Annual report pursuant to Section 13 and 15(d)

STOCKHOLDERS' EQUITY

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STOCKHOLDERS' EQUITY
 12 Months Ended
Dec. 31, 2021
Equity [Abstract]  
STOCKHOLDERS' EQUITY STOCKHOLDERS' EQUITY
PREFERRED STOCK
The Company's authorized preferred stock consists of 10.0 million shares having a par value of $0.001 per share. On January 27, 2015, the Company sold, in an underwritten public offering, 2,250,000 depositary shares, each representing 1/100th of a share of 7.375% Series A Cumulative Redeemable Preferred Stock ("Series A Preferred Stock"). Pursuant to this offering, the Company issued 22,500 whole shares of Series A Preferred Stock. On April 18, 2017, the Company closed a follow-on underwritten public offering of 2,800,000 depositary shares, each representing 1/100th of a share of 7.375% Series A Preferred Stock, at a price of $25.00 per depositary share. On May 10, 2017, the Company sold an additional 150,000 depositary shares at a public offering price of $25.00 per depositary share in connection with the underwriters' exercise of their over-allotment option to purchase additional shares. Following the offering, the Company had a total of 5,200,000 depositary shares outstanding, or 52,000 whole shares.
The depositary shares pay an annual dividend of $1.84375 per share, equivalent to 7.375 percent of the $25.00 liquidation preference. The depositary shares may be redeemed on or after January 27, 2020, at the Company's option, in whole or in part, at the $25.00 liquidation preference plus all accrued and unpaid dividends to, but not including, the date of redemption. The depositary shares have no stated maturity, are not subject to any sinking fund or mandatory redemption and are not convertible into any other securities of the Company except in connection with certain changes of control. Holders of the depositary shares generally have no voting rights, except for limited voting rights if the Company fails to pay dividends for six or more quarters (whether or not consecutive) and in certain other circumstances. The depositary shares representing the Series A Preferred Stock trade on the NYSE under the ticker "CORRPrA."
The Company's Board of Directors authorized a share repurchase program for the Company to buy up to $10.0 million of its depositary shares of Series A Preferred Stock, which commenced August 6, 2018. Purchases were made through the program until it expired on August 5, 2019. During 2018, the Company repurchased 177,773 depositary shares for approximately $4.3 million in cash. During 2019, the Company repurchased 2,500 depositary shares of Series A Preferred Stock for approximately $61 thousand in cash.
The Company's Board of Directors authorized a securities repurchase program for the Company to buy up to the remaining amount of its 7.00% Convertible Notes prior to maturity on June 15, 2020 and up to $5.0 million of its Common Stock and 7.375% Series A Preferred Stock, which commenced March 21, 2020. Purchases were made through the program until it expired on August 20, 2020. During 2020, the Company repurchased 8,913 depositary shares of Series A Preferred Stock for approximately $162 thousand in cash.
On July 6, 2021, the Company completed the internalization of the Company's management company Corridor InfraTrust Management, LLC. The Internalization was consummated for a purchase price of approximately $14.6 million, payable in equity. Pursuant to the Contribution Agreement, the Company issued to the Contributors, based on each Contributor's percentage ownership in Corridor, an aggregate of: (i) 1,153,846 shares of Common Stock, (ii) 683,761 shares of Class B Common Stock, and (iii) 170,213 depositary shares of Series A Preferred Stock.
As of December 31, 2021, the Company had a total of 5,181,027 depositary shares outstanding, or approximately 51,810 whole shares, with an aggregate par value of $51.81. See Note 21 ("Subsequent Events"), for further information regarding the declaration and payment of a dividend on the Series A Preferred Stock.
COMMON STOCK
As of December 31, 2021, the Company had 14,893,184 of common shares issued and outstanding. See Note 21 ("Subsequent Events"), for further information regarding the declaration and payment of a dividend on the Common Stock.
CLASS B COMMON STOCK
On June 29, 2021, the stockholders approved (i) the issuance of Class B Common Stock upon conversion of the Series B Preferred Stock issuable pursuant to the terms of the Crimson Transaction, which effectively will make the Crimson Class A-2 Units exchangeable directly for Class B Common Stock following receipt of CPUC approval, and (ii) the issuance of Class B Common Stock pursuant to the terms of the Internalization. On July 6, 2021, the Company issued 683,761 Class B common shares to the contributors of Corridor InfraTrust Management, LLC as partial consideration for the Internalization transaction.
NON-CONTROLLING INTEREST
As disclosed in Note 3 ("Acquisitions") as part of the Crimson Transaction, the Company and the Grier Members entered into the Third LLC Agreement of Crimson. Pursuant to the terms of the Third LLC Agreement, the Grier Members and the Company's interests in Crimson are summarized in the table below:
Grier Members
Adjustments
As of February 1, 2021 Final Working Capital Paid in Kind Distribution As of December 31, 2021 CorEnergy
(in units, except as noted)
Economic ownership interests in Crimson Midstream Holdings, LLC
Class A-1 Units 1,613,202  37,043  —  1,650,245  — 
Class A-2 Units 2,436,000  —  24,414  2,460,414  — 
Class A-3 Units 2,450,142  —  —  2,450,142  — 
Class B-1 Units —  —  —  —  10,000 
Voting ownership interests in Crimson Midstream Holdings, LLC
Class C-1 Units 505,000  —  —  505,000  495,000 
Voting Interests of C-1 Units (%) 50.50  % —  —  50.62  % 49.38  %
In June 2021, the final working capital adjustment was made for the Crimson Transaction which resulted in an increase in the assets acquired of $1,790,455 (as further described above in Note 3 ("Acquisition"). This resulted in 37,043 Class A-1 Units being issued to the Grier Members for their 50.50% ownership interest. The newly issued units resulted in an increase in non-controlling interest of $882,726. After the working capital adjustment and paid-in-kind dividends, the Grier Members' equity ownership interest is 50.62 percent as of December 31, 2021.
After working capital adjustments, the fair value of the Grier Members' noncontrolling interest, which is represented by the Crimson Class A-1, A-2 and A-3 Units listed above, was $116.2 million. As described further below, the Crimson Class A-1, A-2 and A-3 Units may eventually be exchanged for shares of the Company's common and preferred stock subject to the approval of the CPUC ("CPUC Approval"), which is expected to occur in late 2022. The Crimson A-1, A-2 and A-3 Units held by the Grier Members and the B-1 Units held by the Company represent economic interests in Crimson while the Class C-1 Units represent voting interests.
Upon CPUC Approval, the parties will enter into a Fourth Amended and Restated LLC Agreement of Crimson ("Fourth LLC Agreement"), which will, among other things, (i) give the Company voting control of Crimson and its assets, in connection with an anticipated further restructuring of the Company's asset ownership structure and (ii) provide the Grier Members and Management Members (as defined below) the right to exchange their entire interest in Crimson for securities of the Company as follows:
•Class A-1 Units will become exchangeable for up to 1,755,579, (which includes the addition of 37,043 shares as a result of the working capital adjustment) of the Company's depositary shares, each representing 1/100th of a share of the Company's 7.375% Series A Cumulative Redeemable Preferred Stock ("Series A Preferred") (prior to the changes made, effective June 30, 2021, pursuant to the Stock Exchange Agreement described in the Company’s Current Report Form 8-K filed July 12, 2021, the Class A-1 Units would have become exchangeable into the Company's 9.0% Series C Preferred Stock);

•Class A-2 units will become exchangeable for up to 8,762,158 additional shares of a new non-listed Class B Common Stock of the Company, and

•Class A-3 Units will become exchangeable for up to 2,450,142 shares of the newly created Class B Common Stock.
Class B Common Stock will eventually be converted into the Common Stock of the Company ("Common Stock") on the occurrence of the earlier of the following: (i) the occurrence of the third anniversary of the closing date of the Crimson Transaction or (ii) the satisfaction of certain conditions related to an increase in the relative dividend rate of the Common Stock.
Prior to exchange of the Crimson Class A-1, A-2 and A-3 Units into corresponding CORR securities (and after giving effect to the changes to the CORR securities into which the Class A-1 and A-2 Units may be exchanged, as described above), the Grier Members only have the right to receive distributions to the extent that the Company's Board of Directors determines dividends would be payable if they held the shares of Series A Preferred (for the Class A-1 Units), Series B Preferred (for the Class A-2 Units prior to July 7, 2021), and Class B Common Stock (for the Class A-2 Units (on and after July 7, 2021) and Class A-3 Units), respectively, regardless of whether the securities are outstanding. If the respective shares of Series A Preferred, Series B Preferred and Class B Common Stock are not outstanding, the Company's Board of Directors must consider that they would be outstanding when declaring dividends on the Common Stock. Following CPUC Approval, the terms of the Fourth LLC Agreement provide that such rights will continue until the Grier Members elect to exchange the Crimson Class A-1, A-2 and A-3 Units for the related securities of the Company. In addition, after CPUC Approval, certain Crimson Units held by the Grier Members are expected to be transferred to other individuals currently managing Crimson (the "Management Members"). The following table summarizes the distributions payable under the Crimson Class A-1, A-2 and A-3 Units as if the Grier Members held the respective underlying Company securities. The Crimson Class A-1, A-2 and A-3 Units are entitled to the distribution regardless of whether the corresponding Company security is outstanding.
Units Distribution Rights of CorEnergy Securities Annual Distribution per Share
A-1 Units
7.375% Series A Cumulative Redeemable Preferred Stock(1)
$ 1.84 
A-2 Units
Class B Common Stock(3) (4)
Varies(2)(3)
A-3 Units
Class B Common Stock(3) (4)
Varies(2)(3)
(1) On June 29, 2021, the Board of the Company authorized management to enter into an agreement to convert the right
to receive the Company’s 9.00% Series C Preferred Stock into 7.375% Series A Cumulative Redeemable Preferred Stock.
(2) On July 7, 2021, the Company converted the right that holders of Class A-2 Units would have had to exchange such units for shares of the Company’s 4.00% Series B Preferred Stock into a right to exchange such units for shares of the Company’s Class B Common Stock with the effective date, for dividend purposes, of June 30, 2021.
(3) (A) For the fiscal quarters of the Company ending June 30, 2021, September 30, 2021, December 31, 2021 and March 31, 2022, the Common Stock Base Dividend Per Share shall equal $0.05 per share per quarter; (B) for the fiscal quarters of the Company ending
June 30, 2022, September 30, 2022, December 31, 2022 and March 31, 2023, the Common Stock Base Dividend Per Share shall equal $0.055 per share per quarter; and (C) for the fiscal quarters of the Company ending June 30, 2023, September 30, 2023, December 31, 2023 and March 31, 2024, the Common Stock Base Dividend Per Share shall equal $0.06 per share per quarter. The Class B Common Stock dividend is subordinated based on a distribution formula described in footnote (4) below.
(4) For each fiscal quarter ending June 30, 2021 through and including the fiscal quarter ending March 31, 2024, each share of Class B Common Stock will be entitled to receive dividends (the "Class B Common Stock Dividends"), subject to Board approval, equal to the quotient of (i) difference of (A) CAFD of the most recently completed quarter and (B) 1.25 multiplied by the Common Stock Base Dividend, divided by (ii) shares of Class B Common Stock issued and outstanding multiplied by 1.25.
For the three months ended June 30, 2021, distributions were paid to the Grier Members for the Class A-1 Units ($604,951), Class A-2 Units (based on distributions that would have been payable on Series B Preferred, but authorized by the Board of Directors to be paid as 16,240 additional Class A-2 units paid-in-kind), as distributions for the Series C Preferred and the Series B Preferred began accruing April 1, 2021. No distributions were paid to the Class A-3 Units as no distributions were declared on the Class B Common Stock.
For the three months ended September 30, 2021, distributions were paid to the Grier Members for the Class A-1 Units ($841,950) and Class A-2 Units (8,174 units paid-in-kind, for distributions that would have accrued on underlying Series B Preferred shares through the date Class A-2 Units became exchangeable directly into Class B Common Stock following stockholder approval). No distributions were paid to the Class A-3 Units as no distributions were declared on the Class B Common Stock.
For the three months ended December 31, 2021, distributions were owed to the Grier Members for the Class A-1 Units ($809 thousand). The Company paid these distributions during February 2022. No distributions were paid to the Class A-2 or Class A-3 Units as no distributions were declared on the Class B Common Stock.
See Note 21 ("Subsequent Events") for further information regarding the declaration of distributions related to the Class A-1 and A-2 Units.
SHELF REGISTRATION
On October 30, 2018, the Company filed a shelf registration statement with the SEC, pursuant to which it registered 1,000,000 shares of Common Stock for issuance under its dividend reinvestment plan. As of December 31, 2021, the Company has issued 106,422 shares of Common Stock under its dividend reinvestment plan pursuant to the shelf, resulting in remaining availability (subject to the current limitation discussed below) of approximately 893,578 shares of Common Stock.
On September 16, 2021, the Company had a resale shelf registration statement declared effective by the SEC, pursuant to which it registered the following securities that were issued in connection with the Internalization for resale by the Contributors: 1,837,607 shares of Common Stock (including both (i) 1,153,846 shares of Common Stock issued at the closing of the Internalization and (ii) up to 683,761 additional shares of Common Stock which may be acquired by the Contributors upon the conversion of outstanding shares of our unlisted Class B Common Stock issued at the closing of the Internalization) and 170,213 depositary shares each representing 1/100th fractional interest of a share of 7.375% Series A Cumulative Redeemable Preferred Stock, par value $0.001 per share issued at the closing of the Internalization.
On November 3, 2021, the Company filed a new shelf registration statement, which replaced the previous Shelf Registration Statement, declared effective on November 17, 2021 by the SEC, pursuant to which the Company is now able to publicly offer additional debt or equity securities with an aggregate offering price of up to $600.0 million. As of December 31, 2021, the Company has not issued any securities under this new shelf registration statement, so total availability remains at $600.0 million.