corr-20220930

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

___________________________________________

FORM 10-Q

___________________________________________


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

For the quarterly period ended September 30, 2022


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

For the transition period from to

Commission file number: 001-33292

_________________________________________________________

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,

64106

(Address of Registrant's Principal Executive Offices)

(Zip Code)


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

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 (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☐

Accelerated filer

☐

Non-accelerated filer

☒

Smaller reporting company

☒

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. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act) Yes ☐ No ☒

As of November 3, 2022, the registrant had 15,176,911 shares of Common Stock outstanding and 683,761 shares of Class B Common Stock outstanding.

CorEnergy Infrastructure Trust, Inc.

FORM 10-Q

FOR THE QUARTER ENDED SEPTEMBER 30, 2022

TABLE OF CONTENTS

____________________________________________________________________________________________


				Page No.
Glossary of Defined Terms				4
Forward-Looking Statements				7
PART I		FINANCIAL INFORMATION		9
	Item 1.	Financial Statements (unaudited)		9
		Consolidated Balance Sheets		9
		Consolidated Statements of Operations		10
		Consolidated Statements of Equity		11
		Consolidated Statements of Cash Flows		14
		Notes to Consolidated Financial Statements		16
		1.	Introduction and Basis of Presentation	16
		2.	Recent Accounting Pronouncements	16
		3.	Acquisitions	17
		4.	Transportation and Distribution Revenue	20
		5.	Leased Properties and Leases	21
		6.	Financing Notes Receivable	22
		7.	Income Taxes	23
		8.	Property and Equipment	24
		9.	Management Agreement	24
		10.	Goodwill	25
		1 1 .	Commitments and Contingencies	25
		1 2 .	Fair Value	26
		1 3 .	Debt	27
		1 4 .	Stockholders' Equity	28
		1 5 .	Earnings (Loss) Per Share	31
		1 6 .	Variable Interest Entity	31
		1 7 .	Related Party Transactions	32

		1 8 .	Subsequent Events	34
	Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations		35
	Item 3.	Quantitative and Qualitative Disclosures about Market Risk		56
	Item 4.	Controls and Procedures		56

PART II.		OTHER INFORMATION		58
	Item 1.	Legal Proceedings		58
	Item 1A.	Risk Factors		58
	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds		58
	Item 3.	Defaults Upon Senior Securities		58
	Item 4.	Mine Safety Disclosures		58
	Item 5.	Other Information		58
	Item 6.	Exhibits		59
Signatures				60

This Report on Form 10-Q ("Report") should be read in its entirety. No one section of the Report deals with all aspects of the subject matter disclosed herein. It should be read in conjunction with the unaudited consolidated financial statements, related notes, and with the Management's Discussion & Analysis ("MD&A") included within, as well as provided in the CorEnergy Infrastructure Trust, Inc. Annual Report on Form 10-K, for the year ended December 31, 2021.

The unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information, the instructions to Form 10-Q, and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and notes required by generally accepted accounting principles for complete financial statements. In the opinion of Management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three and nine months ended September 30, 2022 are not necessarily indicative of the results that may be expected for the year ended December 31, 2022 or for any other interim or annual period. For further information, refer to the audited consolidated financial statements and footnotes thereto included in the CorEnergy Infrastructure Trust, Inc. Annual Report on Form 10-K, for the year ended December 31, 2021.


Table of Contents			GLOSSARY OF DEFINED TERMS

Certain of the defined terms used in this Report as set forth below:

5.875% Convertible Notes: the Company's 5.875% Convertible Senior Notes due 2025.

Accretion Expense: the expense recognized when adjusting the present value of the GIGS ARO for the passage of time.

Adjusted SOFR: SOFR plus an adjustment based on tenor. The adjustment is 0.10% for one-month, 0.15% for three-month and 0.25% for six-month, SOFR rates. The adjustment was implemented when changing to SOFR to make the interest expense using SOFR as a reference rate equivalent to that using LIBOR.

Administrative Agreement: the Administrative Agreement dated December 1, 2011, as amended effective August 7, 2012, between the Company and Corridor. The Internalization transaction closed on July 6, 2021 and the Administrative Agreement was effectively terminated when Corridor was acquired by the Company.

ARO: the Asset Retirement Obligation liabilities assumed with the acquisition of GIGS and disposed of with the sale of GIGS effective February 1, 2021.

ASC: FASB Accounting Standards Codification.

ASU: FASB Accounting Standard Update.

Bbls: standard barrel containing 42 U.S. gallons.

bpd: Barrels per day.

Cash Available for Distribution or CAD: the Company's earnings before interest, taxes, depreciation and amortization, less (i) cash interest expense, (ii) preferred stock dividends, (iii) regularly scheduled debt amortization, (iv) maintenance capital expenditures, (v) reinvestment allocation and plus or minus other adjustments, but excluding the impact of extraordinary or nonrecurring expenses unrelated to the operations of Crimson and all of its subsidiaries, as defined in the Articles Supplementary for the Class B Common Stock and effective beginning with the quarter ending June 30, 2021.

Class B Common Stock: the Company's Class B Common Stock, par value $0.001 per share.

Code: the Internal Revenue Code of 1986, as amended.

Common Stock: the Company's Common Stock, par value $0.001 per share.

Company or CorEnergy: CorEnergy Infrastructure Trust, Inc. (NYSE: CORR).

Compass SWD: Compass SWD, LLC, the current borrower under the Compass REIT Loan.

Compass REIT Loan: the financing notes between Compass SWD and Four Wood Corridor.

Contribution Agreement: the Contribution Agreement dated as of February 4, 2021, among the Company and the Contributors pursuant to which the Company acquired Corridor in the Internalization transaction.

Contributors: the managers of the Company's former external manager, Corridor, which include: Richard C. Green, Rick Kreul, Rebecca M. Sandring, Sean DeGon, Jeff Teeven, Jeffrey E. Fulmer, David J. Schulte (as Trustee of the DJS Trust under Trust Agreement dated July 18, 2016), and Campbell Hamilton, Inc., which is an entity controlled by David J. Schulte.

CorEnergy Credit Facility: the Company's $160.0 million CorEnergy Revolver and the $1.0 million MoGas Revolver with Regions Bank, which was terminated on February 4, 2021 in connection with the Crimson Transaction.

CorEnergy Revolver: the Company's $160.0 million secured revolving line of credit facility with Regions Bank, which was terminated on February 4, 2021 in connection with the Crimson Transaction.

Corridor: Corridor InfraTrust Management, LLC, the Company's former external manager pursuant to the Management Agreement. CorEnergy acquired Corridor in the Internalization transaction pursuant to the Contribution Agreement.

Corridor MoGas: Corridor MoGas, Inc., a wholly-owned taxable REIT subsidiary of CorEnergy, the holding company of MoGas, United Property Systems and CorEnergy Pipeline Company, LLC and a co-borrower under the Crimson Credit Facility.


Table of Contents			GLOSSARY OF DEFINED TERMS (Continued from previous page)

COVID-19: Coronavirus disease of 2019; a pandemic affecting many countries globally.

CPI: Consumer Price Index.

CPUC: California Public Utility Commission.

Crimson: Crimson Midstream Holdings, LLC, the indirect owner of CPUC-regulated crude oil pipeline companies, of which the Company owns a 49.50% voting interest and all of the Class B-1 equity ownership interests effective February 1, 2021.

Crimson Credit Facility: the Amended and Restated Credit Agreement with Crimson Midstream Operating and Corridor MoGas as co-borrowers, the lenders from time to time party thereto, and Wells Fargo Bank, National Association, as administrative agent, swingline lender and issuing bank, entered into on February 4, 2021, which provides borrowing capacity of up to $155.0 million, consisting of: the $50.0 million Crimson Revolver, the $80.0 million Crimson Term Loan and an uncommitted incremental facility of $25.0 million.

Crimson Midstream Operating: Crimson Midstream Operating, LLC, a wholly-owned subsidiary of Crimson and a co-borrower under the Crimson Credit Facility and direct owner of CPUC-regulated crude oil pipeline companies.

Crimson Pipeline System: an approximately 2,000-mile crude oil transportation pipeline system, which includes approximately 1,100 active miles, with associated storage facilities located in southern California and the San Joaquin Valley, owned and operated by subsidiaries of Crimson.

Crimson Revolver: the $50.0 million secured revolving line of credit facility with Wells Fargo Bank, National Association entered into on February 4, 2021.

Crimson Term Loan: the $80.0 million secured term loan with Wells Fargo Bank, National Association entered into on February 4, 2021.

Crimson Transaction: the Company's acquisition of a 49.50% voting interest in Crimson effective February 1, 2021 with the right to acquire the remaining 50.50% voting interest upon receiving CPUC approval.

Exchange Act: the Securities Exchange Act of 1934, as amended.

EGC: Energy XXI Ltd, the parent company (and guarantor) of the EGC Tenant, which parent company emerged from a reorganization under Chapter 11 of the US Bankruptcy Code on December 30, 2016, with the succeeding company named Energy XXI Gulf Coast, Inc. Effective October 18, 2018, EGC became an indirect wholly-owned subsidiary of MLCJR LLC, an affiliate of Cox Oil, LLC, as a result of a merger transaction. Throughout this document, references to EGC will refer to both the pre- and post-bankruptcy entities and, for dates on and after October 18, 2018, to EGC as an indirect wholly-owned subsidiary of MLCJR LLC.

EGC Tenant: Energy XXI GIGS Services, LLC, a wholly-owned operating subsidiary of EGC that was the tenant under Grand Isle Corridor's triple-net lease of the Grand Isle Gathering System until the lease was terminated on February 4, 2021.

FASB: Financial Accounting Standards Board.

FERC: Federal Energy Regulatory Commission.

Four Wood Corridor: Four Wood Corridor, LLC, a wholly-owned subsidiary of CorEnergy.

GAAP: U.S. generally accepted accounting principles.

GIGS: the Grand Isle Gathering System, owned by Grand Isle Corridor and triple-net leased to the EGC Tenant until it was disposed of as partial consideration in connection with the Crimson Transaction effective February 1, 2021.

Grand Isle Corridor: Grand Isle Corridor, LP, an indirect wholly-owned subsidiary of the Company.

Grand Isle Gathering System: a subsea midstream pipeline gathering system located in the shallow Gulf of Mexico shelf and storage and onshore processing facilities.

Grand Isle Lease Agreement: the June 2015 agreement pursuant to which the Grand Isle Gathering System assets were triple-net leased to the EGC Tenant, which terminated on February 4, 2021 upon disposal of GIGS.


Table of Contents			GLOSSARY OF DEFINED TERMS (Continued from previous page)

Grier Members: Mr. John D. Grier, Mrs. M. Bridget Grier and certain of their affiliated trusts, which collectively own all of the Class A-1, A-2, and A-3 equity ownership interests in Crimson, which is reflected as a non-controlling interest in the Company's financial statements.

Indenture: that certain Indenture, dated August 12, 2019, between the Company and U.S. Bank National Association, as Trustee for the 5.875% Convertible Notes.

Internalization: CorEnergy's acquisition of its external manager, Corridor, pursuant to the Contribution Agreement. The Internalization transaction closed July 6, 2021.

IRS: Internal Revenue Service.

Management Agreement: the Management Agreement between the Company and Corridor entered into May 8, 2015, effective as of May 1, 2015, and as amended February 4, 2021. The Internalization transaction closed on July 6, 2021 and the Management Agreement was effectively terminated when Corridor was acquired by the Company.

MoGas: MoGas Pipeline LLC, an indirect wholly-owned subsidiary of CorEnergy.

MoGas Pipeline System: an approximately 263-mile interstate natural gas pipeline system in and around St. Louis and extending into central Missouri, owned and operated by MoGas.

MoGas Revolver: a $1.0 million secured revolving line of credit facility at the MoGas subsidiary level with Regions Bank, which was terminated on February 4, 2021 in connection with the Crimson Transaction.

Mowood: Mowood, LLC, an indirect wholly-owned subsidiary of CorEnergy and the holding company of Omega.

Mowood/Omega Revolver: a $1.5 million revolving line of credit facility at the Mowood subsidiary level with Regions Bank, which was terminated on February 4, 2021 in connection with the Crimson Transaction.

Omega: Omega Pipeline Company, LLC, a wholly-owned subsidiary of Mowood.

Omega Pipeline System: a 75-mile natural gas distribution system providing unregulated service in south central Missouri, owned and operated by Omega.

Omnibus Equity Incentive Plan: the CorEnergy Infrastructure Trust, Inc. Omnibus Equity Incentive Plan, which was approved by the Company's stockholders on May 25, 2022.

Pipeline Loss Allowance (or PLA): the portion of crude oil provided by or on behalf of each shipper, at no cost to the carrier, (as allowance for losses sustained due to evaporation, measurement and other losses in transit) and retained by the carrier in recognition of loss and shrinkage in carrier's system.

PLR: the Private Letter Ruling dated November 16, 2018 (PLR 201907001) issued to CorEnergy by the IRS.

REIT: real estate investment trust.

SEC: Securities and Exchange Commission.

Securities Act: the Securities Act of 1933, as amended.

Series A Preferred Stock: the Company's 7.375% Series A Cumulative Redeemable Preferred Stock, par value $0.001 per share, which are represented by depositary shares, each representing 1/100th of a whole share of Series A Preferred Stock.

SOFR: the Secured Overnight Financing Rate, a benchmark interest rate for dollar-denominated loans that will replace LIBOR. It reflects the pricing of overnight loans that are secured by U.S. Treasury securities.

STL Interconnect Project: a pipeline interconnect constructed pursuant to a Facilities Interconnect Agreement with Spire STL Pipeline LLC ("STL Pipeline") and completed during the fourth quarter of 2020.

United Property Systems: United Property Systems, LLC, an indirect wholly-owned subsidiary of CorEnergy, acquired with the MoGas transaction in November 2014.

VIE: variable interest entity.


Table of Contents						Glossary of Defined Terms

CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS

With the exception of historical information, certain statements included or incorporated by reference in this Quarterly Report on Form 10-Q ("Report") may be deemed "forward-looking statements" within the meaning of the federal securities laws. In many cases, these forward-looking statements may be identified by the use of words such as "will," "may," "should," "could," "believes," "expects," "anticipates," "estimates," "intends," "projects," "goals," "objectives," "targets," "predicts," "plans," "seeks," or similar expressions. Any forward-looking statement speaks only as of the date on which it is made and is qualified in its entirety by reference to the factors discussed throughout this Report.

Although we believe the expectations reflected in any forward-looking statements are based on reasonable assumptions, forward-looking statements are not guarantees of future performance or results and we can give no assurance that these expectations will be attained. Our actual results may differ materially from those indicated by these forward-looking statements due to a variety of known and unknown risks and uncertainties. Therefore, you should not rely on any of these forward-looking statements. You should also understand that it is not possible to predict or identify all such factors and should not consider the following list to be a complete statement of all potential risks and uncertainties. Factors that could cause our actual results to differ materially from the results contemplated by such forward-looking statements include, among others, the following:

•changes in economic and business conditions in the energy infrastructure sector where our investments are concentrated, including the financial condition of our customers or borrowers and general economic conditions in the U.S. and in the particular sectors of the energy industry served by each of our infrastructure assets, including inflationary and recessionary risks;

•pandemics, epidemics or disease outbreaks, such as the COVID-19 pandemic and the global response to the pandemic, including without limitation potential adverse impacts of complying with related governmental mandates, which may adversely affect local and global economies as well as our or our customers'' or borrowers' business and financial results;

•the inherent risks associated with owning real estate, including real estate market conditions, governing laws and regulations, including potential liabilities related to environmental matters, and the relative illiquidity of real estate investments;

•competitive and regulatory pressures on the revenues of our California intrastate crude oil transportation business and our interstate natural gas transmission business;

•risks associated with the receipt of CPUC approval for the Company to obtain operational control and majority ownership over Crimson's CPUC-regulated pipeline assets;

•the impact of environmental, pipeline safety and other laws and governmental regulations applicable to certain of our infrastructure assets, including additional costs imposed on our business or other adverse impacts as a result of any unfavorable changes in such laws or regulations;

•risks associated with the bankruptcy or default of any of our customers or borrowers, including the exercise of the rights and remedies of bankrupt entities;

•our continued ability to access the debt and equity markets;

•our ability to comply with covenants in instruments governing our indebtedness;

•the potential impact of greenhouse gas regulation and climate change on our or our customers' business, financial condition and results of operations;

•risks associated with security breaches through cyber attacks or acts of cyber terrorism or other cyber intrusions, or any other significant disruptions of our information technology (IT) networks and related systems;

•risks associated with the age of Crimson's assets, which were constructed over many decades, and which may increase future inspection, maintenance or repair costs, or result in downtime that could have a material adverse effect on our business and results of operations;

•the loss of any member of our management team;

•our ability to successfully implement our selective acquisition strategy;

•our ability to refinance amounts outstanding under our credit facilities and our convertible notes at maturity on terms favorable to us;

•changes in interest rates under our current credit facilities and under any additional variable rate debt arrangements that we may enter into in the future;


Table of Contents						Glossary of Defined Terms

•our dependence on key customers for significant revenues, and the risk of defaults by any such customers;

•our customers' ability to secure adequate insurance and risk of potential uninsured losses, including from natural disasters;

•the continued availability of third-party pipelines, railroads or other facilities interconnected with certain of our infrastructure assets;

•risks associated with owning, operating or financing properties for which our customers' or our operations may be impacted by extreme weather patterns and other natural phenomena;

•our ability to sell properties at an attractive price;

•market conditions and related price volatility affecting our debt and equity securities;

•changes in federal or state tax rules or regulations that could have adverse tax consequences;

•our ability to maintain internal controls and processes to ensure all transactions are accounted for properly, all relevant disclosures and filings are timely made in accordance with all rules and regulations, and any potential fraud or embezzlement is thwarted or detected;

•changes in federal income tax regulations (and applicable interpretations thereof), or in the composition or performance of our assets, that could impact our ability to continue to qualify as a real estate investment trust for federal income tax purposes;

•conflicts of interest that some of our directors and officers may have with respect to certain other business interests related to the Crimson Transaction;

•risks related to potential terrorist attacks, acts of cyber-terrorism, or similar disruptions that could disrupt access to our information technology systems or result in other significant damage to our business and properties, some of which may not be covered by insurance and all of which could adversely impact distributions to our stockholders; and

•the loss of crude oil volumes on pipelines indirectly owned by Crimson due to lower than expected oil production in California or changes in customer shipping practices.

Forward-looking statements speak only as of the date on which they are made. Except as otherwise required by law, we undertake no obligation to publicly update or revise any forward-looking statement to reflect events or circumstances after the date of this Report or to reflect the occurrence of unanticipated events. For a further discussion of these and other factors that could impact our future results and performance, see Part I, Item 1A, "Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, 2021, filed with the SEC on March 14, 2022.


Table of Contents						Glossary of Defined Terms

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

CorEnergy Infrastructure Trust, Inc.

CONSOLIDATED BALANCE SHEETS


	September 30, 2022		December 31, 2021
Assets	(Unaudited)
Property and equipment, net of accumulated depreciation of $48,864,283 and $37,022,035, respectively (Crimson VIE*: $337,470,077, and $338,452,392, respectively)	$	438,249,633	$	441,430,193
Leased property, net of accumulated depreciation of $289,154 and $258,207, respectively	1,236,873		1,267,821

Financing notes and related accrued interest receivable, net of reserve of $600,000 and $600,000, respectively	904,743		1,036,660


Cash and cash equivalents (Crimson VIE: $3,125,706 and $1,870,000, respectively)	21,776,263		12,496,478
Accounts and other receivables (Crimson VIE: $7,654,757 and $11,291,749, respectively)	10,609,744		15,367,389


Due from affiliated companies (Crimson VIE: $94,994 and $676,825, respectively)	94,994		676,825
Deferred costs, net of accumulated amortization of $631,408 and $345,775, respectively	510,939		796,572




Inventory (Crimson VIE: $5,859,262 and $3,839,865, respectively)	6,004,037		3,953,523
Prepaid expenses and other assets (Crimson VIE: $3,946,389 and $5,004,566, respectively)	5,699,079		9,075,043
Operating right-of-use assets (Crimson VIE: $4,755,606 and $5,647,631, respectively)	5,082,028		6,075,939
Deferred tax asset, net	111,681		206,285
Goodwill	—		16,210,020
Total Assets	$	490,280,014	$	508,592,748
Liabilities and Equity





Secured credit facilities, net of deferred financing costs of $817,972 and $1,275,244, respectively	$	99,182,028	$	99,724,756
Unsecured convertible senior notes, net of discount and debt issuance costs of $1,890,895 and $2,384,170, respectively	116,159,105		115,665,830

Accounts payable and other accrued liabilities (Crimson VIE: $14,935,627 and $9,743,904, respectively)	19,596,670		17,036,064

Income tax payable	344,630		—


Due to affiliated companies (Crimson VIE: $276,428 and $648,316, respectively)	276,428		648,316
Operating lease liability (Crimson VIE: $4,653,594 and $5,647,036, respectively)	4,951,891		6,046,657
Unearned revenue (Crimson VIE: $205,790 and $199,405, respectively)	5,990,897		5,839,602
Total Liabilities	$	246,501,649	$	244,961,225
Commitments and Contingencies (Note 11)
Equity

Series A Cumulative Redeemable Preferred Stock 7.375%, $129,525,675 liquidation preference ($2,500 per share, $0.001 par value); 10,000,000 authorized; 51,810 issued and outstanding at September 30, 2022 and December 31, 2021	$	129,525,675	$	129,525,675
Common stock, non-convertible, $0.001 par value; 15,176,911 and 14,893,184 shares issued and outstanding at September 30, 2022 and December 31, 2021, respectively (100,000,000 shares authorized)	15,177		14,893
Class B Common Stock, $0.001 par value; 683,761 shares issued and outstanding at September 30, 2022 and December 31, 2021 (11,896,100 shares authorized)	684		684
Additional paid-in capital	329,796,049		338,302,735
Retained deficit	(339,752,470)		(327,157,636)

Total CorEnergy Equity	119,585,115		140,686,351
Non-controlling interest (Crimson)	124,193,250		122,945,172
Total Equity	243,778,365		263,631,523
Total Liabilities and Equity	$	490,280,014	$	508,592,748
*Variable Interest Entity (VIE) (Note 16)
See accompanying Notes to Consolidated Financial Statements.


Table of Contents						Glossary of Defined Terms

CorEnergy Infrastructure Trust, Inc.

CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)


	For the Three Months Ended				For the Nine Months Ended
	September 30, 2022		September 30, 2021		September 30, 2022		September 30, 2021
Revenue
Transportation and distribution	$	31,305,546	$	34,286,394	$	89,179,734	$	83,681,876
Pipeline loss allowance subsequent sales	1,477,251		2,124,581		7,283,450		6,115,836
Lease	111,725		32,915		176,775		1,208,915

Other	67,164		584,992		715,514		1,359,331

Total Revenue	32,961,686		37,028,882		97,355,473		92,365,958
Expenses


Transportation and distribution	17,647,673		16,089,414		45,857,193		41,795,421
Pipeline loss allowance subsequent sales cost of revenue	1,385,028		2,718,038		6,016,664		5,890,540
General and administrative	5,743,342		5,156,087		16,162,570		20,374,534





Depreciation, amortization and ARO accretion	4,028,800		3,690,856		11,997,781		10,337,639

Loss on impairment of goodwill	16,210,020		—		16,210,020		—
Loss on impairment and disposal of leased property	—		—		—		5,811,779
Loss on termination of lease	—		—		—		165,644

Total Expenses	45,014,863		27,654,395		96,244,228		84,375,557
Operating Income (loss)	$	(12,053,177)	$	9,374,487	$	1,111,245	$	7,990,401
Other Income (expense)
Other income	$	76,050	$	4,040	$	332,615	$	366,859



Interest expense	(3,483,208)		(3,351,967)		(9,972,969)		(9,578,677)
Loss on extinguishment of debt	—		—		—		(861,814)
Total Other Expense	(3,407,158)		(3,347,927)		(9,640,354)		(10,073,632)
Income (Loss) before income taxes	(15,460,335)		6,026,560		(8,529,109)		(2,083,231)
Taxes
Current tax expense (benefit)	35,187		(6,927)		343,108		41,313
Deferred tax expense	6,182		113,516		94,604		222,339
Income tax expense, net	41,369		106,589		437,712		263,652
Net Income (Loss)	(15,501,704)		5,919,971		(8,966,821)		(2,346,883)
Less: Net income attributable to non-controlling interest	601,048		3,155,685		3,628,013		6,775,863
Net Income (Loss) attributable to CorEnergy	$	(16,102,752)	$	2,764,286	$	(12,594,834)	$	(9,122,746)
Preferred stock dividends	2,388,130		2,388,130		7,164,390		7,007,474
Net Income (Loss) attributable to Common Stockholders	$	(18,490,882)	$	376,156	$	(19,759,224)	$	(16,130,220)









Net Income (Loss) Per Common Share:
Basic	$	(1.17)	$	0.02	$	(1.26)	$	(1.13)
Diluted	$	(1.17)	$	0.02	$	(1.26)	$	(1.13)
Weighted Average Shares of Common Stock Outstanding:
Basic	15,773,469		15,426,226		15,683,331		14,252,305
Diluted	15,773,469		15,426,226		15,683,331		14,252,305
Dividends declared per common share	$	0.050	$	0.050	$	0.150	$	0.150

See accompanying Notes to Consolidated Financial Statements.


Table of Contents						Glossary of Defined Terms

CorEnergy Infrastructure Trust, Inc.

CONSOLIDATED STATEMENTS OF EQUITY


	Series A Cumulative Redeemable Preferred Stock		Common Stock			Class B Common Stock			Additional Paid-in Capital		Retained Deficit		Non-controlling Interest		Total
	Amount		Shares	Amount		Shares	Amount














Balance at June 30, 2022 (Unaudited)	$	129,525,675	15,060,857	$	15,060	683,761	$	684	$	332,588,181	$	(323,649,718)	$	124,353,713	$	262,833,595
Net income (loss)	—		—	—		—	—		—		(16,102,752)		601,048		(15,501,704)
Series A preferred stock dividends	—		—	—		—	—		(2,388,130)		—		—		(2,388,130)
Common Stock dividends	—		—	—		—	—		(753,043)		—		—		(753,043)
Reinvestment of dividends paid to common stockholders	—		84,606	85		—	—		197,895		—		—		197,980
Common Stock, accrued dividend equivalent	—		—	—		—	—		(34,145)		—		—		(34,145)
Crimson cash distribution on Class A-1 Units	—		—	—		—	—		—		—		(809,212)		(809,212)
Stock-based compensation	—		31,448	32		—	—		185,291		—		47,701		233,024
Balance at September 30, 2022 (Unaudited)	$	129,525,675	15,176,911	$	15,177	683,761	$	684	$	329,796,049	$	(339,752,470)	$	124,193,250	$	243,778,365
See accompanying Notes to Consolidated Financial Statements.


	Series A Cumulative Redeemable Preferred Stock		Common Stock			Class B Common Stock			Additional Paid-in Capital		Retained Deficit		Non-controlling Interest		Total
	Amount		Shares	Amount		Shares	Amount
Balance at December 31, 2021	$	129,525,675	14,893,184	$	14,893	683,761	$	684	$	338,302,735	$	(327,157,636)	$	122,945,172	$	263,631,523
Net income (loss)	—		—	—		—	—		—		(12,594,834)		3,628,013		(8,966,821)
Series A preferred stock dividends	—		—	—		—	—		(7,164,390)		—		—		(7,164,390)
Common stock dividends	—		—	—		—	—		(2,245,733)		—		—		(2,245,733)
Reinvestment of dividends paid to common stockholders	—		221,362	221		—	—		600,963		—		—		601,184
Common Stock, accrued dividend equivalent	—		—	—		—	—		(34,145)		—		—		(34,145)
Crimson cash dividends on Class A-1 units	—		—	—		—	—		—		—		(2,427,636)		(2,427,636)
Stock-based Compensation	—		62,365	63		—	—		336,619		—		47,701		384,383
Balance at September 30, 2022 (Unaudited)	129,525,675		15,176,911	15,177		683,761	684		329,796,049		(339,752,470)		124,193,250		243,778,365


Table of Contents						Glossary of Defined Terms


	Series A Cumulative Redeemable Preferred Stock		Common Stock			Class B Common Stock			Additional Paid-in Capital		Retained Deficit		Non-controlling Interest		Total
	Amount		Shares	Amount		Shares	Amount













Balance at June 30, 2021 (Unaudited)	$	125,270,350	13,673,326	$	13,673	—	$	—	$	333,890,658	$	(327,513,587)	$	119,220,989	$	250,882,083
Net income	—		—	—		—	—		—		2,764,286		3,155,685		5,919,971
Series A preferred stock dividends	—		—	—		—	—		(2,388,130)		—		—		(2,388,130)
Common stock dividends	—		—	—		—	—		(741,530)		—		—		(741,530)
Reinvestment of dividends paid to common stockholders	—		36,228	36		—	—		174,583		—		—		174,619
Common stock issued under director's compensation plan	—		3,399	3		—	—		22,497		—		—		22,500
Crimson cash distribution on Class A-1 Units	—		—	—		—	—		—		—		(841,950)		(841,950)
Crimson Class A-2 Units dividends payment in kind	—		—	—		—	—		—		—		(204,353)		(204,353)
Equity attributable to non-controlling interest	—		—	—		—	—		—		—		204,353		204,353
Series A preferred stock issued due to internalization transaction	4,255,325		—	—		—	—		(10,213)		—		—		4,245,112
Common Stock issued due to internalization transaction	—		1,153,846	1,154		—	—		7,094,999		—		—		7,096,153
Class B Common Stock issued due to internalization transaction	—		—	—		683,761	684		3,288,206		—		—		3,288,890
Balance at September 30, 2021 (Unaudited)	$	129,525,675	14,866,799	$	14,866	683,761	$	684	$	341,331,070	$	(324,749,301)	$	121,534,724	$	267,657,718
See accompanying Notes to Consolidated Financial Statements.


Table of Contents						Glossary of Defined Terms


	Series A Cumulative Redeemable Preferred Stock		Common Stock			Class B Common Stock			Additional Paid-in Capital		Retained Deficit		Non-controlling Interest		Total
	Amount		Shares	Amount		Shares	Amount
Balance at December 31, 2020	$	125,270,350	13,651,521	$	13,652	—	$	—	$	339,742,380	$	(315,626,555)	$	—	$	149,399,827
Net income (loss)	—		—	—		—	—		—		(9,122,746)		6,775,863		$	(2,346,883)
Series A preferred stock dividends	—		—	—		—	—		(7,007,474)		—		—		$	(7,007,474)
Common Stock dividends	—		—	—		—	—		(2,106,682)		—		—		$	(2,106,682)
Reinvestment of dividends paid to common stockholders	—		58,033	57		—	—		307,357		—		—		$	307,414
Common Stock issued under director's compensation plan	—		3,399	3		—	—		22,497		—		—		$	22,500
Crimson cash distribution on Class A-1 Units	—		—	—		—	—		—		—		(1,446,901)		$	(1,446,901)
Crimson Class A-2 Units dividends payment in kind	—		—	—		—	—		—		—		(610,353)		$	(610,353)
Equity attributable to non-controlling interest	—		—	—		—	—		—		—		116,816,115		$	116,816,115
Series A preferred stock issued due to internalization transaction	4,255,325		—	—		—	—		(10,213)		—		—		$	4,245,112
Common Stock issued due to internalization transaction	—		1,153,846	1,154		—	—		7,094,999		—		—		$	7,096,153
Class B Common Stock issued due to internalization transaction	—		—	—		683,761	684		3,288,206		—		—		$	3,288,890
Balance at September 30, 2021 (Unaudited)	$	129,525,675	14,866,799	$	14,866	683,761	$	684	$	341,331,070	$	(324,749,301)	$	121,534,724	$	267,657,718

See accompanying Notes to Consolidated Financial Statements.


Table of Contents						Glossary of Defined Terms

CorEnergy Infrastructure Trust, Inc.

CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)


	For the Nine Months Ended
	September 30, 2022		September 30, 2021
Operating Activities
Net loss	$	(8,966,821)	$	(2,346,883)
Adjustments to reconcile net loss to net cash provided by operating activities:
Deferred income tax, net	94,604		222,337
Depreciation, amortization and ARO accretion	11,997,781		10,337,639
Amortization of debt issuance costs	1,236,178		1,192,821


Loss on impairment of goodwill	16,210,020		—
Loss on impairment and disposal of leased property	—		5,811,779
Loss on termination of lease	—		165,644

Loss on extinguishment of debt	—		861,814

Gain on sale of equipment	(39,678)		(16,508)
Stock-based compensation	384,383		22,500







Changes in assets and liabilities:

Accounts and other receivables	2,715,207		702,251
Financing note accrued interest receivable	—		(8,780)
Inventory	(2,050,514)		(1,572,534)
Prepaid expenses and other assets	4,296,890		(2,409,857)
Due from affiliated companies, net	209,943		(188,578)
Management fee payable	—		(971,626)
Accounts payable and other accrued liabilities	1,213,961		1,361,746
Income tax liability	344,630		33,027
Operating lease liability	(1,094,766)		(496,900)
Unearned revenue	151,295		(439,106)
Net cash provided by operating activities	$	26,703,113	$	12,260,786
Investing Activities




Acquisition of Crimson Midstream Holdings, net of cash acquired	—		(69,002,053)
Acquisition of Corridor InfraTrust Management, net of cash acquired	—		952,487
Purchases of property and equipment	(7,759,603)