capital	342,734,629 			360,844,497 		
Retained deficit	(312,954,875)			(9,611,872)		

	
Total Equity	155,063,756 			476,739,439 		
Total Liabilities and Equity	$	289,336,945 			$	651,455,794 		

4

																								
Consolidated Statements of Operations (Unaudited)	
								
	For the Three Months Ended		For the Nine Months Ended	
	September 30, 2020		September 30, 2019		September 30, 2020		September 30, 2019	
Revenue								
Lease revenue	$	20,126 			$	16,984,903 			$	21,320,998 			$	50,338,489 		
Deferred rent receivable write-off	— 			— 			(30,105,820)			— 		
Transportation and distribution revenue	4,573,155 			4,068,338 			14,156,361 			13,808,064 		
Financing revenue	32,099 			28,003 			88,319 			89,532 		
	
Total Revenue	4,625,380 			21,081,244 			5,459,858 			64,236,085 		
Expenses								

Transportation and distribution expenses	1,438,443 			1,116,194 			4,035,807 			3,866,092 		
	
General and administrative	2,793,568 			2,494,240 			10,195,635 			8,104,502 		

	
Depreciation, amortization and ARO accretion expense	2,169,806 			5,645,342 			11,479,799 			16,935,688 		
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 			— 		
	
Total Expenses	6,401,817 			9,255,776 			312,975,464 			28,906,282 		
Operating Income (Loss)	$	(1,776,437)			$	11,825,468 			$	(307,515,606)			$	35,329,803 		
Other Income (Expense)								
Net distributions and other income	$	29,654 			$	360,182 			$	449,512 			$	902,056 		

	
Interest expense	(2,247,643)			(2,777,122)			(8,053,650)			(7,582,199)		
Gain (loss) on extinguishment of debt	— 			(28,920,834)			11,549,968 			(33,960,565)		
Total Other Income (Expense)	(2,217,989)			(31,337,774)			3,945,830 			(40,640,708)		
Loss before income taxes	(3,994,426)			(19,512,306)			(303,569,776)			(5,310,905)		
Taxes								
Current tax expense (benefit)	(2,431)			(1,270)			(399,505)			352,474 		
Deferred tax expense (benefit)	(72,897)			(91,436)			225,628 			64,854 		
Income tax expense (benefit), net	(75,328)			(92,706)			(173,877)			417,328 		
Net Loss attributable to CorEnergy Stockholders	(3,919,098)			(19,419,600)			(303,395,899)			(5,728,233)		

Preferred dividend requirements	2,309,672 			2,313,780 			6,880,137 			6,941,688 		
Net Loss attributable to Common Stockholders	$	(6,228,770)			$	(21,733,380)			$	(310,276,036)			$	(12,669,921)		

	

	

	
Loss Per Common Share:								
Basic	$	(0.46)			$	(1.65)			$	(22.73)			$	(0.98)		
Diluted	$	(0.46)			$	(1.65)			$	(22.73)			$	(0.98)		
Weighted Average Shares of Common Stock Outstanding:								
Basic	13,651,521 			13,188,546 			13,650,449 			12,870,357 		
Diluted	13,651,521 			13,188,546 			13,650,449 			12,870,357 		
Dividends declared per share	$	0.050 			$	0.750 			$	0.850 			$	2.250 		
5

												
Consolidated Statements of Cash Flows (Unaudited)	
				
	For the Nine Months Ended	
	September 30, 2020		September 30, 2019	
Operating Activities				
Net loss	$	(303,395,899)			$	(5,728,233)		
Adjustments to reconcile net loss to net cash provided by operating activities:				
Deferred income tax, net	225,628 			64,854 		
Depreciation, amortization and ARO accretion	12,441,775 			17,828,773 		
	
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)			33,960,565 		
	
Gain on sale of equipment	(3,542)			(1,800)		

	

	

Changes in assets and liabilities:				
Increase in deferred rent receivable	(247,718)			(3,656,655)		
Decrease in accounts and other receivables	1,040,064 			2,081,674 		
Increase in financing note accrued interest receivable	(11,293)			— 		
Increase in prepaid expenses and other assets	(1,056,726)			(26,026)		
Decrease in management fee payable	(700,194)			(166,587)		
Increase (decrease) in accounts payable and other accrued liabilities	(2,551,374)			3,449,442 		
	
Decrease in unearned revenue	(838,422)			(40,477)		
Net cash provided by operating activities	$	10,722,374 			$	47,765,530 		
Investing Activities				

	
	
Purchases of property and equipment, net	(885,711)			(311,566)		
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 			32,500 		
	
Net cash provided by (used in) investing activities	$	(834,878)			$	4,720,934 		
Financing Activities				
	
Debt financing costs	— 			(161,963)		

Net offering proceeds on convertible debt	— 			116,355,125 		
Repurchases of preferred stock	(161,997)			(60,550)		

Dividends paid on Series A preferred stock	(6,933,124)			(6,941,340)		
Dividends paid on common stock	(11,603,792)			(28,949,060)		
Cash paid for extinguishment of convertible notes	(1,316,250)			(78,939,743)		
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)			(2,646,000)		
Net cash used in financing activities	$	(26,529,735)			$	(1,343,531)		
Net Change in Cash and Cash Equivalents	$	(16,642,239)			$	51,142,933 		
Cash and Cash Equivalents at beginning of period	120,863,643 			69,287,177 		
Cash and Cash Equivalents at end of period	$	104,221,404 			$	120,430,110 		
				
Supplemental Disclosure of Cash Flow Information				
Interest paid	$	9,066,335 			$	5,893,078 		
Income taxes paid (net of refunds)	(466,382)			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	313,859 			— 		
				
Non-Cash Financing Activities				
Change in accounts payable and accrued expenses related to debt financing costs	$	— 			$	197,227 		
Reinvestment of distributions by common stockholders in additional common shares	— 			403,831 		
Common stock issued upon exchange and conversion of convertible notes	419,129 			62,639,326 		
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 Nine Months Ended	
	September 30, 2020		September 30, 2019		September 30, 2020		September 30, 2019	
Net Loss attributable to CorEnergy Stockholders	$	(3,919,098)			$	(19,419,600)			$	(303,395,899)			$	(5,728,233)		
Less:								
Preferred Dividend Requirements	2,309,672 			2,313,780 			6,880,137 			6,941,688 		
Net Loss attributable to Common Stockholders	$	(6,228,770)			$	(21,733,380)			$	(310,276,036)			$	(12,669,921)		
Add:								
Depreciation	2,045,651 			5,511,367 			11,080,993 			16,533,762 		
Amortization of deferred lease costs	7,641 			22,983 			53,607 			68,949 		
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 			— 		

NAREIT funds from operations (NAREIT FFO)	$	(4,175,478)			$	(16,199,030)			$	(11,877,213)			$	3,932,790 		

Less:								
	
Income tax (expense) benefit from investment securities	— 			(45,205)			149,585 			(203,910)		
Funds from operations adjusted for securities investments (FFO)	$	(4,175,478)			$	(16,153,825)			$	(12,026,798)			$	4,136,700 		
Add:								
Deferred rent receivable write-off	— 			— 			30,105,820 			— 		
(Gain) loss on extinguishment of debt	— 			28,920,834 			(11,549,968)			33,960,565 		
	
Transaction costs	946,817 			14,799 			1,145,807 			157,380 		
Amortization of debt issuance costs	308,061 			313,022 			961,975 			893,084 		
Accretion of asset retirement obligation	116,514 			110,992 			345,199 			332,977 		
Income tax expense (benefit)	(75,328)			(137,911)			(24,292)			213,418 		
	
Adjusted funds from operations (AFFO)	$	(2,879,414)			$	13,067,911 			$	8,957,743 			$	39,694,124 		
								
Weighted Average Shares of Common Stock Outstanding:								
Basic	13,651,521 			13,188,546 			13,650,449 			12,870,357 		
Diluted	13,651,521 			15,609,545 			13,650,449 			15,197,745 		
NAREIT FFO attributable to Common Stockholders								
Basic	$	(0.31)			$	(1.23)			$	(0.87)			$	0.31 		
Diluted (1)	$	(0.31)			$	(1.23)			$	(0.87)			$	0.31 		
FFO attributable to Common Stockholders								
Basic	$	(0.31)			$	(1.22)			$	(0.88)			$	0.32 		
Diluted (1)	$	(0.31)			$	(1.22)			$	(0.88)			$	0.32 		
AFFO attributable to Common Stockholders								
Basic	$	(0.21)			$	0.99 			$	0.66 			$	3.08 		
Diluted (2)	$	(0.21)			$	0.94 			$	0.66 			$	2.89 		
(1) For the three and nine months ended September 30, 2020 and 2019 diluted per share calculations exclude dilutive adjustments for convertible note interest expense, discount amortization and deferred debt issuance amortization because such impact is antidilutive. For periods presented without per share dilution, the number of weighted average diluted shares is equal to the number of weighted average basic shares presented.	
(2) For the three and nine months ended September 30, 2019, diluted per share calculations include a dilutive adjustment for convertible note interest expense.	

	
7