CorEnergy Infrastructure Trust, Inc. Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

Stockholders' Equity

Stockholders' Equity

3 Months Ended

Mar. 31, 2021

PREFERRED STOCK

As of March 31, 2021, the Company has a total of 5,010,814 depository shares outstanding, or approximately 50,108 whole shares of its 7.375% Series A Preferred Stock. See Note 17 ("Subsequent Events") for further information regarding the declaration of a dividend on the 7.375% Series A Preferred Stock.

COMMON STOCK

As of March 31, 2021, the Company has 13,651,521 of common shares issued and outstanding. See Note 17 ("Subsequent Events") for further information regarding the declaration of a dividend on the common stock.

NON-CONTROLLING INTEREST

As disclosed in Note 3 ("Acquisition") as part of the Crimson Transaction, the Company, Grier 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		CorEnergy
Economic ownership interests in Crimson Midstream Holdings, LLC	(in units, except as noted)
Class A-1 Units	1,613,202		—
Class A-2 Units	2,436,000		—
Class A-3 Units	2,450,142		—

Class B-1 Units	—		10,000

Voting ownership interests in Crimson Midstream Holdings, LLC
Class C-1 Units	505,000		495,000
Voting Interests of C-1 Units (%)	50.50	%	49.50	%

Upon closing of the Crimson Transaction, the fair value of Grier's noncontrolling interest, which is represented by the A-1, A-2 and A-3 units above, was $115.3 million. As described further below, the A-1, A-2 and A-3 units may eventually be exchangeable 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 the third quarter of 2021. The A-1, A-2 and A-3 units held by Grier and 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 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 1,613,202 shares of a newly created 9.00% Series C Exchangeable Preferred Stock of the Company ("Series C Preferred"), which may be converted by the holder into up to 1,716,172 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");

•Class A-2 units will become exchangeable for up to 2,436,000 shares of a newly created 4.00% Series B Redeemable Convertible Preferred Stock of the Company ("Series B Preferred"), which will be convertible, following approval of the Company's existing stockholders in compliance with the rules of the New York Stock Exchange ("NYSE"), into up to 8,675,214 additional shares of a new non-listed Class B Common Stock of the Company ("Class B Common Stock"), with such conversion to occur automatically, assuming stockholder approval is received; 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 conversion of the A-1, A-2 and A-3 units into corresponding CORR securities, 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 C Preferred, Series B Preferred and Class B Common Stock, respectively, regardless of whether the securities are outstanding. If the Series C 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 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 A-1, A-2 and A-3 units as if the Grier Members held the Series C Preferred, Series B Preferred and Class B Common Stock, respectively. The 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

Liquidation Preference

Annual Distribution per Share

A-1 Units

9.00% Series C Exchangeable Preferred Stock

25.00

2.25

A-2 Units

4.00% Series B Redeemable Preferred Stock(1)

25.00

1.00

A-3 Units

Class B Common(2) (3)

N/A

Varies(2)(3)

(1) If, by the first anniversary of the original issue date of the Series B Preferred, (i) the affirmative vote of the holders of the issued and outstanding common stock have not approved the convertibility of the Series B Preferred to Class B Common Stock or (ii) any other action or consent necessary for such convertibility has not occurred as of such date, then (i) the dividend rate for the Series B Preferred will increase from 4.00% per annum to 11.00% per annum as of such anniversary.

(2) (A) For the fiscal quarters of the Company ending June 30, 2021, September 30, 2021, December 31, 2021 and March 30, 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 30, 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 30, 2024, the Common Stock Base Dividend Per Share shall equal $0.06 per share per quarter. The Class B Common dividend is subordinated based on a distribution formula described in footnote (3) below.

(3) For the fiscal quarters of the Company ending June 30, 2021, September 30, 2021, December 31, 2021 and March 31, 2022, each share of Class B Common Stock shall be entitled to receive dividends equal to the quotient of (i) difference of (A) First Year Cash Available for Distribution ("CAFD") multiplied by 0.25 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. However, under no circumstances can the Class B Common Stock dividend be greater than the Common Stock dividend.

For the three months ended March 31, 2021, no distributions were paid to the Grier Members for the Class A-1, A-2 and A-3 units as distributions for (i) the Series C Preferred and Series B Preferred began accruing dividends April 1, 2021, (ii) the Class B Common begins paying dividends with the quarter ending June 30, 2021. See Note 17 ("Subsequent Events") for further information regarding the declaration of distributions related to the Class A-1 and A-2 units.

SHELF REGISTRATION STATEMENTS

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 ("DRIP"). As of March 31, 2021, the Company has issued 22,003 shares of common stock under its DRIP pursuant to the shelf, resulting in remaining availability of approximately 977,997 shares of common stock.

On November 9, 2018, the Company had a new shelf registration statement declared effective by the SEC replacing the Company's previously filed shelf registration statement, pursuant to which it may publicly offer additional debt or equity securities with an aggregate offering price of up to $600.0 million. As previously disclosed in the Company's Annual Report on From 10-K filed on March 4, 2021, the Company did not expect to be able to use this shelf registration statement or the shelf registration statement filed for its DRIP, at least until it was able to file certain financial statement information as required by SEC Regulation S-X. On April 29, 2021, the Company announced that its Board of Directors has authorized the reinstatement of the operation of the Company's DRIP. The Board of Directors made this determination in light of the fact that the staff of the SEC has advised the Company that it can resume the use of its previously filed and effective shelf registration statements.