Item 1.01 Entry into a Material Definitive Agreement.
Effective December 8, 2021, Corning Natural Gas Holding Company (the "Company")
issued 5,000 shares of its newly-authorized 1.5% Series D Cumulative Redeemable
Preferred Stock, par value of $0.01 per share (the "Series D Preferred Stock"),
to ACP Crotona Corp., a Delaware corporation (the "Purchaser"), for $1,000 a
share, or $5.0 million in the aggregate. As previously reported, on January 12,
2021, the Company entered into an agreement and plan of merger (the "Merger
Agreement"), by and among the Company, the Purchaser and ACP Crotona Merger Sub
Corp., a New York corporation ("Merger Sub"), pursuant to which Merger Sub will
merge with and into the Company (the "Merger"), on the terms and subject to the
conditions set forth in the Merger Agreement, and the Company will continue as
the surviving corporation and a wholly-owned subsidiary of the Purchaser. The
Purchaser is an affiliate of Argo Infrastructure Partners, LP.
The Company intends to use the funds raised for general working capital and to
fund service expansion projects and capital replacement projects at each of its
utilities over the next several years. In the short term, the Company will pay
down borrowings under lines of credit at Leatherstocking Gas Company LLC and
Corning Natural Gas Corporation.
The Company entered into a purchase agreement with the Purchaser with respect to
the purchase and issuance of the Series D Preferred Stock containing customary
representations and warranties by the Company and the Purchaser. This
description of the purchase agreement is incomplete and is qualified in its
entirety by the purchase agreement by and between the Company and the Purchaser
attached to this Form 8-K as Exhibit 10.1.
The issuance of the Series D Preferred Stock was a private placement to an
accredited investor exempt from registration under Section 4(a)(2) of the
Securities Act of 1933. The Company elected to issue the shares in a private
placement to avoid the delays and costs associated with a public offering of
stock.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an
Off-Balance Sheet Arrangement of a Registrant.
The disclosure included under Item 1.01 above is incorporated by reference to
this Item 2.03.
Item 3.02 Unregistered Sales of Equity Securities.
The disclosure included under Item 1.01 above is incorporated by reference to
this Item 3.02.
Item 5.03 Amendments to Articles of Incorporation or Bylaws; Change in Fiscal
Year.
Effective December 3, 2021, the Company amended its certificate of incorporation
(the "Certificate of Amendment") to authorize 5,000 shares of the Series D
Preferred Stock. The Series D Preferred Stock accrues cumulative dividends at
the rate of 1.5% of the liquidation preference per share (equivalent to $15.00
per annum per share) and are expected to be paid on March 31, June 30, September
30, and December 31 of each year. The Series D Preferred Stock ranks on parity
with the Company's Series A, Series B, and Series C Preferred Stock.
2
The Certificate of Amendment provides for certain redemption requirements and
rights. Specifically, on December 8, 2026, the Company must redeem all of the
outstanding shares of Series D Preferred Stock at a redemption price equal to
$1,000 per share, plus an amount equal to all accrued but unpaid dividends, if
any, on the shares (whether or not declared). Further, upon the earlier to occur
of (i) the termination of the Merger Agreement and (ii) December 31, 2022, for
one year thereafter, any holder of the Series D Preferred Stock may elect to
require the Company to redeem all of the shares of the Series D Preferred Stock
held by that holder for an amount equal to $1,000 per share, plus any
accumulated and unpaid dividends for any dividend period prior to the effective
date of the redemption (the "Redemption Amount"). Moreover, upon the occurrence
of any "fundamental changes," as defined in the Certificate of Amendment, any
holder of the Series D Preferred Stock may elect to require the Company to
redeem, in whole or in part, the Series D Preferred Stock held by that holder
for an amount equal to the Redemption Amount.
This description of the amendment to the Company's certificate of incorporation
authorizing the Series D Preferred Stock is incomplete and is qualified in its
entirety by the Certificate of Amendment attached to this Form 8-K as Exhibit
3.1.
Item 9.01 Financial Statements and Exhibits.
Exhibit 3.1 Certificate of Amendment of the Certificate of Incorporation of
Corning Natural Gas Holding Corporation authorizing 5,000 Shares of 1.5% Series
D Cumulative Redeemable Preferred Stock Filed with the Department of State of
the State of New York on December 3, 2021.
Exhibit 10.1 Purchase Agreement, dated December 8, 2021, by and between
Corning Natural Gas Holding Corporation and ACP Crotona Corp.
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CORNING NATURAL GAS HOLDING CORPORATION 
